Dismissal with Prejudice Creates Implied License Under the Patent Marking Statute? CAFC Seems Unconvinced

"Appellate courts rarely provide this kind of roadmap for arguments not before them."

I. Introduction

Can a patentee unknowingly create a patent license—and trigger marking obligations under 35 U.S.C. § 287—simply by dismissing an infringement suit with prejudice? That was the ruling by the district court in Ortiz & Associates Consulting, LLC v. Vizio, Inc., No. 3:23-CV-00791-N (N.D. Tex. Nov. 1, 2023), which was left undisturbed by the Federal Circuit’s affirmance of the district court’s $162,000 attorneys’ fees award to Vizio under 35 U.S.C. § 285 due to an exceptional case finding.

Ortiz previously sued Roku and Panasonic asserting infringement of the same patents but voluntarily dismissed those actions with prejudice early in each case. In Ortiz’s subsequent case against Vizio, the district court held those prior dismissals constituted patent licenses subject to § 287’s patent marking requirement. Because neither Roku nor Panasonic marked their products, Ortiz could not recover pre-suit damages. And because the patents had expired before Ortiz sued Vizio, Ortiz had no viable claim for post-suit damages. The case was dismissed under Rule 12(b)(6) for failing to state a claim for which relief could be granted.

The Federal Circuit’s opinion in Ortiz & Associates Consulting, LLC v. Vizio, Inc., No. 2024-1783 (Fed. Cir. Dec. 17, 2025), affirmed the attorneys’ fee award against Ortiz. But because Ortiz did not timely appeal the underlying Rule 12(b)(6) dismissal, the merits of the prior dismissal-as-license theory were not before the court. Thus, nothing in the Federal Circuit’s decision resolves whether prior dismissals with prejudice categorically create marking-triggering licenses under § 287. Yet in a peculiar passage, the court went out of its way to explain the argument Ortiz could have made—an argument that, had it been preserved, might well have succeeded.

The theory that dismissals with prejudice automatically create marking-triggering licenses has received no appellate scrutiny—and serious analysis reveals fundamental doctrinal problems. The theory implicitly assumes that the dismissed accused products are “patented articles” requiring marking without establishing they ever practiced the patents.

The theory also appears to conflict with the Kessler doctrine, which treats dismissals with prejudice as adjudications of non-infringement. And it imposes compliance obligations that patentees have no practical mechanism to satisfy, since dismissals—unlike negotiated licenses—create no contractual relationship through which the patentee could require marking.

II. Procedural Background

A. Ortiz’s Prior Litigation Against Roku and Panasonic

Ortiz & Associates Consulting, LLC owned U.S. Patent Nos. 9,147,299 and 9,549,285 covering technology for internet-enabled television systems. The ‘285 patent expired on January 17, 2021, and the ‘299 patent expired on June 22, 2021—both before Ortiz filed suit against Vizio on April 14, 2023. Ortiz itself does not practice the patents and sells no commercial products.

The Roku case, Ortiz & Associates Consulting, LLC v. Roku, Inc., No. 1:18-cv-01265-MN (D. Del.), was filed in 2018. Roku never filed an answer but did file a motion to dismiss for lack of patent-eligible subject matter under 35 U.S.C. § 101. After the motion was fully briefed, the parties stipulated to dismissal with prejudice on June 5, 2019, referencing “the terms of a separate Settlement Agreement.” The terms of that agreement were not part of the public record, and the court never ruled on Roku’s eligibility challenge.

The Panasonic case, Ortiz & Associates Consulting, LLC v. Panasonic Corp. of North America, No. 1:19-cv-01921-MN (D. Del.), was filed in 2019. Panasonic never filed an answer or any substantive motion. On May 15, 2020, Ortiz filed a unilateral notice of dismissal under Rule 41(a)(1)(A)(i), dismissing the case with prejudice.

The record thus reflected two dismissals with prejudice, neither involving any finding or admission of infringement. The existence or terms of Ortiz’s settlements with Roku and Panasonic are unknown. Neither defendant ever filed an answer, so neither was ever required to formally admit or deny infringement.

