The Federal Circuit has spent decades building its own law of patent marking. The Supreme Court last addressed the marking question in Wine Railway Appliance Co. v. Enterprise Railway Equipment Co., 297 U.S. 387 (1936). Ninety years later, we have a body of circuit law that reaches settlement agreements, cross-licenses, and products the patent owner has never made and may never have seen. Its latest application tells an owner seeking past damages to account for what its former litigation opponents did after settling. If the owner cannot, the damages may be gone before the infringement case gets started.^[1][2]

I represented VDPP in the appeal against Volkswagen. I disagree with the decision, and the reader should know my interest at the outset. But the consequence I am writing about reaches well beyond that case. A company that settles patent litigation, licenses a portfolio, or exchanges patent rights with a competitor now has to ask what the agreement will do to its next lawsuit. The answer may depend on products it does not control and records it cannot obtain without discovery.

The Supreme Court precedents leave modern licensing questions unresolved

Section 287(a) concerns patented articles made or sold by the patentee or for or under it. It provides for notice through marking and limits damages when the required marking has not occurred, subject to actual notice of infringement. Filing suit supplies that notice. The statute therefore ties the damages consequence to a failure involving patented articles. A license, standing alone, does not establish that every product sold by the licensee practices the patent. A broad portfolio license certainly does not establish that the licensee practices every patent it covers.^[5]

Wine Railway kept the statute tied to an article someone could mark. Neither the owner nor anyone acting with its consent had manufactured or sold an article under the infringed patent. The Supreme Court rejected the demand for actual notice as a condition of recovery. It explained why in a sentence that ought to remain central to this discussion: “Penalty for failure implies opportunity to perform.” 297 U.S. at 395. The owner had no authorized article to mark. The Court would not read the statute to penalize the owner for failing to do what could not be done.^[1]

When I say the Federal Circuit has fashioned the modern marking law largely from whole cloth, I mean that it has built a substantial body of doctrine extending the Supreme Court's precedents to arrangements those decisions did not address. Congress supplied the statute. Wine Railway supplied guidance, and Dunlap v. Schofield, 152 U.S. 244, 247–48 (1894), had already placed the allegation and proof of notice on the plaintiff in the circumstances there. Those decisions cannot be written out of the history. They also did not decide how a portfolio cross-license should affect damages against a stranger to it.^[1][3] The Federal Circuit has answered that question through its own cases, without contemporary Supreme Court guidance on these arrangements. Each decision can be explained as an application of the one before it. Put them together and the result is substantial: an owner can lose historical damages because of another company's products, keep losing damages after those products leave the market, and face dismissal when its complaint does not adequately address that history. The cumulative burden deserves Supreme Court review.

The defendant identifies a product and the owner pays to investigate

Arctic Cat I supplies much of the burden that makes the rule effective. The accused infringer must identify specific unmarked products it believes practice the patent. That is an initial burden of production, and the Federal Circuit described it as a low bar. Once the defendant clears it, the owner bears the burden of showing compliance, including establishing that the identified products do not practice the patent if that is the owner's position. The defendant does not first have to prove infringement by the licensee. Arctic Cat Inc. v. Bombardier Recreational Products Inc., 876 F.3d 1350, 1366–69 (Fed. Cir. 2017).^[6]

Consider the burden imposed on an owner who settled a case years ago. The former defendant has the engineering records. The former defendant knows what went into the product, when the design changed, and which versions were sold. The patent owner may have obtained none of that discovery before settlement. Now a new defendant identifies the old product and the owner must investigate it for a different lawsuit. The agreement that ended the first dispute has become the reason to reopen part of it. The cost falls on the owner trying to enforce the patent against someone else.

