Court Opinion

ID: 9491217
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:07:17.532763+00
Date Added: 2024-06-11T17:54:35.489660
License: Public Domain

MAYER, Chief Judge,
dissenting.
Because there is no genuine issue of material fact as to whether Cravens L. Wanlass, Energystics, Inc., and Wanlass International, Inc. (collectively “Wanlass”) should have known of Fedders Corporation’s and Rotorex Corporation’s (collectively “Fedders”) possible infringement at least six years before filing suit (the “critical date”), I respectfully dissent. To invoke the laches defense, a defendant must prove that “the plaintiff delayed filing suit for an unreasonable and inexcusable length of time from the time the plaintiff knew or reasonably should have known of its claim against the defendant.” A.C. Aukerman Co. v. R.L. Chaides Contr. Co., 960 F.2d 1020, 1032, 22 USPQ2d 1321, 1328 (Fed.Cir.1992); see also Gasser Chair Co., Inc. v. Infanti Chair Mfg. Corp., 60 F.3d 770, 773, 34 USPQ2d 1822, 1824 (Fed.Cir.1995). The period of delay begins at the time the patentee has actual or constructive knowledge of the defendant’s potentially infringing activities. See Eastman Kodak Co. v. Goodyear Tire & Rubber Co., 114 F.3d 1547, 1559, 42 USPQ2d 1737, 1745 (Fed.Cir.1997) (“[D]elay begins when the plaintiff knew, or in the exercise of reasonable diligence should have known, of the defendant’s allegedly infringing activity.”); Aukerman, 960 F.2d at 1032, 22 USPQ2d at 1328.
A bedrock principle of laches charges a plaintiff “with such knowledge as he might have obtained upon inquiry, provided the facts already known by him were such as to put upon a man of ordinary intelligence the duty of inquiry.” Johnston v. Standard Mining Co., 148 U.S. 360, 370, 13 S.Ct. 585, 37 L.Ed. 480 (1893). Failure to examine readily available information will not insulate a plaintiff from having knowledge of this information imputed to him. Nor will this failure excuse ignorance of the results of inquiries that the knowledge would have motivated a reasonable man to conduct. See, e.g., Wetzel v. Minnesota Ry. Transfer Co., 169 U.S. 237, 240-41, 18 S.Ct. 307, 42 L.Ed. 730 (1898) (finding a duty to inform oneself of ownership of land in light of readily apparent facts in the public records that suggested the transfer of the land to another was improper); Foster v. Mansfield, C. & L.M. R.R. Co., 146 U.S. 88, 99-100, 13 S.Ct. 28, 36 L.Ed. 899 (1892) (imputing knowledge of fraud where party, with reasonable diligence, could have learned of the facts suggesting fraud by questioning people readily available to him); Norris v. Hoggin, 136 U.S. 386, 392, 10 S.Ct. 942, 34 L.Ed. 424 (1890) (imputing knowledge where “the facts out of which [the party] was bound to know th[e] fraud ... were open, were patent, and could not fail to be discovered by any sort of inquiry or investigation”); Burke v. Smith, 83 U.S. (16 Wall.) 390, 401, 21 L.Ed. 361 (1872) (imputing knowledge of fraud where records that suggested the fraud were open to inspection and party failed to review them); Potash Co. of Am. v. International Minerals & Chem. Corp., 213 F.2d 153, 155, 101 USPQ 264, 265 (10th Cir.1954) (Patentees “must be diligent and make such inquiry and investigation as the circumstances reasonably suggest, and the means of knowledge are generally equivalent to actual knowledge.”).
Consistent with this principle, we have recognized that certain circumstances obligate a patentee to investigate whether infringement is occurring. See Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., 988 F.2d 1157, 1162, 26 USPQ2d 1038, 1042 (Fed.Cir.1993) (“Absent actual knowledge, the facts must support a duty of inquiry.”). These circumstances include “pervasive, open, and notorious activities” that a reasonable paten-tee would suspect were infringing. See Hall v. Aqua Queen Mfg., Inc., 93 F.3d 1548, 1553, 39 USPQ2d 1925, 1928 (Fed.Cir.1996) (constructive knowledge where defendant sold and marketed allegedly infringing products through print advertisements and trade *1470shows). See generally Jean F. Rydstrom, Annotation, Laches as a Defense in Patent Infringement Suit, 35 A.L.R. Fed. 551, 577-79,1977 WL 45665 (1977) (examining cases in which constructive knowledge was imputed to the patentee). Furthermore, constructive knowledge of infringement may be imputed to the patentee even where he has no actual knowledge of the conspicuous activities of potential infringement if these activities are sufficiently prevalent in the inventor’s field of endeavor. See A.R. Mosler & Co. v. Lurie, 209 F. 364, 371 (2d Cir.1913) (barring infringement suit “[w]here owners have remained ... supine for many years, shutting their eyes to what was going on in the art to which the patent belonged”). The patentee who is negligently or willfully oblivious to these types of activities cannot later rely on his lack of knowledge to escape the application of laches because “the law imputes knowledge when opportunity and interest, combined with reasonable care, would necessarily impart it. Not to improve such opportunity, under the stimulus of self-interest, with reasonable diligence, constitutes laches which in equity disables the party who seeks to revive a right which he has allowed to lie unclaimed from enforcing it, to the detriment of those who have, in consequence, been led to act as though it were abandoned.” Wollensak v. Reiher, 115 U.S. 96, 99, 5 S.Ct. 1137, 29 L.Ed. 350 (1885).
