Aspex Eyewear, Inc. v. Clariti Eyewear, Inc.

United States Court of Appeals
for the Federal Circuit
__________________________

ASPEX EYEWEAR INC.
AND CONTOUR OPTIK, INC.,
Plaintiffs-Appellants,

v.
CLARITI EYEWEAR, INC.,
Defendant-Cross-Appellant.
__________________________

2009-1147, -1162
__________________________

Appeal from the United States District Court for the
Southern District of New York in 07-CV-2373, Judge Denny
Chin.
__________________________

Decided: May 24, 2010
___________________________

MICHAEL A. NICODEMA, Greenberg Traurig, LLP, of
Florham Park, New Jersey, argued for plaintiffs-appellants.

ANDREW D. SKALE, Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C., of San Diego, California, argued for defen-
dant-cross-appellant. With him on the brief was NATHAN R.
HAMLER.
__________________________
ASPEX EYEWEAR v. CLARITI EYEWEAR 2

Before NEWMAN, RADER AND BRYSON, Circuit Judges.
Opinion for the court filed by Circuit Judge NEWMAN.

Dissenting opinion filed by Circuit Judge RADER.

NEWMAN, Circuit Judge.

Aspex Eyewear Inc. and Contour Optik, Inc. (together
“Aspex”) appeal the summary judgment of the United States
District Court for the Southern District of New York, ruling
that Aspex is equitably estopped from pursuing this in-
fringement claim against Clariti Eyewear, Inc. 1 On cross-
appeal, Clariti challenges the district court’s denial of
attorney fees under 35 U.S.C. §285.

BACKGROUND

Aspex filed suit against Clariti in March 2007, alleging
that Clariti’s sales of its AirMag® brand eyeglass frames
constitute willful infringement of U.S. Patent No. 6,109,747
(“the ’747 patent”) and No. RE37,545 (“the ’545 patent”).
The patents relate to eyeglass frames with magnetically
attachable auxiliary lenses such as sunshades. After sum-
mary judgment briefing was completed, the infringement
claim for the ’545 patent was dismissed by stipulation. As
for the ’747 patent, the dismissal on the ground of equitable
estoppel was based on the three years of silence after
Aspex’s contacts with Clariti in 2003 concerning infringe-
ment by the AirMag® products.

This is not the first litigation between these parties. In
1999, Aspex sued Clariti for infringement of U.S. Patent No.
5,568,207, the patent that was reissued as the ’545 patent.
Later that year, Clariti and Aspex entered into a consent
judgment wherein Clariti acknowledged infringement of the
1
Aspex Eyewear, Inc. v. Clariti Eyewear, Inc., No. 07
Civ. 2373, 2008 WL 5049744 (S.D.N.Y. Nov. 26, 2008).
3 ASPEX EYEWEAR v. CLARITI EYEWEAR

’207 patent by its magnetic eyewear designs, and agreed to a
permanent injunction barring sales of those designs and any
other magnetic eyewear that would infringe the ’207 patent.
Clariti did not again market a magnetic eyewear product
until early 2003, when Clariti launched what it described as
a new line of AirMag® eyeglass frames with magnetically
attachable auxiliary lenses. On March 7, 2003 counsel for
Aspex sent Clariti a letter identifying four Aspex patents,
viz., U.S. Patent Nos. 5,737,054; 6,012,811; 6,092,896; and
the ’545 patent, and stating:

It is our understanding that some of the products
sold by you may be covered by the claims of the
above mentioned patents. In order to minimize fur-
ther damage, we ask you to immediately confirm for
us that you have stopped selling any frames, frame
attachments or parts in violation of our rights under
the patent[s]. We also ask you to supply us with the
identity of the source of these goods and information
concerning the number of pieces sold to date. We
will then be in a position to reach a prompt and rea-
sonable resolution of this situation.

****

It has been our policy and continues to be our strong
intention to fully and vigorously enforce our rights
under the exclusive license to these magnetic frame
attachments.

****

We look forward to your immediate reply to this
very urgent and serious matter.

J.A. 251–52. Three days later, on March 10, 2003, Aspex
sent an almost identical letter as to the ’747 patent. On
ASPEX EYEWEAR v. CLARITI EYEWEAR 4

March 18, 2003 Clariti responded, stating that its policy is
not to infringe any valid, enforceable patent, and requesting
certain information to assist it in analyzing the Aspex
patents, including file histories, assignment documents, and
other documents likely to be readily available to Aspex.
Clariti observed that the patents have a large number of
claims and asked Aspex to specify “which claims you believe
may cover Clariti’s products by model number.” J.A. 256.
Aspex responded on May 12, 2003, as follows:
We are in receipt of your letter dated March 18,
2003.
For your review, enclosed please find courtesy
copies of the file histories for U.S. Patent Nos.
6,012,811 and 6,737,054.
Also, in response to numbered paragraph 7 of
your letter, we have provided you with the following
list of claims we believe cover the frames sold by
your client:
U.S. Patent No. 5,737,054: Claim 1; and
U.S. Patent No. 6,012,811: Claims 1-4, 7, 9-14,
22-33.
We have included more than enough informa-
tion for your analysis of your client’s infringement of
U.S. Patent Nos. 6,012,811 and 5,737,054.
We repeat, in order to minimize further damage,
we ask you to immediately confirm for us that your
client has stopped selling any frames, frame at-
tachments or parts in violation of our client’s rights
under these patents. We also ask you to supply us
with the identity of the source of these goods and in-
formation concerning the number of pieces sold to
date. We will then be in a position to reach a
prompt and reasonable resolution of this situation.
We look forward to hearing from you.
5 ASPEX EYEWEAR v. CLARITI EYEWEAR

J.A. 257–58. Neither the ’545 nor the ’747 patent was
mentioned in this letter, and no claim of either patent was
identified by Aspex as covering any Clariti product.

