Stauffer v. Brooks Brothers Group, Inc. (Fed. Cir. July 10, 2014)
In this false marking case, one of a handful of qui tam false marking cases filed before the Forest Group floodgates opened in late 2009, the Federal Circuit held that the AIA amendments to the false marking statute do not contitute an impermissible pardon and do not violate a common law principle prohibiting use of a pardon to vitiate a qui tam action once it has commenced.
Stauffer accused Brooks Brothers of falsely marking bow ties with expired patents. While his case was pending, the AIA was signed into law which eliminated the false marking statute's qui tam provision. In response to a request by the district court to show why Stauffer's case should not be dismissed in light of the AIA, Stauffer made two arguments. First, he argued that retroactive application of the AIA amendments usurped the President's pardon power because Stauffer believed the amendments eliminated criminal liability for false marking. Second, he argued that the amendments violated a common law principle prohibiting use of a pardon to vitiate a qui tam action once it has commenced. The district court rejected both of these arguments, as well as an argument made by Stauffer for the first time in his reply brief that he had suffered a "competitive injury" because he believed Brooks Brothers' actions inflated the price Stauffer paid for his bow ties.
On appeal, the Federal Circuit first pointed to its prior decisions in the Brooks v. Dunlop and Rogers v. Tristar false marking cases, where the court held that retroactive application of the false marking amendments in the AIA did not violate the Due Process or Intellectual Property Clauses of the Constitution and that qui tam plaintiffs did not have vested rights in pre-AIA false marking lawsuits.
Regarding Stuaffer's pardon argument, the Federal Circuit quickly determined that the amendments to the false marking statute did not grant a pardon, but instead repealed a law, an action within Congress's power. Regarding Stauffer's common law argument, the Federal Circuit held that since Stauffer does not have a vested right in his lawsuit and the AIA amendments do not constitute a pardon, the AIA amendments do not violate the common law principle relied on by Stauffer.
The court also found that Stauffer's additional arguments made for the first time in his reply brief to the district court, including his argument that he suffered a competitive injury, were waived by not properly raising them before the district court.