Authored by Thomas Cunningham and Brady Cunningham
The Federal Circuit’s recent decision in VDPP, LLC v. Volkswagen Grp. of Am., Inc. expands 35 U.S.C. §287’ marking requirement beyond patentees’ own products and traditional licenses. 186 F.4th 1372, 1377–80 (Fed. Cir. 2026). A settlement, covenant, or similar authorization to practice a patent may trigger marking obligations, even for non-practicing entities. Patent owners therefore must address marking in settlement agreements, impose obligations on authorized parties, and document reasonable compliance efforts. For accused infringers, VDPP makes marking a potential threshold defense, not merely a damages issue. Inadequate allegations concerning licensee marking may foreclose pre-suit damages at the pleading stage and, in appropriate cases, support an exceptional-case finding.
Patent Marking Is Not a Technicality. It Is a Damages Strategy.
For many patent owners, patent marking is treated as an administrative afterthought. Products are marked, virtual-marking webpages are created, and the issue often disappears into the broader category of portfolio maintenance. Yet few provisions of the Patent Act can have a greater impact on the amount of money a patent owner ultimately recovers in litigation.
Under 35 U.S.C. § 287, a patent owner’s failure to comply with patent-marking requirements may eliminate years of recoverable damages. Over the last decade, the Federal Circuit has repeatedly reinforced that reality, most recently by affirming dismissal of a plaintiff’s infringement claims and upholding an award of attorney fees. VDPP, LLC v. Volkswagen Grp. of Am., Inc., 186 F.4th 1372 (Fed. Cir. 2026). The court reminded patent owners that patent marking is not merely a compliance obligation. It is a critical component of patent-enforcement strategy.
Like many issues in patent law, patent marking is easy to ignore when everything is going well. It tends to become important only after litigation begins, when it may already be too late to fix the problem.
Patent Marking Exists to Provide Notice, Not to Create Corporate Paperwork
The purpose of the patent-marking statute is straightforward. Congress sought to encourage patent owners to provide notice to the public that articles are protected by patent rights. A patent owner can satisfy this obligation by physically marking products with the applicable patent number or through virtual marking that identifies the relevant patents on a publicly accessible website. Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350, 1366 (Fed. Cir. 2017) (Arctic Cat I); see also Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 950 F.3d 860, 865 (Fed. Cir. 2020) (Arctic Cat II).
The statute creates a significant incentive to comply. When patented products are not properly marked, a patent owner generally cannot recover damages for infringement occurring before the accused infringer receives actual notice of infringement. In practical terms, failure to mark can substantially reduce a damages award even when infringement is ultimately proven. 35 U.S.C. § 287(a).
Importantly, the marking requirement extends beyond products sold directly by the patent owner. Authorized manufacturers, distributors, and licensees can also create marking obligations. Arctic Cat I, 876 F.3d at 1366–68. Consequently, a patent owner’s recovery may depend not only on its own conduct but also on the conduct of third parties operating under the patent.
As a result, patent marking is not simply about attaching patent numbers to products. It is fundamentally about preserving the ability to recover damages.
The Federal Circuit Has Continued to Expand the Practical Importance of Patent Marking
Over the last decade, the Federal Circuit has issued a series of decisions emphasizing that patent owners bear the burden of demonstrating compliance with the marking statute.
A particularly important decision is Arctic Cat I. There, the Federal Circuit explained that once an accused infringer identifies products it reasonably believes practice the asserted patent, the burden remains on the patent owner to prove compliance with § 287. Arctic Cat I, 876 F.3d at 1368. The court also reinforced that patent owners must make reasonable efforts to ensure that licensees comply with marking requirements. Id. at 1366.
In a later appeal, the Federal Circuit separately held that § 287 continues to limit damages after a patentee or licensee stops selling unmarked products and that willful infringement does not itself establish actual notice. Arctic Cat II, 950 F.3d at 864–65.
Other decisions have continued that trend. Courts have repeatedly rejected efforts to minimize the significance of marking obligations and have emphasized the distinction between constructive notice and actual notice. See, e.g., Lubby Holdings LLC v. Chung, 11 F.4th 1355, 1360 (Fed. Cir. 2021). In many circumstances, even an accused infringer’s knowledge of the patent is insufficient to satisfy the statutory notice requirement. Id.
Against that backdrop, the Federal Circuit’s recent decision in VDPP represents the latest chapter in an increasingly strict body of patent-marking jurisprudence.
Settlement Licenses Are Still Licenses: The Lesson of VDPP v. Volkswagen
The dispute in VDPP arose from a patent infringement action involving a patent that had already expired before suit was filed. VDPP, 186 F.4th at 1375–76. Because the patent had expired, the plaintiff’s ability to recover damages depended heavily on obtaining pre-suit damages. Id.
