District Judge P. Kevin Castel denied defendant NY Fusion Merchandise’s 12(b)(6) motion to dismiss on grounds of laches and equitable estoppel. The court also denied NY Fusion’s motion to stay discovery as moot. Plaintiff Masterson is asserting U.S. Patent Nos. 7,980,095, issued July 19, 2011, and 8,479,536, issued July 9, 2013, in the field of customizable jewelry. NY Fusion argued that Masterson waited six years after a 2008 meeting between the parties, so a presumption of laches applies.

The court held that the period of delay cannot begin before the patents-in-suit had been issued, and found Masterson’s sixteen-month delay was not unreasonable. NY Fusion argued that Masterson’s delay led NY Fusion to believe it was permitted to infringe and therefore NY Fusion was prejudiced. The court held that NY Fusion could not simply point to Masterson’s inaction, but had to show a relationship between the parties that gives rise to the necessary inference that the claim is abandoned. Additionally, the court held that NY Fusion did not show reliance on the delay or establish prejudice, and explained that mere investment in the infringing business is not sufficient to show expended “personal and capital equity” in reliance on the delay.

Case: Masterson v. NY Fusion Merch., LLC, No. 13 Civ. 6559 (PKC), 2014 BL 168829, (S.D.N.Y. June 18, 2014)