This is part of a series of articles discussing recent orders of interest issued in patent cases by the United States District Court for the District of Massachusetts.
In Baby Jogger, LLC, v. Monahan Products, LLC d/b/a UPPAbaby, No. 24-cv-11582, Judge Burroughs denied Defendant's motion for summary judgment of equitable estoppel.
Equitable estoppel is established when: (1) the patentee, through misleading conduct, leads the alleged infringer to reasonably infer that the patentee does not intend to enforce its patent against the alleged infringer; (2) the alleged infringer relies on that conduct; and (3) due to its reliance, the alleged infringer will be materially prejudiced if the patentee is allowed to proceed with its claim.
Element 1 (misleading acts): Defendant alleged that Plaintiff misled it through a series of emails and letters regarding allegations of patent infringement. The final letter from Plaintiff identified the products at issue and stated that it was “looking forward to working together towards a resolution.” No further action was taken against Defendant until the filing of this lawsuit eight years later.
While the Federal Circuit has held that a patentee's inaction can evidence misleading conduct, with a longer delay in filing suit making for a stronger inference, the inaction must be combined with other facts respecting the business relationship to compel the Court to reach an inference of misleading conduct. Here, the Court found that while Plaintiff's eight years of inaction was “stretching the limits,” a reasonable trier of fact could find, contrary to Defendant's suggested inference, that Plaintiff did not abandon its claim. Thus, the Court found that Defendant failed to establish the first element of equitable estoppel.
Elements 2 & 3 (reliance & prejudice): Defendant stated that it was prepared to file suit against Plaintiff for unfair business practices if Plaintiff had moved forward with its patent infringement action. There is no dispute that Defendant continued investing in the accused products and withheld its own suit against plaintiff for over eight years, which it alleged together show reliance on Plaintiff's alleged misleading acts. Defendant further alleged that its continued investment and its withholding of suit against the Plaintiff for over eight years resulted in economic and defensive prejudice in reliance on Plaintiff's conduct.
The Court found that Defendant failed to show a nexus between the alleged misleading acts and the alleged reliance, noting in particular that Defendant “has not adduced any evidence that it ‘considered' [Plaintiff]'s inaction in deciding to continue selling and investing in the accused products.” Therefore, the Court found that Defendant failed to establish reasonable reliance.
Finding that Defendant failed to satisfy the first and second elements of equitable estoppel, the Court thus denied Defendant's motion for summary judgment.
In Tristar Products, Inc. v. Whele LLC d/b/a Perch, No. 22-cv-11301, Magistrate Judge Levenson granted Plaintiff's motion to compel, finding that the communications at issue were relevant to Plaintiff's tortious interference claim even where the evidence bears on motive rather than on a core element of a claim.
Plaintiff, as an exclusive licensee, initially sued Defendant for patent infringement. Plaintiff's license was terminated, and a third-party subsequently acquired the patents-in-suit and cancelled the claims at the USPTO. Thereafter, Plaintiff's initial patent infringement suit became a single tortious interference claim in which Plaintiff alleged that Defendant wrongfully interfered with Plaintiff's rights as exclusive licensee.
In its Motion to Compel, Plaintiff requested communications between Defendant and the third-party relating to the patents-in-suit, certain products, and certain entities at issue in the facts; communications concerning ownership of the patents-in-suit; and an interrogatory response providing a detailed timeline of communications between Defendant and the competitor relating to the subject matter of the patents-in-suit or any related patent rights.
Plaintiff alleged that the information sought was relevant to establish a potential motive and provide context for the alleged tortious interference. Defendant argued that: (1) Plaintiff did not meet its burden of showing relevance of the information sought; (2) because the third party is not a party to this lawsuit, communications between it and Defendant are not relevant; and (3) the requested information is not relevant to the tortious interference claim.
The Court held that Plaintiff was entitled to explore whether Defendant conceived a plan whereby the third-party would - in effect - buy out the patents that were impeding Defendant's business, finding that any communications that reflect such a plan are relevant. The Court also found that the third-party's status as a non-party did not make a difference, as discovery frequently involves third parties not named in the lawsuit.
Accordingly, the Court granted Plaintiff's Motion to Compel discovery.
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