The premise behind the burden also deserves attention. Dunlap involved the patentee's own manufactured goods. An owner ordinarily knows whether it marked its own products. It may know very little about a former opponent's engineering changes, product labels, or sales after settlement. Extending the burden to that relationship puts the consequences of missing information on the party that may have the least practical ability to obtain it. That distinction should matter when courts decide what reasonable efforts require.^[3][6]

Arctic Cat II makes the history harder to leave behind. Arctic Cat had licensed Honda under an agreement that expressly excused marking. It argued that it could recover for the period after Honda stopped selling the unmarked products. The Federal Circuit rejected that position. Stopping sales did not cure the notice problem. The court also held that willfulness did not substitute for the statutory notice. Arctic Cat Inc. v. Bombardier Recreational Products Inc., 950 F.3d 860, 863–67 (Fed. Cir. 2020). The defendant's knowledge and the owner's notice obligation remained separate.^[7]

An old product can therefore continue to limit damages after it is no longer being sold. And a defendant's knowledge of the patent, even knowledge sufficient for willfulness, does not necessarily save the owner's recovery. That is circuit law an enforcement lawyer has to apply. It is also a rule corporate licensing departments should understand before they treat marking as a minor provision in an agreement whose principal purpose is to buy peace. The cost of that provision may appear in a case no one is negotiating yet.

VDPP moves the dispute to the complaint

VDPP brings the issue to the complaint. The Federal Circuit's August 19, 2026 opinion reviewed the district court's dismissal and refusal to allow amendment. VDPP had entered eleven settlement agreements licensing the asserted patent. Its proposed amendment said it was a non-practicing entity with no products to mark and generally alleged satisfaction of statutory requirements and conditions precedent. The panel held that those allegations did not supply facts showing licensee compliance, particularly after Volkswagen had raised the agreements. The case did not get past that problem.^[2]

The court rejected VDPP's arguments that the settlement setting and the licensees' nonadmission of infringement took the agreements outside the marking rule. It treated the rights granted as controlling. The agreements authorized making, using, and selling licensed products; one expressly excused marking. VDPP continued to maintain that the licensed products infringed. On those facts, the panel saw no way to amend the complaint to plausibly allege reasonable efforts to secure compliance. Calling the agreement a settlement did not resolve the issue. Neither did calling the owner a non-practicing entity.^[2]

The decision has limits, and they matter in the next case. The panel left open whether reasonable efforts can be established without a contractual marking obligation. It also identified an independent procedural reason to deny amendment, and its fee ruling rested on a broader record. VDPP does not hold that every license defeats damages or that a marking dispute alone warrants fees. My objection is to the burden the marking analysis imposes before the infringement merits can be heard, and to the reach that analysis will have when defendants invoke it against other owners.^[2]

A lawyer preparing the next complaint has to take that reach seriously. Saying that the client makes nothing will not answer a concrete licensee-marking challenge. Saying that every legal condition has been satisfied will not supply missing facts. Counsel must examine the earlier agreements and decide what supports the damages period being claimed. That work can involve an independent company's products and records before discovery opens in the new case. The owner must pay for the investigation whether or not the defendant ultimately has a sound marking defense. A rule that requires this expenditure before discovery makes enforcement more expensive even where the owner ultimately establishes that no marking was required.

The procedural rules deserve closer attention as well. Rule 9(c) permits general allegations of conditions precedent. Whether that rule governs this damages prerequisite requires analysis; the owner cannot simply assume it does. Nor should a dispute about which products practice a patent be resolved as though the allegations themselves established the technical facts. Rule 12(d) requires conversion when outside materials are presented and not excluded, subject to the recognized exceptions for materials properly considered on a motion to dismiss. Courts applying VDPP should distinguish an inadequate allegation from a factual dispute that requires evidence.^[12]

Settlement costs reach every patent owner

For a licensing company, the difficulty is immediate. Licensing is how it earns a return on the invention. If the settlement authorizes patented products, what the settling company does with those products can affect the owner's rights against the next defendant. The next defendant paid nothing for that agreement. It may nevertheless use the agreement to reduce the price of its own infringement. The owner can seek marking and cooperation provisions, but the company buying peace may refuse them or demand a lower settlement price in exchange. The owner bears that cost as well.

