If you are a patent owner considering whether to send a cease and desist letter to someone you think is infringing your patent, you should keep in mind a couple of cases where courts applied the doctrine of equitable estoppel to dismiss infringement claims.
A court may apply equitable estoppel to bar an otherwise viable infringement claim if: (1) a patentee, through misleading conduct, led an alleged infringer to reasonably believe that the patentee did not intend to enforce its patent against the alleged infringer; (2) the alleged infringer relied on that conduct; and (3) due to its reliance, the alleged infringer would be materially prejudiced if the patentee were permitted to go forward with its charge of infringement. The misleading conduct required to prove equitable estoppel may include inaction or silence by the patent owner.
A typical fact pattern in equitable estoppel cases goes like this:
- A patent holder sends a cease and desist letter to an alleged infringer;
- The alleged infringer responds by denying infringement (or claiming that the patent is invalid); and
- The patent holder is then silent for a few years before reemerging to bring a patent infringement lawsuit against the alleged infringer.
In two recent cases, the Federal Circuit confirmed that silence by the patent owner in these situations may be deadly to infringement claims. In Aspex Eyewear Inc. et al v. Clariti Eyewear, Inc., the Court applied equitable estoppel to bar an infringement claim where the patentee was silent for three years and five months after the alleged infringer denied infringement. 605 F.3d 1305, 1308-10 (Fed. Cir. 2010). Just last month, Radio Systems Corporation et al v. Tom Lalor et al, the Court again applied equitable estoppel to dismiss an infringement claim where the patentee was silent for four years and nine months after the alleged infringer denied that the patent was valid. 2013 U.S. App. LEXIS 4644, *1-5 (Fed. Cir. Mar. 6, 2013). In these cases, it didn’t matter whether the alleged infringers’ non-infringement or invalidity arguments had any merit.
The Aspex and Radio Systems cases do not provide black-and-white rules, as the Federal Circuit made no attempt in either case to explain how long is too long. Is one year of silence too long? Two? Nobody knows.
Given this uncertainty, our takeaway is that a patent owner sending a cease and desist letter to an alleged infringer should be aware that it may need to bring suit sooner rather than later if the alleged infringer denies liability. Staying silent in that situation can kill an otherwise strong infringement claim.