The New L & N Sales and, Marketing, Inc. v. Big M, Inc., Civil Action No. 00-4488 (E.D. Pa. 2/1/2001)
| Decision Date | 01 February 2001 |
| Docket Number | Civil Action No. 00-4488. |
| Parties | THE NEW L & N SALES AND, MARKETING, INC., Plaintiff, v. BIG M, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Presently before this Court are Motions for Summary Judgment filed by both parties and the parties' respective Responses thereto. For the following reasons, plaintiff's Motion will be DENIED in part and GRANTED in part, and oral arguments will be heard on defendant's Motion for Summary Judgment and plaintiff's Motion for Summary Judgment on defendant's second affirmative defense.
In this patent infringement case, Plaintiff The New L&N Sales and Marketing has asserted that Defendant Big M, Inc. has sold substantial quantities of fabric-covered elastic ponytail holders that infringe L&N's exclusive rights under U.S. Patent No. 292,030 ("'030 Patent").
Both parties have moved this Court for summary judgment on numerous grounds. Defendant argues: (1) L&N's claims are barred under the doctrine of laches; and (2) L&N's claims are barred under the doctrine of equitable estoppel. Plaintiff asserts that it is entitled to summary judgment on its claim for patent infringement, as well as the following affirmative defenses raised by defendant: (1) that L&N's claims are barred by undue delay, laches, waiver and/or estoppel; (2) that the '030 Patent is void and invalid because its design is dictated by functional considerations; (3) that the '030 Patent was anticipated by prior art; and (4) that the '030 Patent is invalid because its design was obvious in light of prior art.1
A reviewing court may enter summary judgment where there are no genuine issues as to any material fact and one party is entitled to judgment as a matter of law. White v. Westinghouse Elec. Co., 862 F.2d 56, 59 (3d Cir. 1988). The evidence presented must be viewed in the light most favorable to the non-moving party. Id. "The inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one sided that one party must, as a matter of law, prevail over the other." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In deciding the motion for summary judgment, it is not the function of the Court to decide disputed questions of fact, but only to determine whether genuine issues of fact exist. Id. at 248-49. An issue is only "genuine" if there is sufficient evidence with which a reasonable jury could find for the non-moving party. See id. at 249. Furthermore, bearing in mind that all uncertainties are to be resolved in favor of the non-moving party, a factual dispute is only "material" if it might affect the outcome of the suit under governing law. See id. at 248.
The moving party has the initial burden of identifying evidence which it believes shows an absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); Childers v. Joseph, 842 F.2d 689, 694 (3d Cir. 1988). The moving party's burden may be discharged by demonstrating that there is an absence of evidence to support the nonmoving party's case. Celotex, 477 U.S. at 325. Once the moving party satisfies its burden, the burden shifts to the nonmoving party, who must go beyond its pleadings and designate specific facts, by use of affidavits, depositions, admissions, or answers to interrogatories, showing that there is a genuine issue for trial. Id. at 324. Moreover, when the nonmoving party bears the burden of proof, it must "make a showing sufficient to establish the existence of [every] element essential to that party's case." Equimark Commercial Fin. Co. v. C.I.T. Fin. Servs. Corp., 812 F.2d 141, 144 (3d Cir. 1987) (quoting Celotex, 477 U.S. at 322). Summary judgment must be granted "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." White, 862 F.2d at 59 (quoting Celotex, 477 U.S. at 322).
In A.C. Aukerman Co. v. R.L. Chaides Const. Co., 960 F.2d 1020 (Fed.Cir. 1992), the Federal Circuit Court of Appeals clarified and applied the principles of laches and equitable estoppel when those doctrines are raised as defenses in a patent infringement suit. As to laches, the Court held, inter alia, that:
1. Laches is cognizable under 35 U.S.C. § 282 as an equitable defense to a claim for patent infringement.
2. Where the defense of laches is established, the patentee's claim for damages prior to suit may be barred.
3. Two elements underlie the defense of laches:
(a) The patentee's delay in bringing suit was unreasonable and inexcusable.
