Suessen-Schurr v. Schubert

A few individuals (collectively, Suessen) (plaintiffs) held the exclusive right to license U.S. Patent No. 4,059,946 (the ’946 patent). Originally issued in 1977, the ’946 patent covered technology related to open-end spinning devices. Separately, Murata Machinery, Inc. (Murata), an unrelated entity, held the rights to U.S. Patent No. 4,022,011 (the ’011 patent). The ’011 patent covered a device related to open-end spinning. In 1982, Murata granted a few parties (collectively, Schubert) (defendants) a license to practice the ’011 patent. Thereafter, based on its right to use the technology covered by the ’011 patent, Schubert produced and marketed an open-end spinning device, the Spincomat. In 1983, Suessen sued Schubert for infringing the ’946 patent, among other claims. While the lawsuit was pending, Suessen purchased the rights to the ’011 patent from Murata and acknowledged that Schubert was a licensee of the ’011 patent. In 1985, the trial court found that Schubert had infringed the ’946 patent, rejecting Schubert’s defense that it held an implied license. The court entered judgment for Suessen, and Schubert appealed. On appeal, Schubert did not contest the court’s infringement finding but posited that Schubert had an implied license to use the technology covered by the ’946 patent under a theory of legal estoppel. Schubert argued that the implied license arose when Suessen purchased the ’011 patent from Murata.