Gossen Corp. v. Marley Mouldings, Inc.

977 F.Supp. 1346

GOSSEN CORPORATION, Plaintiff, v. MARLEY MOULDINGS, INC., Defendant.

No. 96-C-351.

United States District Court, E.D. Wisconsin.

August 20, 1997.

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Robert L. Gegios, Daniel F. Miller, von Briesen, Purtell & Roper, Milwaukee, WI, Paul L. Ahern, Brett A. Hesterberg, Leydig, Voit & Mayer, Ltd., Chicago, IL, for Plaintiff.

James M. Caragher, Bryan B. House, G. Michael Halfenger, Foley & Lardner, Milwaukee, WI, Thomas David Rein, Hugh A. Abrams, Sidley & Austin, Chicago, IL, for Defendant.

DECISION AND ORDER

CURRAN, District Judge.

Gossen Corporation is suing Marley Mouldings, Inc. for infringing its United States Patent No. 4,690,862 ('862 patent) relating to a dual extruded plastic profile that is used as a garage door weather stripping product. The '862 patent was issued September 1, 1997, for an "Integral Composite Profile of Cellular and Non-Cellular Resins and a Dual Extrusion Method for Its Manufacture." The "Abstract" defines the subject matter of the patent as follows:

The dual extrusion and fusion of cellular and non-cellular resin extrudates produces an integral composite profile having a tongue and groove interlock. The resins are extruded through a common die having overlapping orifices. A bulbous tongue of one extrudate is encapsulated by finger-like projections of a second extrudate and the mated profiles are pulled through a vacuumized sizing box adapted to sealingly receive the cellular portion and to freely receive the non-cellular portion.

Appendix to the Memorandum in Support of the Motion of Defendant Marley Mouldings, Inc. for Summary Judgment on the Grounds of Laches and Equitable Estoppel at Exhibit D.

After conducting discovery, Marley Mouldings moved for summary judgment on the ground that Gossen is precluded from recovering damages under the doctrine of laches and is also barred from obtaining prospective relief, including equitable relief, under the doctrine of equitable estoppel. The parties' briefs and other papers submitted in connection with this motion were filed under seal. Therefore, the court will set forth only those stipulated or undisputed facts material to a resolution of this motion.

I. LEGAL STANDARDS FOR SUMMARY JUDGMENT

Summary judgment is appropriate in a patent case. See Nike. Inc. v. Wolverine World Wide. Inc., 43 F.3d 644, 646 (Fed.Cir. 1994). In order for the court to grant summary judgment in favor of a party asserting laches or estoppel defenses, there must be no genuine issue of material fact; the burden of proof on each issue must be correctly allocated; and all pertinent equitable factors must be considered. See A.C. Aukerman Company v. R.L. Chaides Construction Company, 960 F.2d 1020, 1039 (Fed.Cir.1992) (en banc). Under Federal Rule of Civil Procedure 56(c), summary judgment is warranted only if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. The court must consider all facts in the light most favorable to the nonmovant, resolving all inferences in the nonmovant's favor. See Tolentino v. Friedman, 46 F.3d 645, 649 (7th Cir.), cert. denied, 515 U.S. 1160, 115 S.Ct. 2613, 132 L.Ed.2d 856 (1995).

The summary judgment inquiry implicates the substantive evidentiary standard of proof that would apply at a trial on the merits. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986). A party asserting affirmative defenses such as laches or equitable estoppel has the burden of proving these defenses at trial by a preponderance of the evidence. See A.C. Aukerman Company, 960 F.2d at 1045. Thus, where, as here, the moving party bears the burden of proof, that party must make a showing sufficient for the court to find that no reasonable trier of fact (which, as to these equitable issues, would be the trial court) could find other than for the moving party. See Matsushita Electric Industrial Company, Ltd. v. Zenith Radio Corporation, 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); International Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1265 (5th Cir.1991), cert. denied, 502 U.S. 1059, 112 S.Ct. 936, 117 L.Ed.2d 107 (1992); Calderone v. United States, 799 F.2d 254, 259 (6th Cir.1986). The moving party can make this showing through pleadings, depositions, answers to interrogatories, admissions on file, or affidavits in the record. See Federal Rule of Civil Procedure 56(c); Celotex Corporation v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986).

The non-moving party can defeat the motion by showing that the material facts are in dispute or that the moving party's evidence is so insubstantial that it could not persuade a reasonable finder of fact to grant judgment in the movant's favor. If the nonmoving party is not successful, the sole question is whether the movant is entitled to judgment as a matter of law. See Logan v. Commercial Union Insurance Company, 96 F.3d 971, 977-78 (7th Cir.1996).

