Radio Systems Corp. v. Lalor , 709 F.3d 1124 ( 2013 )

United States Court of Appeals
for the Federal Circuit
__________________________
RADIO SYSTEMS CORPORATION
AND INNOTEK, INC.,
Plaintiffs-Appellees,
v.
TOM LALOR AND
BUMPER BOY, INC.,
Defendants-Appellants.
__________________________
2012-1233
__________________________
Appeal from the United States District Court for the
Western District of Washington in No. 10-CV-0828, Judge
Robert S. Lasnik.
___________________________
Decided: March 6, 2013
___________________________
R. BRADFORD BRITTIAN, Merchant & Gould, P.C., of
Alcoa, Tennessee, argued for plaintiffs-appellees. With
him on the brief was JOHN T. WINEMILLER. Of counsel
was MATTHEW J. STARK.
PHILIP P. MANN, Mann Law Group, of Seattle,
Washington, argued for defendants-appellants. With him
on the brief was JOHN WHITAKER, Whitaker Law Group, of
Seattle, Washington.
RADIO SYSTEMS CORP v. LALOR 2
__________________________
Before NEWMAN, MOORE, and REYNA, Circuit Judges.
Opinion for the court filed by Circuit Judge Moore.
Opinion concurring-in-part and dissenting-in-part filed by
Circuit Judge NEWMAN.
MOORE, Circuit Judge.
In this declaratory judgment action, Tom Lalor and
Bumper Boy, Inc. (collectively, Bumper Boy) appeal from
the district court’s grant of summary judgment that Radio
Systems and Innotek (collectively, Radio Systems) do not
infringe two related Bumper Boy patents. See Radio
Systems Corp. v. Lalor, No. C10-828RSL, 2012 WL
254026 (W.D. Wash. Jan. 26, 2012) (Summary Judgment
Order). For the reasons set forth below, we affirm-in-
part, reverse-in-part, and remand for proceedings
consistent with this opinion.
BACKGROUND
This case involves two of Bumper Boy’s patents on
improvements to electronic animal collars, U.S. Patent
Nos. 6,830,014 and 7,267,082. The ’082 patent is a con-
tinuation-in-part of the ’014 patent. Although the ’082
patent contains some new matter, there is no dispute that
the asserted claims from the ’082 patent are supported by
the ’014 patent specification. Both patents generally
disclose and claim a collar (pictured below) having a
contoured collar housing (12), front surface (14), back
surface (15), outside surface (16), and inside surface (18).
The patents additionally disclose that the inventive collar
includes one or more “high point surfaces” (C, D and E)
that extend the inside surface of the collar above the base
of electrodes 24 toward the animal “to relieve and distrib-
ute the load caused by collar tension around the animal’s
RADIO SYSTEMS CORP v. LALOR 4
and ’082 patents and demanding that Radio Systems take
a license or stop manufacturing the collars and destroy all
sales inventory. In May 2010, Radio Systems filed this
action seeking declarations of noninfringement and
invalidity and Bumper Boy counterclaimed for infringe-
ment. Bumper Boy accused several products based on
four basic collar designs (UltraSmart, GS-011, FieldPro,
and SD-1825) of infringing ’014 patent claims 1, 4, 5, 7,
16, 17, and 18 and ’082 patent claims 1, 3, 4, 6, 15, and 17.
Claim 1 of the ’014 patent is representative of the claims
at issue:
An animal collar designed for attachment to an
animal comprising:
a collar housing having an inside surface di-
rected toward the animal during use; and
at least one electrode intersecting said inside
surface at an electrode base and extending to-
ward the animal during use;
said inside surface having at least one high
point surface extending above said electrode
base and toward the animal during use.
’014 patent claim 1 (emphases added). The district court
construed “inside surface” as “the portion of the collar
housing facing inwards towards the animal” and “elec-
trode base” as “the portion of the electrode where it inter-
sects the inside surface of the collar housing.” See
Summary Judgment Order, 2012 WL 254026, at *5.
Following claim construction, Radio Systems moved for
summary judgment of noninfringement and invalidity.
The district court denied summary judgment of invalidity
but granted summary judgment of noninfringement. It
concluded that the accused GS-011, FieldPro, and SD-
1825 collars did not infringe any of the asserted claims as
construed and that equitable estoppel barred Bumper Boy
5 RADIO SYSTEMS CORP v. LALOR
from accusing the UltraSmart collar of infringing either
patent.