Expiration makes the loss particularly severe. Section 286 generally permits no recovery for infringement more than six years before filing. It does not promise six years of damages. Section 287 can take away the part of that period for which the owner cannot establish the required notice. For an expired patent there is no later infringement period to recover instead. If the entire available historical period is barred, the damages case may be worth nothing. For that owner, a dispute over another company's marking history can determine whether there is any economically meaningful remedy left.^[5,11]

Large manufacturers should recognize themselves in this account. Arctic Cat was an operating company. An owner that marks its own products can still face a dispute about a licensee's products. An owner that has stopped manufacturing can still face the consequences of earlier unmarked sales. The statutory issue follows authorized patented articles and notice, not the label attached to the owner. Companies accustomed to treating marking as an NPE problem should pull their own agreements before reaching that conclusion. Their cross-licenses may present the same question at a much larger scale.^[7]

Take three hypothetical companies. A and B cross-license their portfolios to end a dispute. Years later, A sues C. C identifies an unmarked B product it believes practices A's asserted patent. Under the Arctic Cat framework, A must address that product and its marking consequences. But the agreement between A and B may never have resolved which products practiced which claims. That was part of the point of the deal. They exchanged rights so they could stop spending money answering those questions. C now has a reason to make A answer them.^[6]

A broad license is not proof that B's product practices the patent, and a court should keep that distinction intact. But A may still have to pay to establish why the identified product does not practice it, or prove compliance if it does. Multiply the inquiry across old agreements and changing product lines and the expense grows. A large patent portfolio gives a company more rights. A large licensing history can give the next defendant more places to look for a restriction on the damages those rights will support.

Cross-licenses often buy peace precisely because the parties do not want to decide which of thousands of claims covers which product. Requiring the owner to reconstruct those relationships later reduces the benefit of the original bargain. Acquisitions, discontinued products, and changing designs can make that reconstruction still harder. Engineers and counsel must investigate technology belonging to a company that has already paid to settle, while the new defendant challenges the owner's right to recover from an entirely different infringement.

The arithmetic needs no elaborate model. Assume an otherwise recoverable royalty of $1 million a year for five years. If failure to mark bars that entire pre-notice period, $5 million disappears. This is an illustration, not a valuation of any actual patent. The important point is where the money goes. The sales occurred and, on the assumption, the patent was infringed. The owner cannot collect because of the notice failure. A term that drew little attention in one settlement can control a much larger recovery against a company outside it.

The effect begins before judgment. A defendant with a credible marking defense can discount the case in settlement. A buyer can discount a portfolio until the seller establishes what historical damages remain available. The amount will differ by portfolio, but recoverable years have value and disputed years have less. A company may gain from the rule when it is sued and lose from it when it sues. Its own licensing department has to account for both sides of that calculation.

Repair is uneven and often incomplete. An old counterparty may demand compensation before accepting new marking or cooperation duties. Even a willing counterparty cannot recreate a notice that was never given. A company may pay to investigate its licensing history, pay again to secure cooperation, and still lose the historical recovery. Future compliance can protect later periods where the law permits; it cannot retroactively supply notice for the past.^[5][7]

The inquiry also brings confidential agreements back into litigation. VDPP does not require a company to publish every license or royalty term in its complaint. Protective orders can restrict disclosure of confidential commercial information. But obtaining those protections and producing the relevant records add expense to a dispute the earlier agreement was supposed to end.^[12]

Public notice does not resolve the practical objections

The court's public-notice argument deserves an answer. Authorized patented products entering the market without marks do not give the public the notice Congress contemplated. VDPP relies on that concern, and further asserts a private agreement cannot by itself supply public notice. This is the premise now controlling. What remains and needs an answer is how far it carries the owner's obligation when an independent manufacturer controls the products and the information, and how much the owner must establish before the new case can proceed. Public notice does not answer every question about the means and cost of proving compliance.^[2]

The reasonable-efforts rule ought to do meaningful work there. VDPP leaves open the possibility of reasonable efforts without a contractual marking clause. Courts should give that reservation substance. They should require a concrete identification of the patented articles at issue and distinguish a license from proof that a product practices the patent. A settlement file should start the relevant inquiry where the facts justify it. It should not become a substitute for the inquiry or a reason to assume that every product within a broad agreement required marking. An express waiver of marking presents a different record from silence. Both require attention to whether there were patented articles to mark and what the owner did to secure compliance.^[2][5][6]

The practical effect is to make patent peace more expensive and enforcement less certain. The owner may accept less to settle today, incur substantial costs to investigate tomorrow, and then recover less from a later infringer. Large manufacturers have as much reason to object as licensing companies. Their portfolios and cross-licenses expose them to the same doctrine on a larger scale. For an owner with the right claims, the immediate response is to pursue only method claims. The need to make that choice reveals another injury: the reduced practical value of the system and apparatus claims left behind.^[8][9]

Ramey LLP is a Texas-based intellectual property law firm dedicated to representing small patent owners, startups, and independent inventors in disputes against larger corporations.