The availability of laches based on constructive knowledge of the alleged infringer’s activities, therefore, imposes on patentees a duty to police their rights to the extent that it is reasonable to do so. This duty is triggered by “‘pervasive, open, and notorious activities’ that a reasonable patentee would suspect were infringing.” Wanlass v. General Electric Co., 148 F.3d at 1338 (Fed.Cir.1998), or, in the words of the opinion and the concurrence in this case, “when publicly available information about [a product] should have led [the patentee] to suspect that product of infringing.” The panel agrees, therefore, as to when the duty arises, but disagrees about whether it arose in this case.
Assuming that Wanlass was indeed inactive in the air-conditioning industry from 1982 until 1992, it admits that it has always known that air conditioners are the type of product that uses single-phase motors, whose efficiency would increase through the use of the patented invention. Wanlass also admits that, although it tested some motors for infringement between 1977 and 1982, it did not test any kind of motor, between 1982 and 1992, and did not test a Fedders product until 1995. Uneontradicted evidence shows that the only way to determine whether a motor infringes is to test it directly with electrical equipment and study the waveforms with an oscilloscope and that circuit diagrams of the motor alone do not provide adequate information from which to determine infringement. There is no dispute that since 1973 Fedders has openly made, sold, and marketed compressors containing single-phase, split capacitor motors whose circuit configuration was the same as that of the allegedly infringing motors. Undisputed evidence also reveals that Wanlass was aware of Fedders’ products since at least 1982.
Wanlass argues that there is no evidence that Fedders’ pre-1992 motors infringed and, as a result, the court erred in inferring that Wanlass should have known of the potentially infringing activities before the critical date. The circuit diagram submitted to Underwriters Laboratories qualifies, however, as prima facie evidence that the accused products, the Model C81B compressors, have motors whose design is substantially similar to those produced in 1973. Because Wanlass did not test a Fedders product until 1995, there is no test data in the record to support Wanlass’ argument that Fedders’ pre-1992 motors operated substantially differently than later models. Wanlass relies instead on deposition testimony by a Fedders’ witness, who stated that Model C81B compressors use two different types of motors with operating characteristics that are not identical, to support an inference that the pre-1992 motors differed significantly from the accused- products. This testimony says absolutely nothing about pre-1992 motors because the Model C81B compressor entered the market in 1992. Although another Fedders’ witness stated that the size of the capacitors in the motors has changed since 1973, this testimony reveals nothing about the operation of the pre-1992 *1471motors or the significance of changing the capacitor size. Wanlass argues without support that the changes were significant. However, “[t]here must be sufficient substance, other than attorney argument, to show that the issue requires trial.” Glaverbel Societe Anonyme v. Northlake Mktg. & Supply, Inc., 45 F.3d 1550, 1562, 33 USPQ2d 1496, 1504 (Fed.Cir.1995).
The circuit diagram submitted to Underwriters Laboratories is the only evidence of record that is probative of the pre-1992 motors. Although this diagram alone does not establish infringement, it does reveal a certain level of information about the pre-1992 motors. Because Wanlass failed to offer evidence to dispute this information, there is no genuine issue of material fact as to whether the Model C81B compressors have motors whose design is substantially similar to those produced in 1973. Therefore, Fedders’ activities of extensively making, selling, and marketing compressors (thereby providing the public with information and the means to acquire additional information about its products) since 1973 are sufficiently pervasive, open, and notorious to give rise to a duty to investigate for infringement.
The court finds a genuine issue of material fact in whether it would have been too burdensome for Wanlass to test Fedders’ products based on an inference that Wanlass would have had to test an unknown number of motors. Notwithstanding Mr. Wanlass’ conclusion that identifying potentially infringing products is a “formidable task,” the record reflects that Wanlass easily located an allegedly infringing Fedders’ motor once it tried. Furthermore, undisputed evidence shows that testing products for infringement requires no special equipment, and the test itself takes less than two hours. Testing for infringement is easy and Wanlass knew that the only way to determine whether a motor infringes is through actual testing. To preserve its right to enforce its patent, Wanlass had a duty to examine motors from time to time to determine whether they used capacitors in an infringing way. Testing motors in the late 1970’s did not discharge this continuing duty. Although the frequency with which Wanlass should have conducted infringement investigations is a function of their cost and difficulty, cf. Potash, 213 F.2d at 159-60, 101 USPQ at 269 (applying laches where the inspection necessary to determine infringement “was a comparatively simple matter,” but the patentee delayed the inspection for six years and the suit an additional three years), I cannot agree with the court that a genuine issue of material fact exists as to whether Wanlass’ conduct in these circumstances was reasonable. In my view, no reasonable fact finder could conclude that it is reasonable to conduct no investigation of any type of motor for over ten years, when testing products is as easy and important as it is here.
Because the undisputed evidence shows that Fedders’ motor design has remained substantially the same since 1973 and Wan-lass knew of Fedders’ products since at least 1982, the district' court correctly charged it with the knowledge that inspecting these products would have yielded. If Wanlass had performed a simple test on a single Fedders’ product before the critical date, it would have known of Fedders’ possible infringement. Therefore, it reasonably should have known of the possible infringement and the trial court properly applied the laches presumption of prejudice.
Wanlass has failed to rebut this presumption because it did not offer credible evidence that Fedders suffered no prejudice. ■ Undisputed evidence shows that witnesses are deceased and unavailable, and that the memories of available witnesses, particularly Mr. Wanlass himself, have faded. Therefore, Fedders undoubtedly suffered evidentiary prejudice as a direct result of Wanlass’ delay in bringing suit.