B. The Vizio Litigation and District Court Dismissal

In 2023, Ortiz sued Vizio in the Northern District of Texas, asserting the same two patents. Vizio moved to dismiss under Fed. R. Civ. P. 12(b)(6), raising the Section 287 marking defense and invoking the prior Roku and Panasonic dismissals as “licenses” to Ortiz’s patents, requiring Roku and Panasonic to mark their products. Because the two patents had already expired, Vizio contended that Ortiz’s damages, if any, were limited to past damages. And because Ortiz’s complaint failed to allege either actual pre-suit notice of infringement or marking of the licensed Roku and Panasonic products, the complaint failed to state a claim for which relief could be granted.

The district court’s analysis proceeded in two steps. First, it held that the dismissals with prejudice against Roku and Panasonic “function as the equivalent of licenses to use the Asserted Patents in the products at issue in those suits.” Ortiz, slip op. at 7 (N.D. Tex.). The court reasoned that because “a non-exclusive patent license is equivalent to a covenant not to sue,” and because dismissals with prejudice bar future claims, “Roku and Panasonic are functionally Ortiz’s licensees selling patented articles, and all three entities are subject to the marking statute.” Id. Accordingly, the court concluded, “Ortiz was responsible for making reasonable efforts to ensure the patented articles were marked and pleading compliance with the marking statute.” Id.

Second, the court held that “failure to plead compliance with the marking statute provides an independent basis for dismissal.” Id. The court explained that “‘[a] claim for past damages requires pleading compliance with the marking statute—even when compliance is achieved, factually, by doing nothing at all.’” Id. (quoting Express Mobile, Inc. v. DreamHost LLC, 2019 WL 2514418, at *4 (D. Del. June 18, 2019)). The court had flagged this deficiency in ruling on Vizio’s first motion to dismiss, but Ortiz’s amended complaint did not address it. The court then dismissed with prejudice. Id. at 8.

Critically, Ortiz did not timely appeal the dismissal. Instead, it appealed only the subsequent fee award—limiting the Federal Circuit’s review to whether the district court abused its discretion in finding the case exceptional under Section 285.

C. The Federal Circuit’s Peculiar Affirmance

The Federal Circuit affirmed the fee award but did so in a peculiar fashion. Because Ortiz had not timely appealed the dismissal, the merits of the dismissal-as-license theory were not before the court. As the court stated: “Because Ortiz did not file a timely appeal from the dismissal order, we will not disturb the district court’s dismissal of the complaint with prejudice.” Ortiz, slip op. at 6 (Fed. Cir.). Ortiz’s own brief acknowledged “that Ortiz chose not to appeal the dismissal and judgment, and that the merits of the dismissal order are not at issue in this appeal.” Id. at 6 n.2.

Having disclaimed any authority to review the dismissal, the court nevertheless devoted substantial attention to explaining how Ortiz could have—and should have—challenged it:

Ortiz could have argued that those settlements merely resolved Ortiz’s claims of past infringement by those companies and did not give them the right to practice the asserted patents in the future. On that theory, Ortiz could have responded to Vizio’s motion to dismiss by arguing that because Roku and Panasonic were not licensed to make and sell infringing products in the future, the marking statute imposed no obligation on Ortiz to make an effort to require Roku and Panasonic to mark the products Ortiz had accused of infringing its patents. But Ortiz did not make that argument in the district court and has not made that argument in this court.

Id. at 8. This passage is remarkable. While appellate courts sometimes note forfeited arguments in § 285 cases, it is far less common for a panel to articulate, in such concrete terms, a legal theory that—if preserved—might have defeated the dispositive ruling below. The court explicitly identifies a winning argument, walks through exactly how it would have defeated the marking defense, and then notes—three times—that Ortiz failed to make it (“could have argued,” “could have responded,” “did not make that argument”). Appellate courts rarely provide this kind of roadmap for arguments not before them. The implication is clear. The court believes the district court’s dismissal-as-license theory is at least questionable as applied, and that Ortiz forfeited a meritorious challenge.

