Earlier this month, a group of senators led by Democrat Patrick Leahy launched a surreptitious attempt to permit patent lying. Undoubtedly under pressure from their corporate donors, these Senators (Leahy, Sessions, Schumer, Hatch, Kyl and Kaufman, to be exact) proposed overturning a 150-year-old law that allows private citizens to pursue claims against companies that falsely tout unpatented products as patented. The Senators held no hearings and didn't seek any comment from the public. To anyone with knowledge of U.S. patent law, the move is clearly the result of back room dealings with lobbyists completely hidden from public scrutiny. Allowing patent lying not only denies citizens a traditional consumer protection, but it also deprives the federal government of an important source of revenue.
Aren't we Americans sick of such politics? I am. If eviscerating the 150-year-old patent lying statute by eliminating the ability of Americans to protect themselves from corporate dishonesty really makes sense, then the process should be transparent and the proposal should be debated in public, for all to observe. As a step in that direction, I wrote letters to both Senate and House leaders on March 19 warning them of the public harm that would come from the proposed change in the law.
A patent gives its owner the right to exclude anyone else from making, using, or selling the patented thing for a limited period of time. Patents are very powerful; just ask your neighborhood pharmaceutical company. To protect the public from misinformation about patents, section 292 of the Patent Act forbids false markings done "for the purpose of deceiving the public." The law is aimed at companies who intentionally make untrue statements with the hope of deceiving the public, not those who make good faith mistakes. Patent lying is harmful to the public for many reasons. It misleads consumers into thinking the product is better than others, it scares away competitors, and it robs legitimate patentees of the marketplace distinction they deserve.
Imagine you're shopping for dog food and you are faced with the choice between two brands in similar packaging that both claim to be based on a "patented formula." Could you tell that one of them is lying? I couldn't, and I'm a patent attorney. I'd probably go with the cheaper one that is falsely marked because as far as pet owners are concerned the two seem comparable. That's why patent lying is so insidious. It not only dupes consumers, but it deprives the truly innovative product of the respect and customer preference to which it is entitled.
While harmful to society, patent lying isn't the crime of the century, and our Federal prosecutors are better tasked with fighting terrorism, drug dealers and child pornographers. Recognizing this, section 292 empowers individual citizens to act on behalf of the government in pursuing patent liars. This concept of allowing private citizens to pursue crimes on behalf of the government isn't new. It's called "qui tam" and dates back to England and the days of kings (qui tam in fact means "in the name of the king"). In return for pursuing patent liars, individuals get to keep half of whatever fine a court ultimately imposes for the offense. The other half of the fine goes directly into the federal government's bank account to fund any program it wants, from social security and healthcare to homeland security and national defense. This is free money to the government, as no tax dollars pay for any of the work done to bring the patent liar to justice.
Patent liars argue this will "encourage 'a new cottage industry' of false marking litigation," but the Court of Appeals for the Federal Circuit (the highest court in the country for patent cases other than the Supreme Court) has stated that such "is what the clear language of the statute allows." Indeed, no one forces companies to lie about their products being patented. They do so on their own accord and, thus, when they are caught and brought to justice, they have no one to blame but themselves. And, the amount of fine imposed on them is determined by Federal District Court judges, all of whom were nominated by a President and approved by the Senate. We don't need to worry about these judges awarding unreasonably high amounts. If we can trust the judiciary to render criminal sentences of life in jail, we can trust them to arrive at appropriate penalties for patent lying. But the patent liars don't want to have to pay anything, so when the courts reject their attempts to avoid liability for lying to the public, they turn to Congress for an escape.
Without the cloak of behind-the-scenes corporate influence, it becomes immediately apparent that there is no rational explanation for the Senators' sudden rush to overturn a law that has been part of our country for over 150 years and whose only impact will be to help rid our marketplace of intentionally deceptive false statements. To be sure, deceptive commercial practices have been forbidden since the time Leviticus 25:14 was written (see, Babylonian Talmud, Tractate Bava Metzia, 60a), so there is no "moral" reason to protect patent liars, especially when they made their lies with the intent to deceive the public.
I decry this act of inside politics, especially when it seeks to let patent liars off the hook. The American people deserve better from their elected representatives. They deserve to be protected from lying corporations, not have lying corporations protected from them.
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In other words, I agree with the intent of the statute to punish intentiona