Federal Circuit Reverses Summary Judgment, Finds Insufficient Evidence of Detrimental Reliance for Equitable Estoppel Defense

In Fraunhofer-Gesellschaft v. Sirius XM Radio Inc., No. 2023-2267 (Fed. Cir. June 9, 2025), the Federal Circuit reversed a district court’s grant of summary judgment that barred Fraunhofer’s patent infringement claims against Sirius XM Radio Inc. (SXM) on the grounds of equitable estoppel.

In 1998, Fraunhofer began working with XM Satellite Radio (XM) to bring satellite radio to the United States. As part of this collaboration, Fraunhofer directed XM to sublicense patents related to the satellite radio technology from WorldSpace International Network, Inc., who themselves had been granted licenses by Fraunhofer. In 2008, WorldSpace went bankrupt and settled with XM to resolve outstanding sublicense payments. That same year, XM merged with Sirius Satellite Radio to become SXM, which began using the patented technology in 2010.

Fraunhofer notified SXM that it believed SXM was infringing the licensed patents in 2015 and filed suit in 2017. In Fraunhofer’s view, upon WorldSpace’s bankruptcy, all patent rights reverted to Fraunhofer (which the Federal Circuit confirmed in a prior appeal). SXM moved for summary judgment on its defense of equitable estoppel, arguing that it had relied on Fraunhofer’s 5-year silence from 2010 to 2015 as an implied license. The district court agreed and granted summary judgment in favor of SXM.

On appeal, the Federal Circuit agreed that Fraunhofer’s extended silence was misleading because Fraunhofer had assisted SXM in developing the technology and would have reasonably been aware of SXM’s infringement. However, the Federal Circuit found insufficient evidence showing that SXM had relied on Fraunhofer’s misleading conduct. Rather, the evidence of record suggested SXM chose to implement the patented technology over non-infringing alternatives due to market considerations. The Federal Circuit emphasized that equitable estoppel requires both misleading conduct and detrimental reliance, reversed the district court’s grant of summary judgment, and remanded.