On the exceptional case finding itself, the court found multiple factors supporting the district court’s determination: that Ortiz’s “position was substantively weak given it knew, or should have known, that its complaint stated no viable damages theory”; that Ortiz “failed to comply with the Court’s discovery deadlines, including deadlines to serve infringement contentions and discovery requests”; that Ortiz had a “history of infringement actions involving the Asserted Patents that have been voluntarily dismissed or were dismissed for failure to state a claim before any discovery commenced”; and that Ortiz made a settlement demand that was “below the cost of defense.” Id. at 6–7, 13.

None of this is to say that the Federal Circuit erred in affirming the fee award under § 285. Ortiz’s failure to plead § 287 compliance after the issue was squarely raised, combined with its admitted noncompliance with court-ordered discovery deadlines, provided independent grounds for an exceptional-case finding under Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014).

D. The Unaddressed Timeline Problem

The Federal Circuit’s implied critique—that the dismissals may have resolved only past infringement rather than granting future rights—suggests the district court’s analysis was potentially flawed. But there is a more fundamental problem that neither the courts nor the parties addressed: the timeline.

Under 35 U.S.C. § 286, Ortiz could claim up to six years of pre-suit damages—reaching back to April 14, 2017. Even accepting the dismissal-as-license theory at face value, the earliest any marking obligation could have arisen was June 5, 2019, the date of the Roku dismissal. For the period from April 2017 through June 2019—over two years—Ortiz was a non-practicing entity with no licensees. No licensed “patented articles” existed. Section 287 simply did not apply.

Yet the district court treated the marking failure as a complete bar to all pre-suit damages. The court dismissed Ortiz’s complaint with prejudice for failure to plead Section 287 compliance, without parsing the timeline to recognize that Ortiz had over two years of potential damages entirely untouched by any marking requirement.

This was error. Even under the district court’s own theory, Ortiz’s complaint plausibly alleged a pre-license damages claim unaffected by § 287 arising from Vizio’s infringement between April 2017 and June 2019. During that period, Ortiz had no duty to mark or ensure marking by licensees—because, under any theory, Ortiz had no licensees. The marking statute cannot bar damages for a period when no marking obligation existed, making wholesale dismissal under Rule 12(b)(6) improper.

Ortiz thus had at least two viable grounds for appealing the dismissal. First, the argument the Federal Circuit itself identified: that the dismissals resolved only past infringement and did not create forward-looking licenses triggering marking obligations. Second, the timeline argument: that even if the dismissals created licenses, they could not retroactively bar damages for the pre-dismissal period when no license existed.

By failing to timely appeal, Ortiz forfeited both arguments. The Federal Circuit’s opinion—particularly its pointed discussion of the argument Ortiz “could have” but “did not” make—suggests that forfeiture was costly.

III. The Dismissal-as-License Theory Under Section 287

A. Statutory Framework

Section 287(a) provides that “[p]atentees, and persons making, offering for sale, or selling within the United States any patented article for or under them,” may provide constructive notice of patent rights by marking their products. 35 U.S.C. § 287(a). “In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter.” Id.

The marking requirement applies not only to the patentee’s own products but also to products made or sold by the patentee’s licensees. As the Federal Circuit explained in Amsted Industries Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 185 (Fed. Cir. 1994), “there is no reason why section 287 should only apply to express licensees and not to implied licensees.” Where a patentee authorizes others to make or sell patented articles, the patentee must ensure those authorized products are marked—or forfeit pre-notice damages.

Non-practicing entities (“NPEs”) like Ortiz are not exempt from § 287. If an NPE licenses its patents to practicing entities, it must ensure its licensees comply with marking requirements or provide actual notice to accused infringers before damages can accrue. See Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350, 1366 (Fed. Cir. 2017). The patentee bears the burden of both pleading and proving compliance. Id. (citing Maxwell v. J. Baker, Inc., 86 F.3d 1098, 1111 (Fed. Cir. 1996)).

B. The License-as-Covenant-Not-to-Sue Doctrine

The conceptual bridge between settlements and licenses runs through the covenant-not-to-sue doctrine. The Supreme Court long ago recognized that a license “has been described as a mere waiver of the right to sue by the patentee.” De Forest Radio Tel. & Tel. Co. v. United States, 273 U.S. 236, 242 (1927). The Federal Circuit has explained that “a patent license agreement is in essence nothing more than a promise by the licensor not to sue the licensee.” TransCore, LP v. Elec. Transaction Consultants Corp., 563 F.3d 1271, 1275 (Fed. Cir. 2009).

