United States: It's Not Too Late: Federal Circuit Reverses Equitable Estoppel And Laches Judgments

In John Bean Techs. Corp. v. Morris & Assoc., Inc., No. 17-1502 (Fed. Cir. April 19, 2018), the Federal Circuit reversed a district court's grant of summary judgment dismissing an infringement case based on laches and equitable estoppel.

In 2002, after receiving a patent for poultry chillers, John Bean began notifying Morris' customers that Morris' chillers infringed its patent.  In response, Morris sent John Bean a letter stating that the patent was invalid and demanding that John Bean either respond to its invalidity claims or stop contacting its clients.  John Bean did nothing.  Twelve years later, John Bean, through an ex parte reexam, was issued new claims and thereafter sued Morris for infringing those reexamined claims.  Morris raised laches and equitable estoppel as defenses in the infringement suit, and the district court found in Morris' favor.  The court reasoned that Morris relied on John Bean's twelve-year silence in continuing to manufacture and sell its own chillers, and that Morris would be prejudiced if the infringement suit were allowed to proceed.

On appeal, the Federal Circuit reversed the laches judgment because, while the appeal was pending, the Supreme Court held in SCA Hygiene Prods. Aktiebolag v. First Quality Baby Products, LLC, 137 S. Ct. 954 (2017) that laches is not available to a defendant whose infringing activity occurred within six years of the complaint being filed.  As to equitable estoppel, the Court held that the reexamined claims, having issued in 2014, were essentially new, and so equitable estoppel did not apply.  The Court reasoned that because a reexamined claim cannot be broader than its original, because John Bean could not recover damages for infringement prior to the reexam certificate issuance date, and because any delay in bringing suit could not be attributed to the reexam itself, the district court abused its discretion in granting Morris' equitable estoppel defense.

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