Patent Owner’s Silence Not Enough: Federal Circuit Revives Fraunhofer’s Patent Suit Against Sirius XM

Fraunhofer-Gesellschaft Zur F_rderung Der Angewandten Forschung E.V. v. Sirius XM Radio Inc

In a recent decision, the Federal Circuit reversed a district court’s ruling that had blocked Fraunhofer-Gesellschaft zur Förderung der angewandten Forschung E.V. from pursuing patent infringement claims against Sirius XM Radio Inc. The case centers on Fraunhofer’s patents covering multicarrier modulation (MCM) technology used in satellite radio systems, including U.S. Patent Nos. 6,314,289, 6,931,084, 6,993,084, and 7,061,997. After years of collaboration and licensing arrangements involving Fraunhofer, WorldSpace, and XM Satellite Radio (now part of Sirius XM), Fraunhofer waited over five years after a key licensing agreement ended before asserting its patent rights.

The district court had found that Fraunhofer’s long silence and failure to object to Sirius XM’s continued use of the patented technology amounted to “equitable estoppel”—a legal doctrine that can bar a patent owner from enforcing its rights if its conduct misleads another party into believing they won’t be sued. The court said Sirius XM relied on Fraunhofer’s silence when it chose to shift car manufacturers to the allegedly infringing “high-band” satellite radio system, rather than a non-infringing “low-band” alternative.

However, the Federal Circuit disagreed, finding that there was a genuine factual dispute about whether Sirius XM actually relied on Fraunhofer’s silence when making its business decisions. Testimony from Sirius XM’s own representative suggested the decision to use the high-band system was based on business reasons, not on any belief that Fraunhofer wouldn’t enforce its patents. Because this key issue of reliance was not indisputably established, the appeals court ruled that summary judgment was improper and sent the case back for further proceedings.

This decision highlights that, in patent cases, a patent owner’s silence—even for several years—does not automatically bar them from suing for infringement. The accused infringer must show they actually relied on that silence to their detriment. The case will now proceed, with Sirius XM needing to prove at trial that it made costly business moves specifically because it believed Fraunhofer would not enforce its patents.

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