Bloomberg BNA’s Patent Trademark & Copyright Law Daily™is the IP industry’s premier news service, offering objective, timely,and reliable daily news coverage and commentary from leading IP law...
By Peter Leung
April 5 — The owner of four wireless patents can't sue Sprint Nextel Corp. for infringement because the patents' earlier owners didn't take action, an appeals court ruled.
Sprint had reasonably relied on the conduct of previous owners suggesting that the patents wouldn't be enforce against it, the U.S. Court of Appeals for the Federal Circuit ruled April 5 (High Point SARL v. Sprint Nextel Corp., 2016 BL 106412, Fed. Cir., 2015-1298, 4/5/16).
The court affirmed the trial court's ruling that High Point SARL's lawsuit was blocked by the doctrine of equitable estoppel, which prevents a party from asserting a legal claim inconsistent with prior actions.
The case highlights the importance of due diligence when acquiring patents, of not only the validity and coverage of the patents, but also of the enforcement actions taken or not taken by previous owners. This may be especially true for non-practicing entities that acquire patents mainly to get licensing fees.
Sprint had licenses from the previous owners to use the patents. In 2001, Sprint started using unlicensed equipment to expand its wireless network, and the patent owner at the time was aware of this, the trial court said. That earlier owner did not sue Sprint and, in fact, bid unsuccessfully on one of the expansion projects. The trial court also found that the previous patent owners knew about Sprint's infringement for years and never raised the issue.
In 2008, High Point purchased the patents. A few days later, it sued Sprint.
The trial court granted summary judgment in Sprint's favor, finding that the previous owners' inaction caused Sprint to reasonably believe that it would not be sued, and to rely on this belief.
On appeal, the Federal Circuit rejected High Point's arguments about why equitable estoppel should not apply. The court found that there is evidence of misleading conduct, stemming from the patent owners' silent and active actions indicating that they would not enforce the patents against Sprint.
The Federal Circuit also pointed out that contrary to High Point's claims, Sprint is not required prove bad faith on the patent owners' part to make its case.
To contact the reporter on this story: Peter Leung in Washington at email@example.com
To contact the editor responsible for this story: Mike Wilczek in Washington at firstname.lastname@example.org
Text is available at: http://src.bna.com/dSZ.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)