Lismont v. Alexander Binzel Corporation ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
HEDWIG LISMONT,
Plaintiff-Appellant
v.
ALEXANDER BINZEL CORPORATION,
ALEXANDER BINZEL SCHWEISSTECHNIK GMBH
& CO. KG, IBG INDUSTRIE-BETEILIGUNGS-GMBH
& CO. KG, RICHARD SATTLER,
Defendants-Appellees
______________________
2014-1846
______________________
Appeal from the United States District Court for the
Eastern District of Virginia in No. 2:12-cv-00592-MSD-
LRL, Judge Mark S. Davis.
______________________
Decided: February 16, 2016
______________________
FRANK PORCELLI, Fish & Richardson, P.C., Boston,
MA, argued for plaintiff-appellant.
DOUGLAS A. DOZEMAN, Warner Norcross & Judd LLP,
Grand Rapids, MI, argued for defendants-appellees. Also
represented by AMANDA M. FIELDER.
______________________
Before LOURIE, REYNA, and CHEN, Circuit Judges.
2 LISMONT v. ALEXANDER BINZEL CORPORATION
CHEN, Circuit Judge.
This appeal arises from an inventorship dispute be-
tween Hedwig Lismont (Mr. Lismont) and Alexander
Binzel Schweisstechnik GmbH & Co. KG (Binzel-
Germany), Abicor Unternehmensverwaltungs GmbH
(Abicor), IBG Industrie-Beteiligungs-GmbH & Co. KG
(IBG), Richard Sattler (Mr. Sattler), and Alexander Binzel
Corporation (Binzel-USA) (collectively, Appellees). The
United States District Court for the Eastern District of
Virginia granted summary judgment in favor of Appel-
lees, concluding that Mr. Lismont’s inventorship claim,
which he filed ten years after the patent issued, was
barred by laches. See Lismont v. Alexander Binzel Corp.,
No. 2:12-cv-592, 2014 WL 4181586 (E.D. Va. Aug. 20,
2014). Because we agree with the district court’s conclu-
sion that the presumption of laches applies against Mr.
Lismont’s claim and that he failed to rebut that presump-
tion, we affirm.
BACKGROUND
Mr. Lismont is a resident and citizen of Belgium.
Binzel-Germany 1 is a German company that manufac-
tures welding equipment, including welding contact tips
for use in metal inert gas welding. Binzel-Germany is the
owner of German Patent No. 197 37 934 (DE ’934 patent)
filed on August 30, 1997, which serves as the priority
document for a PCT application filed in 1998. Binzel-
Germany also owns the patent at the heart of this dis-
pute, United States Patent No. 6,429,406 (the ’406 pa-
tent), entitled “contact tip.” The ’406 patent, which issued
in 2002 to Mr. Sattler, claims priority to the 1998 PCT
application. The claims of the ’406 patent are generally
1 Binzel-Germany is affiliated with Abicor and is
wholly owned by IBG. Binzel-USA is a wholly owned
subsidiary of Abicor and IBG.
LISMONT v. ALEXANDER BINZEL CORPORATION 3
directed to a method of manufacturing a contact tip for
use in metal inert gas welding. The ’406 patent explains
that this process is more cost-effective than prior art
methods.
Mr. Lismont asserts that, beginning in 1995, he de-
veloped the method of manufacturing contact tips dis-
closed in both the DE ’934 patent and the ’406 patent in
response to Binzel-Germany’s request for assistance in
developing a lower-cost manufacturing process. Mr.
Lismont further alleges that by mid-1997, he had fully
developed his proposed manufacturing process and dis-
closed the details of the process to Binzel-Germany. Mr.
Lismont also contends that, despite numerous representa-
tions from Binzel-Germany that he was the first to con-
ceive of this method, Binzel-Germany filed the DE ’934
patent application naming Mr. Sattler, a Binzel-Germany
employee, as the inventor, rather than Mr. Lismont.
Binzel-Germany filed its patent application on August 30,
1997, and one year later, on August 13, 1998, Binzel-
Germany filed PCT Application No. PCT/EP98/05138
covering the same method of manufacturing contact tips.