Bumper Boy appeals, arguing that the court’s equita-
ble estoppel analysis is erroneous and that its construc-
tions of “electrode base” and “inside surface” and
application of those constructions to the accused products
are erroneous. We have jurisdiction under 28 U.S.C. §
1295(a)(1).
DISCUSSION
A.
Claim construction is a matter of law, which we re-
view de novo. ICU Med., Inc. v. Alaris Med. Sys. Inc., 558
F.3d 1368, 1374 (Fed. Cir. 2009). We review summary
judgment decisions under regional circuit law. Lexion
Med., LLC v. Northgate Techs., Inc., 641 F.3d 1352, 1358
(Fed. Cir. 2011). In the Ninth Circuit, summary judg-
ment decisions are reviewed de novo. Greater Yellowstone
Coalition v. Lewis, 628 F.3d 1143, 1148 (9th Cir. 2010).
Summary judgment is appropriate if “the movant shows
that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a).
At issue in this case are the constructions of two claim
terms: “electrode base” and “inside surface.” Claim 1
recites a collar having “at least one electrode intersecting
said inside surface at an electrode base and extending
toward the animal during use” and “said inside surface
having at least one high point surface extending above
said electrode base and toward the animal during use.”
’014 patent claim 1 (emphasis added). In the figures
below, the patents illustrate electrode 24 that intersects
inside surface 18 at electrode base 26. The figures illus-
trate a high point surface C—a raised portion of inside
RADIO SYSTEMS CORP v. LALOR 8
We agree with Radio Systems that the district court
correctly construed “electrode base” and “inside surface.”
The claim language recites an “inside surface directed
toward the animal during use” and an “electrode inter-
secting said inside surface at an electrode base and ex-
tending toward the animal during use.” ’014 patent claim
1. The ’014 patent specification explains that the in-
ventive collar includes “a collar housing having an inside
surface directed toward the animal during use” and
“electrodes or sensors that extend from or through an
inside surface of the collar housing into the skin of the
animal during use.” ’014 patent col. 2 ll. 30-31. The ’014
patent further discloses that a collar’s electrodes may
extend from a raised inside surface. ’014 patent col. 4 ll.
3-29, figs. 1 & 2. The district court’s constructions of
“electrode base” and “inside surface” are thus fully sup-
ported by both the claim language and the specification.
We also agree with Radio Systems that the district
court correctly applied its constructions to the accused
GS-011, FieldPro, and SD-1825 collars. In these products,
the electrode tips have threaded posts that screw into
receptacles that form part of the inside surface of the
collar housing. The district court correctly concluded that
the electrode bases in these products are at the points X
(depicted above), where the electrodes intersect with the
inside surface of the collar housing. As a result, these
three products do not have a high point surface extending
the inside surface of the collar housing past the line
created by the electrode bases (points X) and thus do not
infringe. We agree with the district court that no genuine
issue of material fact exists regarding the location of the
electrode bases in the accused GS-011, FieldPro, and SD-
1825 products and that these products do not have the
required high point surface. Accordingly, we affirm the
district court’s judgment of noninfringement for these
three products.
9 RADIO SYSTEMS CORP v. LALOR
B.
Although we review summary judgment decisions de
novo, the applicability of equitable estoppel is “committed
to the sound discretion of the trial judge.” A.C. Aukerman
Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1028 (Fed.
Cir. 1992) (en banc). A district court’s decision to apply
the equitable estoppel doctrine is “reviewed by this court
under the abuse of discretion standard.” Id. Three ele-
ments are required for equitable estoppel to bar a patent-
ee’s suit: (1) the patentee, through misleading conduct (or
silence), leads the alleged infringer to reasonably infer
that the patentee does not intend to enforce its patent
against the alleged infringer; (2) the alleged infringer
relies on that conduct; and (3) the alleged infringer will be
materially prejudiced if the patentee is allowed to proceed
with its claim. Id.For the fourth accused collar design, the UltraSmart
collar, the district court based its grant of summary
judgment of noninfringement as to both the ’014 and ’082
patents on the doctrine of equitable estoppel. Summary
Judgment Order, 2012 WL 254026, at *7-10. Indeed,
Radio Systems did not argue noninfringement of the
UltraSmart collar except under equitable estoppel. The
district court found that Bumper Boy unquestionably
misled Innotek through its 2005 demand letter and sub-
sequent silence for over four and a half years. The court
also found that Innotek relied on this silence by signifi-
cantly expanding its product line and by being acquired
by Radio Systems. The court found that Innotek’s in-
vestment in new products constituted economic prejudice.
