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Thomas A. Simonian v. Bp Lubricants Usa Inc

September 9, 2011

THOMAS A. SIMONIAN, PLAINTIFF,
v.
BP LUBRICANTS USA INC., DEFENDANT.



The opinion of the court was delivered by: Judge Feinerman

MEMORANDUM OPINION AND ORDER

Relator Thomas Simonian brought this qui tam action on behalf of the United States, alleging that BP Lubricants USA Inc. engaged in false patent marking in violation of 35 U.S.C. § 292. In August 2010, the court denied BP Lubricants' Rule 12(b)(6) motion to dismiss Simonian's initial complaint. Doc. 31. BP Lubricants sought and obtained a writ of mandamus from the Federal Circuit, which directed this court to dismiss Simonian's complaint with leave to amend. In re BP Lubricants USA Inc., 637 F.3d 1307 (Fed. Cir. 2011). Simonian filed an amended complaint, and BP Lubricants again moved to dismiss. Because the amended complaint does not satisfy the standard set forth by the Federal Circuit for pleading false patent marking claims, the motion is granted and the case is dismissed.

Background

The well-pleaded facts alleged in the amended complaint (Doc. 53) are assumed true on a Rule 12(b)(6) motion. See Reger Dev., LLC v. Nat'l City Bank, 592 F.3d 759, 763 (7th Cir. 2010). Also pertinent at the Rule 12(b)(6) stage are exhibits attached to the amended complaint, see Fed. R. Civ. P. 10(c); Witzke v. Femal, 376 F.3d 744, 749 (7th Cir. 2004), and documents attached to BP's dismissal papers that are "referred to" in the complaint and "central to [Simonian's] claim," Wright v. Associated Ins. Cos. Inc., 29 F.3d 1244, 1248 (7th Cir. 1994). See Hecker v. Deere & Co., 556 F.3d 575, 582 (7th Cir. 2009). To the extent an exhibit contradicts the complaint's allegations, the exhibit takes precedence. See Forrest v. Universal Sav. Bank, F.A., 507 F.3d 540, 542 (7th Cir. 2007).

The facts are set forth as favorably to Simonian as permitted by the amended complaint and the relevant exhibits. United States Patent Number D314,509 ("the '509 Patent") was issued to Castrol Limited on February 12, 1991, with a fourteen-year term ending February 12, 2005. The patent covered the ornamental (non-functional) design of a bottle used for CASTROL-brand lubrication products. After BP Lubricants' parent acquired Castrol Limited in July 2000, BP Lubricants manufactured and sold CASTROL GTX products. Although both BP Lubricants and Castrol Limited were part of the BP Group, because Castrol Limited continued to own the '509 Patent, BP Lubricants and Castrol Limited executed a license agreement allowing BP to use the patent's bottle design. Docs. 58-5, 62, 62-1 through 62-6. The agreement (there actually were two agreements, but for ease of reference they will be considered as one) covered not just the '509 Patent, but dozens of other Castrol Limited designs, patents, trademarks, and products. The agreement did not reference the '509 Patent's term or expiration date.

After executing the agreement, BP Lubricants began to mark the labels of CASTROL GTX products with the '509 Patent, signifying that a valid patent protected something contained in or embodied by the bottle. BP Lubricants continued to do so even after the '509 Patent expired in February 12, 2005. Between that date and February 2010, when Simonian filed this lawsuit, BP Lubricants revised the CASTROL GTX label at least three times. The '509 Patent marking remained on the label after each revision, which gave BP Lubricants a commercial advantage, dissuading competitors from using similar bottle designs and encouraging consumers to purchase CASTROL GTX for its patented qualities. Although the agreement did not reference the '509 Patent's expiration date, all BP Lubricants employees had electronic access on the BP intranet to full versions of every patent document and patent application assigned to companies within the BP Group.

Simonian alleges that BP Lubricants engaged in false patent marking by placing the expired '509 Patent on CASTROL GTX bottles after February 12, 2005. He seeks a declaration that BP Lubricants engaged in false patent marking in violation of 35 U.S.C. § 292; an award of $500 per false marking, half of which would be paid to the United States; an accounting for any falsely-marked products not yet identified; and costs and attorney fees.

Discussion

The false marking statute provides in relevant part:

(a) 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]hall be fined not more than $500 for every such offense.

(b) 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. Claims under § 292 must satisfy the particularity requirements of Federal Rule of Civil Procedure 9(b). See BP Lubricants, 637 F.3d at 1310-11. Rule 9(b) provides: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). Although Rule 9(b) allows a plaintiff to allege knowledge and intent generally or to plead upon information and belief, the complaint nevertheless must "'allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind.'" BP Lubricants, 637 F.3d at 1311 (quoting Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 (Fed. Cir. 2009)).

As applied in false marking suits, Rule 9(b) requires the relator to allege that the defendant marked an unpatented item as patented with the intent to deceive the public. See Pequignot v. Solo Cup Co., 608 F.3d 1356, 1361-62 (Fed. Cir. 2010); Forest Grp., Inc v. Bon Tool Co., 590 F.3d 1295, 1300 (Fed. Cir. 2009). Settled law holds that "the combination of a false statement and knowledge that the statement was false creates a rebuttable presumption of intent to deceive the public." Pequignot, 608 F.3d at 1362-63. Accordingly, to properly allege deceptive intent, a complaint must "provide some objective indication to reasonably infer that the defendant was aware that the patent expired" yet continued to mark the patent on its products. BP Lubricants, 637 F.3d at 1311. The Federal Circuit identified two non-exclusive examples that would satisfy this requirement: "[A] relator can, for example, allege that the defendant sued a third party for infringement of the patent after the patent expired or made multiple revisions of the marking after expiration." Id. at 1312.

Simonian contends that four allegations in the amended complaint provided an "objective indication to reasonably infer" that BP Lubricants was aware that the '509 Patent ...


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