Sources

[1] Wine Railway Appliance Co. v. Enterprise Railway Equipment Co., 297 U.S. 387, 393–98 (1936). The case construed the predecessor marking statute. The reference to the absence of contemporary Supreme Court guidance concerns the modern licensing and pleading questions discussed here. https://www.govinfo.gov/content/pkg/USREPORTS-297/pdf/USREPORTS-297-387.pdf

[2] VDPP, LLC v. Volkswagen Group of America, Inc., No. 2024-2226, 2026 WL 2416565, at *1–3 (Fed. Cir. Aug. 19, 2026). The separate fee and appellate-jurisdiction discussions are not the basis of this article's marking thesis. https://caselaw.findlaw.com/court/us-federal-circuit/332291.html

[3] Dunlap v. Schofield, 152 U.S. 244, 247–48 (1894). The Court addressed the duty to allege and prove marking or actual notice where the patentee made or sold patented articles. https://supreme.justia.com/cases/federal/us/152/244/

[4] Complaint ¶¶ 9–14, AlmondNet, Inc. v. Whaleco Inc., No. 1:26-cv-01339, ECF No. 1 (D. Del. Oct. 16, 2026), at 3. https://storage.courtlistener.com/recap/gov.uscourts.ded.95068/gov.uscourts.ded.95068.1.0.pdf. See also Michael P. Eddy, AlmondNet Sues Temu Operator Whaleco in Delaware on a Profile-Based Ad Delivery Patent, Patent Litigator (Oct. 21, 2026), https://patentlitigator.com/analysis/almondnet-v-whaleco-temu-profile-based-ad-patent/. The complaint verifies the method-only assertion; neither source establishes counsel's motive or a marking failure.

[5] 35 U.S.C. § 287(a). Discussion is limited to subsection (a), including its patented-article trigger, conventional and virtual marking provisions, and actual notice. https://uscode.house.gov/us/usc/119-118/t35/s287/

[6] Arctic Cat Inc. v. Bombardier Recreational Products Inc., 876 F.3d 1350, 1366–69 (Fed. Cir. 2017). The decision distinguishes the defendant's initial production burden from the patentee's ultimate burden and discusses reasonable efforts concerning licensees.

[7] Arctic Cat Inc. v. Bombardier Recreational Products Inc., 950 F.3d 860, 863–67 (Fed. Cir. 2020). Cessation of unmarked sales and an infringer's knowledge did not supply the statutory notice required for the disputed recovery period.

[8] Crown Packaging Technology, Inc. v. Rexam Beverage Can Co., 559 F.3d 1308, 1316–17 (Fed. Cir. 2009), applying Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075, 1082–83 (Fed. Cir. 1983). Crown Packaging verifies the method-only holding and its distinction of American Medical Systems. https://law.justia.com/cases/federal/appellate-courts/cafc/08-1284/08-1284-2011-03-27.html

[9] American Medical Systems, Inc. v. Medical Engineering Corp., 6 F.3d 1523, 1538–39 (Fed. Cir. 1993). Both apparatus and method claims were asserted and a tangible article could be marked. https://law.justia.com/cases/federal/appellate-courts/F3/6/1523/576978/

[10] Akamai Technologies, Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022–23 (Fed. Cir. 2015) (en banc). All method steps must be performed by or attributable to a single entity; the opinion explains attribution. https://law.justia.com/cases/federal/appellate-courts/cafc/09-1372/09-1372-2015-08-13.html

[11] 35 U.S.C. § 286. The six-year damages limitation is subject to other applicable law and does not guarantee recovery for the full period. https://www.law.cornell.edu/uscode/text/35/286

[12] Fed. R. Civ. P. 9(c), 12(d), 26(c)(1)(G). The rules address general pleading of conditions precedent, conversion when outside materials are considered, and protective orders for confidential commercial information.