The court concluded that equitable estoppel applied to
Bumper Boy’s allegations against Innotek. The court
further reasoned that equitable estoppel also barred
Bumper Boy’s allegations against Radio Systems because
RADIO SYSTEMS CORP v. LALOR 10
it (1) wholly owns Innotek, (2) is headed by the same
individual as Innotek, (3) purchased Innotek to incorpo-
rate its designs and products into its own product lines,
and (4) exerts substantial control over Innotek.
In granting summary judgment of noninfringement,
the district court found that Bumper Boy was equitably
estopped from alleging that the Radio Systems Ul-
traSmart collar infringed the ’014 and ’082 patents.
Summary Judgment Order, 2012 WL 254026, at *6; Radio
Systems Corp. v. Lalor, No. C10-828RSL, 2012 WL
555092, at *2-3 (W.D. Wash. Feb. 21, 2012) (denying
Radio Systems’ motion for reconsideration).
Bumper Boy argues that equitable estoppel does not
bar its claims against Radio Systems because Radio
Systems neither knew about Bumper Boy’s demand letter
to Innotek nor relied on Bumper Boy’s silence after
Innotek responded. Bumper Boy argues that the district
court’s extension of equitable estoppel to Radio Systems
was erroneously based on assignor estoppel cases. Bump-
er Boy argues that assignor estoppel is fundamentally
different from equitable estoppel because equitable estop-
pel requires proof of detrimental reliance while assignor
estoppel does not. Bumper Boy argues that equitable
estoppel can apply, if at all, only to Innotek because Radio
Systems is a different legal entity and must independent-
ly show detrimental reliance. Alternatively, Bumper Boy
argues that even if equitable estoppel does apply to the
’014 patent, it cannot apply to the ’082 patent because
Bumper Boy “never accused either Innotek or Radio
Systems of infringing the ’082 patent prior to November
2009.”
Radio Systems argues that the district court correctly
concluded that Radio Systems stands in the shoes of
Innotek as its successor-in-interest and is thus entitled to
the benefit of equitable estoppel. Radio Systems argues
11 RADIO SYSTEMS CORP v. LALOR
that the district court did not abuse its discretion in
applying equitable estoppel to the ’082 patent because the
district court properly treated the two related patents as
one for purposes of equitable estoppel.
As to the ’014 patent, we hold that the district court
did not abuse its discretion in concluding that equitable
estoppel barred Bumper Boy’s infringement claims on the
UltraSmart collar against Innotek. With respect to
Innotek, all three elements of equitable estoppel are
present and Bumper Boy does not contest the district
court’s factual findings. We also hold that the district
court did not abuse its discretion in concluding that
equitable estoppel barred Bumper Boy’s infringement
claims against Radio Systems, Innotek’s successor-in-
interest. Our precedent confirms that equitable estoppel
applies to successors-in-interest where privity has been
established. See Jamesbury Corp. v. Litton Indus. Prods.,
Inc., 839 F.2d 1544, 1555 (Fed. Cir. 1988), overruled on
other grounds by Aukerman, 960 F.2d at 1042 (“The
district court properly held Litton liable for the knowledge
of [predecessor-in-interest] Contromatics. . . . Litton is
entitled to rely on the lack of communication to Contro-
matics, as well as to itself, following the letter.”). The
district court’s privity findings are not challenged on
appeal. Accordingly, we hold that the district court did
not abuse its discretion in concluding that equitable
estoppel applied to Bumper Boy’s ’014 patent infringe-
ment allegations on the UltraSmart collar against both
Innotek and its successor-in-interest, Radio Systems.
We conclude, however, that the district court abused
its discretion in extending equitable estoppel to the ’082
patent. The first notice of infringement to Radio Systems
regarding the ’082 patent was in Bumper Boy’s November
2009 demand letter. Regardless of whether the ’082
patent claims are supported by the subject matter in the
RADIO SYSTEMS CORP v. LALOR 12
’014 patent—and therefore entitled to claim priority to its
filing date—the patents contain claims of different scope.
