Sale of Unmarked Patented Products Are Damaged Goods (For Purposes of Damages Recovery)

In Arctic Cat Inc. v. Bombardier Recreation, the Fed. Cir. affirmed the district court’s damages limit, even after discontinuing sales of unmarked products, rejecting Appellant’s argument that a finding of willful infringement established actual notice.  Patentee Arctic Cat had licensed Honda under the patent, but the license did not require patent marking.  Licensee Honda sold product without marking and discontinued sales prior to litigation.  Arctic Cat was unable to meet its burden of proof to provide evidence that the sold product was outside of the patent and the sales were viewed as of a patented product. 

The Fed. Cir. ruled that cessation of sales of unmarked patented product does not excuse noncompliance with the §287 notice requirement and that the statute requires either beginning marking or providing actual notice to the alleged infringer to recover damages.  The Fed. Cir. emphasized the policy objectives of the marking statute of 1) helping to avoid innocent infringement; 2) encourage public notice of the patented article; and 3) assist the public in identifying patent articles.  The Fed. Cir. noted that the notice requirement cannot be turned on and off and that unmarked product will remain in the market, frustrating the statutory objectives.  In rejecting Arctic Cat’s argument equating willful infringement with notice, the Fed. Cir. cited their decision in Amstead Indus. Inc. v. Buckeye Steel Castings Co. holding that the notice function must focus on the action of the patentee, not the knowledge or understanding of the infringer.

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