On June 26, 2003 Clariti responded, stating: “After re-
viewing the allegations raised in your letter, we believe that
the products of Clariti Eyewear do not infringe any valid
claims of the ’811 or ’054 patents.” J.A. 259.

The record reports no further contact from Aspex until
August 23, 2006, when Aspex wrote to Clariti as follows:

It has come to our attention that your company is
manufacturing a product called AirMag®. This
product utilizes magnetic attraction on the two side
extensions for attachment of the auxiliary frames to
the primary frames. As such, it directly infringes
our clients’ patent rights with regard to the ’747
patent. Specifically, your products are covered by
claims of these patents, including but not limited to
claims 10 and 12. A copy of the patent is enclosed
for your reference.

J.A. 289. The parties exchanged additional letters concern-
ing the ’747 patent, Clariti refused to cease sales of the
AirMag® products, and Aspex filed this suit on March 22,
2007.

Clariti then moved to dismiss Aspex’s infringement
claims on the ground of equitable estoppel based on the
three years of silence. Clariti also moved for summary
judgment of invalidity, and of unenforceability due to ineq-
uitable conduct during patent prosecution. Based on the
asserted equitable estoppel and/or inequitable conduct,
Clariti moved to have the case declared “exceptional” and
attorney fees awarded under 35 U.S.C. §285. The district
court granted Clariti’s motion for dismissal on the ground of
equitable estoppel, but ruled that the case was not “excep-
ASPEX EYEWEAR v. CLARITI EYEWEAR 6

tional.” Aspex and Clariti appeal the judgments adverse to
each. We affirm the district court’s rulings.

DISCUSSION

I

A summary judgment of equitable estoppel is reviewed
for an abuse of discretion. See A.C. Aukerman Co. v. R.L.
Chaides Constr. Co., 960 F.2d 1020, 1028 (Fed. Cir. 1992)
(en banc). However, when there are disputed underlying
factual elements, summary judgment is inappropriate
unless the movant would prevail even on the non-movant’s
view of the facts. See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 247–48 (1986).

The district court held that Aspex’s conduct was mis-
leading, in that Aspex in 2003 threatened an infringement
suit under several patents, Clariti responded that its prod-
ucts did not infringe the claims of the ’054 and ’811 patents
on which Aspex focused, and this response was followed by
silence for three years as to the patents now in suit, while
Clariti continued to market the accused products without
objection. In the context of patent infringement, the three
elements of equitable estoppel that must be established are:
(1) the patentee, through misleading conduct, led the al-
leged infringer to reasonably believe that the patentee did
not intend to enforce its patent against the infringer; (2) the
alleged infringer relied on that conduct; and (3) due to its
reliance, the alleged infringer would be materially preju-
diced if the patentee were permitted to proceed with its
charge of infringement. Aukerman, 960 F.2d at 1028.
Misleading “conduct” may include specific statements,
action, inaction, or silence when there was an obligation to
speak. Id. In deciding whether to bar the suit on estoppel
grounds, the court must consider all evidence relevant to the
equities. Id. at 1043.
7 ASPEX EYEWEAR v. CLARITI EYEWEAR

Aspex argues that misleading silence cannot be found
unless an express charge of infringement was levied against
a particular product. Aspex states that no particular prod-
uct was identified by either Aspex or Clariti during the 2003
correspondence and that Aspex did not threaten an immedi-
ate suit for infringement, whereby its failure to sue could
not produce an estoppel. In support Aspex cites Meyers v.
Asics Corp., 974 F.2d 1304 (Fed. Cir. 1992). However, this
case does not support the position taken by Aspex. In
Meyers the court explained that intentionally misleading
silence arises when a patentee “threatened immediate or
vigorous enforcement of its patent rights but then did
nothing for an unreasonably long time.” Id. (quoting Meyers
v. Brooks Shoe, Inc., 912 F.2d 1459, 1464 (Fed. Cir. 1990)).
Meyers did not hold that failure to identify specific products
is a critical condition, when the accused infringer is suffi-
ciently apprised of the products of the patentee’s concern.