As with the DE ’934 patent application, Binzel-Germany
did not identify Mr. Lismont as an inventor on its PCT
Application. This PCT Application resulted in issued
patents in numerous countries, including the ’406 patent
in the United States.
On October 13, 2000, two years after the DE ’934 pa-
tent issued, Mr. Lismont initiated litigation against
Binzel-Germany in the German Regional Federal Court in
Frankfurt, Germany (First German Litigation). In this
litigation, Lismont maintained that he was the sole
inventor of the subject matter disclosed in the DE ’934
patent and therefore sought to change inventorship on the
German patent.
In addition, on June 24, 2002, Mr. Lismont’s attorneys
sent a letter to the named inventor of the DE ’934 patent,
4 LISMONT v. ALEXANDER BINZEL CORPORATION
Mr. Sattler, demanding damages for his purportedly false
declarations of inventorship. The letter noted that Binzel-
Germany had filed a patent application in the United
States Patent and Trademark Office (PTO) and explained
that, if Mr. Lismont did not receive compensation for his
contribution toward inventing the claimed method, he
would be “extensively assessing and pursuing your con-
duct and actions from every legal perspective.” Joint
Appendix (J.A.) 1554. 2 The letter further stated that if
Binzel-Germany did not respond by July 5, 2002, Mr.
Lismont would “initiate the necessary legal steps without
further notice.” Id. Neither Mr. Sattler nor Binzel-
Germany responded. Accordingly, in December 2002, Mr.
Lismont filed a second action in Germany (Second Ger-
man Litigation) against Binzel-Germany, Abicor, and Mr.
Sattler, seeking damages related to his inventorship
claim. The complaint in the Second German Litigation
also sought information about the countries in which
Binzel-Germany was pursuing patents and information
about the manufacture and sales of contact tips that used
the method disclosed in the DE ’934 patent.
Ultimately, the German courts ruled against Mr.
Lismont in both cases for essentially the same reasons:
that he failed to prove that he had an inventorship inter-
est in the DE ’934 patent. Specifically, on December 18,
2008, the German court concluded that Mr. Lismont had
not proven that he was either the sole inventor or a joint
inventor of the inventive process disclosed in the DE ’934
patent. Mr. Lismont appealed this decision to the Ger-
man Supreme Court, which rejected his appeal on No-
vember 25, 2009. After losing his inventorship claim and
2 The record before us contains numerous English
translations of documents from the German litigations.
Neither party has challenged the accuracy of these trans-
lations.
LISMONT v. ALEXANDER BINZEL CORPORATION 5
his related claim for damages, Mr. Lismont also filed
actions in the German Federal Constitutional Court and
in the European Court of Human Rights. These two cases
were not appeals from the German Supreme Court’s
rejection of his appeal, but were separate actions claiming
that the earlier proceedings amounted to a denial of basic
due process in violation of his constitutional or human
rights, respectively.
On October 31, 2012, twelve years after Mr. Lismont
initiated the First German Litigation, he initiated the
underlying litigation seeking, among other things, to
correct inventorship of the ’406 patent under 35 U.S.C.
§ 256(a). After the parties engaged in discovery tailored
to the issue of laches, Appellees filed a motion for sum-
mary judgment asserting that Mr. Lismont’s inventorship
claim was barred by laches. The district court agreed and
entered judgment in favor of Appellees. Mr. Lismont filed
a timely notice of appeal. We have jurisdiction under 28
U.S.C. § 1295(a)(1).
DISCUSSION
“Laches is an equitable defense that may bar an in-
ventorship claim.” Serdarevic v. Advanced Med. Optics.,
Inc., 532 F.3d 1352, 1358 (Fed. Cir. 2008). To prevail on a
defense of laches, a defendant must establish that (1) the
plaintiff’s delay in filing a suit was “unreasonable and
inexcusable”; and (2) the defendant suffered “material
prejudice attributable to the delay.” A.C. Aukerman v.
R.L. Chaides Constr. Co., 960 F.2d 1020, 1028 (Fed. Cir.