That created a problem.
Before filing suit, VDPP had entered into numerous settlement agreements relating to the asserted patent. VDPP, 186 F.4th at 1375–76. Those agreements effectively granted rights to practice the patented technology. Id. Volkswagen argued that these arrangements triggered patent-marking obligations and that VDPP could not plausibly allege compliance with § 287. Id. The district court agreed, and the Federal Circuit affirmed. Id. at 1377–78.
The Federal Circuit rejected the argument that settlement-based licenses should be treated differently from traditional patent licenses. VDPP, 186 F.4th at 1377–78. Instead, it emphasized that a settlement agreement authorizing another party to practice a patent functions as a license and may therefore create the same marking obligations as any other license arrangement. Id.; see also TransCore, LP v. Elec. Transaction Consultants Corp., 563 F.3d 1271, 1275–76 (Fed. Cir. 2009).
The court also rejected the notion that a non-practicing entity automatically escapes the marking statute. VDPP, 186 F.4th at 1377–78; see also Arctic Cat II, 950 F.3d at 864. Although VDPP did not manufacture products itself, it had authorized others to operate under the patent. VDPP, 186 F.4th at 1377–78. Consequently, VDPP was required to demonstrate that it had taken reasonable steps to ensure compliance with patent-marking requirements. Id.
According to the court, VDPP failed to do so. Rather than identifying concrete efforts to ensure marking by authorized parties, the plaintiff relied largely on conclusory allegations that statutory conditions had been satisfied. The Federal Circuit concluded that these allegations were insufficient and affirmed dismissal of the complaint. VDPP, 186 F.4th at 1377–78. The court also upheld an exceptional-case finding and an award of attorney fees under 35 U.S.C. § 285. Id. at 1378–80.
The significance of the decision extends beyond its immediate outcome. The court confirmed that patent-marking issues may be addressed at the pleading stage and that settlement programs can create future marking problems that patent owners may not fully appreciate when negotiating resolutions. VDPP, 186 F.4th at 1377.
Patent Marking Can Be a Powerful Defense
While patent marking is often discussed from the patent owner’s perspective, VDPP also highlights the opportunities available to accused infringers.
Historically, marking disputes were frequently viewed as damages issues to be addressed later in litigation. Recent Federal Circuit decisions suggest that marking can be a meaningful early-stage defense capable of significantly reducing or even eliminating a plaintiff’s damages claims. The court’s willingness in VDPP to affirm dismissal based on the plaintiff’s inability to plausibly allege compliance with § 287 demonstrates that marking may be more than a damages issue in certain cases. It can become a threshold pleading issue. VDPP, 186 F.4th at 1377.
For defendants, this means that investigating patent-marking compliance should be part of the initial case assessment. A review of the plaintiff’s products, virtual-marking practices, licensing history, and prior enforcement activities may reveal issues that materially affect damages exposure. Prior settlement agreements, license arrangements, and covenants not to sue may provide fertile ground for examining whether third parties were authorized to practice the asserted patents without satisfying applicable marking requirements.
Arctic Cat provides an important roadmap. Once an accused infringer identifies products it reasonably believes practice the asserted patent, the burden remains with the patent owner to prove compliance. Arctic Cat I, 876 F.3d at 1368. When combined with VDPP, defendants now have substantial authority to challenge conclusory allegations of compliance and, in the appropriate case, seek early resolution of marking-related issues.
Marking issues may be particularly valuable in cases involving expired patents, non-practicing entities with extensive licensing histories, repeat patent assertion campaigns, or patent owners that have entered into numerous settlements over time. In those circumstances, investigation of prior licenses and authorized products may substantially narrow the available damages period.
Not every case will present a viable marking defense. Method claims, for example, often present different marking considerations than apparatus or system claims. Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., 559 F.3d 1308, 1316–17 (Fed. Cir. 2009); Am. Med. Sys., Inc. v. Med. Eng’g Corp., 6 F.3d 1523, 1538 (Fed. Cir. 1993). Nevertheless, VDPP serves as a reminder that accused infringers should not treat patent marking as a mere technical issue. In the right case, it may substantially reduce damages exposure or eliminate pre-suit damages altogether.
Not Every Patent Owner Has a Marking Problem, but Every Patent Owner Should Ask the Question
One of the most important lessons from VDPP is that marking should not be viewed solely through the lens of product manufacturing.
Many patent owners assume that because they do not make products themselves, marking compliance is someone else’s issue. Yet licensing programs, settlement agreements, covenants not to sue, joint-development arrangements, distribution relationships, and other forms of authorization can create obligations that affect damages years later.
