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Justin E. Gray

IP Litigation Attorney at Foley & Lardner LLP

Former Adjunct Professor at Northwestern University School of Law

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Friday
May042012

Federal Circuit Rejects Constitutional Challenges to False Marking Provisions of AIA

Rogers v. Tristar Products, Inc. (May 2, 2012) (nonprecedential)

In this case, the qui tam plaintiff's false marking claim was originally dismissed by the district court for violating the Take Care Clause of the U.S. Constitution.  While the plaintiff's appeal to the Federal Circuit was pending, the AIA was passed, which amended 35 U.S.C. 292 to retroactively eliminate the qui tam provision of the statute.  In light of the AIA, the Federal Circuit dismissed plaintiff's appeal as moot and remanded with instructions to vacate the trial court's opinion.  Plaintiff then moved for reconsideration, challenging the dismissal of his appeal as moot on the grounds that the AIA's amendments violate the Takings and Due Process Clauses of the U.S. Constitution.

The Federal Circuit held that the AIA's amendments to 35 U.S.C. 292 did not violate either the Takings or Due Process Clauses.

First, the Court determined that Congress did intend for its amendments to 35 U.S.C. 292 to apply retroactively, given both the language and the legislative history of the AIA.

Next, the Court considered plaintiff's Takings Clause argument.  The Court disagreed with plaintiff's proposition that by initiating a false marking lawsuit, the potential recovery from that suit had become property.  Instead, the Court explained that "no 'vested' right attaches until there is a final, unreviewable judgment, so it is of no moment that [plaintiff] expended effort and resources in filing and pursuing the complaint."  Further, analogizing to the False Claims Act, the Court stated that "courts long ago rejected the argument that a constitutional protected right vests upon initiating suit."  Thus, the Court held that the AIA amendments to the false marking statute did not violate the Takings Clause.

Moving on to the Due Process Clause, the Court explained that "[b]y making the False Marking Act amendments retroactive, Congress was in significant part attempting to reduce the litigation expenditures in the large number of complaints filed, but not yet subject to a final judgment ... [t]hat objective was a legitimate justification for making the AIA amendments to 292 retroactive."  The Court therefore found that the AIA amendments to the false marking statute did not violate the Due Process Clause.

This decision should effectively signal the end for all pending non-competitor false marking lawsuits. Since the Federal Circuit's Forest Group decision in December 2009, over 1000 false marking cases were filed in the federal courts.  Of those, approximately 521 cases settled for a total of $22,617,835.62, half of which went to the U.S. government and the other half of which went to the various false marking plaintiffs.