1992) (en banc); see also SCA Hygiene Prods. Aktiebolag v.
First Quality Baby Prods., LLC, 807 F.3d 1311, 1317 (Fed.
Cir. 2015) (en banc). Further, a rebuttable presumption
of laches attaches whenever more than six years passes
from the time a purportedly omitted inventor knew or
should have known of the issuance of the relevant patent.
Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys.,
Inc., 988 F.2d 1157, 1163 (Fed. Cir. 1993); Serdarevic, 532
6 LISMONT v. ALEXANDER BINZEL CORPORATION
F.3d at 1358. This presumption of laches may be rebutted
if the plaintiff “offer[s] evidence to show an excuse for the
delay or that the delay was reasonable” or by offering
“evidence sufficient to place the matters of defense preju-
dice and economic prejudice genuinely in issue.” Auker-
man, 960 F.2d at 1038.
Here, the district court concluded at the summary
judgment stage that Mr. Lismont’s inventorship claim
was barred by laches. We review the grant of summary
judgment under the law of the regional circuit. Charles
Mach. Works, Inc. v. Vermeer Mfg. Co., 723 F.3d 1376,
1378 (Fed. Cir. 2013). The Fourth Circuit generally
reviews the grant or denial of summary judgment de novo.
See Myers v. Finkle, 950 F.2d 165, 167 (4th Cir. 1991).
Summary judgment is appropriate when “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). The issue of laches, however, “is committed to the
sound discretion of the district court.” Aukerman, 960
F.2d at 1032. Because the factors underlying a laches
determination—unreasonable delay and prejudice—are
factual in nature, genuine issues of material fact as to
these factors will preclude summary judgment in favor of
the defendant. For this reason, “[w]hen reviewing a
laches decision rendered on summary judgment, this
court reviews for an abuse of discretion unless genuine
issues of material fact preclude summary judgment.” Pei-
Herng Hor v. Ching-Wu Chu, 699 F.3d 1331, 1334 (Fed.
Cir. 2012).
If the presumption of laches attaches, a plaintiff may
defeat summary judgment by “rais[ing] a genuine dispute
as to either delay or prejudice.” Hemstreet v. Comput.
Entry Sys. Corp., 972 F.2d 1290, 1293 (Fed. Cir. 1992). If
the plaintiff makes such a showing, the presumption
dissolves and the defendant is then “put to its proof on
both factors” and “must affirmatively prove
(1) unreasonable and inexcusable delay and (2) prejudice
LISMONT v. ALEXANDER BINZEL CORPORATION 7
resulting from that delay.” Id. If, however, we agree with
the district court that there are no genuine issues of
material fact, we may set aside the imposition of laches if
“the decision rests on an erroneous interpretation of the
law or on clearly erroneous factual underpinnings.”
Serdarevic, 532 F.3d at 1358; see also Ray Commc’ns, Inc.
v. Clear Channel Commc’ns, Inc., 673 F.3d 294, 299 (4th
Cir. 2012) (“The court has abused its discretion if its
decision is guided by erroneous legal principles or rests
upon a clearly erroneous factual finding.” (internal quota-
tion marks omitted)).
On appeal, Mr. Lismont first asserts that the district
court should not have applied the laches presumption
against his inventorship claim. Alternatively, Mr. Lis-
mont seems to argue that his litigation in the German
and European courts served as notice to Binzel-Germany
that an inventorship suit in the United States was likely
forthcoming and thus was sufficient to excuse his delay
and rebut the presumption of laches. We address each
argument in turn.
