Thursday, April 19, 2018

Equitable estoppel issue in John Bean case

From the beginning of the decision:

John Bean Technologies Corp. appeals from a decision
by the United States District Court for the Eastern District
of Arkansas holding that its patent infringement
claims are barred by the affirmative defenses of equitable
estoppel and laches.1 Because the asserted claims in this
action were substantively amended or added following ex
parte reexamination in 2014, and the plaintiff only sought
damages for infringement of the reexamined claims, the
district court abused its discretion in finding equitable
estoppel based on activity beginning in 2002, twelve years
prior to the issuance of the reexamination certificate. We
therefore reverse the district court’s grant of summary
judgment based on its finding of equitable estoppel, and
remand for proceedings consistent with this opinion.

One legal issue is addressed in footnote 1:

Following the district court’s grant of summary
judgment, the Supreme Court issued its decision in SCA
Hygiene Products Aktiebolag v. First Quality Baby Products,
LLC, 137 S. Ct. 954 (2017), holding that laches
cannot be asserted as a defense to infringement occurring
within the six-year period prior to the filing of a complaint
for infringement as prescribed by 35 U.S.C. § 286. As the
allegedly infringing activity for which John Bean seeks
damages started on May 9, 2014, and John Bean filed its
complaint for patent infringement on June 19, 2014, we
hold, and the parties agree, that SCA Hygiene bars Morris’s
laches defense. Appellant’s Br. 41; Appellee’s Br. 1
n.2. We thus reverse the district court’s grant of summary
judgment based on Morris’s affirmative defense of

Of equitable estoppel

Equitable estoppel serves as an absolute bar to a patentee’s
infringement action. Aukerman, 960 F.2d at
1041. The defense consists of three elements: (1) the
patentee engages in misleading conduct that leads the
accused infringer to reasonably infer that the patentee
does not intend to assert its patent against the accused
infringer; (2) the accused infringer relies on that conduct;
and (3) as a result of that reliance, the accused infringer
would be materially prejudiced if the patentee is allowed
to proceed with its infringement action. Scholle, 133 F.3d
at 1471. Misleading conduct may include the patentee’s
“specific statements, action, inaction, or silence where
there was an obligation to speak.” Id.
This case presents an 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. Here, the reexamined
claims did not exist in their present form in 2002
at the time Morris sent the Demand Letter to John Bean.
These claims first issued in May 2014 following reexamination.
We have no precedent that presents this factual
scenario and provides a clear solution. Under the circumstances
presented here, we find that the district court
abused its discretion in extending equitable estoppel to
the reexamined claims.
Our resolution of this matter lies in the principles undergirding
the issuance of reexamination claims. First,
claims amended and issued during reexamination cannot
be broader than the original claims. 35 U.S.C. § 305; 37
C.F.R. § 1.552(b). While claim broadening can result in
the invalidation of the claims under § 305, claim narrowing
means that the scope of what is and is not an infringing
product can change. See Predicate Logic, Inc. v.
Distributive Software, Inc., 544 F.3d 1298, 1302 (Fed. Cir.
2008). And when claims are narrowed during reexamination
to overcome prior art, as is the case here, any validity
analysis of the newly issued claims differs from that of the
original broader claims. Thus, Morris’s challenge to the
validity of the ’622 patent claims in the Demand Letter
may no longer be accurate. Indeed, it would not be wrong
for John Bean to narrow its claims in response to the
Demand Letter.


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