Aspex also seeks to distinguish Scholle Corp. v. Black-
hawk Molding Co., 133 F.3d 1469 (Fed. Cir. 1998), and
Wafer Shave, Inc. v. Gillette Co., 857 F. Supp. 112 (D. Mass.
1993), aff’d, 26 F.3d 140 (Fed. Cir. 1994) (Table). The
district court cited Scholle Corp. and Wafer Shave for the
proposition that a patentee’s silence and inaction can be
misleading in the context of the specific interaction between
the parties. In Scholle Corp. the patentee had notified
Blackhawk that one of Blackhawk’s valved bottle caps
infringed a Scholle patent. Blackhawk asked which claims
were allegedly infringed, but received no response. Later
Blackhawk provided Scholle with samples of a new cap
design, and stated that it would consider the new product
non-infringing unless Scholle advised otherwise. Scholle
made no response, but three years later sued for infringe-
ment. Dismissal on grounds of equitable estoppel was
sustained. Aspex argues that Clariti did not advise Aspex
that it considered AirMag® a non-infringing alternative to
the ’747 patent, and thus that Scholle Corp. is inapplicable.
ASPEX EYEWEAR v. CLARITI EYEWEAR 8

Wafer Shave involved a charge of infringement as to a
particular Gillette product, with a cease and desist deadline
included in the letter from Wafer Shave. Gillette refused to
cease and desist, Wafer Shave did not explain why it consid-
ered the patent to be infringed, and Wafer Shave did not
reassert infringement in later correspondence with Gillette.
Wafer Shave filed suit three years and five months after its
last charge of infringement and two years and nine months
after the last communication with Gillette. The district
court found equitable estoppel, and this court affirmed,
Wafer Shave, Inc. v. Gillette Co., 26 F.3d 140 (Fed. Cir.
1994) (Table). Aspex states that it presented no deadline in
its letters.

Although Aspex notes factual differences among Wafer
Shave, Scholle Corp., and the instant case, equitable relief is
not a matter of precise formula. Aspex’s letters to Clariti of
March 7 and 10, 2003 can fairly be understood as threats of
suit for infringement, for Aspex stated its “understanding
that some of the products sold by you may be covered by the
claims of the above mentioned patents,” and Aspex’s “strong
intention to fully and vigorously enforce our rights” in this
“very urgent and serious matter.” The ensuing silence is
analogous to the silence in Scholle Corp. and in Wafer
Shave.

Aspex argues that its letters did not threaten suit, and
highlights the equivocal nature of the statements that its
patents “may” cover “some” of Clariti’s products. Aspex
points to the letters’ request that Clariti divulge sales
information and the source of the accused goods, arguing
that this shows that Aspex would not file suit until it re-
ceived such information. The district court viewed the
correspondence as a whole, and concluded that it was rea-
sonably viewed by Clariti as a threat of an infringement
suit, and not mitigated by the words “may” and “some.”
9 ASPEX EYEWEAR v. CLARITI EYEWEAR

With respect to the ’747 patent, the Aspex letter of
March 10, 2003 was specific to this patent, but in response
to Clariti’s request for the claims thought to be infringed,
Aspex on May 12, 2003 identified only claims of the ’054 and
’811 patents. Whether this sequence is fairly viewed as a
tacit withdrawal of the ’747 patent, or as misleading silence
with respect to the ’747 patent, the result is the same, for it
was reasonable for Clariti to infer that Aspex was not
continuing the accusation of infringement as to the ’747
patent.

Aspex points out that silence alone does not generate an
estoppel, and that Clariti “must show that, in fact, it sub-
stantially relied on the misleading conduct of the patentee
in connection with taking some action.” Aukerman, 960
F.2d at 1042. It is correct that estoppel requires reliance.
Clariti’s position is that it expanded its AirMag® products
in the belief that the ’747 patent would not be enforced.
Clariti’s president, Dominique Yonemoto, declared that
“following Aspex’s May 2003 correspondence, she under-
stood that Aspex was no longer accusing Clariti of infringing
any claims of the ’747 Patent.” Aspex, 2008 WL 5049744, at
*6. Ms. Yonemoto stated that “had Aspex filed a patent
infringement suit against the AirMag® products [in March
2003], given the newness of the products and Clariti’s lack
of investment in them, Clariti would very likely have simply
decided to stop selling the AirMag® products and pursued
other business opportunities.” Clariti Principal Br. 10
(quoting declaration). Clariti points to the May 12, 2003
letter from Aspex, which listed only claims of the ’811 and
’054 patents, and did not mention the ’747 patent, which is
the only patent here in suit. Clariti stresses that Aspex did
not respond to Clariti’s letter asserting non-infringement,
and that Clariti thereafter expanded its business involving
the AirMag® products: its 2003 AirMag® sales totaled less
than $45,000; 2004 sales were over $150,000; and in 2005
and 2006 Clariti sold about $500,000 in AirMag® products.
ASPEX EYEWEAR v. CLARITI EYEWEAR 10

Clariti promoted the products at the International Vision
Expo and enlarged its sales force during this period.

Aspex argues that Clariti’s testimony was speculative
and conclusory, and does not suffice to support summary
judgment of estoppel. However, to show reliance on Aspex’s
silence and inaction, Clariti need not prove precisely what
alternative paths it would have taken, or that every market-
ing decision was based on reliance on Aspex’s silence. It
was undisputed that Clariti took into account Aspex’s
failure to pursue the ’747 patent while the parties discussed
the ’811 and ’054 patents. Clariti’s president referred to the
prior patent dispute between the parties, where Aspex did
file an infringement suit. In that suit Clariti agreed to an
injunction, and withdrew the accused products. Clariti’s
president stated that Clariti would likely have done the
same with the AirMag® products if Aspex had filed suit in
2003 rather than withdraw into silence. We agree with the
district court that reliance on Aspex’s silence was shown.

