A patent refers to the monopolistic rights granted to the proprietor of an invention by the government. It is a legal right protecting the inventor of an invention, to prevent others from copying and reproducing such inventions. The Patents Act, 1970 (hereinafter referred to as “the Act”) amended by the Patents (Amendment) Act, 2005 and the Patents Act Rules, 2006 are the statutes which govern patent law in India.
The Office of Controller General of Patents, Trade Marks and Design (hereinafter referred to as “CGPDTM”) is responsible for the grant of patents and overall administration of patent system in India. In exchange of disclosure of details of the invention, the CGPDTM grants patent rights over such inventions to the proprietor of the invention subject to the invention meeting the criteria as specified in the Act.
CONCEPT OF PATENT MARKING
A patent enables the proprietor of the invention to protect its individual work and ideas from reproduction without prior permission or license. It is to encourage inventors to research and develop innovative inventions, which would be beneficial for the society. This is done by granting inventors exclusive rights to benefit from their invention for a limited period of time. Additionally, patents also provide “public notice” regarding the patented invention, prohibiting other competitors from reproducing patented inventions.
As such, patent marking has emerged as a concrete method to communicate the existence of patent over a particular product. This comes at a time when new innovation is constantly growing leading to increased number of patented products in the market. It has become impractical to ensure communication and publicity of every single patent through publication alone. Resultantly, proprietors throughout the world are marking the patented products to serve a “public notice” to consumers and competitors.
Patent marking refers to marking the patented products as patented, stating the details of the patent granted on the product or directing to a website link for the same. It serves as a legal notice to an infringer, informing competitors to not indulge in innocent infringement. Further, the proprietor can sue an infringer for enhanced damages in a patent infringement suit on the basis of patent marking serving prior notice to the infringer.
Nonetheless, the proprietor should ensure that accurate information regarding the patent is provided on such marking, as false marking with mala fide intent can be liable for punishment. Therefore, proprietors of invention should ensure effective patent marking on products to caution infringers and at the same time not indulge in false marking.
PATENT MARKING LAW UNDER INDIAN PATENTS ACT, 1970
The Act does not mandate patent marking of patented products. However, appropriate patent marking is encouraged so as to protect the rights of proprietors over their invention. Section 30 of the Indian Patents and Designs Act, 1911 protected the innocent infringers from liability for damages where the product was marked only as “patent” or “patented”. The 1970 Act was in conformity with this view in Section 111 of the Act.
Section 111(1) of the Act provides relief for a defendant from liability for damages, if the defendant is able to prove that at the date of infringement he was unaware of the patent and had no reasonable grounds for believing that the patent existed. Therefore, the intent of the legislature is to protect the rights of innocent infringers.
The explanation appended to this Section makes it clear that mere mention of the word “patent”, “patented” or any word expressing or implying a patent obtained on the article cannot be deemed to have made a person aware or give reasonable grounds for believing that a patent existed. The burden of proof lies on the defendant to prove that he was not aware of the existence of such a patent.However, the burden of proof shifts to the patentee when the Defendant shows that the article in question was not marked with appropriate patent number and that he was not informed of the existing patent through any notice.
The explanation to Section 111(1) provides condition for patent marking to be held valid in law, which states “unless the number of the patent accompanies the word or words in question.” Hence, for patent marking to be considered appropriate public notice, the marking should mention either “patent”, “patented” or any term or word expressing or implying the existence of a patent obtained for the article along with the number of the patent, assigned by CGPDTM.
Such patent marking shall have the effect of making a person aware or giving reasonable grounds to believe that the patent exists. Thereby, this Section enables proprietors to sue infringers for damages when their products are marked appropriately for existence of patent, mentioning patent number.
Thus, it can be concluded that for a valid patent marking to serve as constructive notice to public, it should:
1. Contain words “patent”, “patented” or any term indicating the existence of patent;
2. These words are to be accompanied with the patent number granted by Patents Office;
3. The patent should be active. Words/terms indicating that a patent application is pending for the product would suffice in case of pending patent applications.
VIRTUAL PATENT MARKING
Patent marking has become a crucial necessity to protect patented articles from infringement. However, with current and upcoming technology, most products consist of more than one patent. Moreover, the list of patents would increase when pending inventions are granted patents. Traditional patent marking is subject to several drawbacks, such as the cost of producing new packaging material, inventory, etc., when an additional patent is to be listed, a new patent is granted or an old one expires.
Due to the cumbersome task of regularly updating patent marking on articles, many patentees have shifted to virtual patent marking, which is an efficient and practical substitute to physical patent marking.
