Hollander v. Ortho-McNeil-Janssen Pharmaceuticals, Inc. — District Court Dismisses False Patent Marking Complaint Under Rule 9(b)

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

In Hollander v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., No. 2:10-cv-00836-RB, 2010 U.S. Dist. LEXIS 113005 (E.D. Pa. Oct. 21, 2010) (opinion by J. Buckwalter), Plaintiff sued Defendant for falsely marking 39 prescription drug products with expired patent numbers. Judge Buckwalter denied Defendant’s motion challenging Plaintiff’s standing to bring suit, but granted defendant’s motion to dismiss for failure to meet the heightened pleading standards of Fed. R. Civ. P. 9(b).

Defendant initially challenged Plaintiff’s standing to bring suit, arguing that Plaintiff suffered no concrete injury himself.  Citing the recent Federal Circuit decision in Stauffer v. Brooks Brothers, Nos. CIV.A 2009-1428, 2009-1430, 2009-1453, 2010 U.S. App. LEXIS 18144, 2010 WL 3397419 (Fed. Cir. Aug. 31, 2010), the court rejected Defendant’s argument.  The Federal Circuit held in Stauffer that any person has standing to bring claims under 35 U.S.C. § 292, because this is a qui tam statute, and the plaintiff acts as the assignee of the government.

Moving to Defendant’s Rule 9(b) challenge, the court stated that under 35 U.S.C. § 292, a plaintiff must show “(1) a marking importing that the article is patented (2) falsely affixed to (3) an unpatented article (4) with the intent to deceive the public.”  Courts in the Third Circuit have found that intent to deceive element of § 292 claims must meet the heightened pleading standard of Rule 9(b).

Plaintiff relied on boilerplate allegations based “on information and belief” that Defendant knowingly violated § 292(a) by falsely marking its products with expired patent numbers with the intent to deceive the public.  Plaintiff supported this allegation by claiming that Defendant was a “highly sophisticated business entity” with “extensive experience with the application for, procurement of, and publication of its patents.”  The court found these allegations insufficient under Rule 9(b) because Plaintiff offered no factual support for his allegations that Defendant knew it had falsely marked its product or that it intended to deceive the public.  Thus, In Hollander, the court rejected boilerplate, conclusory allegations of fraud and intent, finding that Rule 9(b) requires specific allegations of at least some facts to support an inference of fraudulent intent.