Aspex argues that Clariti was not reasonable in relying
on Aspex’s silence to believe that the ’747 and other patents
would not be enforced and thus to continue to enlarge the
AirMag® business. According to Aspex, Clariti should have
known that Aspex might be delaying an infringement suit
because suit was not economically worthwhile in 2003, at
the low volume of AirMag® sales. Aspex takes this argu-
ment from Aukerman, where the accused infringer Chaides
told the patentee Aukerman that the infringement claim
was worth at most $200 to $300 a year. This court ruled
that this “could lead one in Chaides’ position to infer that
Aukerman did not sue because the amount in issue was de
minimis, not that Aukerman was abandoning its claim
against Chaides for all time regardless of quantum.” Au-
kerman, 960 F.2d at 1044. The court held that Aukerman
was not necessarily estopped from bringing suit more than
eight years later, when the infringer’s business had grown.
11 ASPEX EYEWEAR v. CLARITI EYEWEAR

The court explained that summary judgment of estoppel
was not available, for the infringer might not reasonably be
credited with believing that enlarged infringement could not
be remedied. In the case at bar, neither party argued that
the low volume of Clariti’s initial sales was a factor in
leading Aspex to drop the ’747 patent from its correspon-
dence in 2003, while the May 12, 2003 letter listed claims
from the ’811 and ’054 patents. Clariti could reasonably
have relied on this action in enlarging its business within
the possible reach of the ’747 patent, and in continuing to do
so in the succeeding years of silence.

We also agree with the district court that Clariti’s de-
velopment of its AirMag® business, in reliance on Aspex’s
silence after its aggressive letters, represents a significant
change in economic position and constitutes material preju-
dice sufficient to support equitable estoppel. Clariti need
not show a total loss of value in order to show material
prejudice. Prejudice may be shown by a change of economic
position flowing from actions taken or not taken by the
patentee. See ABB Robotics, Inc. v. GMFanuc Robotics
Corp., 52 F.3d 1062, 1065 (Fed. Cir. 1995) (“[C]ases in which
economic prejudice has been found lacking did not so hold
because of a lack of capital investments, but, rather, be-
cause the alleged infringer failed to prove that their in-
creased expenditures, i.e., on marketing and development,
were in any way related to actions taken by the patentee.”).
Although Aspex argues that Clariti continued to expand
this business after Aspex filed suit in 2007 for infringement
of the ’747 patent, and thus that material prejudice should
not be attributed to Aspex’s period of silence, the district
court did not err in determining prejudice based on Clariti’s
commercial activities undertaken and expanded during the
period of silence.

In Aukerman the court explained that “the trial court
must, even where the three elements of equitable estoppel
ASPEX EYEWEAR v. CLARITI EYEWEAR 12

are established, take into consideration any other evidence
and facts respecting the equities of the parties in exercising
its discretion and deciding whether to allow the defense of
equitable estoppel to bar the suit.” 960 F.2d at 1043. Aspex
argues that the trial court did not properly consider Clariti’s
own egregious conduct, for Clariti continued its sales of the
AirMag® products after receipt of Aspex’s letters in 2003,
and without obtaining advice of counsel as to the ’747 pat-
ent. Aspex states that this shows willful infringement of
the ’747 patent, for only the passage of time gave weight to
Aspex’s silence.

The district court stated that this court’s ruling in In re
Seagate Technolgy, LLC, 497 F.3d 1360 (Fed. Cir. 2007),
made clear that there is no automatic obligation to obtain or
present an exculpatory opinion of counsel in order to avoid
“willful” infringement. Although this ruling is not control-
ling as to estoppel, for this equitable question the court
could have given weight to its conclusion that the record
contained no evidence of egregious copying or willful in-
fringement. The district court further reasoned that in light
of Aspex’s May 12, 2003 letter, which did not mention the
’747 patent and identified no ’747 claims as infringed,
Clariti had no reason to think that Aspex still believed it
infringed the ’747 patent, and was under no duty to cease its
activities based solely on the initial letter from Aspex and
the abandoned charge of infringement as to the ’747 patent.

After Aspex reopened discussion in 2006, Clariti re-
ceived from the manufacturer of the AirMag® products an
opinion of counsel on the validity of the ’747 patent. Aspex
points out that Clariti relied on this opinion in the district
court, and argues that Clariti’s failure to obtain an opinion
earlier constitutes evidence of Clariti’s willful infringement.
Aspex argues that where a defendant chooses to rely on an
opinion of counsel to negate a charge of willful infringement,
the timing of the opinion can be considered in the totality of
13 ASPEX EYEWEAR v. CLARITI EYEWEAR

circumstances. Aspex argues that in view of the 2003
letters and Clariti’s knowledge of Aspex’s enforcement of its
patents in the 1999 litigation between them, Clariti should
have stopped selling the AirMag® products or obtained an
opinion of counsel in 2003.