Quite simply, the ’082 patent claims could not have been
asserted against Innotek or Radio Systems until those
claims issued. See 35 U.S.C. § 281 (“A patentee shall
have remedy by civil action for infringement of his pa-
tent.”); GAF Building Materials Corp. v. Elk Corp. of
Dallas, 90 F.3d 479, 482 (Fed. Cir. 1996) (holding that no
case or controversy exists unless patent has issued prior
to filing suit). As a result, the elements of equitable
estoppel are not present with respect to the ’082 patent.
There is simply no misleading conduct or silence by
Bumper Boy to indicate that it did not intend to enforce
the ’082 patent against Radio Systems. Not surprisingly,
there is also no evidence that Radio Systems actually
relied on such misleading conduct or silence. As to the
’082 patent, we conclude that the district court abused its
discretion by granting summary judgment of nonin-
fringement for the UltraSmart collar on the basis of
equitable estoppel. We therefore reverse the district
court’s judgment in this respect and remand for proceed-
ings consistent with this opinion.
C.
Radio Systems argued in its responsive appellate brief
that invalidity is an alternative ground for affirming the
district court’s judgment. Appellees’ Resp. Br. 29-36.
Bumper Boy, in its reply brief, moved to strike this argu-
ment because such an affirmance would enlarge the scope
of the district court’s judgment. Appellants’ Reply Br. 19-
21. Bumper Boy contends that Radio Systems was re-
quired by legal precedent and the rules of this court to
raise invalidity in a cross appeal.
We agree with Bumper Boy. The Supreme Court has
long recognized that “[a]bsent a cross appeal, an appellee .
. . may not attack the decree with a view either to enlarg-
13 RADIO SYSTEMS CORP v. LALOR
ing his own rights thereunder or of lessening the rights of
his adversary.” El Paso Nat. Gas Co. v. Neztsosie, 526
U.S. 473, 479 (1999) (internal quotation marks and cita-
tion omitted). We have held that a judgment of invalidity
is broader than a judgment of noninfringement. “[A]
determination of infringement applies only to a specific
accused product or process, whereas invalidity operates as
a complete defense to infringement for any product,
forever.” Typeright Keyboard Corp. v. Microsoft Corp.,
374 F.3d 1151, 1157 (Fed. Cir. 2004) (internal quotation
marks and citation omitted). Thus, invalidity cannot be
an alternative ground for affirming a judgment of nonin-
fringment absent a cross-appeal. See id. at 1157 n.4 (“In
that situation [where the appellee urges invalidity as a
ground on which to support a judgment of noninfringe-
ment] a cross appeal is necessary since a judgment of
invalidity is broader than a judgment of noninfringe-
ment.” (citation omitted)).
While we acknowledge the inefficiency that may re-
sult from requiring cross-appeals in situations where the
scope of a judgment would be enlarged, we are cabined by
our jurisdiction and may not reach issues that are not
properly before us. On remand, Radio Systems may
pursue its invalidity defense in further proceedings, and,
should there be additional rulings on invalidity by the
district court, Radio Systems may pursue a proper appeal
at that time. Because Radio Systems did not properly file
a cross-appeal on the invalidity issue in this appeal,
Bumper Boy’s motion to strike Radio System’ alternative
grounds for affirmance is granted.
CONCLUSION
We affirm the district court in all but one respect.
The district court correctly granted summary judgment of
noninfringement on the GS-011, FieldPro, and SD-1825
RADIO SYSTEMS CORP v. LALOR 14
collar designs based on its claim constructions. Accord-
ingly, we affirm the judgment in this respect. We con-
clude that the district court did not abuse its discretion in
granting summary judgment that the UltraSmart collar
does not infringe the ’014 patent based on equitable
estoppel. We also hold, however, that the district court
abused its discretion in relying on equitable estoppel for
the ’082 patent. Accordingly, for the ’014 patent, we
affirm the district court’s judgment of noninfringement.
For the ’082 patent, we reverse the judgment of nonin-
fringement and remand for proceedings consistent with
this opinion. We have considered the remaining argu-
ments on appeal and conclude that they lack merit.
AFFIRMED-IN-PART, REVERSED-IN-PART, AND
REMANDED.
COSTS
No Costs.
United States Court of Appeals
for the Federal Circuit
______________________
RADIO SYSTEMS CORPORATION
AND INNOTEK, INC.,
Plaintiffs-Appellees,
v.
