Retroactive Elimination Of The 'Qui Tam' Provision Of The Federal False Marking Statute Does Not Violate The Due Process Clause Of The Constitution

In Brooks v. Dunlop Manufacturing Inc., No. 12-1164 (Fed. Cir. Dec. 13, 2012), the Federal Circuit affirmed the constitutionality of the retroactive elimination of the qui tam provisions of the federal false marking statute effectuated by the Leahy-Smith America Invents Act ("AIA").

35 U.S.C. § 292 makes it unlawful for any person to engage in specified acts of false patent marking, including falsely marking products as patented, with the intent to deceive the public. Historically, § 292 has included a qui tam provision allowing any person to sue for the false marking penalty, with the proceeds to be split evenly with the United States. The prevalence of false marking suits by private qui tam plaintiffs increased rapidly in 2009 after the Federal Circuit held that § 292 requires a penalty for false marking on a per article basis.

On September 16, 2011, the AIA eliminated the qui tam provisions of § 292. Section 292 now only allows false marking suits by either (1) the United States or (2) any person "who has suffered a competitive injury as a result of a violation" of § 292. 35 U.S.C. § 292(b). This provision is expressly made applicable to cases commenced prior to the passage of the AIA.

Before passage of the AIA, qui tam plaintiff Kenneth Brooks filed suit against Dunlop Manufacturing Inc. ("Dunlop"), alleging that Dunlop marked a guitar string winder with the number of a patent that expired and had been invalidated. Dunlop initially moved to dismiss the case, arguing, among other things, that the qui tam provision of § 292 violated the Take Care Clause, U.S. Const. art. II, § 3. While the Federal Circuit considered this constitutional question in a different case, Brooks's case against Dunlop was stayed. During the pendency of the stay, Congress enacted the AIA, eliminating the qui tam provision of § 292. Dunlop then moved to dismiss the case, arguing that Brooks could not show a right to damages based on competitive injury.

Brooks opposed Dunlop's motion to dismiss, arguing that Congress's retroactive elimination of the qui tam provision of § 292 was unconstitutional because (1) it constituted a taking of his property without just compensation, and (2) was a violation of the Due Process Clause of the Constitution. The district court found that there was no unconstitutional taking or violation of the Due Process Clause and granted Dunlop's motion to dismiss.

On appeal, the Federal Circuit affirmed the constitutionality of the retroactive...