Greenblum & Bernstein, P.L.C.
Recent Litigation News in Intellectual Property
In This Issue
· Federal Circuit Reverses District Court’s Denial Of Motion To Supplement Complaint To Assert Declaratory Judgment Of Newly Issued patents
· Federal Circuit Reverses Summary Judgment Of Noninfringement Based Upon Equitable Estoppel
· Federal Circuit Affirms Dismissal Of Complaint
· Federal Circuit Reverses Grant Of Summary Judgment
In Arkema Inc. et al. v. Honeywell International Inc. (Appeal No. 2012-1308), the Federal Circuit reversed the district court’s denial of a motion for leave to supplement a complaint by adding declaratory judgment claims regarding two newly issued patents.
In November 2009, Honeywell filed suit against Arkema for infringement of a European patent based on Arkema’s offers to sell HFO-1234yf (“1234yf”), a next generation automotive refrigerant, in Germany. In June 2010, Arkema brought suit against Honeywell in the U.S. District Court for the Eastern District of Pennsylvania, seeking declaratory judgment that the asserted patents were invalid and not infringed by Arkema’s plans to supply U.S. automobile manufacturers with 1234yf. Honeywell counterclaimed, asserting that Arkema’s sale and offer for sale of 1234yf in the U.S. constituted infringement. Honeywell specifically alleged (and Arkema admitted) that Arkema “has sought, and continues to seek, to compete with Honeywell for supplying 1234yf to automobile manufacturers in the U.S.,” and that Arkema is “aware that U.S. automobile manufacturers purchase . . . 1234yf primarily or exclusively for use in automobile air conditioning systems.” While the suit was in discovery, Honeywell obtained two additional patents covering methods of using 1234yf, the ’120 and ’882 patents. Arkema then moved to supplement its complaint to seek declaratory judgment of non-infringement and invalidity as to the ’120 and ’882 patents, fearing liability under those patents should it proceed with plans to sell 1234yf to U.S. automobile manufacturers.
The district court denied Arkema’s motion to supplement its complaint finding that Arkema’s new claims did not present an Article III case or controversy. The district court concluded that Arkema could not be charged with directly infringing the ’120 and ’882 patents because, as a mere supplier, Arkema had no plans to use 1234yf in any manner that could directly infringe those patents, which cover only methods of using 1234yf. As for indirect infringement, the district court concluded that Arkema “is not currently or imminently in danger of facing liability for contributory infringement or induced infringement.”
The Federal Circuit disagreed, holding that the controversy between Arkema and Honeywell regarding the ’120 and ’882 patents is “of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” The case was reversed and remanded to the district court.
Federal Circuit Reverses Summary Judgment Of Noninfringement Based Upon Equitable Estoppel
In Radio Systems Corp. and Innotek, Inc. v. Tom Lalor and Bumper Boy, Inc. (Appeal No. 2012-1233), the Federal Circuit reversed the district court’s grant of summary judgment of noninfringement based on the doctrine of equitable estoppel.
The district court had found that Bumper Boy misled Innotek through its 2005 demand letter and subsequent silence for over four and a half years. The court also found that Innotek relied on this silence by significantly expanding its product line and by being acquired by Radio Systems. The court found that Innotek’s investment in new products constituted economic prejudice. The court concluded that equitable estoppel applied to Bumper Boy’s allegations against Innotek.
The court further reasoned that equitable estoppel also barred Bumper Boy’s allegations against Radio Systems because it: (1) wholly owns Innotek; (2) is headed by the same individual as Innotek; (3) purchased Innotek to incorporate its designs and products into its own product lines; and (4) exerts substantial control over Innotek. In granting summary judgment of noninfringement, the district court found that Bumper Boy was equitably estopped from alleging that the Radio Systems accused collar infringed the ’014 and ’082 patents.
Bumper Boy argued, inter alia, that even if equitable estoppel applied to the
’014 patent, it cannot apply to the ’082 patent because Bumper Boy “never accused either Innotek or Radio Systems of infringing the ’082 patent prior to November 2009.”
The Federal Circuit affirmed the district court’s finding of equitable estoppel with respect to the ’014 patent, as all three elements of equitable estoppel were present. The Federal Circuit also affirmed the district court’s finding that equitable estoppel barred Bumper Boy’s infringement claims against Radio Systems, Innotek’s successor-in-interest because precedent confirms that equitable estoppel
applies to successors-in-interest where privity has been established.
However, the Federal Circuit concluded that the district court had abused its discretion in extending equitable estoppel to the ’082 patent. The first notice of infringement to Radio Systems regarding the ’082 patent was in Bumper Boy’s November 2009 demand letter. Regardless of whether the ’082 patent claims are supported by the subject matter in the’014 patent, the patents contain claims of different scope. The ’082 patent claims could not have been asserted against Innotek or Radio Systems until those claims issued. As a result, the elements of equitable estoppel were not present with respect to the ’082 patent. Accordingly, the Federal Circuit concluded that the district court abused its discretion by granting summary judgment of noninfringement with respect to the ’082 patent on the basis of equitable estoppel and reversed the district court’s judgment.