Courts have broadly construed what constitutes an authorization that triggers marking obligations. In In re Yarn Processing Patent Validity Litigation, 602 F. Supp. 159, 225 (W.D.N.C. 1984)—cited with approval in Amsted, 24 F.3d at 185—the court held that the marking requirement applies “regardless of whether the authorizations are settlement agreements, covenants not to sue, or licenses.”

The rationale is functional. If a patentee has authorized someone to make or sell products that practice the patent, the public needs notice that those products are covered by patent rights—regardless of how the authorization was granted.

C. Extension to Dismissals with Prejudice

The district court in Ortiz took the next logical step. If a covenant not to sue is equivalent to a license, and if a dismissal with prejudice bars future claims against the same defendant for the same products, then a dismissal with prejudice functions as a covenant not to sue and should trigger marking obligations.

This theory appears to originate in EMG Technology, LLC v. Vanguard Group, Inc., 2014 WL 12597427, at *2 (E.D. Tex. May 12, 2014). As the Ortiz district court summarized: “Courts have extended this reasoning to conclude that dismissals with prejudice of patent infringement claims function as the equivalent of a license.” Ortiz, slip op. at 7 (N.D. Tex.) (citing EMG Technology).

The theory has a surface logic. If a patentee cannot sue a defendant for infringement, the defendant has the practical equivalent of a license to practice the patent. Products sold by that defendant without patent marking enter the market appearing to be non-infringing when they may in fact practice the patent. Absent marking, the public—including potential infringers—has no way to know.

D. The Federal Circuit’s Implied Skepticism

The Federal Circuit in Ortiz did not reach the merits of the dismissal-as-license theory. But the court’s extended discussion of the argument Ortiz could have made reveals apparent skepticism about the district court’s approach.

The court’s key passage bears emphasis. It explained that Ortiz “could have argued that those settlements merely resolved Ortiz’s claims of past infringement by those companies and did not give them the right to practice the asserted patents in the future.” Ortiz, slip op. at 8 (Fed. Cir.). Under that theory, “because Roku and Panasonic were not licensed to make and sell infringing products in the future, the marking statute imposed no obligation on Ortiz.” Id.

This framing suggests the court views the past/future distinction as potentially dispositive. A dismissal that merely resolves claims of past infringement—without granting any forward-looking rights—may not create the kind of “authorization” that triggers Section 287. The district court’s theory, which treats every dismissal with prejudice as a license regardless of scope or intent, appears to conflict with this distinction.

IV. Doctrinal Problems with the Dismissal-as-License Extension

The dismissal-as-license theory has superficial appeal but has never been subjected to rigorous doctrinal analysis. When examined against established Section 287 principles, it suffers from fundamental logical and practical defects.

A. The “Patented Article” Prerequisite

Section 287 applies to “patented article[s]”—products that actually practice the patent claims. 35 U.S.C. § 287(a). This is not a formality. The Arctic Cat burden-shifting framework confirms this requirement. Once an alleged infringer identifies products it believes are unmarked “patented articles,” the patentee bears the burden to prove the identified products do not practice the claimed invention. 876 F.3d at 1368. The framework presupposes that “patented article” status requires actual practice of the claims—not mere allegation.

The Ortiz courts never interrogated whether Roku’s or Panasonic’s products actually practiced Ortiz’s patents. The Roku dismissal came after a fully-briefed Section 101 motion that was never decided. The Panasonic dismissal came before any substantive engagement with the merits. Neither defendant ever admitted infringement. Neither court ever found infringement. There was no determination—and no basis in the record for assuming—that these products were “patented articles” at all.

B. The Kessler Doctrine Contradiction

The dismissal-as-license theory also sits in tension with the Kessler doctrine, which addresses the preclusive effect of patent judgments. In Kessler v. Eldred, 206 U.S. 285 (1907), the Supreme Court held that a manufacturer who prevails against a patentee acquires a limited trade right to continue selling the adjudged products free from subsequent patent harassment. This right protects both the manufacturer and its customers from follow-on suits involving the same products.

