Solo Cup wins ruling over expired patents

Solo Cup Co., a maker of disposable food-service products, didn't mean to deceive consumers when it posted expired patent numbers on its cups and lids, a federal judge ruled in a decision that may deter other such suits.

U.S. District Judge Leonie Brinkema in Alexandria, Virginia, on Aug. 25 rejected a lawsuit filed by a Washington patent lawyer who claimed Solo should be forced to pay a fine of $500 for each "offense" of improper marking. Solo uses molds that last between 15 and 20 years and the company removed the patent numbers when getting new molds, the judge said.

The case generated attention from consumer groups who said a victory for lawyer Matthew Pequignot 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. One of the Solo patents expired in 1988.

The false marking "creates the potential to negatively impact the marketplace, the public interests and the integrity of the patent system," said a group including the Electronic Frontier Foundation, Initiative for Medicines, Access and Knowledge and the Software Freedom Law Center.

Brinkema agreed that false patent markings can be harmful and are illegal under federal law. Still, she said, to be liable, Highland Park-based Solo had to act with the intent to mislead consumers and competitors. The company said it didn't swap out the mold cavities because each time would cost about $500,000.

'Desire to Reduce Costs'

Solo "acted not for the purpose of deceiving the public, but in good faith reliance on the advice of counsel and out of a desire to reduce costs and business disruption," the judge said.

Pequignot, of Pequignot & Myers in Washington, sued on behalf of the public, saying the expired patent numbers were put on billions of cups and lids. Had he won the case, he would have been able to keep half of any fine, with the other half going to the government.

The lawyer's arguments would allow people "who have suffered no injury to pursue potentially lucrative recoveries against companies like Solo that have caused no actual injury to anyone," the judge said.

Brinkema also rejected Pequignot's arguments, backed by the consumer groups, that each cup or lid was a separate "offense" and thus subject to a $500 fine for each of the billions of items. Instead, the judge said, Solo's offenses were at most three and related to the production decisions, not each cup.

Brinkema said she needed to address the question of defining an offense "because a decision about this issue could significantly effect the incentives" for others to file similar lawsuits over false patent marking.

Pequignot didn't immediately return messages seeking comment. Solo spokeswoman Angie Gorman said the company had no immediate comment.

The case is Pequignot v. Solo Cup Co., 07cv897, U.S. District Court for the Eastern District of Virginia (Alexandria).