In a precedent setting decision, the Federal Circuit placed strict limits on the time recovery of damages in the absence of either (a) actual notice to the infringer or (b) marking of the patent number on patented articles, under 35 USC § 287(a) Amsted v. Buckeye Steel, 30 USPQ2d 1470 (Fed. Cir. 1994). A petition for rehearing of Amsted was denied. Under Amsted, please be guided by the following:
- Even if the patentee only makes an unpatented component of the patented combination, marking of that component under § 287(a) by the patentee is now required to start the period for recovery of damages.
- Alternatively, if the patentee's customers (even if only in a mere buyer/seller relationship) assemble the unpatented component into the patented combination, they thereby act as an "implied licensee." Accordingly, Amsted now imposes compliance with the marking statute as to them as well, (at least when the manufacturing patent owner has not itself marked the patent number on the products sold to such customers). The Federal Circuit reasoned that the customers sell "by or under" the patent owner. The penalty is inability to collect damages from an infringer.
- Furthermore, an actual notice-of-infringement letter will not be effective under § 287(a) unless its content directly charges the recipient with infringement in a manner sufficient to generate a basis for a declaratory judgment action against the patent owner. (Merely advising of the existence of the patent, and an intention to enforce it, with a warning against making articles under the patent was in Amsted insufficient.)
Note: The court entered this latter holding even though the infringer was found to have actively concealed its infringing acts from the patentee (and even though other cases have insisted on a good faith factual basis for a letter charging infringement).
In Amsted, the infringer, Buckeye Steel, had been found guilty of willful and deliberate copying and contributory infringement of the patent and treble damages were awarded. Both such findings were upheld in this same appeal. The evidence even included letters by Buckeye's own counsel advising that the making of the component would infringe the patent. Nonetheless, because the patent owner Amsted had earlier failed to meet the marking and notice requirements discussed above, Buckeye Steel avoided payment of any damages for at least the four earliest years of infringement of the six year pre-lawsuit period permitted by 35 USC § 286.
The notice and marking requirements under U.S. law are thus extremely important to assuring adequate protection of patented inventions.