Later courts extended Kessler to cover dismissals with prejudice. In In re PersonalWeb Technologies, LLC, 961 F.3d 1365 (Fed. Cir. 2020), the Federal Circuit held that a dismissal with prejudice—even without actual litigation of infringement—operates as an adjudication of non-liability. The court explained that the Kessler doctrine grants a “limited trade right” protecting products “as to which the manufacturer established a right not to be sued for infringement.” Id. at 1378-79. Significantly, the court held that regardless of the issues actually litigated, a dismissal with prejudice “operate[s] as an adjudication of non-liability for infringement for purposes of invoking the Kessler doctrine.” Id. at 1379.

This creates an irreconcilable conflict. Under Kessler, a dismissal with prejudice means the products are deemed non-infringing. Under the EMG/Ortiz theory, the same dismissal means the products are licensed patented articles requiring marking. A product cannot simultaneously be non-infringing and a “patented article.” If the dismissal establishes that Roku’s products do not infringe Ortiz’s patents—the Kessler characterization—then they are not “patented articles,” and Section 287 has no application.

To be sure, nothing in Kessler expressly resolves the § 287 issue in Ortiz, but its treatment of dismissed products as non-infringing highlights the difficulty of simultaneously treating them as licensed patented articles. And courts sometimes employ the terms “license,” “authorization,” and “non-liability” imprecisely across different doctrinal contexts. But even allowing for that imprecision, treating the same dismissal as both an effective adjudication of non-infringement and an authorization to practice the patent exposes a fundamental conceptual tension within the applicable precedent.

The contradiction runs deeper than semantics. Kessler protects defendants from “repeated harassment for continuing [their] business-as-usual post-final judgment.” Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1056 (Fed. Cir. 2014). The dismissal-as-license theory does the opposite. It punishes the patentee for not continuing to harass the defendant to comply with the patentee’s marking duties. That perverse incentive undermines the policy of encouraging settlement.

C. The “Reasonable Efforts” Problem

Even if a dismissal could theoretically create a license, the patentee would face an impossible compliance burden.

When a patentee’s licensees sell unmarked products, the patentee can still recover pre-notice damages if it made “reasonable efforts to ensure compliance with the marking requirements.” Maxwell, 86 F.3d at 1112. Courts evaluate whether the patentee took affirmative steps—typically, including marking obligations in the license agreement, auditing the licensee’s compliance, and enforcing contractual remedies for non-compliance. See Finjan, Inc. v. Juniper Networks, Inc., 387 F. Supp. 3d 1004, 1017–18 (N.D. Cal. 2019).

But a dismissal with prejudice by itself creates no contractual relationship. There are no license terms to impose marking obligations. There are no ongoing communication channels through which to request or verify compliance. There is no audit right. There is no remedy for non-compliance. The patentee has no leverage whatsoever to require the dismissed defendant to mark its products.

What would “reasonable efforts” look like in this context? Should the patentee write a letter to the dismissed defendant requesting voluntary marking—knowing the defendant has no obligation to comply and every incentive to refuse? Should the patentee condition future dismissals on marking commitments—even when the dismissal is necessitated by the patentee’s own realization that its case is weak?

The theory creates obligations without any mechanism for compliance.

D. Misalignment with Section 287’s Statutory Purpose

Section 287 serves a specific policy function: requiring notice from those who put patented articles into commerce to provide constructive notice of the patent. The Supreme Court in Dunlap v. Schofield, 152 U.S. 244, 247–48 (1894), explained that a patentee “cannot recover damages against infringers of the patent, unless he has given notice of his right, either to the whole public, by marking his article ‘Patented,’ or to the particular defendants, by informing them of his patent and of their infringement of it.” See also American Medical Systems, Inc. v. Medical Engineering Corp., 6 F.3d 1523, 1537 (Fed. Cir. 1993) (“marking statute furthers the policy of encouraging marking to provide notice to the public”).

Traditional licenses involve the patentee actively participating in putting patented articles into commerce. The patentee receives consideration—royalties, cross-licenses, or other value—in exchange for authorizing the licensee’s activity. The patentee has a stake in the commercial success of the licensed products and a relationship through which it can require constructive notice to the public through marking.

