U.S. District Judge Rodney Gilstrap issued the memorandum opinion and order on April 22, 2026, in Headwater Research LLC v. Walmart Inc. (the case name includes Walmart, but the equitable defense was raised by Verizon, a defendant litigation context or a related party, though the opinion focuses on Verizon). The court found that Headwater Research LLC’s principal, Dr. Gregory Raleigh, and his entities "consciously delayed litigation against Verizon purely to benefit themselves" after discovering infringement in 2017.
The ruling vacates a July 2025 jury verdict that awarded Headwater $175 million in damages for willful infringement of U.S. Patent Nos. 8,589,541 and 9,215,613, which relate to background data technologies.
Gilstrap rejected Headwater’s argument that it lacked knowledge of the infringement until filing suit in 2023. The court noted that Headwater investigated the infringement in 2017, a period when it could only recover damages for less than two years. By waiting until 2023, Headwater was able to seek damages for the full six-year period permitted under 35 U.S.C. § 286.
"The Court finds that Headwater's delay in filing suit is directly attributable to maximizing the damages it could recover," Gilstrap wrote. "In other words, the Court finds that Headwater had full knowledge of Verizon's infringement in 2017."
The judge determined that Headwater’s silence and delay induced a reasonable belief by Verizon that Headwater had waived its right to enforce the patents. Verizon, which held a 10% equity interest in Headwater since 2010 and invested $30 million in sister entity ItsOn between 2015 and 2017, was deprived of the opportunity to seek non-infringing alternatives during the delay.
Gilstrap distinguished the ruling from the Supreme Court’s decision in SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, which barred the laches defense to damages in patent cases. The judge found that SCA Hygiene precluded laches only against damages, not underlying liability, and that implied waiver is a distinct equitable doctrine focused on the inducement of reasonable belief rather than mere delay.
"Every law student, early on, learns the equitable concept of unclean hands," Gilstrap wrote. "Having realized in 2017 that its patents were being infringed, Dr. Raleigh and his corporate entities consciously delayed litigation against Verizon purely to benefit themselves. Six years later, they sued Verizon and asserted that such infringement had been willfully undertaken. This is conduct done with unclean hands."
The court also rejected Verizon’s arguments for equitable estoppel based on its prior investments in Headwater. Gilstrap found that investments alone do not create a reasonable belief that an investor can infringe a patentee’s patents, and that Headwater’s 2010 investment agreement expressly permitted it to remain silent about potential infringement claims due to conflicts of interest.
Verizon is not entitled to relief under the doctrine of waiver based on its prior investments because it failed to show that Headwater knew of the infringement those investments were made. However, the court granted relief based on Headwater’s post-investment conduct.
Gilstrap ordered that Headwater cannot enforce the asserted patents against Verizon under the doctrine of implied waiver.
Headwater’s attorney, Jeffrey Johnson, appeared pro se in the case.