Federal Circuit reinstates false marking patent qui tam

by Ben Vernia | August 31st, 2010

The False Claims Act is not the only federal qui tam statute: as this blog mentioned in July, there is a patent qui tam provision, 35 U.S.C. ยง 292. On August 31, the Court of Appeals for the Federal Circuit addressed that law in Stauffer v. Brooks Brothers, Inc.. In that case, the qui tam relator sued Brooks Brothers and its parent company for falsely marking patents on its bow ties’ adjustment device – the “Adjustolox” mechanism, made by the J.M.C. Bow Co.

Brooks Brothers moved to dismiss for lack of standing (Rule 12(b)(1)) and lack of particularity (12(b)(6)). A judge in the Southern District of New York granted the motion on standing grounds, and denied the government’s motion to intervene.

The Federal Circuit reversed, reasoning that under Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (2000), the relator could establish standing through the law’s partial assignment of the United States’ damages claims, and need not prove any personal injury in fact. The court rejected the company’s reliance on Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), distinguishing the law in that case because it allowed private individuals to sue the government.

The Federal Circuit declined to address the arguments of an amicus, Ciba Vision Corp., that the patent qui tam violated the Take Care Clause of Article II of the Constitution, because the issue had not been briefed or argued by the parties in the District Court.

Finally, the court agreed with the government that the District Judge had erred in refusing to permit it to intervene. The government’s ability to enforce the law, the court reasoned, would be impaired or impeded by the District Court’s disposition of the case without the government’s intervention.

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