Opinion ID: 699661
Heading Depth: 2
Heading Rank: 2

Heading: Equitable Estoppel of the Patent Infringement Claim

Text: 24 Equitable estoppel requires the defendant to prove by a preponderance of the evidence that (1) the patent owner, through misleading conduct, led the alleged infringer to reasonably infer that the patent owner did not intend to enforce its patent against the alleged infringer; (2) the alleged infringer relied on this conduct; and (3) due to the reliance, the alleged infringer will be materially prejudiced if the patent owner is allowed to proceed on its claim. See Aukerman, 960 F.2d at 1041, 22 USPQ2d at 1335-36. As with laches, egregious conduct must be considered as part of the equitable estoppel determination. See id. at 1043-44, 22 USPQ2d at 1337. For the reasons set out above in discussing prejudice and egregious conduct in the laches context, we disagree with the district court's summary dismissal of Gasser's patent infringement claim as barred by equitable estoppel. 25 We also disagree with the district court's analysis of the second factor, reliance, which is not a requirement of laches but is essential to equitable estoppel. To show reliance, the infringer must have had a relationship or communication with the plaintiff which lulls the infringer into a sense of security in going ahead with [its investments]. Id. at 1042-43, 22 USPQ2d at 1336-37. Infanti must show that it substantially relied on the misleading conduct of Gasser in taking some action, such as building a plant for producing the infringing product. See id. 26 Infanti was asked whether he relied on Gasser's supposed silence from 1981 to 1988 and answered that's right. Based solely on this answer, the trial court concluded that Infanti's decision to expand his chair manufacturing business was based on his belief that Gasser had abandoned its infringement claim. Mem. and Order at 13. This court has rejected similarly conclusory assertions as a basis for summary judgment of equitable estoppel. See Meyers v. Asics, 974 F.2d at 1309, 24 USPQ2d at 1040 (Defendants make numerous conclusory assertions that they relied on Meyers conduct, but they have not presented undisputed facts to show that they did.... Furthermore, defendants have not shown that they would have altered their conduct if Meyers had sued earlier.). As in Meyers v. Asics, the evidence here showed that Infanti paid little attention to Gasser's complaints. 27 The district court also inferred from Infanti's conclusory assertions that absent Gasser's conduct, Infanti would not have acted in the same way and would not have suffered the same economic harm. Mem. and Order at 13. But Infanti did not establish that he would have acted differently under other circumstances. Indeed, as noted above, Infanti ignored Gasser's charges of infringement because he believed the patent was invalid. Thus, Infanti totally failed to show that he acted in reliance on supposed actions of Gasser rather than a business judgment. See Hemstreet, 972 F.2d at 1294-95, 23 USPQ2d at 1864 (referring to a total absence in the record of any showing by CES that its activities were in reliance upon supposed actions of Hemstreet, rather than a business judgment of its own--a judgment which subsequent events may well prove to have been faulty); Vaupel Textilmaschinen, 944 F.2d at 879, 20 USPQ2d at 1052 (MEI did not rely on any purported abandonment by Vaupel of its patent rights or any intentionally misleading silence to suggest abandonment, but relied on the existence of MEI's own patents. In MEI's communications with Vaupel and its customers, it repeatedly stated that because its own patent covered its loom, ... it had the right to sell its allegedly infringing looms in the United States.).