EDTX Finds Duty to Mark Gift Cards (Alexsam v. Pier 1 Imports)


Judge Schneider ruled on plaintiff Alexsam, Inc.'s motion for summary judgment concerning marking under 35 USC Section 287. Alexsam, Inc. v. Pier 1 Imports, Inc., Case No. 2:08-CV-15 (E.D. Tex. Oct. 14, 2011). The court disagreed with plaintiff Alexsam's argument that the marking requirement of Section 287 did not apply to the patents-in-suit because they covered methods and systems for activating pre-paid gift cards, using existing retail point-of-sale devices. The court did note that Section 287 does not apply to method or process claims because ordinarily there is nothing to mark. But then, citing American Med. Sys. Inc. v. Medical Eng'g Corp., 6 F.3d 1523, 1538-39 (Fed. Cir. 1993), Judge Schneider observed that if there is a tangible item to mark, the plaintiff must to do so if it wishes to obtain pre-suit damages: "[H]owever, to the extent that there is a tangible item to mark by which notice of the asserted method claims can be given, a party is obliged to do so if it intends to avail itself of the constructive notice provisions of section 287(a)." American Med. at 1538-39. The court found that a gift card is a "tangible item" that could have been marked and that Alexsam and its licensees had a duty to mark the cards to claim pre-suit damages. The court, however, reserved judgment on whether the plaintiff had satisfied its burden to mark because compliance with Section 287 is a question of fact.