We agree that the timing as well as the content of an
opinion of counsel may be relevant to the issue of willful
infringement, for timely consultation with counsel may be
evidence that an infringer did not engage in objectively
reckless behavior. See Finisar Corp. v. DirecTV Group, Inc.,
523 F.3d 1323, 1339 (Fed. Cir. 2008) (“Thus a competent
opinion of counsel concluding either that DirecTV did not
infringe the ’505 patent or that it was invalid would provide
a sufficient basis for DirecTV to proceed without engaging in
objectively reckless behavior with respect to the ’505 pat-
ent.”). However, as the district court explained, the May 12,
2003 letter from Aspex no longer referred to the ’747 patent
as potentially infringed, and Clariti could reasonably have
concluded that Aspex would not sue on the ’747 patent.
Thus Clariti cannot have been objectively reckless in not
obtaining an opinion of counsel as to the ’747 patent.

The elements of equitable estoppel were established
without material factual dispute, and the district court did
not abuse its discretion in weighing the equities. We affirm
the district court’s ruling that Aspex is equitably estopped
from suing Clariti for infringement of the ’747 patent.

II

On cross-appeal, Clariti argues that this case should be
declared exceptional under 35 U.S.C. §285, for the purpose
of awarding attorney fees. The district court denied the
request.

A case may be found exceptional in terms of §285 when
there has been some material inappropriate conduct related
ASPEX EYEWEAR v. CLARITI EYEWEAR 14

to the matter in litigation, such as willful infringement,
fraud or inequitable conduct in procuring the patent, mis-
conduct during litigation, vexatious or unjustified litigation,
conduct that violates Fed. R. Civ. P. 11, or other major
impropriety. See Standard Oil Co. v. Am. Cyanamid Co.,
774 F.2d 448, 455 (Fed. Cir. 1985) (collecting cases); Beck-
man Instruments, Inc., v. LKB Produkter AB, 892 F.2d 1547,
1551–52 (Fed. Cir. 1989) (affirming exceptional case deter-
mination based on a strategy of vexatious litigation activ-
ity). Even in the absence of misconduct in the litigation or
in securing the patent, attorney fees may be assessed when
the litigation was objectively baseless and was brought in
subjective bad faith. Brooks Furniture Mfg., Inc. v. Dutailer
Int’l, Inc., 393 F.3d 1378, 1381 (Fed. Cir. 2005) (reversing
exceptional case finding based on lack of subjective bad
faith, citing Professional Real Estate Investors, Inc. v. Co-
lumbia Pictures Industries, Inc., 508 U.S. 49, 60–61 (1993)
(holding that litigation cannot be deprived of immunity
under the Noerr-Pennington doctrine as a sham unless the
litigation is objectively baseless and brought in subjective
bad faith)); see also ICU Medical, Inc. v. Alaris Medical Sys.,
Inc., 558 F.3d 1368, 1379–80 (Fed. Cir. 2009) (affirming
attorney fee award on the basis of litigation misconduct and
objectively baseless litigation brought in bad faith). The
party seeking attorney fees under §285 must establish, by
clear and convincing evidence, that the case is exceptional.
Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1327 (Fed.
Cir. 2003). This court reviews the factual determination of
whether a case is exceptional for clear error. Id. at 1328.
When a case is found to be exceptional, the award of attor-
ney fees is within the discretion of the district court, and is
reviewed accordingly. See Serio-US Indus. v. Plastic Recov-
ery Techs. Corp., 459 F.3d 1311, 1321 (Fed. Cir. 2006) (abuse
of discretion standard).

Section 285 is an exception to the “American Rule” con-
cerning attorney fees, and is limited to circumstances in
15 ASPEX EYEWEAR v. CLARITI EYEWEAR

which the award of fees is necessary “to prevent a gross
injustice.” Forest Labs., 339 F.3d at 1329. In Forest Labs.
the accused infringer argued that the patentee’s misleading
conduct leading to a successful charge of equitable estoppel
was in bad faith, and that this made the case exceptional;
this court held that §285 does not reach a patentee’s bad-
faith or misleading business conduct toward an accused
infringer before litigation. Id. Clariti argues that this case
is different because Clariti specifically warned Aspex in
2006, after Aspex broke its three-year silence, that an
attempt at litigation would be equitably estopped, yet Aspex
filed suit anyway.

While we have affirmed the district court’s ruling of eq-
uitable estoppel, the warning by Clariti that it would raise
this defense does not convert Aspex’s action into one of bad
faith. Defeat of a litigation position, even on summary
judgment, does not warrant an automatic finding that the
suit was objectively baseless; all of the circumstances must
be considered. The district court did not clearly err in
ruling that the act of bringing this suit, under the circum-
stances that existed, did not produce an exceptional case in
terms of §285, and does not warrant the award of attorney
fees.

