Wanlass v. Fedders Corp., No. 97-1418

CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit
Writing for the CourtBefore MAYER, Chief Judge, and MICHEL and RADER; MICHEL; RADER; MAYER
Citation145 F.3d 1461
PartiesCravens L. WANLASS, Energystics, Inc. and Wanlass International, Inc., Plaintiffs-Appellants, v. FEDDERS CORPORATION and Rotorex Company, Inc., Defendants-Appellees.
Decision Date18 June 1998
Docket NumberNo. 97-1418

Page 1461

145 F.3d 1461
47 U.S.P.Q.2d 1097
Cravens L. WANLASS, Energystics, Inc. and Wanlass
International, Inc., Plaintiffs-Appellants,
v.
FEDDERS CORPORATION and Rotorex Company, Inc., Defendants-Appellees.
No. 97-1418.
United States Court of Appeals,
Federal Circuit.
June 18, 1998.
Rehearing Denied; Suggestion for Rehearing In Banc
Declined Aug. 12, 1998.

Page 1462

Robert M. Taylor, Jr., Lyon & Lyon LLP, Costa Mesa, CA, argued, for plaintiffs-appellants. With him on brief were Robert E. Lyon, James H. Shalek, and Charles C. Fowler.

Martin E. Goldstein, Darby & Darby P.C., New York City, argued, for defendants-appellees. With him on brief was Pierre R. Yanney.

Before MAYER, Chief Judge, and MICHEL and RADER, Circuit Judges.

Opinion for the court filed by Circuit Judge MICHEL. Concurring opinion filed by Circuit Judge RADER. Dissenting opinion filed by Chief Judge MAYER.

MICHEL, Circuit Judge.

Cravens L. Wanlass, Energystics, Inc. and Wanlass International, Inc., (collectively, "Wanlass") appeal the order of the United States District Court for the District of Utah in Wanlass, Inc. v. Fedders Corp., No. 2:95-CV-909-S (consolidated with 2:95-CV-0320-S), slip op. at 30 (May 19, 1997), which granted to Fedders Corp. and Rotorex Corp. (collectively, "Fedders") summary judgment on the ground of laches thereby dismissing the patent infringement suit brought by Wanlass. This case was submitted for our decision following oral argument on March 2, 1998.

The district court erred in applying the presumption of laches based on the summary judgment record, and when Wanlass could not rebut the presumption, improperly found that Wanlass unreasonably, inexcusably, and prejudicially delayed in filing suit against Fedders. On this record, the issue simply could not be resolved on summary judgment. After development of additional evidentiary material and/or, if necessary, an evidentiary hearing, the district court on remand will be in a proper position to rule on the application of the presumption of laches. We, therefore, vacate the order and remand the case for such further proceedings on laches as may be appropriate.

BACKGROUND

In September 1995, Wanlass sued Fedders alleging infringement of United States Patent No. 4,063,135 (the " '135 patent"). The '135 patent, entitled "Electric Motor Having Controlled Magnetic Flux Density," issued in December 1977, and expired in December 1994. Wanlass, therefore, could only sue for damages from six years prior to filing suit, i.e., September 1989, until the expiration of the patent in December 1994. See 35 U.S.C. § 286 (1994). The '135 patent claims a single-phase, alternating current, electric motor that uses a capacitor with specific characteristics to produce a high efficiency output during the run operation.

Since the mid-1970s, Fedders has been manufacturing and selling compressors to the room air-conditioning industry. According to Fedders, since 1973 the motors used in its compressors have had essentially the same motor design. The accused product, the model C81B compressor, has been sold since 1992, and the motor inside the C81B unit that was tested was developed by General Electric Co. ("GE") in 1988.

