Solo Cup Co., a maker of plastic and paper tableware, won an appeals court ruling that may help consumer-goods companies fend off lawsuits over expired patents listed on their products.
Solo Cup didn't mean to deceive consumers when it posted expired patent numbers on its cups and lids, an appeals court in Washington said today in upholding a judge's finding. The closely held company said it didn't immediately swap out the molds that had the old patent numbers because each replacement would have cost about $500,000.
More than 100 lawsuits have been filed this year against companies including Pfizer Inc., Procter & Gamble Co. and Kimberly-Clark Corp. after a court in a different case in December said companies can face a penalty of as much as $500 for every item falsely marked as under patent protection. The Solo Cup case was brought by a San Diego patent lawyer.
Solo Cup had about $1.5 billion in net sales in fiscal 2009, with 81 percent of its business from corporate customers including food distributor Sysco Corp., coffee-shop operator Starbucks Corp. and restaurant chain McDonald's Corp., according to the Highland Park, Illinois-based company's annual filing.
Federal law for more than 150 years has made it an offense to list patents on products if they are expired or don't cover the item. The U.S. Court of Appeals for the Federal Circuit in December ruled, as part of a dispute over stilts used in construction, that each item is a separate offense.
Matthew Pequignot, the San Diego lawyer, filed suit against Solo Cup in September 2007. Consumer groups said at the time that a victory would deter companies from listing improper patents on their products as a way of curtailing competition and enticing buyers into thinking the products are special.
The Federal Circuit today said companies can rebuff such suits if they can prove the expired patents were listed for reasons other than to deceive customers.
Lawyers for Pequignot and Solo Cup had no immediate comment on the ruling.
The case is Matthew A. Pequignot v. Solo Cup Co., 2009- 1547, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Pequignot v. Solo Cup Co., 07cv897, U.S. District Court for the Eastern District of Virginia (Alexandria).