Misleading Silence Leads to Equitable Estoppel

Aspex Eyewear, Inc. v. Clariti Eyewear, Inc., Nos. 2009-1147, -1162 (Fed. Cir. May 24, 2010).

Holding:

An accused infringer’s development of its allegedly infringing product line, in reliance on a patentee’s silence after aggressive letters, represents a significant change in economic position and constitutes material prejudice sufficient to support equitable estoppel. Slip op. at 11.

“Prejudice may be shown by a change of economic position flowing from actions taken or not taken by the patentee.” Id.

Relevant Facts:

Aspex first contacted Clariti concerning a potential infringement in 2003. In the series of letters exchanged between the parties in 2003, Aspex did not name the patent in question. In 2006, more than three years later, Aspex contacted Clariti again regarding the patent in question, and after the parties exchanged additional letters, Aspex filed a patent infringement lawsuit. The district court granted Clariti’s summary judgment (SJ) motion, dismissing Aspex’s infringement claims on the ground of equitable estoppel based on the three years of silence. The Federal Circuit affirmed.

Comments:

In the context of patent infringement, equitable estoppel requires three elements to be established: “(1) the patentee, through misleading conduct, led the alleged infringer to reasonably believe that the patentee did not intend to enforce its patent against the 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 proceed with its charge of infringement.” Slip op. at 6.

Judge Rader authored a dissenting opinion, in which he pointed out that “[s]ilence alone will not create an estoppels” (Rader Op. at 1) and SJ was inappropriate because of “lingering questions of fact.” Id. at 6.