III

Clariti also argues that the case is exceptional based on
inequitable conduct by Aspex in procuring the ’747 patent.
Inequitable conduct in obtaining a patent may, depending
on the circumstances, support the award of attorney fees.
See, e.g., Brasseler, U.S.A. I, L.P. v. Stryker Sales Corp., 267
F.3d 1370 (Fed. Cir. 2001) (affirming finding of exceptional
case based on inequitable conduct); Gardco Mfg., Inc. v.
Herst Lighting Co., 820 F.2d 1209, 1215 (Fed. Cir. 1987)
(“[I]t has not been held that every case of proven inequitable
conduct must result in an automatic attorney fee award.”).
ASPEX EYEWEAR v. CLARITI EYEWEAR 16

Clariti argues that the inventor of the ’747 patent, David
Chao, and his assignee, co-defendant Contour Optik, Inc.,
knew of a material reference and intentionally withheld it
from the Patent and Trademark Office. The reference is a
patent application filed by Julie Madison of Manhattan
Design Studio. The Madison application was filed on April
18, 1997, ten days before Chao filed the ’747 application,
and it issued as U.S. Patent No. 6,149,269 (“the ’269 pat-
ent”) shortly after the ’747 patent issued. Mr. Chao testified
that he became aware of the Madison application while it
was pending, in late 1996 or early 1997, and was “very
upset” because he had given some technical drawings to Ms.
Madison and he believed that she had used these drawings
in her patent application. Neither Mr. Chao nor his as-
signee Contour Optik brought the Madison application to
the attention of the PTO during prosecution of the ’747
application. Clariti later requested reexamination of the
issued ’747 patent on the basis of Ms. Madison’s issued ’269
patent, and the ’747 claims were confirmed after Mr. Chao
“swore behind” the Madison application.

Clariti’s argument for inequitable conduct is that the
Madison application was material because the PTO granted
reexamination of the ’747 patent, and that Mr. Chao should
have described the Madison application to the examiner
during pendency of the ’747 application. Clariti argues that
Aspex, the ’747 patent’s exclusive licensee, committed
inequitable conduct independent of this lapse by the inven-
tor and the assignee of the ’747 patent, because Aspex had
purchased the assets of Manhattan Design Studio, including
the Madison application, before issuance of the ’747 patent.
Clariti states that Aspex should have required disclosure of
the Madison application to the examiner handling the ’747
application. Aspex responds that Clariti has not identified
any person at Aspex who had a copy of the Madison applica-
tion, knew of its contents, and knew of any possible materi-
ality in relation to the ’747 application. Aspex also points
17 ASPEX EYEWEAR v. CLARITI EYEWEAR

out that there is no evidence that Mr. Chao or anyone at
Contour Optik saw the Madison application or was aware of
its contents during the pendency of the ’747 application.

“Inequitable conduct resides in failure to disclose mate-
rial information, or submission of false material informa-
tion, with an intent to deceive, and those two elements,
materiality and intent, must be proven by clear and convinc-
ing evidence.” Kingsdown Medical Consultants, Ltd. v.
Hollister Inc., 863 F.2d 867, 872 (Fed. Cir. 1988). Intent to
deceive cannot be inferred from even a high degree of mate-
riality, but must be separately proved by clear and convinc-
ing evidence. Id. at 876; see Star Scientific, Inc. v. R.J.
Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008)
(“[T]he fact that information later found material was not
disclosed cannot, by itself, satisfy the deceptive intent
element of inequitable conduct.”). Mistake or negligence,
even gross negligence, does not support a ruling of inequita-
ble conduct. Kingsdown, 863 F.2d at 876 (en banc in rele-
vant part). When both materiality and deceptive intent
have been established, the district court determines, in the
court’s discretion, whether inequitable conduct has oc-
curred; appellate review is on the basis of whether this
discretion has been abused. See id. (“As an equitable issue,
inequitable conduct is committed to the discretion of the
trial court and is reviewed by this court under an abuse of
discretion standard. We, accordingly, will not simply sub-
stitute our judgment for that of the trial court in relation to
inequitable conduct.”).

The district court did not hold a full trial on inequitable
conduct, because the summary judgment of equitable estop-
pel ended the litigation. Clariti argues that the district
court clearly erred because it did not fully develop and find
all the facts that might show that this case should be de-
clared exceptional. However, having resolved the litigation,
and especially in the absence of a prima facie case showing
ASPEX EYEWEAR v. CLARITI EYEWEAR 18

clear and convincing evidence of inequitable conduct, the
court was not required to pursue the fee-shifting premises.
As in Lighting World, Inc. v. Birchwood Lighting, Inc., 382
F.3d 1354, 1366–67 (Fed. Cir. 2004), “the district court was
justified in not requiring a full trial on the issue of inequita-
ble conduct as part of the attorney fee motion or in entering
detailed findings of fact and conclusions of law on the issue.”
We agree with the district court that the circumstances
here presented do not meet the threshold levels of material-
ity and intent necessary to establish inequitable conduct by
clear and convincing evidence. Mr. Chao’s concern about
Ms. Madison’s possible use of his information does not
impart materiality and deceptive intent to the prosecution
of the ’747 application. No evidence of deceptive intent was
presented. Because the elements of inequitable conduct
were not met, the district court did not abuse its discretion
in ruling that inequitable conduct in the PTO had not been
shown, and in declining to award attorney fees based on
prosecution of the ’747 application.

