Increased Sales and Foregoing Legal Action Support Laches, Equitable Estoppel Defenses

The court denied plaintiffs' motion to dismiss defendants' laches and equitable estoppel counterclaims for failure to state a claim. "Defendants allege two forms of prejudice, that they 'sold more [accused] products to a wider market due to the inexcusable delay of [Plaintiffs’] bringing suit than they would have if [Plaintiffs] had timely brought suit' (thus subjecting them to exposure to greater damages) and that they 'forewent legal action during the period of time within the statute of limitations for claims they could have pursued against [Plaintiffs].' . . . While Defendants were already selling [the accused software] prior to Plaintiffs’ obtaining the [patent-in-suit], Defendants . . . 'sold more [accused] products to a wider market' due to Plaintiffs’ silence. . . . Moreover . . . Defendants here 'forewent legal action during the period of time within the statute of limitations for claims they could have pursued against [Plaintiffs].'. . . Defendants’ foregoing their opportunity to pursue an interference proceeding, coupled with their increased sales of [the accused software] and concomitant increased infringement liability, suffice to show economic prejudice."

Kane, et. al. v. Delong, et. al., 3-12-cv-05437 (CAND March 19, 2013, Order) (Chen, J.).