I. Presumption of Laches
The district court found, based on a statement made
by Mr. Lismont to the German court, that Mr. Lismont
undisputedly knew by February 12, 2001, that Binzel-
Germany and/or Mr. Sattler had already filed the applica-
tion that eventually issued as the ’406 patent. Because
Mr. Lismont knew of the application before the ’406
patent issued, the district court concluded that the laches
clock started to run when the ’406 patent issued on Au-
gust 6, 2002. See Pei-Herng Hor, 699 F.3d at 1335 (“[T]he
laches clock [can]not start to run—at the earliest—until
the patent issue[s].”). More than ten years later, on
October 31, 2012, Mr. Lismont initiated the present
action. Given that this delay exceeded six years, the
district court found that the rebuttable presumption of
laches attached. Serdarevic, 532 F.3d at 1358 (“‘A delay
8 LISMONT v. ALEXANDER BINZEL CORPORATION
of more than six years after the omitted inventor knew or
should have known of the issuance of the patent will
produce a rebuttable presumption of laches.’” (quoting
Advanced Cardiovascular Sys., 988 F.2d at 1163)).
Mr. Lismont argues that he did not delay in initiating
the underlying action because he had been diligently
seeking to vindicate his inventorship rights in German
and European courts. Mr. Lismont further asserts that
he specifically sought resolution of the ’406 patent inven-
torship issue in the Second German Litigation when he
requested “worldwide damages, including in the U.S., and
a worldwide declaration of liability, including in the U.S.”
Appellant Br. 25. Thus, according to Mr. Lismont, the
parties have been litigating inventorship of the ’406
patent in Germany since he filed the Second German
Litigation in 2002 and the presumption of laches is there-
fore inappropriate.
We disagree. The relevant inquiry for the laches pre-
sumption is whether more than six years passed between
the time when the inventor knew or should have known of
the subject patent and the time the inventor initiated
litigation. See Aukerman, 960 F.2d at 1034. As the
district court correctly recognized, Mr. Lismont was aware
that Binzel-Germany had filed a U.S. patent application
covering the manufacturing method he allegedly invented
before the ’406 patent issued. Accordingly, to avoid the
imposition of the rebuttable laches presumption, Mr.
Lismont should have filed his United States inventorship
litigation within six years of August 6, 2002, the date on
which the patent issued. Because it is undisputed that he
waited more than ten years from that date to initiate this
litigation, the district court correctly found that the
presumption of laches attached.
As to Mr. Lismont’s contention that he was attempt-
ing to correct the inventorship of the ’406 patent in his
foreign litigation, he has not pointed to any allegations in
LISMONT v. ALEXANDER BINZEL CORPORATION 9
his German or European litigations in which he sought to
correct the inventorship of the ’406 patent. 3 In his com-
plaint in the Second German Litigation, Mr. Lismont
requested that Binzel-Germany “issue the plaintiff infor-
mation, when and where the protected invention specified
. . . was also registered and if applicable where it was
published or rather issued, as well as to provide the
plaintiff information about the respective current process
status.” J.A. 694. In addition, the complaint seeks “a
rendering of accounts regarding the scope of the preceding
and committed acts and . . . a description of the quantity
of the goods manufactured, as well as the individual
deliveries by designating the delivery quantity, delivery
price, and the names and addresses of the recipients.” Id.
Finally, the complaint asks the German court “[t]o deter-
mine that the defendants are obligated as joint debtors to
make up for all losses incurred by the plaintiff, which
were committed against him through the acts [alleged in
the complaint] and the losses that will be incurred in the
future.” Id. Based on these statements in the complaint,
a fact-finder could conclude that Mr. Lismont was seeking
compensation for worldwide damages, but there is noth-
3 This argument is based on the questionable as-
sumption that, even if properly presented, the German
court could or would resolve the issue of inventorship on
the ’406 patent such that no litigation in the United
States would be necessary. Mr. Lismont has not pointed
to any authority supporting the proposition that a Ger-
man court may declare rights under a United States
patent. In fact, Mr. Lismont’s attorney acknowledged at
oral argument that even if the German courts had dis-
cussed inventorship of the ’406 patent, an action in the
United States would have nevertheless been necessary to
correct inventorship on the ’406 patent. See Oral Argu-
ment at 4:26–4:48 available at http://oralarguments.
cafc.uscourts.gov/default.aspx?fl+2014-1846.mp3.
10 LISMONT v. ALEXANDER BINZEL CORPORATION
ing in the complaint indicating that he was also asking
the German court to correct the inventorship on the ’406
patent as provided by 35 U.S.C. § 256.
