In High Point SARL v. Sprint Nextel Corporation, [2015-1298] (April 5, 2016), the Federal Circuit affirmed summary judgment that equitable estoppel and laches preclude prosecution of High Point’s claims for infringement of United States Patent Nos. 5,195,090, 5,195,091, 5,305,308, and 5,184,347.  High Point is an NPE that acquired the patents from successors of AT&T and Lucent.

The Federal Circuit held that the district court did not abuse its discretion
in determining that equitable estoppel precludes High Point from bringing this case against Defendants.  The Court said that three elements must be established for equitable estoppel to bar a patentee’s suit:

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.

The Federal Circuit concluded that High Point’s predecessors’ misleading course of conduct caused Sprint to reasonably infer that they would not assert the patents-in-suit while Sprint purchased unlicensed infrastructure to build its network. The Court said that misleading conduct occurs when the alleged infringer is aware of the patentee or its patents, and knows or can reasonably infer that the patentee has own of the allegedly infringing activities for some time.  The Federal Circuit said that the evidence showed both silence and active conduct.

The Federal Circuit also agreed with the district court that Sprint detrimentally relied upon the inaction of High Point’s predecessors.

Finally, the Federal Circuit agreed with the district court that Sprint were prejudiced by the delay, both economically because of continued investment in the accused technology, and through loss of evidence over time.

The effect of equitable estoppel is “a license to use the invention that extends throughout the life of the patent.”

In Cardpool, Inc. v. Plastic Jungle, Inc., [2014-1562] (April 5, 2016) the Federal Circuit affirmed the district court’s denial of vacatur, because the denial was within the district court’s discretion and also because the premise of the motion was both speculative and inaccurate.

The parties’ jointly requested vacatur was that all of the Cardpool patent claims had been replaced on reexamination, and that Plastic Jungle was no longer conducting the accused infringing activities.

The Federal Circuit, applying Ninth Circuit law, said that a district court’s denial of a Rule 60(b) motion is reviewed for abuse of discretion, and found that it was not an abuse of discretion to preserve its original decision, which was limited to the claims and grounds that existed at the time.  The Federal Circuit further found that the premise of the motion was both speculative and inaccurate: the district court’s final judgment as to an original group of claims does not automatically render that judgment res judicata as to new claims granted upon reexamination.  The Federal Circuit distinguished Aspex, noting that for res judicata to apply, it is necessary that the claim either was asserted, or could have been asserted, in the prior action. If the claim did not exist at the time of the
earlier action, it could not have been asserted in that action and is not barred by res judicata.  A prior judgment cannot be given the effect of extinguishing claims which
did not even then exist and which could not possibly have been sued upon in the previous case.  The Federal Circuit said that the issue of validity of the reexamined claims remains to be addressed in any future proceeding, and found that the district court did not abuse its discretion refusing to vacate the judgment as to the original claims.