Equitable Estoppel

  • Equitable Estoppel Arises From Reliance On Misleading Representation: A party raising equitable estoppel as a defense must prove, by a preponderance of the evidence, three elements: “(1) The [patentee], who usually must have knowledge of the true facts, communicates something in a misleading way, either by words, conduct or silence. (2) The [accused infringer] relies upon that communication. (3) And the [accused infringer] would be harmed materially if the [patentee] is later permitted to assert any claim inconsistent with his earlier conduct. C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1041 (Fed. Cir. 1992) (en banc).” Vanderlande (Fed. Cir. 05/03/04); High Point SARL (Fed. Cir. 04/05/16) (aff’g holding of equitable estoppel: “(1) the patentee, through misleading conduct (or silence), leads the alleged infringer to reasonably infer that the patentee does not intend to enforce its patent against the alleged infringer; (2) the alleged infringer relies on that conduct; and (3) the alleged infringer will be materially prejudiced if the patentee is allowed to proceed with its claim.”) “There is a difference between prejudice that results from a patentee’s alleged misrepresentation and prejudice caused by reliance upon it. Although the former is sufficient to show a nexus for laches, the latter is required to show reliance for equitable estoppel.” SCA Hygiene (Fed. Cir. 09/17/14) (vacating Summ. J. of equitable estoppel where genuine dispute on whether patent owner’s silence after initial exchange of letters was misleading, and on reliance), reinstated SCA Hygiene II (Fed. Cir. 09/18/15) (en banc) (unanimous on this issue) (adopting panel’s reasoning), vacated on other grounds, SCA Hygiene III (U.S. 03/21/2017) (7-1). See Wang Labs (Fed. Cir. 01/03/97) (aff’g implied license “in the nature of equitable rather than legal estoppel, because the license arose from an accord implicit in the entire course of conduct between the parties”).  See GlaxcoSmithKline rehearing en banc denied (Fed. Cir. 02/11/22) (7-3) (6-Judge Concurring op.) (dissents’ fairness concerns track elements of equitable estoppel; a party may know it is infringing but be misled into believing that patent owner will not enforce the patent against that infringement; long discussion of equitable estoppel elements).
  • No Equitable Estoppel Where Patent Owner Warned Defendant Of Infringement: Aff’g ITC “infringement” finding. Patent owner warned the respondent that it was infringing, so failure to file suit earlier did not amount to equitable estoppel. Vanderlande (Fed. Cir. 05/03/04).
  • Equitable Estoppel Where Patent Owner Identified Patents But Then Detailed Alleged Infringement Of Other Patents Only: Aff’g Summ. J. of equitable estoppel where patent owner wrote the defendant identifying a number of patents, including the two later in suit, saying defendant may be infringing them, then followed up with detailed infringement allegations on two patents (but not those in suit), and then after the defendant responded that it did not infringe any valid claim, there was three years of silence before suit filed. Aspex Eyewear (Fed. Cir. 05/24/10).
  • Equitable Estoppel Protects Privities: “equitable estoppel applies to successors-in-interest where privity has been established.” Radio Sys. (Fed. Cir. 03/06/13) (aff’g Summ. J. of equitable estoppel due to four years of silence as to first cease and desist letter, but rev’g as to later issued continuation-in-part patent.)
  • Equitable Estoppel Binds Successors: “The effect of equitable estoppel is ‘a license to use the invention that extends throughout the life of the patent.’ That effect can arise when a predecessor’s conduct is imputed to its successors-in-interest.” High Point SARL (Fed. Cir. 04/05/16) (aff’g Summ. J. of equitable estoppel against NPE assignee based on commercial conduct of earlier assignees vis-à-vis the alleged infringer).
  • Equitable Estoppel Cannot Be Based On Inactivity Or Statements Before Claims Substantially Amended In Reexamination: Where “amendments made during reexamination were both substantial and substantive,” abuse of discretion to base equitable estoppel on inaction of patent owner for 12 years in response to allegation of invalidity, before the Reexamination. John Bean I (Fed. Cir. 04/19/18). But “we decline to adopt a bright-line rule that equitable estoppel cannot apply whenever the scope of the issued patent is different than what the parties discussed in communications leading to the allegedly misleading conduct. Thus, while differences in claim scope are relevant to the equitable estoppel inquiry, their mere existence does not render pre-issuance conduct or communications irrelevant.” Ferring (Fed. Cir. 11/10/20) (vacating Summ. J. of equitable estoppel barring inventorship correction action, because misleading conduct not “only possible inference” from the evidence ivo difference in claim scope).
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