A dismissal with prejudice, by itself, is fundamentally different. The patentee is withdrawing from the marketplace, not participating in it. The patentee often receives nothing. By the dismissal itself, the patentee is not authorizing commercial activity; it is abandoning a claim against that commercial activity. Absent a separate settlement agreement, the defendant continues selling products it was already selling, unchanged by the dismissal.

Treating this as equivalent to the patentee “putting patented articles into commerce” stretches Section 287 beyond its statutory purpose.

E. The Basis-for-Dismissal Problem

The theory also fails to account for why a dismissal occurred. Dismissals with prejudice happen for many reasons:

The plaintiff realizes it cannot prove infringement after seeing claim construction or the defendant’s technical evidence.

The plaintiff fears an adverse eligibility or validity ruling that would affect other cases.

The plaintiff lacks resources to continue litigation.

The parties reach a commercial settlement that may or may not include license rights.

Only the last category arguably involves the patentee granting rights to practice the patent. A dismissal conceding non-infringement is categorically different from a dismissal granting rights to an infringer. The EMG/Ortiz theory treats all dismissals with prejudice as identical, but the basis for dismissal should matter. In that sense, the district court’s analysis in Ortiz was incomplete and required further inquiry into whether Ortiz actually granted license rights to Roku and Panasonic. Instead, the court merely assumed an authorization occurred based solely on the fact of dismissal with prejudice.

F. The Temporal Scope Problem

Even if the dismissal-as-license theory were valid, it can only affect damages from the date any marking obligation arose. It cannot retroactively bar damages for periods when no obligation existed.

As discussed above, the district court’s dismissal of the entire case for failure to plead Section 287 compliance was analytically flawed. Ortiz did not need to plead marking compliance for the pre-Roku period—there was nothing to comply with. A properly pled complaint could have alleged: “From April 2017 through June 2019, no marking was required because Plaintiff had no licensees and made no patented articles. Accordingly, Plaintiff is entitled to damages for Defendant’s infringement during that period without regard to Section 287.”

This analytical gap highlights a broader problem with Ortiz’s dismissal-as-license theory. It treats marking obligations as if they existed from the dawn of the patent term, when in fact they can only arise when an event triggering the obligation occurs. The theory, even on its own terms, cannot reach backward in time.

V. The Affirmative Duty to Plead Section 287 Compliance

A. The Pleading Requirement

Ortiz thus functions less as a warning about § 285 in the abstract than as a cautionary tale about pleading discipline, settlement structure, and the unintended consequences of unresolved marking theories. Independent of the license theory, Ortiz foremost illustrates the problem of failing to expressly plead Section 287 compliance.

The Federal Circuit has held that Section 287 compliance is not an affirmative defense that must be pled by the accused infringer; it is a limitation on damages that the patentee must affirmatively plead and prove. See Arctic Cat, 876 F.3d at 1366 (citing Maxwell, 86 F.3d at 1111). The patentee’s compliance “is a matter peculiarly within his own knowledge.” Dunlap, 152 U.S. at 248. As Judge Andrews explained in Express Mobile, Inc. v. Liquid Web, LLC, Nos. 18-01177-RGA, 18-01181-RGA, 2019 WL 1716455, at *3 (D. Del. Apr. 15, 2019), “[a] claim for past damages requires pleading compliance—even when compliance is achieved, factually, by doing nothing at all.”

This pleading requirement reflects both Twombly/Iqbal standards and the information asymmetry underlying Section 287. The facts bearing on marking compliance—whether the patentee sold products, whether they were marked, whether licensees existed and marked their products, when actual notice was given—are known to the patentee. It makes little sense to require defendants to plead and prove facts the patentee already knows.

B. Ortiz as Cautionary Tale

Ortiz’s complaint sought damages for past infringement but did not allege compliance with Section 287. The district court flagged this deficiency in ruling on Vizio’s first motion to dismiss. Yet Ortiz’s amended complaint still did not address the issue.

The consequences compounded. What began as a curable pleading defect became a litigation-ending failure when Ortiz failed to properly amend. That failure then became evidence supporting the exceptional case finding—demonstrating what the Federal Circuit called Ortiz’s “substantively weak” litigation position and contributing to the $162,000 fee award. See Ortiz, slip op. at 6 (Fed. Cir.).

