Toy Companies Encouraged to Review Product Patents as “Ambulance Chasing” Escalates
The Toy Industry Association (www.toyassociation.org) reports a long-standing law against false patent marking is seeing new life as a rash of federal lawsuits have been filed against companies accused of marking their products with expired patents.
Since the Court of Appeals for the Federal Circuit ruled last December that companies with expired patents could be held responsible for up to $500 per offense, “ambulance chasing” individuals and organizations in search of a new revenue stream have been aggressively searching for items bearing expired patents and, upon finding them on store shelves or websites, filing suit.
Because the law is similar in structure to whistleblower laws, anyone may file a claim on behalf of the government and split with the government any fines awarded from the suit. And because the definition of “per offense” could be interpreted as “each unit sold,” the potential damage is significant.
“Every toy company with a patent is urged to review its product packaging, labeling and markings, as well as their advertising and websites to ensure that no expired patent numbers are referenced,” says M. Barry Levy, a partner with Sharretts, Paley, Carter & Blauvelt, P.C., outside counsel to TIA on trade-related issues.
