Equitable Estoppel: Don't Just Sit on a Patent Infringement Claim

It's not enough to notify a competitor that its design infringes on your patent, and then forget about the claim for years.

The Federal Circuit Court of Appeals ruled last week that equitable estoppel applies to block a patentee from alleging patent infringement following a five-year delay in pursuing its claim, Patently-O reports.

Bumper Boy -- the losing party in this appeal -- makes electric shock dog collars, and has a patent on its designs. In 2005, Bumper Boy notified Innotek -- which also makes electric shock dog collars -- that Innotek's collars infringed on one of Bumper Boy's patents. Innotek responded that its design was "prior art [that] invalidates the claims" of Bumper Boy's patent.

For more than four years after Innotek's response, Bumper Boy didn't do anything significant to act on its patent infringement claim. In 2009, Bumper Boy sent a demand letter to Radio Systems -- which had acquired Innotek -- once again alleging infringement. The parties went to court, and the district court concluded (among other things) that equitable estoppel barred Bumper Boy from accusing the Innotek/Radio Systems collar of infringement because it sat on its claim for years.

On appeal, Bumper Boy argued that equitable estoppel does not bar its claims because Radio Systems neither knew about Bumper Boy's demand letter to Innotek nor relied on Bumper Boy's silence after Innotek responded. Bumper Boy further argued that the district court's extension of equitable estoppel to Radio Systems was erroneously based on assignor estoppel cases because equitable estoppel requires proof of detrimental reliance while assignor estoppel does not. Bumper According to Bumper Boy, equitable estoppel can only apply -- if at all -- to Innotek because Radio Systems is a different legal entity and must independently show detrimental reliance.

The Federal Circuit disagreed.

Here, the appellate court reasoned that all three elements of equitable estoppel -- misleading silence, reliance, and prejudice -- were present. The court also hold that the district court did not abuse its discretion in concluding that equitable estoppel barred Bumper Boy's infringement claims against Radio Systems, Innotek's successor-in-interest because circuit precedent confirms that equitable estoppel applies to successors-in-interest where privity has been established.

Related Resources:

• Radio Systems Corp v. Lalor (FindLaw's CaseLaw)
• Jerry McGuire v. U.S.: You Had Me at 'Regulatory Taking' (FindLaw's Federal Circuit Blog)
• Towel Tote Can Pursue IP Claims Against Bed Bath and Beyond (FindLaw's Federal Circuit Blog)