Judge Newman, who filed a separate opinion concurring in part and dissenting in part, stated that she would also apply estoppel to the ’082 patent.
Federal Circuit Affirms Dismissal Of Complaint
In Semiconductor Energy Laboratory Co., Ltd. v. Yujiro Nagata (Appeal No. 2012-1245), the Federal Circuit affirmed the district court’s dismissal of SEL’s
complaint with prejudice pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction under 28 U.S.C. § 1338(a) and declining to exercise supplemental jurisdiction over a number of state law claims.
SEL owns U.S. Patent 6,900,463 (the “’463 patent”), which names Dr. Yujiro Nagata (“Nagata”) as a coinventor. During prosecution in 1991, Nagata assigned
his rights to applications and patents related to the ’463 patent to SEL’s founder Dr. Shunpei Yamazaki, and subsequently signed a substitute Declaration and Assignment of those applications and patents. From 2002 to 2003, Nagata assisted SEL in a patent infringement suit against another party and was paid for his cooperation and services relating to that litigation.
In 2009, SEL brought suit for infringement of a number of patents, including the ’463 patent, against Samsung, Inc. and others. SEL contacted Nagata for further assistance, assuming that he would cooperate as he had in the earlier case, but learned instead that Nagata had agreed to assist Samsung in the litigation as a fact witness. During the proceedings, Nagata gave testimony repudiating his signature on the 1991 Declarations and Assignments. Samsung then claimed that the patents-at-issue, including the ’463 patent, were unenforceable due to inequitable conduct, alleging that the documents were forged. The dispute eventually was settled, but SEL maintained that because Nagata’s testimony impugned the enforceability of the ’463 patent, SEL settled for less money than it would have otherwise. SEL subsequently brought suit against Nagata.
Nagata moved to dismiss SEL’s complaint under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction. The district court granted Nagata’s motion, dismissing SEL’s complaint with prejudice for lack of subject matter jurisdiction because the doctrine of assignor estoppel does not provide a cognizable federal cause of action. The district court further held that SEL’s “artful pleading” of the state law claims did not give rise to subject matter jurisdiction under 35 U.S.C. § 1338(a) because: (1) there was no federal law central to each of the counts, as the doctrine of assignor estoppel did not even apply to the facts of this case; and (2) federal patent law was not essential to those claims as they were supported by alternative state law theories. Thus, the district court declined to exercise supplemental jurisdiction over the state law claims.
The Federal Circuit affirmed the dismissal, holding that the district court did not
err in holding that SEL failed to invoke federal subject matter jurisdiction because there was no federal cause of action based on the affirmative application of the doctrine of assignor estoppel and because disposition of the state law claims did not necessarily require resolution of a substantial issue of federal patent law. Furthermore, the district court did not abuse its discretion in declining supplemental jurisdiction over the state law claims.
Federal Circuit Reverses Grant Of Summary Judgment
In Brilliant Instruments, Inc. v. GuideTech, Inc. (Appeal No. 2012-1018), the Federal Circuit reversed the district court's grant of summary judgment of noninfringement based on the doctrine of equivalents.
In November 2009, Brilliant brought a declaratory judgment action for non-infringement of the U.S. Patent Nos. 6,226,231, 6,091,671, and 6,181,649 (the ‘231, ‘671, ‘649 patents) assigned to GuideTech. GuideTech counterclaimed, asserting infringement of these patents. The district court granted summary judgment of noninfringement as to all three patents.
On appeal, the Federal Circuit held that the district court erred when it granted summary judgment with respect to the ‘231 patent because a genuine issue of
material fact exists as to how the accused products function. The evidence raised a genuine issue of material fact as to whether Brilliant’s products literally infringe the ’231 patent claims, such that summary judgment should not have been granted.
With respect to the ’671 and ’649 patents, the Federal Circuit held that the district court properly granted summary judgment that Brilliant’s accused products do not literally infringe, but that the district court erred when it granted summary judgment that Brilliant does not infringe under the doctrine of equivalents.
Specifically, GuideTech argued that there was nothing in the claims that precluded a certain capacitor from being part of the first circuit and at the same time being operatively disposed in parallel and pointed to its expert, Dr. West’s detailed explanation of how the accused capacitor was operatively equivalent to the claimed capacitor. The Federal Circuit agreed with Guidetech that the expert’s testimony created a genuine issue of material fact which precluded summary judgment of noninfringement. Accordingly, the Federal Circuit reversed and remanded the district court’s grant of summary judgment.
Judge Dyk filed a dissent, reiterating that the function-way-result test for the doctrine of equivalents requires a “showing on limitation-by-limitation” and argued that the expert report did not actually consider equivalents to the particular limitation at issue, but was an application of the equivalent to the invention as a whole.