As a follow-on to our previous blog entry on the recent surge in the number of false marking lawsuits being filed, on March 15, 2011, the Federal Circuit in In Re BP Lubricants USA Inc., Misc. Doc. No. 960 (C.A.F.C., March 15, 2011) granted a petition for a writ of mandamus directing the United States District Court for the Northern District of Illinois to grant a motion to dismiss a complaint pursuant to the False Marking Statute, 35 U.S.C. § 292.  In granting this petition, the Federal Circuit held as a matter of first impression that the complaint did not meet Fed. R. Civ. P. Rule 9(b)’s particularity requirement.

In the complaint, Thomas Simonian, a patent attorney, had alleged that BP Lubricants USA Inc. (BP) continued to falsely mark certain CASTROL® branded bottles with design patent number D314,509 after the design patent covering the bottles had expired.  Simonian claimed that: “(1) BP knew or should have known that the patent expired; (2) BP is a sophisticated company and has experience applying for, obtaining, and litigating patents; and (3) BP marked the CASTROL products with the patent numbers for the purpose of deceiving the public and its competitors into believing that something contained or embodied in the products is covered or protected by the expired patent.”

Below are images of the design patent-in-suit and the allegedly falsely marked bottles.

Relying on Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 (Fed. Cir. 2009), the district court had found that the complaint met the requirements of Fed. R. Civ. P. 9(b), which provides:

In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.

“The [district] court explained that in addition to alleging that BP knew or should have known the patent expired, it was enough under Rule 9(b) for the relator to allege that BP (the "who") had deliberately and falsely marked (the "how") at least one line of its motor oil products (the "what") with an expired patent and continues to falsely mark its products (the "when") throughout the Northern District of Illinois and the rest of the United States (the "where") with the intent to deceive its competitors and the public.”

In granting the petition, the Federal Circuit cited its power under the All Writs Act, 28 U.S.C. § 1651(a) to issue a writ of mandamus ‘as “necessary or appropriate in aid of our jurisdiction.”’ Mississippi Chem. Corp. v. Swift Agr. Chem., 717 F.2d 1374, 1379 (Fed. Cir. 1983), and held that similar to claims under the False Claims Act, ‘Rule 9(b)’s particularity requirement applies to false marking claims and that a complaint alleging false marking is insufficient when it only asserts conclusory allegations that a defendant is a “sophisticated company” and “knew or should have known” that the patent expired.’  The Federal Circuit further determined that Rule 9(b) “acts as a safety valve to assure that only viable claims alleging fraud or mistake are allowed to proceed to discovery” and “prevents relators using discovery as a fishing expedition.”

Accordingly, the Federal Circuit granted the petition for a writ of mandamus directing the United States District Court for the Northern District of Illinois to grant BP’s motion to dismiss Simonian’s complaint with leave to amend pursuant to the pleading requirements described in the opinion.

The full text of the case can be found here.