Wine Railway Appliance Co. v. Enterprise Railway Equipment Co.

Background

Two companies sued over competing patent claims. One company owned a patent but never made or sold the patented product. The other company was accused of infringing and an accounting found profits from the accused device before and after a counterclaim was filed. The lower court approved an accounting that included profits earned before the counterclaim; the appeals court held those earlier profits could not be recovered because no prior notice or marking had been given.

Reasoning

The Court interpreted the long-standing federal marking-and-notice statute that tells when a patentee or a maker must mark products or give direct notice. The Justices examined earlier statutes and concluded the 1870 law did not change the rule that a patentee who does not manufacture or vend the product is not required to give actual notice before recovering damages. The Court said the marking rule was aimed at preventing deception by unmarked manufactured articles and should not impose an impossible duty on a non-producing patent owner. For those who do make or sell, marking or notice still protects the public.

Real world impact

The ruling reverses the appeals court and affirms the district court’s award, allowing a patent owner who does not make or sell a product to recover damages for infringement that occurred before any notice was given. Manufacturers and sellers remain subject to the marking and notice rules to protect the public and preserve their right to damages when they fail to mark.