The rulings of the district court are

AFFIRMED
 United States Court of Appeals
for the Federal Circuit
__________________________

ASPEX EYEWEAR INC.
AND CONTOUR OPTIK, INC.,
Plaintiffs-Appellants,

v.
CLARITI EYEWEAR, INC.,
Defendant-Cross-Appellant.
__________________________

2009-1147, -1162
__________________________

Appeals from the United States District Court for the
Southern District of New York in case no. 07-CV-2373,
Judge Denny Chin.
__________________________

RADER, Circuit Judge, dissenting.

Because this court with this opinion expands the doc-
trine of equitable estoppel beyond its own precedent, I must
respectfully dissent.

“Silence alone will not create an estoppel unless there
was a clear duty to speak or somehow the patentee’s contin-
ued silence reinforces the defendant’s inference from the
plaintiff’s known acquiescence that the defendant will be
unmolested. . . . [O]n summary judgment, such inference
must be the only possible inference from the evidence.” A.C.
Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020,
ASPEX EYEWEAR v. CLARITI EYEWEAR 2

1043–44 (Fed. Cir. 1992) (en banc) (internal citations omit-
ted) (emphasis in original). In Aukerman, this court held
that because the district court could draw different infer-
ences from the correspondence between the parties, the
district court clearly and impermissibly drew an unfavor-
able inference against the patentee in granting summary
judgment. Id.; see also Hemstreet v. Computer Entry Sys.
Corp., 972 F.2d 1290, 1295 (Fed. Cir. 1992) (holding that
“mere silence must be accompanied by some other factor
which indicates that the silence was sufficiently misleading
as to amount to bad faith” (emphasis in original)). The
patentee’s silence “must be combined with other facts re-
specting the relationship or contacts between the parties to
give rise to the necessary inference that the claim against
the defendant is abandoned.” Aukerman, 960 F.2d at 1042.
This court held that even an invitation to sue made by the
defendant did not create a clear duty to speak for the pat-
entee. See id. at 1026–27.

In this case, Aspex sent Clariti a letter that does not
create the clear duty required by Aukerman. Notably ab-
sent is a threat of “immediate and vigorous enforcement of
its patent rights.” Hottel Corp. v. Seaman Corp., 833 F.2d
1570, 1574 (Fed. Cir. 1987) (holding that “[i]n the cases that
have applied intentionally misleading silence in the patent
infringement context, a patentee threatened immediate and
vigorous enforcement of its patent right but then did noth-
ing for an unreasonably long time”). The letter merely
informs Clariti of the patents, points to Aspex’s patent
enforcement policy, and requests additional information
from Clariti to permit Aspex to evaluate its position. Aspex
made no outright “threats of litigation.” Meyers v. Asics
Corp., 974 F.2d 1304, 1309 (Fed. Cir. 1992); see also Hem-
street, 972 F.2d at 1292 (finding a genuine issue of fact as to
whether patentee engaged in misleading conduct because
“[t]he letter did not threaten immediate litigation, nor did it
provide any deadline for response”). Also, Aspex did not
3 ASPEX EYEWEAR v. CLARITI EYEWEAR

accuse specific Clariti products. See Aukerman, 960 F.2d at
1042 (“In the most common situation, the patentee specifi-
cally objects to the activities currently asserted as infringe-
ment in the suit . . . .” (emphasis added)); see also Meyers,
974 F.2d at 1305 (finding no misleading conduct even where
patentee sent letter to defendant asserting that several of
defendant’s product models infringed its patents).

Licensing negotiations in which a patentee asserts in-
fringement do not create estoppel. See, e.g., Meyers, 974
F.2d at 1308–09 (holding that “a suggestion of infringement
coupled with an offer to license followed by silence [does not]
suffice to establish equitable estoppel”). An “invitation to
enter into a business relationship [that] neither threatens
litigation nor conveys the impression that the [patentee]
would acquiesce in [the defendant’s] alleged infringement”
does not create a clear duty to speak. Id. at 1309. In this
case, one could find that the letters from Aspex were simply
requests for more information to facilitate an informed
decision amongst the options of licensing, litigation, or
abandonment of the infringement claim. In a case with
little evidence beyond the actual letters sent by the parties,
the district court should avoid premature conclusions that
leap to the drastic punishment of barring all relief.

This court does not justify its conclusion that Aspex ex-
plicitly abandoned its infringement claim with respect to the
’747 patent. After all, Aspex did not even mention the
patent in its May 12, 2003 letter. Moreover, Clariti did not
give Aspex the information repeatedly requested in Aspex’s
March 7, March 10, and May 12, 2003 letters. Thus, Aspex
did not even have the information it requested to make an
informed decision about a patent infringement claim on the
’747 patent. In each of its earlier three letters, Aspex
stated that after it received the information from Clariti, it
would “then be in a position to reach a prompt and reason-
able resolution of this situation.” This statement put Clariti
ASPEX EYEWEAR v. CLARITI EYEWEAR 4

on notice that Aspex would not even consider filing suit
until it received the information, and therefore the ensuing
silence was not misleading.

