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IP Alert: Equitable Estoppel Inapplicable After Claims Amended in Reexamination

April 20, 2018

On April 19, in John Bean Technologies Corporation v. Morris & Associates, Inc., a Federal Circuit panel concluded that activity that predated issuance of the asserted reexamination claims could not result in equitable estoppel in regard to the amended claims. The decision has potential implications for any situation in which an estoppel defense is raised against patent claims that have been substantively altered after issuance.

John Bean is the owner of U.S. Patent No. 6,397,622, which is directed to a chiller for cooling poultry carcasses and issued on June 4, 2002. Morris is a competitor of John Bean and the only other manufacturer of poultry chillers in the United States. The two companies have been involved in several lawsuits against each other.

Immediately after the issuance of the ’622 patent, representatives of John Bean began contacting Morris’s customers and asserting that equipment sold by Morris infringed the ’622 patent. In response, on June 27, 2002, Morris sent a letter arguing that the patent was invalid based on multiple prior art references and demanding that John Bean terminate such conduct. John Bean received but did not respond to Morris’s letter.

In December 2013, more than 11 years after the issuance of the patent, John Bean filed a request for ex parte reexamination of the patent. The USPTO rejected both claims of the ’622 patent based on the prior art identified in Morris’s 2002 letter. John Bean amended the only independent claim and added six new claims that were narrower than the original independent claim. The USPTO determined that these claims were patentable and issued a reexamination certificate in May 2014.

In June 2014, nearly 12 years after Morris’s letter to John Bean asserting invalidity of the ’622 patent, John Bean sued Morris, alleging infringement beginning on the date that the reexamination certificate issued. John Bean did not allege infringement prior to issuance of the reexamination certificate, nor did it seek damages prior to that date.

In December 2016, the Eastern District of Arkansas granted summary judgment to Morris, holding that John Bean’s infringement claim was barred by both laches and equitable estoppel. The court determined that John Bean’s “misleading” silence and choice not to pursue a patent infringement claim for 12 years, during which time it was aware that Morris would continue to invest, develop, and sell its chillers, gave rise to both laches and equitable estoppel.

On appeal, the Federal Circuit reversed. As to equitable estoppel, the court held that the activity prior to issuance of the reexamination certificate did not bar John Bean’s 2014 infringement claims. The court noted that when patent claims are narrowed during reexamination to overcome prior art, the invalidity analysis of the amended claims necessarily differs from that of the broader original claims. In addition, the court found it relevant that the substantial and substantive changes to the claims foreclosed John Bean from obtaining damages from the period prior to issuance of the reexamination certificate. Finally, the court observed that equitable estoppel does not apply to pending patent claims, because claims that have not issued do not present a case or controversy. John Bean’s silence from 2002 to 2014 could not have constituted misleading conduct with respect to the claims in the reexamination certificate, which did not exist at that time.

Citing the Supreme Court’s recent decision in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, the Federal Circuit also held that Morris’s laches defense was barred by 35 U.S.C. 286 because the allegedly infringing activity for which damages were sought began in May 2014, less than six years before John Bean filed its complaint.  

This case is potentially relevant to any situation in which a patent owner asserts claims but does not immediately pursue litigation despite knowledge of the continued activity by the alleged infringer. There is no time limitation for narrowing patent claims through reexamination or reissue, and substantive changes to the claims may eliminate a defense based on equitable estoppel. The decision leaves open the question whether the outcome would be different where some claims survive unamended or where amendments are relatively minor and the new claims are arguably identical to the original ones.

If you have any questions on this decision, please contact Fitch Even partner Mark A. Borsos, author of this alert.

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