Pleading Licensee Marking After VDPP v. Volkswagen: Settlement Licensees Must Mark, and the Patentee Must Plead Its Efforts to Make Them

The U.S. Court of Appeals for the Federal Circuit has affirmed the dismissal of a patent infringement complaint because the patentee — VDPP, LLC, a non-practicing entity holding eleven settlement licenses — failed to plead compliance with the patent marking statute, Dennis Crouch reported on Patently-O. In VDPP, LLC v. Volkswagen Group of America, Inc., No. 2024-2226 (Fed. Cir. Aug. 19, 2026), a precedential opinion authored by Chief Judge Moore, the court also affirmed a $207,543.60 attorney fee award to Volkswagen and dismissed, for want of appellate jurisdiction, the portion of the appeal contesting sanctions against VDPP's counsel, William Ramey.

VDPP sued Volkswagen in the U.S. District Court for the Southern District of Texas over U.S. Patent No. 9,426,452, relating to 'electrically controlled spectacles.' Because the patent had expired, the only potential remedy was back damages. Under 35 U.S.C. § 286, up to six years of back damages are generally available, but § 287(a) limits recovery: a patentee who makes or sells patented articles — or licenses others to do so — must mark those articles with the patent number, and without marking, damages run only from actual notice to the accused infringer.

VDPP practiced nothing itself and so had nothing to mark, but it had licensed the asserted patent to eleven settling defendants, and its proposed amended complaint said nothing about whether any of them required marking or actually marked. Under Arctic Cat Inc. v. Bombardier Recreational Products Inc. (Fed. Cir. 2020), a patentee's licensees must comply with § 287 as well, and the patentee must make reasonable efforts to see that they do. VDPP argued its settlement agreements were different because none of its licensees admitted infringement, but the court held its precedent 'suggests there is no difference between a license entered into under a settlement agreement and any other patent license agreement.'

The panel refused leave to amend as futile: 'we see no way for VDPP to amend its complaint to plausibly allege it made reasonable efforts to ensure its licensees complied with 35 U.S.C. § 287.' The court added: 'While we do not foreclose the possibility that a licensor can ever establish it made reasonable efforts to ensure licensee compliance with 35 U.S.C. § 287 in the absence of a marking obligation, that is certainly not the case here.' VDPP had also implicitly agreed not to amend its complaint in exchange for Volkswagen's consent to an extension of time.

On fees, the Federal Circuit agreed the case was exceptional, citing frivolous and objectively unreasonable positions — seeking future damages and an injunction on an expired patent, seeking past damages despite an inability to allege marking, failing to disclose the settlement agreements, and prolonging the litigation with false statements about them — as well as a pattern of repeat lawsuits over the same patent with settlement demands below the cost of defense. The sanctions issue failed on jurisdictional grounds because Ramey had not timely appealed in his own name. The practical lesson for patent owners and NPEs: include marking obligations in settlement licenses and be prepared to plead reasonable efforts to ensure compliance.

Original Link: https://patentlyo.com/patent/2026/08/pleading-licensee-marking-after-vdpp-v-volkswagen.html