Patent Marking in the USA: VDPP v. Volkswagen and licence settlements

„We do not manufacture any products ourselves“ is not a sufficient response to the marking issue. This is demonstrated by VDPP, LLC v. Volkswagen Group of America, Inc., No. 2024-2226, dated 19 August 2026. The Federal Circuit upheld the dismissal of the claim without allowing for further amendments, as the proposed version failed to plausibly address the relevant labelling issues. Products from licensees were also a decisive factor.

Section 287 does not apply solely to the patent holder’s own products

35 U.S.C. § 287(a) covers patented products which are manufactured, offered for sale, sold or imported into the United States by the patent holder or with his authorisation. In the absence of proper labelling, the provision generally limits claims for damages to acts of infringement occurring after sufficient actual notice has been given; the filing of a lawsuit is deemed to constitute such notice.

The first test is therefore not merely whether the patent holder manufactures the products themselves. What must be examined is whether other companies are, with the patent holder’s authorisation, actually placing patented products on the relevant market. Conversely, the existence of a licence agreement alone does not in itself answer the question of whether certain products fall within the scope of the relevant patent claims.

A settlement that does not acknowledge infringement does not constitute a defence against trademark infringement

VDPP argued that its eleven licence agreements had arisen from settlements and that the licensees had not admitted to any infringement. This failed to convince the Federal Circuit. The agreements granted standard rights of manufacture, use and distribution; one expressly excluded a marking obligation. At the same time, VDPP maintained that the licensed products infringed the patent. In these circumstances, it was not possible to subsequently present a plausible argument regarding reasonable efforts on the part of the licensees to ensure compliance with the marking requirements.

This therefore introduces an additional consideration for settlement negotiations: a licence that is economically attractive from the perspective of an individual case may have implications for the enforcement of the same patent against other companies. Marking should therefore not be assessed only when the next legal action is brought.

Contractual clauses and their actual implementation go hand in hand

The Federal Circuit expressly left open the question of whether reasonable efforts by a licensee to comply can be demonstrated in other cases even in the absence of a contractual marking clause. The decision therefore does not establish an unconditional obligation to use a specific contractual formulation.

For practical purposes, however, it is advisable to set out the labelling arrangements explicitly: Which products are affected? Who is responsible for maintaining the patent assignments? How are product changes handled? What information does the licensor receive regarding implementation?

In the case of virtual marking, Section 287(a) provides for labelling with a freely accessible internet address that links the patented product to the patent number. For the purposes of future evidence, therefore, it is not sufficient for only the current version of a website to be available. Documented product assignments and historical versions are also useful.

Putting an end to unmarked sales does not make up for the past

The case of Arctic Cat Inc. v. Bombardier Recreational Products Inc., 950 F.3d 860 (Fed. Cir. 2020), already highlights two further limitations: ceasing unmarked sales does not simply resolve the existing notification issue. Nor does a finding of wilful infringement automatically replace the required actual notification.

It is therefore advisable to use a patent-specific timeline when calculating damages: relevant licensee products, the start date of the marking, changes to the marking, and verifiable notifications to the defendant in question. In the case of patent claims relating exclusively to the method, the applicability of the marking rules must be assessed separately.

Not every labelling error leads to a refund

In the VDPP case, the reimbursement of legal fees under Section 285 was also confirmed. However, the decisive factor was the conduct of the proceedings as a whole, which was deemed objectively unreasonable, and not merely a shortfall in the marking.

The practical implication is that marking is not an issue confined solely to packaging. It forms part of licence agreements, settlement approvals, portfolio due diligence and the preparation of any US claim for damages.

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