The lesson is clear. Patentees seeking pre-notice damages must address Section 287 in their complaints. The allegation need not be elaborate, but it must be present.

C. Practical Guidance

At the pleading stage, courts are not asking patentees to prove compliance—only to address it. Silence, as Ortiz illustrates, can be dispositive. Patentees should include Section 287 compliance allegations in every complaint seeking pre-suit damages. Sample language might include:

“Plaintiff does not make, use, sell, offer for sale, or import any articles covered by the patents-in-suit. Plaintiff has not licensed any entity to make, use, sell, offer for sale, or import any articles covered by the patents-in-suit. Accordingly, no marking was required under 35 U.S.C. § 287(a).”

Or, where licensees exist:

“Plaintiff and/or its licensees have complied with the marking requirements of 35 U.S.C. § 287(a) by [marking all patented articles / providing actual notice to Defendant on or about [date]].”

Patentees with prior settlements or dismissals should carefully evaluate whether those events created marking obligations. If there is any doubt, the complaint should address the issue directly—either by alleging that no license was created, by alleging compliance with whatever marking obligations exist, or by limiting the damages period to post-notice infringement.

Critically, patentees should parse the timeline. As Ortiz illustrates, even if later events create marking obligations, the patentee may have a clean damages period before those events occurred. A complaint that identifies and preserves claims to pre-obligation damages avoids the trap of treating Section 287 as an all-or-nothing bar.

VI. Structuring Dismissals to Avoid Section 287 Exposure

The Ortiz decision creates uncertainty for patentees settling litigation. Until appellate courts definitively address the dismissal-as-license theory, practitioners might consider structural approaches to mitigate risk.

The most direct way to avoid a dismissal-as-license problem would be to dismiss without prejudice. But this is rarely a realistic option. Defendants who have invested in litigation—especially those who have developed meritorious defenses—will insist on finality. In the Roku case, where the defendant had filed a fully-briefed Section 101 motion, dismissal with prejudice was almost certainly the price of settlement. Patentees facing weak cases may have no leverage to negotiate different terms.

For stipulated dismissals with prejudice, patentees might consider including protective language addressing Section 287 such as: “This dismissal does not constitute an admission that Defendant’s products practice any claim of the patents-in-suit.” The intention is to make clear that the case was dismissed before any infringement issues were resolved, and that no implied authorization to practice the asserted patents should be inferred from the dismissal itself.

Whether such language would be effective is uncertain. On the one hand, PersonalWeb suggests that parties retain flexibility: “Settling parties will remain free to limit the preclusive effect of a dismissal; they simply have to fashion their agreement in a way that makes clear any limitations to which they wish to agree as to the downstream effect of the dismissal.” 961 F.3d at 1379.

On the other hand, Finjan held that disclaiming infringement in a license agreement does not eliminate marking obligations if the products in fact practice the patent. 387 F. Supp. 3d at 1017–18. Thus, to the extent that courts recognize dismissals with prejudice as a license subject to § 287 marking requirements, the protective language may lack force if the accused products are later shown to actually practice the asserted claims.

Practitioners should remain attentive to this unresolved tension when dismissing cases with prejudice, particularly where patent infringement claims are resolved without any adjudication on the merits.

VII. Conclusion

Ortiz v. Vizio illustrates how routine litigation events can create unexpected downstream consequences. The theory that dismissals with prejudice trigger Section 287 marking obligations remains untested at the appellate level—and the Federal Circuit’s peculiar affirmance suggests the court has doubts about its validity.

But until appellate courts definitively reject the theory, prudent practitioners must assume it could apply. Patentees settling cases should structure dismissals carefully, consider protective language where negotiable, and document their rationale. And every patentee seeking pre-suit damages should address Section 287 compliance in its complaint—parsing the timeline to preserve claims to any period when no marking obligation existed.

The alternative, as Ortiz learned, is to convert a potentially curable defect into an exceptional case finding—and a $162,000 fee award. Until the Federal Circuit squarely addresses whether, and under what circumstances, a dismissal with prejudice creates marking obligations, practitioners should assume the issue remains unsettled—and draft, plead, and settle accordingly.