Wednesday, June 1, 2011

The U.S. Court of Appeals for the Federal Circuit affirmed a lower court’s dismissal, with prejudice, of a false marking complaint, finding that the complaint failed to properly allege an “unpatented article” under 35 U.S.C. § 292. Juniper Networks, Inc. v. Shipley, Case No. 10-1327 (Fed. Cir., Apr. 29, 2011) (Rader, J.).

Defendant Peter M. Shipley is an alleged computer hacker who maintained a website for the hacker community. In 1995 and 1996, Shipley developed software known as Dynamic Firewall, a self-modifying active firewall filter designed to defend against network monitors and tools. In 1997, Shipley provided information on a “Current Projects” portion of his website regarding the Dynamic Firewall. The website stated that the Dynamic Firewall was patented.

Plaintiff Juniper filed its false marking complaint against Shipley after the current owner of the Dynamic Firewall patents accused Juniper of infringing those patents in a separate lawsuit. Relying on information obtained during the discovery phase of that suit, Juniper alleged that an embodiment of the Dynamic Firewall was used as a component of the website. The Dynamic Firewall, however, was destroyed in 1999 due to a hard drive crash in a computer in Shipley’s home. Thereafter, no other prototype or product embodying the Dynamic Firewall was created.

In its original complaint, Juniper alleged that Shipley falsely marked the website and any firewall or services operating thereon from 1999 (the date the Dynamic Firewall was destroyed) to the present. The lower court dismissed Juniper’s original complaint and, later, Juniper’s amended complaint, finding that Juniper failed to plead facts showing that Shipley had marked an “unpatented article.” The lower court reasoned that the markings displayed on the website referred only to the Dynamic Firewall, and not to software operating on the website, as alleged by Juniper. Juniper appealed.

The Federal Circuit affirmed, emphasizing that Juniper only alleged that the falsely marked “unpatented article” was the Website itself. As a side note, the Court noted that had Juniper alleged that the Dynamic Firewall was itself falsely marked, such a claim would be barred because the sole embodiment of the Dynamic Firewall was destroyed in 1999 and §292 requires that the mismarked article actually exist.

However, the Court did note that a website may qualify as an “unpatented article” under §292 because websites may both embody intellectual property and contain identifying markings. Turning to Shipley’s website and markings appearing therein, the Court focused on whether the markings related to the website itself. The Court reasoned that the markings appeared on the “Current Projects” page, which was intended to provide the viewer with “a list of current projects and research underway.” The page also stated that “[m]ost or all of these projects will be released to the public upon completion.” Accordingly, the Court found that the website categorized the Dynamic Firewall as a “current project” that was “underway.” Additionally, nowhere did the website indicate that the Dynamic Firewall was operating on the website. Therefore, the Court found that “when considered in context, the allegedly affixed marks relate to [the] Dynamic Firewall as opposed to the Website, software operating on the Web-site, or pages generated by the Website.”