"Enforcement Laches does not require detrimental reliance. However, the patentee must be shown to have "unreasonably and inexcusably" delayed bringing suit and that the alleged infringer subsequently suffered material prejudice. A six year delay creates a presumption of laches. Here, the delay was only five years – calculated from the 1997 patent issuance to the 2002 counterclaims. Although no presumption exists in this case, the magistrate judge noted that Pine's excuse - lack of motivation – is insufficient."
[A] laches defense exists precisely to prevent patentees from delaying in filing suit simply because they do not feel "motivated to do so." Accordingly, the undersigned hereby finds that Pine's unjustified five year delay was unreasonable and that Troxler is entitled to summary judgment on the unreasonable delay prong of its laches defense
The harm of the delay can be shown in a variety of ways. Here, the magistrate judge focused on evidentiary harms and economic harms.
- Evidence Lost: Troxler founder and CEO died during the interim. He had directed the development of the accused product.
- Evidence Lost: Time delay has probably faded the memory of the Pine inventors.
- Evidence Lost: Many documents have been destroyed. (Troxler is a family business – "When the drawer gets full, you toss something.")
- Economic: In the interim, Troxler has invested millions of dollars in manufacturing facilities and producing the alleged product.
Based on the potential validity of some of these arguments, the magistrate judge recommended they be explored at trial.
Unclean Hands: Because laches and equitable estoppel are both judged in equity, Pine argued that Troxler's "unclean hands" should bar the company from relying upon those defenses. Particularly, Pine noted discovery shenanigans and filing suit without a good faith basis. The magistrate judge agreed that allegations of "egregious behavior" must be included in any equitable decision.
The district court will now decide whether to convert the magistrate judge's recommendations into an order.