In
my view, Patent Act § 287(a) is—along with § 289, which requires the
disgorgement of a design patent infringer’s “total profit” attributable to the infringing
article of manufacture—one of the least defensible provisions of the
statute.  Section 287(a) establishes a
general rule that patent owners cannot recover damages for any infringement of
their patents occurring before the date on which they marked their products
with the patent number, or provided actual notice to the accused infringer that
their products are patented; but the statute, as interpreted by the courts, is
so riddled with exceptions and with formalisms that it is instead largely a
trap for the unwary (much like the ill-advised rule, reaffirmed in Kimble v.
Marvel, that an agreement requiring the payment of post-expiration royalties
is unenforceable per se).  For an overview of my criticism of the statute, see my article Fifty Years of Patent Remedies Case Law: Two Steps Forward, One Step Back, 50 AIPLA Q.J. 607, 621-25 (2022).  Nevertheless, one intriguing issue
surrounding the statute’s interpretation, however, is what to do when a
nonpracticing patent owner and an accused infringer agree to a settlement under
which the accused infringer will continue engaging in the alleged use of the
patented invention in the products it makes and sells, but does not admit that its
products actually are infringing.  Is the
patent owner obligated to ensure that the accused infringer marks those products
anyway, because as a general rule the licensor must take reasonable steps to
ensure that its licensee comply with the marking requirement?  What if the accused infringer balks because,
as stated above, it continues to dispute that its products actually infringe?

It’s
not clear what the right answers to these questions are.  In a recent article on IP Watchdog, titled NPEs
Have No Obligation to Mark Under the Statute—and that Should Extend to an NPE’s
Settlement Licensees, William P. Ramey III argues, well, what the title
says.  The author provides advice on how
NPEs should respond, in cases in which a defendant discovers that the products sold
by a third party who entered into a license with the NPE are not marked.  One
recommendation is that the NPE should plead that, while it “believes there was
infringement, the defendant entity did not agree that it was infringing.  Thus, each prior settlement license reflected
a desire to end litigation and as such the policies of Section 287 are not
violated.”  That seems sensible to me.  The author also advises, however,
that in some instances the NPE should plead that, although it or its predecessors
entered into settlements with third parties, “none of the settlement licenses
were to produce a patented article, for or under the Plaintiff’s patents”; or
that the “NPE should plead that all settlement licenses were to end litigation
and not to produce a patented article.” 
That phrasing suggests to me that the NPE would be admitting that
the “licenses” weren’t necessary to avoid infringement—but if not, then is the
NPE entitled to continue recovering royalties from the third party?  Has it engaged in some form of misuse or bad
faith assertion?  Maybe I’m misunderstanding
this part of the proposed advice, I don’t know.

My
former student Bernard Cryan published a very good paper on this very topic three
years ago, which I have previously mentioned on this blog.  The paper is titled Not All Patent
Licensees Are the Same: 35 U.S.C. § 287 Should Not Require Marking by Licensees
That Deny Infringement, 101 J. Pat. & Trademark Off. Soc’y 531 (2021),
and here is the abstract:

Current patent marking law requires
all licensees–even those that deny infringement–to comply with 35 U.S.C. §
287. This requirement has several undesirable consequences such as discouraging
settlement agreements. Not all licensees, however, are the same. Patent marking
law fails to recognize that “no-admission licensees”–patent licensees who deny
infringement and do not believe they need a license but agree to a license
anyway–should be treated differently. The Federal Circuit can and should
correct this flaw by (1) holding that a patentee can satisfy the “reasonable
efforts” requirement under the Arctic Cat rule of reason analysis by
making no efforts or minimal efforts to ensure its no-admission licensees
comply with the marking requirements of § 287, or (2) holding that a
no-admission licensee does not act “for or under” the patentee for § 287
purposes. Both solutions allow a patentee to provide constructive notice even
if its no-admission licensees did not mark. Further, the Federal Circuit can
adopt the five-factor test proposed below to distinguish between no-admission
and traditional licensees. The proposed solutions leave the law undisturbed
with respect to traditional licensees. Although the no-admission licensee
situation may arise only infrequently, addressing the issue will help the
patent system.

As
you can see, both authors are of the view that the settling licensee’s
nonmarking should not preclude the licensor from recovering damages.