United States District Court, D. Minnesota
BOMBARDIER RECREATIONAL PRODUCTS, INC., and BRP U.S. INC., Plaintiffs,
ARCTIC CAT INC., and ARCTIC CAT SALES INC., Defendants.
C. Marcus, LOCKE LORD LLP, Three World Financial Center, New
York, NY 10281, and Kevin D. Conneely and Ruth A. Rivard,
STINSON LEONARD STREET LLP, 50 South Sixth Street, Suite
2600, Minneapolis, MN 55402, for plaintiffs.
A. Myers, Diane L. Peterson, and Niall A. MacLeod, KUTAK ROCK
LLP, 60 South Sixth Street, Suite 3400, Minneapolis, MN
55402, for defendants.
MEMORANDUM OPINION AND ORDER ON ARCTIC CAT'S
R. TUNHEIM Chief Judge United States District Court
Bombardier Recreational Products, Inc. and BRP U.S. Inc.
(collectively “BRP”) brought this action against
Arctic Cat Inc. and Arctic Cat Sales Inc. (collectively
“Arctic Cat”), alleging patent infringement.
Arctic Cat asserts four equitable defenses against BRP:
equitable estoppel, laches, waiver, and unclean hands.
(Defs.' Answer, Affirmative Defenses, and Countercls. to
Am. Compl., Defenses to Pls.' Compl.
(“Answer”) ¶¶ 10-12, Mar. 15, 2012,
Docket No. 29.) The Court denied BRP's motion in limine
to exclude evidence of Arctic Cat's equitable defenses at
trial, but the Court expressed concern “that Arctic Cat
lacks sufficient evidence to support a finding that it will
prevail on its equitable defenses.” (Mem. Op. &
Order at 5, Nov. 11, 2017, Docket No. 990.) The Court ordered
Arctic Cat to submit a proffer showing that it could
“present at trial sufficient evidence to support a
finding that one or more of the asserted claims of the
patents-in-suit are unenforceable” due to equitable
estoppel, laches, waiver, or unclean hands.”
(Id. at 11; Defs.' Proffer, Nov. 13, 2017,
Docket No. 991.) In response, BRP filed a motion for judgment
as a matter of law dismissing Arctic Cat's equitable
defenses. (Pls.' Mot. for J. as a Matter of Law, Nov. 14,
2017, Docket No. 1006.)
Cat has not shown that it can present sufficient evidence at
trial to support a finding that one or more of the asserted
claims of the patents-in-suit are unenforceable due to
equitable estoppel, waiver, or unclean hands. The Court will
therefore grant BRP summary judgment and dismiss those
equitable defenses. In the event, however, that BRP prevails
at trial and seeks a permanent injunction, the Court will
consider Arctic Cat's laches defense then.
STANDARD OF REVIEW
Rule of Civil Procedure 56(f) empowers the Court to grant
summary judgment independent of a motion. It provides that
“the court may . . . consider summary judgment on its
own after identifying for the parties material facts that may
not be genuinely in dispute.” Fed.R.Civ.P. 56(f).
“Federal district courts have power to grant summary
judgment sua sponte when the losing party is given
sufficient advance notice and an adequate opportunity to
submit evidence in opposition.” Barkley, Inc. v.
Gabriel Bros., Inc., 829 F.3d 1030, 1041 (8th
Cir. 2016) (quoting Chrysler Credit Corp. v. Cathey,
977 F.2d 447, 449 (8th Cir. 1992) (per curiam)).
prove that a patent is unenforceable due to equitable
estoppel, an accused infringer must show (1) misleading
conduct, (2) reliance on that conduct, and (3) material
prejudice. A.C. Aukerman Co. v. R.L. Chaides Construction
Co., 960 F.2d 1020, 1028 (Fed. Cir. 1992) (en banc),
abrogated on other grounds by SCA Hygiene Prod.
Aktiebolag v. First Quality Baby Prod., LLC, 137 S.Ct.
954, 967 (2017).
Cat maintains that BRP unreasonably and inexcusably delayed
filing this action for four years, and that BRP never
notified Arctic Cat of its infringement. But silence can only
constitute “misleading conduct” when there is an
obligation to speak. Aukerman, 960 F.2d at 1028.
Arctic Cat points to a 2003 letter from BRP to Arctic Cat
notifying Arctic Cat of BRP's pending patent
applications, but pre-issuance activity cannot give rise to
equitable estoppel. Radio Sys. Corp. v. Lalor, 709
F.3d 1124, 1131 (Fed. Cir. 2013). Moreover, Arctic Cat has
not presented evidence of any reliance on BRP's delay -
e.g., a change in position that Arctic Cat would not have
taken but for BRP's delay. An accused infringer's
reliance based on its subjective belief of invalidity does
not suffice for purposes of inequitable conduct. Hall v.
Aqua Queen Mfg., Inc., 93 F.3d 1548, 1558 (Fed. Cir.
1996). The Court will therefore dismiss Arctic Cat's
no longer bars damages in patent cases. SCA Hygiene,
137 S.Ct. at 967. Rather, laches may apply to equitable
relief only, such as a permanent injunction. See Id.
To prove laches, an accused infringer must show (1)
unreasonable and inexcusable delay in filing suit, and (2)
that the delay prejudiced the accused infringer.
Aukerman, 960 F.2d at 1032. The Court will permit
Arctic Cat to assert its laches defense post-trial if BRP
prevails on the merits and seeks injunctive relief. Moreover,
BRP has stated that it will not object to Arctic Cat arguing
“undue-delay-type facts” on any ...