Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Morris Turek v. Merck & Co.

June 20, 2011


The opinion of the court was delivered by: Reagan, District Judge:


A. Factual and Procedural Background

Morris Turek, who resides in St. Louis, Missouri, brings this qui tam action for false patent marking pursuant to 35 U.S.C. §292. Merck & Co., Inc., is a New Jersey corporation with its principal place of business in Whitehouse Station, New Jersey, and Schering-Plough Healthcare Products, Inc., is a Delaware corporation with its principal place of business in Memphis, Tennessee. The Court exercises subject matter jurisdiction under 28 U.S.C. § 1331 a federal question statute and 28 U.S.C. § 1338(a) a trademark statutes.

Turek alleges that Merck falsely marked products with expired patents in violation of 35 U.S.C. § 292(b). (Doc. 2 ¶ 14). Specifically, Turek alleges that Merck marked Dr. Scholl's For Her: Cracked Skin Repair Cream products (Skin Repair Cream) with expired U.S. Patent No. 4,760,096 (096 Patent) (Doc. 2 ¶16). Turek alleges that Defendants are sophisticated business entities that hold numerous patents and have an in-house legal department that routinely monitors Defendants' patent rights. (Doc. 2 ¶¶ 12-14). Turek further alleges that Defendants have marked and continue to mark their Skin Repair Cream for the purpose of deceiving the public into believing that Defendants' products are covered by the 096 patent and to discourage competition and innovation in competing products. (Doc. 2 ¶¶ 21, 24). Turek seeks injunctive relief, a civil monetary fine of $500 per false marking offense - one-half of which would be paid to the United States -- plus attorneys' fees and costs.

Defendants move to dismiss this action under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted and 12(b)(1) for lack of subject matter jurisdiction (Doc. 16). Defendants attack the sufficiency of the pleadings under Rule 9(b) and the constitutionality of 35 U.S.C. § 292. In the alternative, Defendants ask the Court to stay this action until the Federal Circuit issues its decision on the constitutionality of § 292(b) in the currently pending appeal, FLFMC, LLC v. Wham-O Inc., Appeal No. 2011-1067. By separate motion, Defendants seek to transfer venue to the District of New Jersey, pursuant to 28 U.S.C. § 1404, asserting that New Jersey is a more convenient forum (Doc. 17).

B. Discussion

The false marking statute provides, in relevant part

1. Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word "patent" or any word or number importing that the same is patented for the purpose of deceiving the public;. *s薩 be fined not more than $500 for every such offense.

2. Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.

35 U.S.C. §292. "*A qui tam plaintiff, or relator, can establish standing based on the United States' implicit partial assignment of its damages claim,. to 'any person,'.. In other words, even though a relator may suffer no injury himself, a qui tam provision operates as a statutory assignment of the United States' rights, and 'the assignee of a claim has standing to assert the injury in fact suffered by the assignor.'" Stauffer v. Brooks Brothers, Inc., 619 F.3d 1321, 1325 (Fed. Cir. 2010) (citing Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 773 (2000) (internal citations omitted)). It follows that a violation of the statute inherently constitutes an injury to the United States, and, therefore, so long as a relator alleges a violation of the statute then the relator has standing to pursue the claim as the United States' implicit assignee. Id. at 1324-25.

In the Stauffercase, the Federal Circuit reversed the district court's decision, concluding that the plaintiff did not have standing, and remanded the case to the district court to address the merits of the case. Id. at 1328. The district court was directed to consider the defendant's motion to dismiss pursuant to Rule 12(b)(6) "'on the grounds that the complaint fails to state a plausible claim to relief because it fails to allege an 'intent to deceive' the public - a critical element of a section 292 claim - with sufficient specificity to meet the heightened pleading requirements for claims of fraud imposed by' Rule 9(b)." Id. (quoting Stauffer v. Brooks Bros., Inc., 615 F.Supp.2d 248, 251 n.1 (S.D.N.Y. 2009)).

After Stauffer was decided, the Federal Circuit specifically held "that Rule 9(b)'s particularity requirement applies to false marking claims brought under § 292 and that a complaint alleging false marking is insufficient when it only asserts conclusory allegations that a defendant is a 'sophisticated company' and 'knew or should have known'" that the patent expired. In re BP Lubricants, 637 F.3d 1307, 1309 (Fed. Cir. 2011).

Although knowledge and intent may be averred generally, and a plaintiff may plead upon information and belief, in a false marking case, the complaint must contain sufficient underlying facts from which a court may reasonably infer that the defendant acted with the requisite state of mind - intent to deceive the public - to satisfy Rule 9(b). Id. at 1311 (citing Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 (Fed. Cir. 2009)). To allege the requisite intent to deceive in the § 292 context, the complaint must provide "some objective indication to reasonably infer that the defendant was aware that the patent expired." Id. (citing Clontech Labs, Inc. v. Invitrogen Corp., 406 F.3d 1347, 1352 (Fed. Cir. 2005) (proof that the party making a misrepresentation had knowledge of its falsity "is enough to warrant drawing the inference that there was fraudulent intent")).

In Pequignot v. Solo Cup Co., 608 F.3d 1356 (Fed. Cir. 2010), the Federal Circuit stated that "*i order to be liable for false marking, inter alia, a party must mark an 'unpatented article.'" 608 F.3d at 1361 (citing 35 U.S.C. § 292(a)). The court reasoned that an article covered by an expired patent is "unpatented." Id.The court concluded that "the combination of a false statement and knowledge that the statement was false creates a rebuttable presumption of intent to deceive the public, rather than irrebuttably proving such intent." ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.