Page 1463

Shortly after issuance of the patent, Wanlass attempted to license the invention to various companies such as GE, A.O. Smith Corp., and Whirlpool Corp. No company, however, would take a license, and negative reports about the invention were circulated through the air-conditioning industry. Furthermore, at least one company, GE, believed and told Wanlass that the claimed motor was "old art," implying that the patent was invalid. Following a universal rejection by the industry, from the early 1980s until the mid-1990s, Wanlass focused its commercial efforts on three-phase motors rather than making, selling or licensing the single-phase motor claimed in the '135 patent. 1

Wanlass asserts that in the mid-1990s it learned that numerous companies had been infringing the '135 patent for some time. In 1995, Wanlass tested a Fedders air conditioner for the first time, determined that it infringed the '135 patent, and filed suit against Fedders. During discovery, only one document evidencing contact between Wanlass and Fedders prior to 1995 was produced. That document, found in Wanlass's files, is a form listing Fedders, its mailing address, telephone number, and the names of two contact people, each of whom presumably was mailed a letter and brochures. An entry on the form states that on January 28, 1982, one of the two Fedders contacts believed "motors are of great concern at this time. [We] are very interested in tech. breakthrough." The notation on the form continues that the contact person "will present to [the second Fedders contact person] as well as carry through engineering." The final entry dated January 17, 1983 is illegible.

In 1997, Fedders filed a motion for summary judgment alleging that Wanlass was precluded by laches from asserting infringement of the '135 patent against Fedders. The district court, applying the presumption of laches, granted the motion, and Wanlass timely appealed to this court. We have jurisdiction under 28 U.S.C. § 1295(a) (1994).

DISCUSSION

Summary judgment is appropriate where "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In determining the propriety of summary judgment, credibility determinations may not be made, and the evidence must be viewed favorably to the non-movant, with doubts resolved and reasonable inferences drawn in the non-movant's favor. See SRI Int'l v. Matsushita Elec. Corp., 775 F.2d 1107, 1116, 227 USPQ 577, 581-82 (Fed.Cir.1985) (in banc). We review de novo all district court decisions to grant summary judgment. See Gasser Chair Co. v. Infanti Chair Mfg. Corp., 60 F.3d 770, 773, 34 USPQ2d 1822, 1824 (Fed.Cir.1995).

Where the grant of summary judgment is based on laches, however, additional standards of review may also apply:

[T]he standard of review of the conclusion of laches is abuse of discretion. An appellate court, however, may set aside a discretionary decision if the decision rests on an erroneous interpretation of the law or on clearly erroneous factual underpinnings. If such error is absent, the determination can be overturned only if the trial court's decision represents an unreasonable judgment in weighing relevant factors.

A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1039, 22 USPQ2d 1321, 1333 (Fed.Cir.1992) (in banc) (citations omitted). In the instant case, however, because we hold that genuine issues of material fact precluded summary judgment of laches, we need not apply these additional standards of review.

In order to invoke the laches defense, a defendant must prove two elements:

1. the plaintiff delayed filing suit for an unreasonable and inexcusable length of time from the time the plaintiff knew or reasonably should have known of its claim against the defendant, and

Page 1464

2. the delay operated to the prejudice or injury of the defendant.

Id. at 1032, 22 USPQ2d at 1328. The period of delay is measured from the time the plaintiff knew or reasonably should have known of the defendant's alleged infringing activities to the date of suit. See id. "Prima facie, the underlying critical factors of laches are presumed upon proof that the patentee delayed filing suit for more than six years after actual or constructive knowledge of the defendant's alleged infringing activity." Id. at 1035-36, 22 USPQ2d at 1331 (the "presumption of laches").

I

In the present case, the district court found undisputed that Fedders has been using essentially the same motor circuit design since the 1970s 2 and that Fedders is an active participant in the room air-conditioning industry, participating in trade shows, advertising, and promoting its products. See Wanlass, slip op. at 24. According to the district court, therefore, if Wanlass had been properly policing its rights, it would have known about Fedders and the allegedly infringing motor well before 1995, before the critical date in 1989, and possibly as early as 1977. See id. at 28. The district court, therefore, held that the presumption of laches had been established because Wanlass had constructive knowledge of the alleged infringement at least six years prior to filing suit. See id.

