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.