Seattle Box Co., Inc. v. Industrial Crating & Packing

This case was remanded to a district court for consideration of Industrial Crating & Packing’s (Industrial) (plaintiff) defense of intervening rights to infringement of Seattle Box Co.’s (Seattle Box) (defendant) reissue patent, claiming a method for transporting oil pipes using spacers. The United States Court of Appeals for the Federal Circuit provided a detailed analysis of the law regarding the issue and suggested that the district court employ one of the following options considering Industrial’s defense: allow it to use all its remaining infringing spacers; allow it to continue using the spacers with restrictions; or allow it to continue business unconditionally. On remand, Industrial presented evidence that it had enough infringing spacers on-hand to transport 224 bundles of pipe, pre-reissue. Industrial had manufactured the spacers after advice from counsel on how not to infringe the original patent. Of the 224 bundles, 114 of the bundles were transported post-reissue in fulfilment of pre-reissue contracts. Altogether, Industrial transported 919 bundles of pipe with infringing spacers. The district court held that Industrial failed to set forth good and valid reasons for it to use its discretion regarding intervening rights with respect to the spacers Industrial had on-hand pre-reissue. Industrial appealed.