This court mistakenly relies on Scholle Corp. v. Black-
hawk Molding Co., 133 F.3d 1469 (Fed. Cir. 1998) and
Wafer Shave, Inc. v. The Gillette Co., 857 F. Supp. 112 (D.
Mass. 1993), aff’d, 26 F.3d 140 (Fed. Cir. 1994) to establish
misleading conduct. In Scholle, the accused infringer made
a design-around product during litigation in an effort to
avoid future infringement. 133 F.3d at 1470. The defen-
dant presented samples of the design-around product to the
patentee and informed the patentee that it would consider
the design-around product non-infringing unless the pat-
entee advised it otherwise. The patentee gave no response
to the defendant’s inquiry. Id. Following the defendant’s
inquiry, the parties had numerous discussions regarding the
patent and even a possible merger. Id. at 1471. The pat-
entee knew of the defendant’s position in the market and
the rapidly growing sales of the design-around product. Id.
In those years of discussions, the patentee never suggested
that it might consider the design-around product to infringe
its patent. Id. Years later, the patentee sued the defendant
for infringement by the design-around product. Id. at 1471–
72. In Scholle, this court found that the discussions that the
parties had over the years was “cooperative behavior [that],
in light of [the patentee’s] previous threats to sue, created a
reasonable inference that [the patentee] considered the
[product] a non-infringing design-around product and did
not intend to sue.” Id. at 1472. In other words, the “course
of dealing” and “extensive contact” between the parties
coupled with the patentee’s inaction created the estoppel.
Id. at 1472, 1473.

This case does not present this extended course of deal-
ing. Aspex requested information from Clariti and informed
it of the patent and basic patent law. In addition, Clariti
5 ASPEX EYEWEAR v. CLARITI EYEWEAR

did not present Aspex with a design-around product and ask
whether that product infringed.

In Wafer Shave, the patentee accused Gillette’s “Atra
Plus” product of infringing its patent. 857 F. Supp. at 117.
In the same communication, the patentee demanded that
Gillette “cease and desist from making, using, or selling” the
product and threatened to commence litigation within
fourteen days of the communication unless Gillette stopped
infringing. Id. at 117, 120. Independent evidence also
established that Wafer Shave intended to threaten litiga-
tion. Id. at 120. Following this communication, Wafer
Shave attempted to sell or license the patent to Gillette
without reasserting any claim of patent infringement.
Based on the specific threat of litigation, the “cease and
desist” demand, the deadline to respond before Waver Shave
would initiate suit, and the subsequent course of dealing
with no mention of infringement, the district court found
that Wafer Shave’s conduct was misleading. Id. Aspex’s
communications with Clariti did not rise to the level of those
in Wafer Shave. Aspex simply informed Clariti that it
“may” infringe some of its patents and requested informa-
tion.

To my eyes, this record also lacks any material preju-
dice. Prejudice hinges on any changes in economic position
that Clariti undertook during the period of delay due to the
actions taken or not taken by Aspex. See Ecolab, Inc. v.
Envirochem, Inc., 264 F.3d 1358,1371 (Fed. Cir. 2001).
Although “increasing sales . . . may constitute economic
prejudice,” they alone are not always sufficient to prove that
prejudice. See ABB Robotics, Inc. v. GMFanuc Robotics
Corp., 52 F.3d 1062, 1065 (Fed. Cir. 1995).

Marketing products, which is all Clariti did here, gener-
ally does not require the same kind of investment as devel-
oping and manufacturing products. For example, in ABB,
ASPEX EYEWEAR v. CLARITI EYEWEAR 6

the accused infringer expended resources, which a market-
ing-only company would not, on procuring additional pat-
ents in the field of the patent-in-suit and developing the
technology. Id. Similarly, in Scholle, the accused infringer
invested approximately $700,000 in tooling and machinery,
which a marketing-only company would not. 133 F.3d at
1471. In this case, the record leaves many questions about
economic prejudice because Clariti did not manufacture any
products but simply marketed them.

In addition, the record does not really show that Aspex’s
silence contributed at all to the marketing expenses, the
increases in sales force, and the trademark protection costs
asserted as “prejudice.” The marketing expenses were
minimal, $12,500 per year from 2004 to 2006. From 2003 to
2006, Clariti hired sixteen new sales persons, but it is
unclear how many sales persons were hired due to increased
sales of AirMag® as opposed to Clariti’s over one hundred
other products. In addition, the trademark registration
shows that the AirMag® mark covers a broad range of
eyewear products, including those unrelated to Aspex’s
invention. Even the district court stated that there was a
“possible factual dispute concern[ing] the extent of Clariti’s
economic prejudice . . . .” Aspex Eyewear, Inc. v. Clariti
Eyewear, Inc., No. 07 Civ. 2373(DC), 2008 WL 5049744, at
*7 (S.D.N.Y. Nov. 26, 2008).

Because of these lingering questions of fact, this case
was not ripe for summary judgment. Affirming the grant of
summary judgment expands the equitable estoppel doctrine
beyond this court’s precedent with respect to both mislead-
ing conduct and material prejudice.