John Bean Technologies Corp. v. Morris & Associates, Inc.
Decided: April 19, 2018
A patentee accused a competitor of infringing a patent related to poultry carcass chillers. The accused infringer then sent the patentee a letter identifying an arguably invalidating prior art reference; the patentee never responded to this letter.
More than a decade later, the patentee filed an ex parte reexam and significantly narrowed its claims to distinguish the reference identified by its competitor.
After the patentee asserted the new, narrower claims in a suit against the same competitor, the district court dismissed the case on equitable estoppel grounds, reasoning that the patentee’s decade-plus silence amounted to misleading conduct that its competitor reasonably relied upon. The United States Court of Appeals for the Federal Circuit (Federal Circuit) reversed, ruling that the district court’s dismissal was an abuse of discretion.
John Bean Technologies Corp., owns U.S. Patent No. 6,397,622; Morris & Associates, Inc. competes with John Bean in the poultry chiller market. These two companies have a long history of litigating their patent disputes.
In barring the infringement action, the District Court held that John Bean knew that competitor was infringing the ‘622 patent, and that its decade of silence after receiving Morris’s invalidity contention amounted to misleading conduct because it was aware that—absent a response from John Bean—Morris would continue to invest, develop, and sell its chillers.
In its appeal, John Bean argued that because the claims asserted in the infringement action did not exist when Morris was given notice in 2002, the District Court abused its discretion when it dismissed the case. The Federal Circuit agreed; its opinion begins with a listing of the three elements required to establish the defense of equitable estoppel:
(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.
The court then drew a parallel to the Radio Systems case, in which an equitable estoppel defense was asserted against a patent owner whose asserted patent claims had not yet issued at the time of the alleged misleading conduct. In that case, the Federal Circuit held that because pending patent claims cannot be asserted, there can be no Article III case or controversy regarding those pending claims—and therefore no misleading conduct or silence regarding them that could give rise to equitable estoppel. Similarly in this case, the claims that were granted in the reissue patent did not exist (and were not even pending) at the time of the initial correspondence between the two companies; no Article III case or controversy could have existed regarding those claims at the time of the initial correspondence, and therefore John Bean could not have engaged in misleading conduct or silence with respect to those (nonexistent) claims. Click here for the PDF