Intellectual Property Directions

Since Valentine’s day is behind us, is it okay to speak of a relationship gone bad? A “divorce” that has ended up in patent court some 12 years after the patent issued? Can you really enforce a patent 12 years after the supposed infringement started or is this just a “lovers’ quarrel” taken too far?

Hassan Kunbargi started investigating the chemistry of cement at a graduate student in 1984. Edward Rice, owner of CTS Cement Manufacturing, became aware of Kunbargi’s work and sought an adjunct faculty position at UCLA so that he could serve as Kunbargi’s advisor. Rice hired Kunbargi to work at CTS in 1985. After that, both men worked for another company, Fibermesh.

In 1989, after demonstrating the invention disclosed in a patent application to Rice, something in the relationship apparentlyy turned sour and Kunbargi ceased working for Rice. In September 1990 the patent was allowed and Kunbargi received the ’556 patent, entitled “Very Early Setting High Strength Early Cement.”

Fast forward to 2002. Upon the issuance of his third patent, Kunargi sued Rice for, among other things, patent infringement and theft of trade secrets. This case bounced around the courts with motions on both sides being considered at one time or another. [including Kunbargi's motion to disqualify Rice's counsel, who had been listed on a power of attorney as entitled to prosecute a patent application on an invention by Rice and Kunbargi when they had both worked for Fibermesh!].

Among other defenses, Rice turned to the doctrine of laches - that is, the idea that if you fail to act within a reasonable period of time you lose your rights under the law. The concept, like most aspects of patent law, is an attempt to enforce fairness. If you believe someone is infringing your patent, it is considered unfair for you to wait until the other party has invested in the technology and built up a large business before enforcing your patent. The District Court agreed with Rice that 12 years was too long and declared the patent unenforcable against Rice in a summary judgement [viz., without a trial].

According to the court, Kunbargi should have known of his infringement claim because of his history of working on cement mixtures with, and then having a falling out with, Rice, and because of his prior affiliation with CTS. The court found that, because Kunbargi had demonstrated his invention to Rice before the ’556 patent issued, Kunbargi was on “inquiry notice” at the time the patent issued.

The appeals court (the CAFC) disagreed. It said:

CTS does not dispute that [Kunbargi] could not have tested CTS’s product for the presence of soluble anhydrite. Without access to CTS’s internal procedures, Kunbargi could not have investigated CTS’s methods to determine infringement. Even Kunbargi’s hiring of a private investigator led to no conclusive result that CTS’s products infringed the ’556 patent. An infringer does not escape liability merely by infringing in secret. [Kunbargi] could only have asserted infringement of the ’556 patent upon a reasonable belief that CTS infringed all of the limitations of the claims, including the limitation requiring soluble anhydrite.

The CAFC therefore reversed the summary judgement and sent the question of laches back for trial. The CAFC pointed out that, for laches to apply, the only time that counts is the time after the patent holder should have had a reasonable basis to believe infringement is taking place.

Keeping a low profile while you infringe, even if you are successful for many years, will not get you off the hook for infringement. And knowingly allowing someone to infringe in order to build up your settlement (or get revenge in a relationship gone bad) may leave you holding an empty purse.