Once the presumption of laches is applied, a prima facie defense of laches is made. See Aukerman, 960 F.2d at 1037, 22 USPQ2d at 1332. With the presumption, the facts of unreasonable and inexcusable delay and of prejudice are inferred, absent rebuttal evidence. See id. Once the presumption is established, the patentee may introduce evidence sufficient to support a finding of the nonexistence of the presumed facts. See id. at 1038, 960 F.2d 1020, 22 USPQ2d at 1333. In the instant case, however, the district court held that Wanlass failed to rebut the presumption, particularly as to prejudice to Fedders, and hence, the district court granted Fedders's motion for summary judgment of laches. See Wanlass, slip op. at 30.

We need not and do not review the finding of inadequacy of the rebuttal evidence. We hold, however, that the district court erred in applying the presumption of unreasonable and inexcusable delay because the facts as developed for the summary judgment motion are not without genuine disputes on material issues as to whether Wanlass knew or reasonably should have known of Fedders's allegedly infringing activity before the critical date in 1989.

II

Fedders presented evidence that Wanlass knew prior to its tests in the 1990s that single-phase motors were frequently used in the air-conditioning industry. From that evidence alone, the district court imposed upon Wanlass a duty to police its patent in the air-conditioning industry, and this duty included an unlimited and undefined duty to test any single-phase motor air conditioner....

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    • Court of Federal Claims
    • 1 Abril 2015
    ...(Fed. Cir. 2002), cert. denied, 539 U.S. 957 (2003); Monon Corp. v. Stoughton Trailers, Inc., 239 F.3d at 1257; Wanlass v. Fedders Corp., 145 F.3d 1461, 1463 (Fed. Cir.), reh'g denied and en banc suggestion declined (Fed. Cir. 1998); see also Am. Pelagic Co. v. United States, 379 F.3d at 13......
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67 cases
  • BES Design/Build, LLC v. The United States, 19-1892C
    • United States
    • Court of Federal Claims
    • 30 Noviembre 2021
    ...(Fed. Cir. 2002), cert. denied, 539 U.S. 957 (2003); Monon Corp. v. Stoughton Trailers, Inc., 239 F.3d at 1257; Wanlass v. Fedders Corp., 145 F.3d 1461, 1463 (Fed. Cir.), reh'g denied and en banc suggestion declined (Fed. Cir. 1998); see also Am. Pelagic Co. v. United States, 379 F.3d at 13......
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    • United States
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    • 20 Diciembre 2017
    ...(Fed. Cir. 2002), cert. denied, 539 U.S. 957 (2003); Monon Corp. v. Stoughton Trailers, Inc., 239 F.3d at 1257; Wanlass v. Fedders Corp., 145 F.3d 1461, 1463 (Fed. Cir.), reh'g denied and en banc suggestion declined (Fed. Cir. 1998); see also Am. Pelagic Co. v. United States, 379 F.3d at 13......
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    ...(Fed. Cir. 2002), cert. denied, 539 U.S. 957 (2003); Monon Corp. v. Stoughton Trailers, Inc., 239 F.3d at 1257; Wanlass v. Fedders Corp., 145 F.3d 1461, 1463 (Fed. Cir.), reh'g denied and en banc suggestion declined (Fed. Cir. 1998); see also Am. Pelagic Co. v. United States, 379 F.3d at 13......
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    • Court of Federal Claims
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    ...the defendant’s allegedly infringing activity.”). 76 Wanlass v. Gen. Elec. Co., 148 F.3d 1334 (Fed. Cir. 1998); Wanlass v. Fedders Corp., 145 F.3d 1461 (Fed. Cir. Aukerman, 960 F.2d at 1325. L E A R N I N G F R O M R A M B U S : 145 court emphasized that “[p]laintiff could not remain silent......

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