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Justin E. Gray

Partner at Eversheds Sutherland (US) LLP

Former Adjunct Professor at Northwestern University School of Law

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Wednesday
Aug112010

Pair of District Courts Grant Motions to Dismiss for Lack of Standing in False Marking Cases

Shizzle Pop, LLC v. Aviva Sports, Inc. (C.D. Cal. Aug. 5, 2010); FLFMC, LLC v. Wham-O, Inc. (W.D. Pa. Aug. 3, 2010)

Last week, a pair of district courts granted motions to dismiss false marking complaints for lack of standing.  In Shizzle Pop, the Court found that the qui tam plaintiff failed "to allege any cognizable injury to the United States or the public, much less adequate factual pleadings to support a concrete, particularized injury that is actual or imminent.  Therefore, Plaintiff lacks standing to pursue the penalties imposed by Section 292."  The Court went on to also find that even if the complaint had survived the motion to dismiss on standing, it failed to adequately state a claim as "Plaintiff alleges only that 'Defendants falsely marked their 'Cosmic Slide,' 'Sea Spray Slide' and 'Slider Island' slides with the intent to deceive the public in violation of [Section 292].' … This allegation constitutes merely a recitation of the elements and fails to meet either the Rule 8 or Rule 9(b) standards of pleading."

In FLFMC, the Court found that "there is no quantifiable, concrete injury to the United States or to FLFMC; the only injury that has been alleged is the quasi-criminal violation of the false marking statute, a 'sovereign injury.' … This Court aligns itself with the Brooks Brothers decision, however, and holds that (1) the government cannot assign a purely 'sovereign injury,' and (2) even if the government could assign a 'sovereign injury,' plaintiff's complaint does not and cannot establish a concrete injury-in-fact.  Because plaintiff does not have any actual injury and cannot be deemed to have acquired the government's sovereign injury, plaintiff has no standing, and therefore, this Court has no jurisdiction."  The Court explained that "FLFMC's position is that the mere fact that defendant affixes (allegedly) the mark of an expired patent to its products is sufficient to show an injury to the market or the public.  The Court finds, however, that such generalized injury arising from a violation of the sovereign's laws against false marking does not, without more, show an adequate 'concrete and actual or imminent' injury." As any "amendment to the complaint would be futile", the Court dismissed the case "with prejudice."

Thanks go out to the Docket Report blog for its initial reporting of these cases.

Gray on Claims, in conjunction with Docket Navigator®, is providing a false marking chart that is updated daily with new false marking cases as well as status updates on pending cases.  A downloadable PDF chart is available on this page as well including information on the specific patents and products at issue in each litigation.  Other writings on false marking can be found here.