Digest of SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, No. 2013-1564 (Fed. Cir. Sept. 17, 2014) (precedential). On appeal from W.D. Ky. Before Reyna, Wallach, and Hughes.

Procedural posture: Plaintiff patentee appealed grant of summary judgment of laches and equitable estoppel. CAFC affirmed in part, reversed in part, and remanded.

  • Laches: A delay exceeding six years gives rise to a rebuttable presumption that the delay is unreasonable, inexcusable, and prejudicial. Under this presumption, the burden of evidentiary production shifts from the accused infringer to the patentee. The CAFC affirmed the district court’s ruling that the patentee did not provide a reasonable explanation for filing suit more than six years after it became aware of the allegedly infringing activities. Although patentee participated in a reexamination proceeding on the same patent during that period, a reexamination proceeding does not toll the six-year clock period for purposes of laches, and patentee inexcusably waited almost three-and-a-half years after the proceeding had ended to file suit. Regarding prejudice, the CAFC affirmed the district court’s ruling that patentee had failed to rebut the presumption of economic harm to the accused infringer, especially since the accused infringer had made a number of expenditures to increase its sales. Therefore, the CAFC affirmed the district court’s grant of summary judgment of laches.
  • Estoppel: If the accused infringer suffered material prejudice due to its reliance on patentee’s misleading communication, then equitable estoppel would attach. Patentee first sent a letter to accused infringer suggesting that certain products might infringe, and the accused infringer responded stating its belief that the patent was invalid. Patentee thereafter initiated an ex parte reexamination of the patent, but did not inform the accused infringer of the proceeding. The district court ruled that patentee’s silence could have misled the accused infringer into believing that the patentee was withdrawing its patent assertion. The CAFC reversed the district court’s ruling, relying on precedent to note that silence alone does not create an estoppel unless there was a clear duty to speak. The CAFC contrasted this case with previous cases where a party had been silent as to a particular patent assertion, but continued to communicate extensively on other patent assertions, and estoppel had been found to attach. The CAFC also reversed the district court’s ruling on the reliance element, due to a lack of evidence that the accused infringer had relied on patentee’s silence, as opposed to relying on its own invalidity opinion, or even simply ignoring the patentee.