The False Marking Gold Rush: A Case Study of the Private Enforcement of Public Laws

Abstract

Federal law prohibits deceiving the public by falsely marking an item as patented. The “false marking” prohibition has been enforced primarily by private lawsuits on behalf of the United States, with the party plaintiff and the government splitting the penalty. When a court decision dramatically increased the potential recovery for false marking claims, lawyers pounced immediately, filing more cases per week than had previously been filed in years. Indeed, many lawyers who did not previously work on patent cases joined the fray. Within two years, Congress eliminated this type of false marking suit and terminated all pending cases. Using empirical data, interviews with lawyers, legislative history, litigation documents, and news sources, this article tells the instructive history of false marking litigation. This history shows that the supply of private enforcement—lawsuits by private parties to enforce laws in the public interest—is sensitive to market forces. It also shows that, even when concentrated interests encourage Congress to cut back on private enforcement, Congress does not move as quickly as the bar. This matters because once Congress authorizes private enforcement, the maintenance of that system depends on judges and lawyers interpreting private enforcement statutes.