Equitable Estoppel Requires Claim Scope Sufficiently Similar to Earlier Claims

John Bean Techs. Corp. v. Morris & Assocs., No. 2017-1502, 2018 U.S. App. LEXIS 9894 (Fed. Cir. Apr. 19, 2018) (Before Prost, C.J., Reyna, and Wallach, J.) (Opinion for the court, Reyna, J.).

John Bean appealed a district court decision holding that its patent infringement claims are barred by the affirmative defenses of equitable estoppel and laches. The Federal Circuit reversed and remanded for further proceedings.

As an initial matter, the Court noted that subsequent to the district court’s grant of summary judgment, the Supreme Court issued a decision holding that laches cannot be asserted as a defense to infringement occurring within the six-year period prior to the filing of an infringement complaint as prescribed by 35 U.S.C. § 286. See SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (2017). Thus, the Court held, and the parties agreed, the laches defense is barred.

As originally issued, the disputed John Bean patent contained two claims, both directed to an auger-type chiller for cooling poultry carcasses. Shortly after issuance, Morris contacted John Bean, because Bean was telling Morris’s customers that Morris’s equipment infringed the patent. Morris’s letter detailed prior art references that it believed invalidated the patent. John Bean received but never responded to the letter, and Morris continued to develop and sell its chillers.

In 2013, eleven years after the patent issued, John Bean field a request for ex parte reexamination, which was granted. In response to anticipation and obviousness rejections, Bean amended its specification and the two original claims and added six more claims

In 2014, approximately one month after the reexamination certificate issued, Bean filed a complaint against Morris for patent infringement, alleging that Morris directly infringed its patent from the date the reexamination certificate issued, and induced and willfully infringed the patent from the date Bean served Morris with the original complaint. Notably, Bean did not allege that Morris engaged in any infringing activity prior to the reexamination certificate. Morris filed its answer and asserted, inter alia, the affirmative defenses of equitable estoppel, prosecution laches, and absolute and equitable intervening rights.

The district court requested the parties’ positions on whether laches and equitable estoppel could be dispositive of the case, and subsequently ordered summary judgment briefing on these issues. The court granted summary judgment in favor of Morris, holding that the 2002 letter established that Bean knew Morris was selling a product that Bean believed infringed its patent. Bean was aware that Morris would continue to invest, develop, and sell its chillers. Thus, Morris relied on Bean’s silence and would be materially prejudiced if Bean was allowed to pursue its infringement action.

On appeal, the Court noted that there is no precedent for this “unusual situation where the district court has found that equitable estoppel bars an infringement action based on activity prior to the issuance of the asserted reexamination claims.” The Court found that when claims are narrowed during reexamination to overcome prior art, as here, any validity analysis of the newly issued claims differs from that of the original, broader claims, and Morris’s challenge to the original claims in the demand letter may no longer be accurate.

Further, a patentee cannot assert reexamination claims prior to the reexamination certificate, unless the reexamined claims are identical in scope to the original claims. Here, the amendments made during reexamination were substantial and substantive. Thus, “because the asserted claims did not exist at, or were substantively altered” since the time of the Morris letter, John Bean “could not have engaged in misleading conduct or silence with respect to those claims.”

Accordingly, the Court reversed the grant of summary judgment for Morris based on equitable estoppel and laches and remanded for further proceedings. The Court noted that its decision did not necessarily preclude the affirmative defenses of absolute and equitable intervening rights.

Take Away

Equitable estoppel does not bar assertion of patent claims later amended by reexamination when those new claims differ in scope from earlier claims in the patent that were not asserted. Thus, a defendant’s reliance on a patentee’s knowing silence and failure to enforce an earlier patent does not shield him from allegations of infringing later-issued claims of different scope.

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Joseph Robinson

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

Joseph Robinson

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

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