Qui Tam, Quo Vadis II


Judge Ward in the Eastern District of Texas recently determined that the intent to deceive element of a false marking claim need not be plead with particularity under Rule 9(b). See Texas Data Co., L.L.C. v. Target Brands, Inc. and Target Corp., No. 2:10-cv-269, Dkt. 30 (E.D. Tex. Nov. 23, 2010). This ruling is notable because, as explained in Qui Tam, Quo Vadis?, many commentators predicted that language in the Federal Circuit’s ruling in Stauffer vs. Brooks Brothers, Inc., 619 F.3d 1321 (Fed. Cir. 2010), would lead lower courts to conclude that Rule 9(b)’s heightened pleading standard applies to the intent to deceive element in a false marking claim. This is so because, in Stauffer, the Federal Circuit remanded a false marking lawsuit and directed the district court to specifically consider the defendant’s motion to dismiss on the grounds that the complaint failed to allege an intent to deceive the public “with sufficient specificity to meet the heightened pleading requirements for claims of fraud.” Id. at 1323 (emphasis added).

In Target, the plaintiff alleged that Target made and sold up&up Training Pants marked with expired patent numbers. Target Brands, Inc., No. 2:10-cv 269, Dkt. 1, ¶ 13. The plaintiff’s attempts to satisfy the intent-to-deceive element were typical of the allegations found in most false marking cases. Specifically, the plaintiff alleged that defendants (1) were “large, sophisticated companies;” (2) “have, or regularly retain, legal counsel;” (3) “have experience applying for patents, obtaining patents, licensing patents and/or litigating in patent-related lawsuits;” (4) have knowledge “that a patent expires and that an expired patent cannot protect any product;” (5) knew the patents had expired; (6) “marked or caused to be marked” the up&up Training Pants with the expired patents; and...

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