(b) The alleged infringer suffered material prejudice attributable to the delay laches. The district court should consider these factors and all of the evidence and other circumstances to determine whether equity should intercede to bar pre-filing damages.
4. A presumption of laches arises where a patentee delays bringing suit for more than six years after the date the patentee knew or should have known of the alleged infringer's activity.
5. A presumption has the effect of shifting the burden of going forward with evidence, not the burden of persuasion.
Aukerman, 960 F.2d at 1028. As to equitable estoppel against a patent infringement claim, the Court in Aukerman held:
1. Equitable estoppel is cognizable under 35 U.S.C. § 282 as an equitable defense to a claim for patent infringement.
2. Where an alleged infringer establishes the defense of equitable estoppel, the patentee's claim may be entirely barred.
3. Three elements must be established to bar a patentee's suit by reason of equitable estoppel:
(a) 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. "Conduct" may include specific statements, action, inaction, or silence where there was an obligation to speak.
(b) The alleged infringer relies on that conduct.
(c) Due to its reliance, the alleged infringer will be materially prejudiced if the patentee is allowed to proceed with its claim.
4. No presumption is applicable to the defense of equitable estoppel.
Id. The Court went on to note that as equitable defenses, laches and equitable estoppel are matters committed to the sound discretion of the trial judge, and the trial judge's decision is reviewed by the appellate courts under the abuse of discretion standard. Id.
In the instant case, Big M has demonstrated evidence of the two elements of laches, that is, that Rommy Revson, the '030 Patent holder, and L&N may have delayed in bringing suit, and that Big M suffered material prejudice because of said delay. Specifically, Big M has produced evidence that in 1990 and 1992 Revson and her counsel wrote cease and desist letters to Big M threatening to bring suit against it for its alleged patent infringement. Big M has also shown that L&N knew in the early 1990s of Big M's allegedly infringing activities. Nevertheless, neither Revson nor L&N brought suit until September 2000.
This Court determines that there is a presumption of laches in the instant case, since a presumption of laches arises where a patentee delays bringing suit for more than six years after the date the patentee knew or should have known of the alleged infringer's activity. Plaintiff, however, counters defendant's claim for laches by arguing that its delay was excusable because in 1993 defendant began purchasing its ponytail holders from Danel Accessories, a sub-division of L&N, which led L&N to believe Big M had decided to purchase from a licensed vendor. Allegedly, it was not until 1997, when Big M switched back to purchasing its ponytail holders from unlicensed suppliers, that L&N again became aware of Big M's alleged patent infringement.
The Court determines that it does not have enough evidence to render a decision on the issue of laches at this time. Accordingly, the Court will order oral arguments with the right of counsel to present evidence on the issue of laches.
The Court also determines that Big M has produced sufficient evidence to make out a prima facie case for equitable estoppel. Defendant asserts that Revson and L&N, by their inaction and failure to bring suit against Big M for years after threatening to do so in the 1990 and 1992 cease and desist letters, led Big M to reasonably infer that the patentee did not intend to enforce the '030 Patent against Big M. Big M also claims to have relied on L&N's conduct, which will materially prejudice Big M if L&N is allowed to proceed with its claim because Big M incurred numerous costs in believing plaintiff was not intending to enforce the '030 Patent.
Again, plaintiff relies on Big M's alleged temporary compliance with L&N's rights to argue that: (1) Big M knew or should have known that L&N was not abandoning its claim for patent infringement and that L&N would take action as soon as it learned of Big M's subsequent infringement; and (2) there was no reliance or prejudice on Big M's part because there was no conduct directed at Big M by L&N that would mislead it into believing that any continued infringement was condoned or approved.
As with defendant's claim for laches, the Court determines that there is a need to hear oral arguments on the issue of equitable estoppel before making its ruling here. Accordingly, the Court will order oral arguments with the right of counsel to present evidence on the issue of equitable estoppel as well.
Plaintiff's requests for summary judgment on defendant's fourth, fifth, and sixth affirmative defenses attack defendant's claim that the '030 Patent is invalid. Specifically, defendant posits that the '030 Patent is invalid because its...
To continue reading
Request your trial