Skip to main content
SearchLoginLogin or Signup

A Bow Tie Changes Standing Requirement in False Patent Marking Lawsuits

Published onFeb 15, 2011
A Bow Tie Changes Standing Requirement in False Patent Marking Lawsuits

Law school makes you look at life differently.  Those seemingly innocuous incidents that other people don’t notice start to take on new meaning.  It starts with the inevitable joke as a 1L asking whether someone has been torted.  But then the inquiries become more sophisticated.  This summer I drove 2,500 miles across the country to get to Los Angeles for my internship.  As I entered the eighth and final state, California, I came upon the agricultural inspection checkpoint.  The car in front of me had California plates and was waived on through.  I was stopped and asked about my state of origin.  When I responded North Carolina, the agent questioned me about any fruits or vegetables I may be carrying and then asked me to open the trunk so she could see what was inside.  It was all over very quickly, and I continued on my way.  But I spent the next twenty minutes engaged in a debate with myself over whether California had discriminated against me because I came from another state, and in doing so had violated my constitutional rights.  In the end, it probably doesn’t matter.  When I indignantly related my experience to a good friend and fellow law student, she quickly pointed out that I wasn’t injured.  Therefore, I didn’t have standing to sue, even if I had a slam dunk case.

Raymond Stauffer may have had one of those moments when he went shopping for new bow ties at the Brooks Brothers store in Short Hills, New Jersey.  A patent attorney himself, Stauffer noticed that the Adjustolox mechanisms on the bow ties he was considering were marked with patent numbers 2,083,106 and 2,123,620.  When he went home and looked up the numbers, he discovered that they expired in the 1950s, before he was even born.  He filed a pro se lawsuit against Brooks Brothers, alleging false marking under 35 U.S.C. § 292.  Stauffer’s suit was dismissed.

On August 31, 2010, however, the U.S. Court of Appeals for the Federal Circuit reversed the U.S. District Court for the Southern District of New York, which dismissed Stauffer’s claim for lack of standing, holding that any person has standing to use under 35 U.S.C. § 292.  See generally Stauffer v. Brooks Bros., Inc., 2010 WL 3397419 (Fed. Cir. Aug. 31, 2010).  Stauffer filed his suit as a qui tam plaintiff.  Black’s Law Dictionary (8th Ed. 2004) defines a qui tam action as one “brought under a statute that allows a private person to sue for a penalty, part of which the government . . . will receive.”  The relevant provision here is § 292(b), which provides that “[a]ny person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.”  The Federal Circuit agreed with arguments from the United States government that the United States has an interest in seeing its laws enforced and thus suffers an injury when those laws are not obeyed.  Since Stauffer is the government’s implicit assignee under the qui tam provision, this is sufficient to confer standing on him.

To have standing to sue,

a plaintiff must show (1) that he has suffered an “injury in fact,” . . . that is (a) concrete and particularized, and (b) actual or imminent; (2) that there is a causal connection between the injury and the conduct complained of; and (3) that the injury is likely to be redressed by a favorable decision.

Id. at *3, citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).  The government argued, and the Federal Circuit agreed, that by enacting § 292, Congress defined an injury in fact to the United States.  Moreover, the parties here were unable to cite “any case in which the government has been denied standing to enforce its own law.”  Id. at *4.  Noting that the qui tam provision allows individuals to stand in as assignees of the government’s own claims, the court held that Stauffer also had standing to sue.  His standing arises from his status as “any person” under § 292.  As the court summarized,

Stauffer has sufficiently alleged (1) an injury in fact to the United States that (2) is caused by Brooks Brothers’ alleged conduct, attaching the markings to its bow ties, and (3) is likely to be redressed, with a statutory fine, by a favorable decision.

Id. at *6.  Although this means that Stauffer has standing, it does not necessarily mean he will win his case.  The district court must now determine whether he has met the heightened pleading requirements for claims of fraud.

After the 2009 decision in Forest Group, Inc. v. Bon Tool Co., 590 F.3d. 1295(Fed. Cir. 2009), the stakes are high.  Section 292(a) specifies that the fine is to be “not more than $500 for every such offense.”  In Forest Group, the Federal Circuit interpreted every offense to mean every device sold.  This could result in very high judgments in false marking cases, especially now that “any person” has been defined so broadly.  Many false marking suits have been filed following Forest Group and were stayed pending a decision about standing in Stauffer.  Now those cases may go forward.

As for my own standing problem, I continue to maintain that I was totally injured by that five minute delay at the California-Arizona border.  If I had arrived in Los Angeles five minutes earlier, I would have missed the 101 freeway traffic entirely, right?

**Brooks Brothers bow ties source; Raymon Stauffer photo source.

* Alayna Ness is a third year law student at Wake Forest University School of Law, graduating in May 2011.  She holds a Bachelor of Science in Business from Indiana University.  In the summer of 2010, she worked at the Securities and Exchange Commission in Los Angeles, California.  Ms. Ness will be taking the bar examination in Virginia and plans to practice corporate and securities law.

No comments here
Why not start the discussion?