TOM LALOR AND
BUMPER BOY, INC.,
Defendants-Appellants.
______________________
2012-1233
______________________
Appealed from the United States District Court for
the Western District of Washington in No. 10-CV-0828,
Judge Robert S. Lasnik.
______________________
NEWMAN, Circuit Judge, concurring in part, dissenting in
part.
I agree with the ruling that the district court correctly
construed the claim terms “electrode base” and “inside
surface,” and I agree with the resultant affirmance of the
district court’s judgment of non-infringement of the ’014
patent as to Radio Systems’ accused GS-011, FieldPro,
and SD-1825 models. As to the UltraSmart collar, the
only issue decided by the panel majority is whether equi-
table estoppel applies; the district court did not decide
infringement as to this model. I agree that equitable
estoppel arose on the five years of silence after Bumper
2 RADIO SYSTEMS CORP v. LALOR
Boy’s accusation of infringement of the ’014 patent in
February 2005. However, I would also apply estoppel to
the ’082 patent. And, unlike the panel majority, I would
reach the issue of validity, which was decided by the
district court and asserted by Radio Systems as an alter-
native ground for affirming the judgment in its favor.
I
I would affirm the district court’s ruling that estoppel
applies not only to the ’014 patent but also to the continu-
ation-in-part ’082 patent. The subject matter of the ’082
claims in suit is disclosed and described in the ’014 pa-
tent, and these claims do not draw on any new matter.
The new matter added in the ’082 patent relates to a
stretchable insert in the collar, a feature absent from all
of the ’082 claims in suit. The force of equitable estoppel
cannot be escaped by including previously disclosed but
unclaimed subject matter in a continuation-in-part pa-
tent.
The district court did not abuse its discretion in find-
ing that equitable estoppel applies to the ’082 as well as
the ’014 patent. From my colleagues’ contrary ruling, I
respectfully dissent.
II
The panel majority does not reach the district court’s
holding that the two patents in suit are valid, holding
that validity was not appealed. Radio Systems argues
invalidity as an alternative ground of affirmance of the
district court’s judgment of no liability. The panel majori-
ty rules that invalidity cannot be reviewed on this appeal,
although it was decided by the district court. Radio
Systems fully briefed invalidity on appeal. Bumper Boy
had an opportunity to respond, but chose not to discuss
validity.
Radio Systems prevailed in the district court; the
court entered judgment “in favor of plaintiffs [Radio
RADIO SYSTEMS CORP v. LALOR 3
Systems] and against defendants [Bumper Boy].” Radio
Sys. Corp. v. Lalor, No. 10-cv-0828 (W.D. Wash. Jan. 26,
2012), ECF No. 111 (“Judgment”). Thus Radio Systems
was not required to file a cross-appeal, for as prevailing
party it had no right of appeal. See Datascope Corp. v.
SMEC, Inc., 879 F.2d 820, 822 n.1 (Fed. Cir. 1989) (filing
of “‘cross-appeal’ for the ‘sole purpose of preserving [the]
right to offer arguments in support of the judgment’ is
improper.”).
My colleagues hold that because no cross-appeal was
filed, invalidity cannot be raised by Radio Systems in
defense of the judgment in its favor. That is incorrect.
The prevailing party need not file a cross-appeal in order
to defend a judgment in its favor on any ground that is
supported by the record. Jaffke v. Dunham, 352 U.S. 280,
281 (1957) (“A successful party in the District Court may
sustain its judgment on any ground that finds support in
the record.”); Glaxo Group Ltd. v. TorPharm, Inc., 153
F.3d 1366, 1371 (Fed. Cir. 1998) (“[A]n appellate court
may affirm a judgment of a district court on any ground
the law and the record will support so long as that ground
would not expand the relief granted.”); Datascope, 879
F.2d at 822 n.1 (“Appellees always have the right to
assert alternative grounds for affirming the judgment
that are supported by the record.”); Bio-Rad Labs., Inc. v.
Nicolet Instrument Corp., 807 F.2d 964, 969 (Fed. Cir.
1986) (“[A] court of appeals may affirm the judgment of a
district court on any ground, including grounds not relied
upon by the district court.”). Since validity was not
considered on the appeal to this court, it may be consid-
ered in the remand proceeding.