A patent owner may therefore find itself litigating not only the merits of infringement but also the terms of agreements signed long before the lawsuit was filed.
The question is not simply whether products are being marked. The question is whether the patent owner can later demonstrate that it took reasonable steps to ensure compliance if those issues become the subject of discovery.
Patent Owners Should Treat Marking as Part of Portfolio Management and Enforcement Strategy
Much like trademark owners must actively police and manage their brands, patent owners should view marking as part of broader portfolio stewardship rather than a narrow compliance exercise.
License agreements should address marking obligations expressly. Settlement agreements should be evaluated with future enforcement efforts in mind. Patent owners should include provisions for auditing licensee marking and have procedures to verify compliance, maintain records of communications regarding marking, and periodically review whether authorized products are being sold in a manner consistent with § 287. For current licensees, patent owners should investigate whether the licensed products have been marked and, if not, take steps to ensure compliance.
The goal is not perfection. The Federal Circuit has described the standard in terms of reasonable efforts. But reasonable efforts are significantly easier to demonstrate when they are planned, documented, and implemented before litigation begins rather than reconstructed afterward.
Patent owners spend substantial resources obtaining patents, prosecuting applications, maintaining portfolios, and enforcing their rights. A comparatively modest investment in patent-marking compliance may help preserve a far greater recovery down the road. When filing suit, patent owners with licensees will need to provide specific allegations of their licensees’ compliance with the marking obligation.
Conversely, defendants should view patent marking as a key component of litigation strategy. Early in litigation, defendants should identify prior licenses, settlement agreements, authorized products, or potential noncompliance, which may uncover defenses capable of materially limiting a plaintiff’s damages claims. The most successful marking defenses often begin with early investigation rather than late-stage damages discovery.
Patent Marking Is the Beginning, Not the End
A patent grant confers valuable exclusionary rights, but preserving the full value of those rights requires more than obtaining the patent itself. Patent marking is one of the mechanisms through which the patent system balances the interests of patent owners and the public, and courts continue to enforce those requirements with rigor.
The lesson from VDPP is not merely that patent owners should mark patented products. It is that patent owners should think strategically about notice, licensing, and enforcement long before litigation begins. Likewise, defendants should recognize that patent-marking compliance may provide a powerful avenue for limiting exposure in the appropriate case.
Patent marking may appear to be a small detail in the life of a patent portfolio. When damages are at stake, however, small details can become very large problems.
A patent may provide the right to sue. Proper marking may determine how much that lawsuit is worth.
Authorities
35 U.S.C. §§ 285, 287(a); VDPP, LLC v. Volkswagen Grp. of Am., Inc., 186 F.4th 1372 (Fed. Cir. 2026); Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350 (Fed. Cir. 2017); Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 950 F.3d 860 (Fed. Cir. 2020); Lubby Holdings LLC v. Chung, 11 F.4th 1355 (Fed. Cir. 2021); TransCore, LP v. Elec. Transaction Consultants Corp., 563 F.3d 1271 (Fed. Cir. 2009); Wine Ry. Appliance Co. v. Enter. Ry. Equip. Co., 297 U.S. 387 (1936); Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., 559 F.3d 1308 (Fed. Cir. 2009); Am. Med. Sys., Inc. v. Med. Eng’g Corp., 6 F.3d 1523 (Fed. Cir. 1993).
Authorities are current through September 30, 2026.
About the Authors
Thomas W. Cunningham is a Shareholder at Brooks Kushman whose practice focuses on Patent, Trademark, Copyright & Trade Secret Litigation. Over the course of more than 25 years, Tom has represented both plaintiffs and defendants in federal courts across the country, handling disputes involving technologies ranging from automotive innovations, e-commerce systems and software, to biotechnology and LED technologies. In addition to serving as trial counsel in high-stakes intellectual property matters, he has extensive experience with appeals before the Federal Circuit and has successfully represented clients in parallel district court and PTAB proceedings. Tom also counsels clients on intellectual property enforcement strategies, licensing matters, and designing around existing patents to help minimize risk while supporting business objectives.
Brady Cunningham is a Technical Specialist at Brooks Kushman, where he supports attorneys in intellectual property litigation matters. Prior to joining the firm, Brady served as a Judicial Intern with the Washtenaw County Trial Court, where he conducted legal research, analyzed case law and legal precedent, reviewed civil and criminal matters, and gained firsthand exposure to litigation and courtroom proceedings. A graduate of Penn State University, Brady leverages his legal research and analytical skills to assist with patent-related matters and support clients in protecting and enforcing their intellectual property rights through Brooks Kushman’s patent and IP litigation practices.
About Brooks Kushman P.C.
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