II. LACHES

First, Marley argues that it is entitled to summary judgment on the ground of laches because Gossen waited more than six years after learning that Marley might be infringing the '862 patent to file suit. Marley claims to have suffered economic and evidentiary prejudice due to Gossen's delay in filing suit. Gossen, on the other hand, maintains that its delay was reasonable and justifiable. Furthermore, Gossen charges that Marley has unclean hands and is not entitled to invoke the equitable defense of laches.

The Federal Circuit has explained the legal standards governing the laches defense as follows:

Laches is a long-recognized defense to a patent infringement suit that arises when a patent holder "neglect[s] or delay[s] ... bringing suit to remedy an alleged wrong, which taken together with lapse of time and other circumstances, causes prejudice to the adverse party and operates as an equitable bar." Aukerman, 960 F.2d at 1028-29, 22 USPQ2d at 1325. Laches "focuses on the dilatory conduct of the patentee and the prejudice which the patentee's delay has caused." Id., at 1031-32, 960 F.2d 1020, 22 USPQ2d at 1328. If successful, the laches defense bars relief only for damages accrued prior to suit. See Id. at 1040-41, 960 F.2d 1020, 22 USPQ2d at 1334-35.

To successfully invoke laches, a defendant must prove by a preponderance of the evidence (1) that the plaintiff delayed filing suit an unreasonable and inexcusable length of time after the plaintiff knew or reasonably should have known of its claim against the defendant; and (2) the delay resulted in material prejudice or injury to the defendant. See Advanced Cardiovascular Sys., Inc. v. SciMed Life Sys., Inc., 988 F.2d 1157, 1161, 26 USPQ2d 1038, 1041 (Fed.Cir.1993); Aukerman, 960 F.2d at 1028, 22 USPQ2d at 1324; Meyers v. Brooks Shoe Inc., 912 F.2d 1459, 1461, 16 USPQ2d 1055, 1057 (Fed.Cir.1990), overruled on other grounds by Aukerman, 960 F.2d at 1038-39, 22 USPQ2d at 1333. On summary judgment, [the movant] also had to establish that there was no genuine issue of material fact as to either element.

Even if the elements of laches are established, however, a court need not bar a plaintiff's suit. The application of the laches defense is discretionary, and as an equitable matter, the district court is to look to all the facts and circumstances of the case and weigh the equities of the parties. See, e.g., Aukerman, 960 F.2d at 1032, 22 USPQ2d at 1328. "Laches is not established by undue delay and prejudice. Those factors merely lay the foundation for the trial court's exercise of discretion. Where there is evidence of other factors which would make it inequitable to recognize the defense despite undue delay and prejudice, the defense may be denied." Id. at 1036, 960 F.2d 1020, 22 USPQ2d at 1331.

Gasser Chair Company, Inc. v. Infanti Chair Manufacturing Corporation, 60 F.3d 770 773 (Fed.Cir.1995). At all times the defendant bears the ultimate burden of persuasion of the affirmative defense of laches. See A.C. Aukerman Company v. R.L. Chaides Construction Company, 960 F.2d 1020, 1038 (Fed.Cir.1992) (en banc).

A. PRESUMPTION OF LACHES

In a patent infringement case, a presumption of laches arises when there has been more than a six-year delay in filing suit. See A.C. Aukerman Company v. R.L. Chaides Construction Company, 960 F.2d 1020, 1037 (Fed.Cir.1992) (en banc). "By reason of this presumption, absent other equitable considerations, a prima facie defense of laches is made out upon proof by the accused infringer that the patentee delayed filing suit for six years after actual or constructive knowledge of the defendant's acts of alleged infringement." Id. Once a presumption of laches arises, the patentee may offer proof directed to rebutting the laches factors. Such evidence may be directed to showing either that the patentee's delay was reasonable or that the defendant suffered no prejudice or both. Id. at 1038. By raising a genuine issue respecting either factual element of a laches defense, the presumption of laches is overcome. Id. The accused infringer is left to its proof and would then have to satisfy its burden of persuasion with actual evidence. Id. at 1037-38.

In this case, the record reflects that the '862 patent was issued in 1987.¹ See Appendix to the Memorandum in Support of the Motion of Defendant Marley Mouldings Inc. for Summary Judgment on the Grounds of Laches and Equitable Estoppel at Exhibit D. The testimony of Gossen's President, Frank Butterfield, Jr. establishes that Gossen had actual or constructive knowledge of Marley's alleged infringement when it first analyzed Marley's Thermo*Stop product samples in 1988 or 1989. See Id. at Exhibit E, pp. 44-50, 56-57, 125-26. See also Id. at Exhibit P. Because Gossen had this knowledge more than six years before it filed suit in 1996, the presumption of laches arises.

B. REASONS FOR DELAY

The presumption of...