Tuesday, March 15, 2011

Federal Circuit Issues Writ of Mandamus in In Re BP Lubricants

Applies Heightened Pleading Requirements
to False Marking Cases

The Federal Circuit issued an Opinion and Order in In Re BP Lubricants USA Inc. today ( Misc. Docket No. 960) granting in part BP Lubricant’s petition for a writ of mandamus.

The issue before the Court was whether the district court properly denied BP’s motion to dismiss a false marking case where the allegations of intent to deceive were no more than general statements that BP "new or should have known" about its patents having expired.  BP argued that a complaint alleging false marking must satisfy the heightened pleading requirement of Fed. R. Civ. P. 9(b) as interpreted by the Federal Circuit in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009).

Recognizing that the case presented a question of first impression, and that district courts have been split on the issue, the Federal Circuit granted review and issued a writ of mandamus. The Court agreed with BP that false marking cases must be plead with particularity under Rule 9(b) and that “Excergen’s pleading requirements apply to all claims under Rule 9(b), not just inequitable conduct cases.” Opinion at 7. In those cases where false marking allegations are based on an expired patent, “a complaint must in the § 292 context provide some objective indication to reasonably infer that the defendant was aware that the patent expired.” A statement that the patent owner “knew or should have known that the patent expired” is not sufficient.

The plaintiff in BP Lubricant’s will be given leave to amend its complaint. It remains to be seen, however, whether the plaintiff will be able to meet the heightened pleading requirement it now faces.

The guidance provided by the Federal Circuit in In re BP Lubricants significantly raises the bar for pleading alleged violations under § 292 and should provide defendants facing these claims with a more solid foundation on which to base a motion to dismiss.