Various international jurisdictions have recognized virtual patent marking as a legally recognised manner of patent marking, including the United States and United Kingdom.
Virtual marking of patented products is done through an internet link or URL placed on the product to direct the users and competitors to an online webpage mentioning all the patents, whether active or newly issued. It enables patentees to update patents as and when they are granted or expired, without having to spend additionally on new packaging material.
The Act, however, does not provide for virtual patent marking. The only requirement for patent marking to serve as a constructive notice is that the patent marking should be accompanied with the patent number. Therefore, virtual patent marking may not serve to fulfil the requirement under Section 111(1) of mandatorily mentioning the patent number for it to serve as a constructive notice. The said provision can be interpreted such that for more than one patents over an article, the patent number of a single patent can be mentioned along with the website link directing to details of other patents on that article.
The legislative intent of Section 111(1) is to reduce the liability incurred by innocent infringer. The explanation to the section provides for appropriate notice to be served to infringers regarding the existence of patent.
Through virtual patent marking, both customers and competitors are given adequate information about the patents which can be said to fulfil the intent of the legislature. However, this concept is yet to be backed by Indian jurisprudence.
False marking of patents is a punishable offence under Section 120 of the Act. It provides that when a person represents that an article sold by him is patented in India or has a pending patent application in India, he shall be punishable with a fine, which may extend up to Rs 1 Lakh.
The explanation appended to the Section makes it clear that a person shall be deemed to represent:
1. That an article is patented in India, if the words “patent”, “patented” or some other word indicating that a patent is obtained for the article in India is mentioned on the article.
2. That an article is subject to pending patent application in India, if the words “patent pending”, “patent applied for” or some words indicating that the article is subject to a pending patent application is mentioned on the article.
Therefore, this Section imposes criminal liability on the act of marking a patent falsely and inaccurately, including marking of expired patents.
Intention of the seller to deceive the public is not required, the mere representation of a mark falsely indicating the existence of a patent or pending patent application is sufficient to attract criminal liability. Further, the person shall be liable for punishment under this Section only when the article containing false mark is sold by him and not prior to selling.
Hence, it provides room for innocent sellers to withdraw false patent marking from the products before selling to avoid criminal liability.
Patent marking is a legally recognized concept in both the United States of America and the United Kingdom.
1. United States of America
In the USA, the 35 U.S.C. § 287 provides for patent marking provisions. Although not mandatory, patent marking is legally recognized as notice of infringement, along with sending actual notice to the infringer or filing suit against infringement. Patent marking is regarded as notice to the public at large, or notice in rem.
Under the statute, for a mark to be valid it should mention terms “patent” or “pat.” along with the patent number.
Further, the Leahy-Smith America Invents Act, 2011 permits virtual marking of patent article as a practical method to mark patents non-traditionally. Accordingly, the patent marking has to be done by mentioning the word “patent” or “pat.” Along with the website link or URL directing to the patent information.
The US statute also provides for false marking under 35 U.S.C. § 292, which prohibits mismarking of patents. Under the US laws, false marking comprises of counterfeiting existing marks, false patent marking of unpatented article, marking articles as “patent pending” for which no patent application has been made.
However, for a person to be liable for false marking, the marking to an unpatented article should be done with an intent to deceive the public. A fine of not more than $500 for every offense is to be imposed under the US statute.
2. United Kingdom
Under the Patents Act, 1977 of the UK, patent marking is not a mandatory requirement but acts as a means to discourage infringers and enables the patentee to seek higher damages for infringement. Section 62(1) of the UK Act requires that an article be marked with the details of patent, mentioning the word “patent” or “patented” along with patent number(s). The infringer of such a product cannot avoid damages on the ground that they were unaware or did not have reasonable grounds to believe that the patent existed, similar to the Indian provisions.
Further, the UK Patent Law was amended in 2014 to enable patentees to mark their articles through virtual marking, by appending the website link or URL to the webpage containing details of the patent article along with the words “patent” or “patented”. The UK Intellectual Property Office has issued guidance to be followed regarding the webpage to be used for virtual patent marking.
Section 110 and 111 of the Patents Act, 1977 imposes summary conviction and fine on improper marking of patents, either by falsely representing that an article is patented, or representing that an article has been applied for patent where no application has been made or the application is refused or withdrawn.
Through a catena of judgments, the US Courts have recognized and interpreted the patent marking statutes.
