That was the title of the talk I gave Friday at a panel on food and product labeling law as part of a stimulating symposium put on by the Vermont Law Review at Vermont Law School in South Royalton, Vt. I drew on a number of different sources, but especially two relatively recent articles: Omri Ben-Shahar and Curt Schneider, “The Failure of Mandated Disclosure,” U. Penn. Law Review (2011), and Kesten C. Green and J. Scott Armstrong, “Evidence on the Effects of Mandatory Disclaimers in Advertising”, Journal of Public Policy and Marketing, Fall 2012. I was able to bring in examples ranging from patent marking law to Prop 65 in California to pharmaceutical patient package inserts, as well as the durable phenomenon of labels, disclosures, and disclaimers going unread even by very sophisticated consumers.
My talk was well received, and I think I might adapt and expand it in future into a full-length speech for audiences on failures of consumer protection law.
Congratulations to lawmakers for wisely terminating this unfair and destructive line of patent litigation — even if, as I explain at Cato, the result was to moot the case in which I’d filed my first amicus brief. More here, etc.
I’m quoted in this report by Sheri Qualters in the National Law Journal:
The false-marking statute “tempts people to become roving bounty hunters filing suits which at least the targets often see as shakedowns for money,” Olson said.
Last month, in a case called Unique Product Solutions v. Hy-Grade Valve Inc., a different federal court (in the Northern District of Ohio) found the statute unconstitutional on the grounds that it violates the Constitution’s “Take Care” clause, the same argument I and the Cato Institute advance in our recent amicus brief.
Along with the Cato Institute’s Center for Constitutional Studies, I’ve filed an amicus brief (a first for me) urging the U.S. Court of Appeals for the Federal Circuit to recognize the constitutional flaws in the federal “false marking” statute, which empowers private parties to sue over inaccurate (in practice, mostly expired) patent markings on products and collect fines of a generally criminal/punitive as opposed to civil/compensatory nature. Here’s our argument in a nutshell, from the Cato website:
[click to continue…]
The maker of a 1950s-vintage kids’ toy is the latest target as the false-marking lawsuit wave continues [Pittsburgh Tribune-Review]
Now it’s caught up with Apple. Earlier here, here, here, etc. More: video from Washington Legal Foundation.
Justin Gray, Gray on Claims:
If the comprehensive patent reform amendment announced today is passed, qui tam plaintiffs who have been hunting for expired patent numbers to bring false marking suits will be out of luck. Only “competitive[ly] injure[d]” parties will be able to sue for false marking. The Senate bill, if enacted, would have sweeping retroactive effect even for still-pending but earlier-filed actions.
Earlier on false marking suits here, here, etc.
Per Joe Mullin, many of the plaintiffs appear to be attorneys. [Justin Gray, Gray on Claims; earlier here and here] [Corrected Wed. evening: Mullin says in email he initially overestimated the number of suits filed directly on attorneys' behalf.]
In June we reported on a boomlet in freelance lawsuits accusing companies of marking their products with outdated patent numbers or with other violations of a federal statute that prohibits the use of false or misleading patent marks on products. On December 28 the Federal Circuit issued a decision that may greatly stimulate the activities of what are already being called “marking trolls”. It holds that courts have discretion to impose the law’s $500 penalty per mislabeled item sold, which means that total penalties might rise to gigantic levels; lawyers who bring the cases then split the proceeds with the federal government in qui tam fashion. Coverage: George Best and Jeffrey Simmons/Foley & Lardner, Robert Matthews, Jr., Patently-O, Rebecca Tushnet and more, Patent Prospector.
Annals of bounty-hunting: “A recent ruling on an obscure, century-old statute has opened the door for people familiar with the finer points of patent law to sue companies that stamp their products with expired patent numbers.” Washington, D.C. patent attorney Matthew Pequignot “noticed the patent marks on the lid to his daily cup of coffee, did some research and found that the lid’s maker, Solo Cup Co., was continuing to claim patent protections for disposable lids that had expired nearly 20 years ago.” So he’s sued Solo and E.D. Va. federal judge Leonie Brinkema has allowed his case to go forward, ruling that the requisite harm to the government is satisfied because the government’s laws against “false markings” were violated. (A federal judge in New York, however, ruled differently on the harm-to-government issue in a recent case with similar facts.) Pequignot has offered to settle the Solo suit for $9 million and has sued Gillette on similar theories; the bounty-hunting law allows claimants to keep half of the recovery.
Pequignot, for his part, says he does not expect an avalanche of false markings lawsuits, despite the fact that [attorney Raymond] Stauffer and some others have already followed in his footsteps. He said that, even as a patent attorney, it took him many hours of research to be able to file his lawsuit.
[AP/Fort Wayne Journal Gazette via ABA Journal; Sheri Qualters, NLJ]