For these reasons, Mr. Lismont’s argument that he
was continuously litigating the issue of inventorship of
the Binzel-Germany’s United States patent fails. We
therefore affirm the district court’s conclusion that a
presumption of laches was appropriate in this case.
II. Rebutting the Presumption
Although Mr. Lismont’s litigation abroad may not be
used to avoid a presumption of laches, it may help to
rebut that presumption. Serdarevic, 532 F.3d at 1359–60
(holding that one option for overcoming the presumption
of laches is to rebut it with “evidence to show an excuse
for the delay or that the delay was reasonable”). 4 We
have previously recognized that “[a] patent owner may
avoid the consequences of what would otherwise be an
unreasonable delay in filing suit by establishing that he
or she was engaged in ‘other litigation.’” Vaupel Textil-
maschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d
870, 876–77 (Fed. Cir. 1991). We have also recognized
that it is not an abuse of discretion to consider litigation
4 In addition to deciding that Mr. Lismont could not
prove that his delay was either reasonable or excusable,
the district court also concluded that Mr. Lismont had
failed to rebut the presumption by showing the existence
of a genuine issue as to prejudice. Mr. Lismont does not,
however, raise this as a ground for reversal in his opening
brief. To the extent his reply brief can be construed as
objecting to the district court’s conclusions on the preju-
dice factor, this argument is waived. See Becton Dickin-
son & Co. v. C.R. Bard, Inc., 922 F.2d 792, 800 (Fed. Cir.
1990) (“[A]n issue not raised by an appellant in its open-
ing brief . . . is waived.”).
LISMONT v. ALEXANDER BINZEL CORPORATION 11
in fora outside the United States when determining
excusable delay. See Mainland Indus., Inc. v. Standal’s
Patents Ltd., 799 F.2d 746, 749 (Fed. Cir. 1986) (overruled
on other grounds by A.C. Aukerman, 960 F.2d at 1038–39)
(“[W]e are unwilling to say as a matter of law that litiga-
tion in non-United States forums cannot be considered in
determining excusable delay . . . .”); see also 6A Donald S.
Chisum, Chisum on Patents § 19.05[2][b][i] (Matthew
Bender) (recognizing that proceedings including “court
action in a foreign country concerning the same invention
and similar issues of fact and law” could be used to excuse
delay, “subject to the notice requirement applied to litiga-
tion”).
For other litigation to excuse a plaintiff’s delay, how-
ever, the defendant must have adequate notice of the
other proceedings as well as plaintiff’s intention to pursue
its patent rights upon completion of the other proceed-
ings. Vaupel, 944 F.2d at 877. “What is important is
whether [the defendant] had reason to believe it was
likely to be sued.” Id. at 878. For example, in Vaupel, we
found that a plaintiff’s delay in filing suit could be ex-
cused by its engagement in reissue proceedings in which
the defendant participated so long as “the evidence as a
whole show[ed] that the accused infringer was in fear of
suit.” Id. Specifically, the evidence in Vaupel supported
the conclusion that the infringer was in fear of suit based
on (i) a letter sent by the plaintiff to the defendant declar-
ing that it would “protect its [U.S. patent] and look after
our rights” and requesting discussions with the defendant
before “plunging into court proceedings”; (ii) a letter sent
by the defendant to the PTO during the reissue proceed-
ings acknowledging the “continued threats of infringe-
ment”; and (iii) a letter sent by the defendant to the
plaintiff during the same time period threatening a de-
claratory judgment action. Id. We thus found that the
defendant was sufficiently aware of the threat of litigation
upon completion of the reissue proceedings. Id.
12 LISMONT v. ALEXANDER BINZEL CORPORATION
Although the “other litigation” excuse is typically in-
voked when a plaintiff is serially asserting its patents
against different defendants, in circumstances like those
presented in this case, the defendant in the foreign litiga-
tion must likewise receive adequate notice that the plain-
tiff intends to later pursue its rights under United States
patents after termination of the proceedings in the foreign
jurisdiction. We agree with the district court that the
mere initiation of patent litigation in a foreign jurisdiction
and the existence of United States patents are not suffi-
cient to notify a defendant that the plaintiff will eventual-
ly seek to assert its patent rights in the United States.
