Opinion ID: 207675
Heading Depth: 3
Heading Rank: 2

Heading: Laches Relating to the '556 Patent

Text: The district court also held that the '556 patent was unenforceable due to laches, granting CTS's motion for summary judgment. See '684 Indefiniteness and '556 Noninfringement and Laches Opinion, 2004 U.S. Dist. Lexis 29580, at -51. The court found that Plaintiffs had waited twelve years to sue after the '556 patent issued and should have known of CTS's use of the patented cement at the time of issuance, creating a presumption of laches. Id. at . According to the court, Ultimax should have known of its claim because of Kunbargi's history of working on cement mixtures with, and then having a falling out with, CTS's owner, Rice, and because of Kunbargi's prior affiliation with CTS. Id. at -49. The court found that, because Kunbargi had demonstrated his invention to Rice before the '556 patent issued, Kunbargi was on inquiry notice at the time the patent issued. Id. Although Plaintiffs argued that it was not possible to analyze CTS's cement to determine if it infringed the '556 patent, the court maintained that Ultimax could have also proven infringement of the method claims by investigating CTS's methods. Id. at . The court also found that Kunbargi's hiring of a private investigator in 1997, whose results were inconclusive, did not fulfill his obligation to investigate infringement. Id. The court found unpersuasive Kunbargi's assertion that Rice had assured him that CTS's products did not infringe the '556 patent, especially in light of the declaration of CTS's witness, Collins, stating that Kunbargi had expressed his intent to sue CTS as early as 1997, but was waiting for Rice to build up the business. Id. at . Finally, because of the delay, the court presumed prejudice to CTS, and it further found prejudice in the loss of testimony of a CTS employee who had died in the interim and the loss of records from a test that had occurred while Kunbargi was working at CTS. Id. at -51. Ultimax argues that the district court erred in granting summary judgment of laches for the '556 patent, as there was no evidence that Ultimax knew or should have known of infringement until it conducted discovery on the '684 patent after filing suit in 2002. Ultimax asserts that it was impossible to test for soluble anhydrite in CTS's product, so it could not have known of the infringement until it saw in CTS's discovery materials that CTS used a process that infringed the '556 patent. In fact, according to Ultimax, Rice had assured Kunbargi that CTS did not infringe because it did not use soluble anhydrite in its cement, which it was not unreasonable for Kunbargi to accept. Further, Ultimax argues that CTS was not prejudiced by the delay because alternative witnesses and documents remained available to replace those that were unavailable. CTS responds that Ultimax waited thirteen years to add the '556 patent to the suit and should have known of the alleged infringement at least at the time the '556 patent issued. Thus, according to CTS, the laches presumption applies, and Ultimax did not rebut it. CTS argues that Kunbargi knew of CTS's activities even before the '556 patent issued because he had worked for CTS. According to CTS, it was also easy for Ultimax to test CTS's cement's compressive strength and to test for the presence of calcium sulfate. Finally, CTS argues that it was prejudiced by the delay, as a witness had died, records were not preserved, and CTS had invested in producing the accused cement. We agree with Ultimax that genuine issues of material fact precluded summary judgment that the '556 patent is unenforceable due to laches, as it is not clear that Ultimax knew or should have known of CTS's alleged infringement before it conducted discovery on the '684 patent in 2002. Summary judgment is appropriate only where there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). Thus, if genuine issues of material fact preclude summary judgment of laches, we need not apply [the abuse of discretion] standard[ ] of review that generally applies to laches. Wanlass v. Fedders Corp., 145 F.3d 1461, 1463 (Fed.Cir.1998). To prevail on a defense of laches, CTS must prove two elements: (1) Plaintiffs delayed filing suit for an unreasonable and inexcusable length of time from the time they knew or reasonably should have known of their claim against CTS, and (2) the delay operated to the prejudice or injury of CTS. Id. at 1463-64 (quoting A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1032 (Fed.Cir.1992) (en banc)). Plaintiffs' delay is measured from the time [they] knew or reasonably should have known of [CTS's] alleged infringing activities to the date of suit. Id. (citing A.C. Aukerman, 960 F.2d at 1032). [T]he underlying critical factors of laches are presumed upon proof that the patentee delayed filing suit for more than six years after actual or constructive knowledge of the defendant's alleged infringing activity. Id. (quoting A.C. Aukerman, 960 F.2d at 1035-36). CTS does not dispute that Ultimax could not have tested CTS's product for the presence of soluble anhydrite. Without access to CTS's internal procedures, Kunbargi could not have investigated CTS's methods to determine infringement. Even Kunbargi's hiring of a private investigator led to no conclusive result that CTS's products infringed the '556 patent. An infringer does not escape liability merely by infringing in secret. Ultimax could only have asserted infringement of the '556 patent upon a reasonable belief that CTS infringed all of the limitations of the claims, including the limitation requiring soluble anhydrite. See Antonious v. Spalding & Evenflo Cos., 275 F.3d 1066, 1074 (Fed.Cir.2002) ([A]n attorney violates [Fed.R.Civ.P.] 11(b)(3) when an objectively reasonable attorney would not believe, based on some actual evidence uncovered during the prefiling investigation, that each claim limitation reads on the accused device either literally or under the doctrine of equivalents.). Thus, because Ultimax alleges, and CTS does not rebut, that Ultimax had no such reasonable belief before 2002, summary judgment of laches should have been precluded. Although, as CTS argues and the district court found, twelve (or thirteen) years is a long time between patent issuance and filing suit, the only time relevant to the laches presumption is that after Ultimax knew or should have known of the allegedly infringing product. In the case of a claim limitation whose presence is undetectable in a finished product, it is reasonable that Ultimax might not have known or been able to find out whether CTS infringed. Furthermore, there is a genuine issue as to whether Kunbargi fulfilled his duty to investigate by hiring a private investigator, especially given Kunbargi's allegation that Rice assured him that CTS was not infringing because it did not use soluble anhydrite. Genuine issues of material fact thus precluded summary judgment that Plaintiffs knew or should have known of CTS's alleged infringement before 2002, so we need not address prejudice caused by any alleged delay. We reverse the court's grant of summary judgment of laches and remand for a trial on laches relating to the '556 patent.