John Bean Techs. Corp. v. Morris & Assoc., Inc. (Fed. Cir. 2021)
John Bean’s U.S. Patent No. 6,397,622 covers a machine for rapidly chilling “slaughtered, eviscerated poultry carcasses.” Id. 🤢. The approach uses an auger that moves the carcasses in one direction against a counter-flow of chilled water. In 2014, John Bean sued its primary competitor Morris for patent infringement, and this is the second appeal in the case.
The first appeal focused on the defenses of laches and equitable estoppel. You see, back in 2002 Morris had notified John Bean that the patent was invalid (with an explanation of the prior art). John Bean took no action for the succeeding 11 years. That delay gave rise to the equitable bars. In 2013-2014 John Bean shepherded the patent through ex parte reexamination. The 2014 infringement action followed based upon amended and new claims in the patent. In its 2018 decision, the Federal Circuit explained (1) that laches no longer applies following SCA Hygiene (2017) and (2) equitable estoppel did not bar the patentee from seeking damages for the amended/new claims.
On remand, the district court again dismissed the case — finding that Morris’s conduct was permitted under a doctrine of equitable intervening rights as codified in 35 U.S.C. 252. On appeal for the second time, the Federal Circuit has affirmed.
The reissue statute, Section 252 provides for both absolute and equitable intervening rights. Although the provision applies expressly to reissue patents, Section 307(b) brings reexaminations under the fold as well. See also 35 U.S.C. 318(c) (applying intervening rights to inter partes review).
The focus here is on equitable intervening rights created where “substantial preparation was made before the grant of the [reexam].” Under the statute, a judge can allow infringing actions to continue without penalty “to the extent and under such terms as the court deems equitable for the protection of investments made or business commenced before the grant of the [reexam].” In the appeal, the patentee made two main arguments about allowing the infringer to completely avoid damages.
Equitable Relief to Protect Investments: It is undisputed that Morris has already recouped its investment in the infringing product made prior to the reexamination. Thus, according to the patentee, there is no need for equity to provide further relief “for the protection of investments.” On appeal, the Federal Circuit found no strict limits on scope of relief. “We see no indication in the statute that monetary investments made and recouped before reissue are the only investments that a court may deem sufficient to protect as an equitable remedy.”
Willful Infringement: The patentee also argued that willful infringement should be seen as a form of unclean hands that would deny equity. On appeal though, the Federal Circuit disagreed with the premise that the defendant infringed-at-all:
If there is no infringement, there cannot be willful infringement. Once the district court granted Morris’s motion for summary judgment on the affirmative defense of equitable intervening rights, it did not have to reach the question of willful infringement.
Slip Op.
Affirmed.
Dennis, in view the emoji at the end of your first sentence here, I cannot help wondering about the ultimate fate of the chickens in your own chicken coop, the design for which you posted earlier on this blog? Were your chickens put on Avian Social Security after they stopped laying eggs, or did they meet a fowl fate similar to those being put into this patented machine?
Yes, full pension.
Hmmm….seems like unless they kept a claim from the original patent that they probably should lose this. The willful infringement argument doesn’t seem to make sense.
35 U.S.C. 252.
“… offered for sale, or sold, the specific thing so made, purchased, offered for sale, used, or imported unless the making, using, offering for sale, or selling of such thing infringes a valid claim of the reissued patent which was in the original patent …”
I didn’t read the opinion but I think I timeline is needed to understand this fully.
In particular, when were the reissue claims issued relative to the Ds use?
I wonder how this would apply relative to changes to the machines.
My guess is that the way to handle this if you are the inventor is to try and capture an improvement to the machine that helps efficiency.
So—as always–the way forward with patents is to continue to innovate.
My clients do not have endless funds to pour into the patent system with the only return being the later invitation to lose the patent in post grant review.
Sadly, we are seeing a lot of movement into Trade Secrets.
That is what we are seeing too.
The other thing we are seeing is a movement to the EPO and China where at least one of our largest clients now sees the EPO and China as more important than the USA. Their litigators are now saying that you really can’t enforce a patent in the USA anymore and at least the enforcement is much better at the EPO and China.
In fact it is so bad that they are moving about 90 percent of their prosecution work to the EPO and China with the US attorneys becoming clerks to file applications written in the other countries.
They now have Chinse patent attorneys taking the lead role in writing their applications. Not a joke.
“The patentee also argued that willful infringement should be seen as a form of unclean hands that would deny equity. On appeal though, the Federal Circuit disagreed with the premise that the defendant infringed-at-all:
If there is no infringement, there cannot be willful infringement. Once the district court granted Morris’s motion for summary judgment on the affirmative defense of equitable intervening rights, it did not have to reach the question of willful infringement.”
Now there is some ipse dixit logic right there. I raise. How do you reach the equitable defense without the prima face case of infringement? Justice Story must be spinning in his grave (he’s been doing that a lot as of late) because once you reach the ‘court of equity’ (which by tradition comes AFTER the court of law in patent cases) why wouldn’t any and all ‘equitable’ defenses be available to the accused party? Guess we have the new offensive equitable unenforceable cause in action in equity in which the accused has no equitable defense.
? Equitable defenses need to be affirmatively pleaded in the Answer, but since the Sup. Ct. combined law and equity issues in the same [federal] courts [in 1936?] I never heard of having to first show some kind of “prima facie infringement.”* Furthermore, although recent Sup. Ct. and follow-on CAFC decisions seem to have now eliminated purely equitable suit delay defenses in cases like this one, they cannot eliminate this specific equitable defense for “intervening rights” in patent cases because it is statutory.
*One of my grumbles on this blog has been various assertions that citations of ancient case law was going to win modern Sup. Ct. patent decisions. They did not.
“How do you reach the equitable defense without the prima face case of infringement?” Easily.
There is no rule that requires defenses to be considered in a particular order, especially in the case of affirmative defenses. A defendant does not have to wait until infringement is proven before establishing invalidity, if possible. Why would this be different? In any case, one of the elements of infringement is “without authority”.
Waiting all those years to cancel your invalid original claims and only then first trying to enforce only the new and narrower claims you got in such an extremely long delayed post-grant proceeding. Then suing the known competitor you had let proceed un-threatened with its own product design and sales for all those years after showing you that your original claims were invalid. That was never going to be acceptable practice, under the intervening rights statute OR the long-prior equitable estoppel case law [which was presumed after only 7 years of such conduct].
Fixing the last sentence above, A.C. Aukerman Co. v. R.L. Chaides Constr. Co., (Fed. Cir. 1992) (en banc) hd applied a presumption of laches [not full estoppel] after more than six years of such suit delays.
Slippery slope approaching infinity anyone?
(my, how the Efficient Infringer group must be salivating)
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