CAFC tackles intervening rights in JOHN BEAN TECHNOLOGIES

The outcome:

This appeal is from a decision of the United States District Court for the Eastern District of Arkansas that, on remand from this court, granted-in-part Morris & Associates, Inc.’s motion for summary judgment as to equitable intervening rights, denied-in-part its motion as to prosecution laches, and dismissed the case. John Bean appeals the district court decision as to equitable intervening rights and Morris cross-appeals the decision as to prosecution laches. For the following reasons, we affirm the district court’s decision. (...)

The district court found that Morris made “substantial preparation” before the USPTO issued the reexamination certificate based on Morris’s “years of research, developments, investments, improvement, promotion, and goodwill associated with the accused product” and Morris’s conversion of “nearly [two-thirds] of its business to selling the accused product.” Id. at *2. The district court found that while Morris had made profits sufficient to recoup its investment due to a long period of sales, requiring “a company to eliminate [two-thirds] of its business because a patent holder, after, a decade, decided to seek reexamination and enforce the patent is inequitable.” Id. at *3. (...)

We turn to the question of whether the district court abused its discretion in its application of the equitable intervening rights doctrine. This court has previously determined that “once the doctrine of intervening rights is properly raised, the court must consider whether to use its broad equity powers to fashion an appropriate remedy.” Seattle Box II, 756 F.2d at 1579. This court also held that “the second sentence of the second paragraph in 35 U.S.C. § 252 was to be applied in that case in accordance with equity.”2 Id. In cases involving equitable remedies and equitable defenses, the discretion of the court permits “decisions that are flexible, intuitive, and tailored to the particular case.”3 See e.g., Mikohn Gaming Corp. v. Acres Gaming, Inc., 165 F.3d 891, 895 (Fed. Cir. 1998), Monsanto Co. v. E.I. Du Pont de Nemours & Co., 784 F.3d 1189, 1197 (Fed. Cir. 2014). It permits a “judge’s discretion to see justice done in individual cases, by remedying the imperfect fit between the rules of law and the facts of the world.”4 John Bean argues that this court should deem monetary recoupment of investments made prior to the grant of reissue as sufficient to protect investments and defeat the grant of the equitable remedy. We disagree.