In the Arctic Cat Inc. v. Bombardier Recreational Products Inc., No. 2017-1475 (Fed. Cir. Dec. 7, 2017), Arctic Cat had licensed patents to Honda concerning personal watercraft (PWC) steering systems. The License Agreement did not require Honda to mark the licenses patents, and Arctic Cat did not make any efforts to ensure that Honda marked the patents over its PWCs. Later, Bombardier infringed two of these patents licensed to Honda and Arctic Cat sued for the same. The jury found that both patents were infringed and therefore Arctic was to be awarded reasonable royalty from October 2008, prior to when Bombardier received actual notice of infringement.
On an appeal, the Federal Circuit referred to the established position of patent owner to prove that unmarked products are not covered by patents. The panel noted that the infringer has the burden to produce the products that are covered by patents and which are unmarked. Such a burden was only regarding production and not proof. Pursuant thereof, the burden shifts to the patentee to prove that the identified products are properly marked or are not patented.
Thus, the Court observed that Bombardier had met its burden to identify the unmarked Honda PWCs along with the license agreement between Honda and Arctic Cat. The Panel directed on remand that for Arctic Cat to be entitled to pre-notice damages, it must establish that the identified Honda PWCs were not patented, and thus did not require license from Arctic Cat. Therefore, the Federal Circuit emphasized the need to appropriately mark patent for its own products and for those of its licensees.
In July 2020, the Court of Appeals for the Federal Circuit in Packet Intelligence LLC v. NetScout Sys., Inc., No 19-2041 (July 14, 2020) set aside the verdict of the jury that awarded pre-suit damages on the ground that licensees did not properly mark the patent practicing products.
The Court of Appeals relied on the judgment in Arctic Cat and concluded that Packet Intelligence LLC did not satisfy the burden of proof that an unmarked product manufactured by the licensee was not a patent practicing product. The Court held that the patentee cannot circumvent the requirement under 35 U.S.C. § 287 to claim royalty over unmarked patent practicing products.
In the American Medical Systems v. Medical Engineering Corp., 6 F.3d 1523 (1993), the Federal Circuit held that the patent marking statute was structured to “tie failure to mark with disability to collect damages, as opposed to failure to mark at the time of issuance with the disability to collect damages.”
In Amsted v. Buckeye, 24 F.3s 178 (Fed. Cir. 1994) the patentee claimed damages for infringement of patent, wherein they sold components and the licensee assembled and sold the patented combination. The patentee argued that the failure to mark patent did not affect patentee’s claim for damages.
The Court held that Amsted should have used the words “for use under Patent _______” on the components, or instruct the licensees to mark the patent on the assembled combination, which was not done by Amsted.
Therefore, the Court did not allow Amsted to claim damages from the date of infringement, but allowed to claim from the date of issuing notice of infringement.
Currently, the Indian Patent laws do not expressly recognize patent marking as a means to protect the rights of the patent holder. The Act only seeks to reduce the liability incurred by infringers, such that a patent holder cannot claim to have given notice to the infringer by only mentioning the words “patent” or “patented” on the article.
The need of the hour is for Indian laws to recognize patent marking to serve as constructive notice to infringers, allowing patent holders to sue on the basis of such notice. Further, the law should also provide for virtual patent marking. The Act needs to be amended accordingly to include marking done through internet links which redirect to website containing information about the patents.
The issue of false patent marking also needs to be addressed adequately. The current law only provides punishment of fine up to Rs 1 Lakh and identifies marking which amounts to false patent marking.
The existing law also needs to address the use of an existing patent number for false patent marking, as it affects the rights of the original patent holder. The judiciary should attempt to determine the harm caused to the patent holder due the actionable false marking, in terms of plaintiff’s loss or defendant’s gains as a result of such false marking.
Patent marking is considered to be one of the most efficient means to serve notice to infringers and the public at large, making them aware of the existence of patent. While patent marking is recognized at large by international jurisdictions, Indian legislature is far behind as it has recognized patent marking only for the purpose of reducing the infringer’s liability.
Additionally, Indian legislation does not provide for virtual patent marking at all and is still in the nascent stage and is considered as a new concept in India. Virtual patent marking has, in various other countries, proved to be an effective means to mark ever-changing patents on the product using a website link. The Indian Act recognizes false or incorrect patent marking as an offence, which can cause the person making such representations liable for fine.
The legislation relating to patent marking in India exists with the intention to reduce the liability incurred by the infringer. Patent holders should make use of this provision to their benefit, for proving that appropriate notice has been served through patent marking to claim higher damages. This would in turn lead to judicial pronouncements concerning patent marking in India, which would enhance the patent marking laws in India.
Therefore, there is a pressing need to actively legislate and bring about judicial reforms in the concept of patent marking in India.
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