Mr. Lismont points to three possible sources of the
requisite notice. 5 Mr. Lismont first points to a document
filed in the First German Litigation in which he stated
that “the witness Sattler has applied for the patent that is
in dispute here in the Unite[d] States in his own name as
inventor” and then stated that an “extension of claim
according to § 263 ZPO is therefore expressly reserved.”
J.A. 1556. Mr. Lismont contends that this statement
notified Binzel-Germany that he was reserving his right
to assert correction of inventorship on the ’406 patent.
Mr. Lismont is incorrect. “ZPO” refers to the German
Code of Civil Procedure and section 263 of the German
Code of Civil Procedure permits amendments to pleadings
5 On appeal, Mr. Lismont does not maintain his ar-
gument that his delay should be excused because of the
parties’ settlement negotiations between July and Sep-
tember 2012. Even if he had, however, the district court
was correct to conclude that “a tolling of the laches period
for three months [during these settlement negotiations]
would make little difference . . . , as the overall time
between the issuance of the U.S. patent and the filing of
Plaintiff’s action . . . amounts to nearly a decade.” Lis-
mont, 2014 WL 4181586, at *8.
LISMONT v. ALEXANDER BINZEL CORPORATION 13
pending in a German civil action. Thus, Mr. Lismont’s
reference to “§ 263 ZPO” reserves only his right to “ex-
tend” his German claim in front of the German court.
Nothing in this statement could lead a reasonable fact-
finder to infer that Mr. Lismont communicated his intent
to pursue a separate inventorship claim in a United
States court.
Next, Mr. Lismont relies on the June 2002 Letter to
Mr. Sattler. In this letter, he (i) noted the filing of a U.S.
patent application naming Mr. Sattler as the inventor;
(ii) advised that Mr. Lismont would “carefully examine
and prosecute your conduct and actions in all legal re-
spects”; and (iii) notified Mr. Sattler that failure to pay
damages would result in the initiation of “appropriate
legal action with no further notification.” J.A. 1396–97.
Again, this communication lacks any indication that Mr.
Lismont intended to commence legal proceedings to
correct inventorship in the United States. 6 In fact, ap-
proximately six months after sending the letter, Mr.
Lismont followed through on his threat to pursue further
legal action by filing the Second German Litigation in
December 2002. Mr. Lismont has not pointed to anything
in the record from which a fact-finder could conclude that
Binzel-Germany expected further litigation after comple-
tion of the Second German Litigation, especially not in a
forum other than Germany.
Mr. Lismont’s request in Germany for “worldwide
damages” does not alter this conclusion. There are no
assertions in the complaint filed in the Second German
Litigation indicating that Mr. Lismont was pursuing the
issue of inventorship as to the ’406 patent. More im-
6 It is also worth noting, at the time of this letter,
the ’406 patent had not yet issued. Thus, at the time this
letter was sent, there was not yet a United States patent
to be litigated.
14 LISMONT v. ALEXANDER BINZEL CORPORATION
portantly, there are no assertions in the complaint that
could serve to notify Binzel-Germany that this issue
would eventually be litigated in the United States if left
unresolved upon conclusion of the litigation abroad.
Thus, because the plaintiff did not provide any notice
to the defendants in a foreign patent dispute that it would
pursue litigation in the courts of the United States
against the same defendants upon termination of the
foreign litigation, it is not an abuse of discretion to find
that laches bars the later claim.
CONCLUSION
For these reasons, we conclude that the district court
correctly imposed the presumption of laches and properly
determined that Mr. Lismont had not presented any
genuine issues sufficient to rebut the presumption. We
therefore hold that the district court did not abuse its
discretion when it held Mr. Lismont’s claim barred by
laches. 7
AFFIRMED
COSTS
No Costs.
7 In his reply brief, Mr. Lismont requested that we
strike the portions of Appellees’ brief discussing collateral
estoppel. Because our decision does not turn on these
contents, we deny Mr. Lismont’s motion as moot.