DC grant of intervening rights regarding reexamined patent affirmed

John Bean Tech. Corp. v. Morris & Assoc., Inc.

Docket No. 2020-1090, -1148 (http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/20-1090.OPINION.2-19-2021_1736234.pdf)

LOURIE, REYNA, WALLACH

February 19, 2021

Brief Summary:  DC grant of intervening rights to Morris affirmed.

Summary:  John Bean (JB) appealed DC decision as to equitable intervening rights and Morris cross-appeals the decision as to prosecution laches.  The dispute relates to JB’s US 6,397,622 covering an auger-type poultry chiller that issued on June 4, 2002.  On June 7, 2002, Morris wrote to JB “explaining its belief that the ‘622 patent was invalid and citing prior art to support its position” to which JB did not respond.  On December 18, 2013, JB filed a request for ex parte reexamination of the ‘622 patent, amending claims 1 and 2 and adding six additional claims, and the USPTO issued a reexamination certificate on May 9, 2014.  Six weeks later, JB filed a complaint alleging Morris infringed (including willfully) the reexamined ‘622 patent.  The DC originally granted Morris’s motion for summary judgment (SJ) with respect to the affirmative defenses of laches and equitable estoppel, which the FC panel reversed and remanded (John Bean, FC 2018).  On remand, the DC denied Morris’s motion for SJ “with respect to prosecution laches, reasoning that the laches doctrine applies to conduct of a patent applicant before the patent’s issuance, but not to conduct of a patent owner after the patent’s issuance”, but this FC opinion did not address that issue but instead affirmed the DC decision granting-in-part Morris’s motion for SJ for equitable intervening rights.  The FC panel explained that “[w]hen a defendant is accused of infringing a reissued patent, she may raise the affirmative defense of equitable intervening rights” (section 252 protects the “alleged infringer… from liability for infringement of substantively and substantially altered claims in a reissued patent”, and applies to reexamined patents (section 307(b), Marine Polymer (FC 2012) (“After a patent emerges from reexamination…makes available absolute and equitable intervening rights…with respect to ‘amended or new’ claims in the reexamined patent.”))  Intervening rights “give the alleged infringer the continued right to manufacture, sell, or use the accused product after the reexamination certificate is issued ‘when the defendant made, purchased, or used identical products, or made substantial preparations to make, use, or sell identical products, before the reissue date’” (BIC Leisure, FC 1993), and section 252 “an infringer may continue what would otherwise be infringing activity after a reissue or reexamination” (Seattle Box, FC 1985).  The DC granted Morris’s request for intervening rights because of, e.g., its “‘years of research, developments, investments, improvement, promotion, and goodwill associated with the accused product’ and…‘conversion of “nearly [two-thirds] of its business to selling the accused product.’”  The FC panel explained that the analysis of intervening rights is “broader than simply determining whether a party claiming intervening rights has fully recouped its monetary investment”, noting the DC’s finding “John Bean had engaged in bad faith and that Morris’s investment was more than just a financial” and “the broad equity powers a trial court has”, and affirmed this part of the DC decision.

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