Winston Scores Bulls-eye for Client New Archery Products in Texas Court’s Dismissal of Qui Tam False Marking Case

On April 4, 2011, Winston & Strawn attorneys won the dismissal of a potentially high stakes qui tam or whistleblower’s false marking case on behalf of Chicago-based client New Archery Products (“NAP”) in the federal district court for the Eastern District of Texas.

NAP is one of the country’s leading manufacturers of archery products and has several patented products within the archery line. Like nearly 600 other businesses across the U.S., NAP had been sued under the qui tam false marking statute since December 2009. That’s when the Federal Circuit held that false marking penalties are to be calculated on a per article basis of up to $500 per article, thereby dramatically increasing the potential stakes for such easily targeted consumer product companies as NAP.

In its complaint, Plaintiff, who had brought 100 such cases last year alone, had alleged that a “sophisticated company” such as NAP should have known that some of its products remained in the retail trade with packaging that contained expired patent numbers. Winston argued in its motions and briefs, however, that Plaintiff’s conclusory allegations had not established that NAP had knowledge that these old product packages remained in the marketplace. Winston further argued that Plaintiff’s allegation that NAP was a “sophisticated company” was not a surrogate for pleading intent as required by governing Federal Circuit law.

U.S. District Judge T. John Ward agreed with the defense arguments and dismissed the plaintiff’s complaint on April 4, 2011. Winston attorneys represented NAP. United States ex rel. Patent Group, LLC, v. New Archery Products Corp., Civil Action No. 2:10-cv-377 (TJW), In the United States District Court for the Eastern District of Texas Marshall Division.