The Software IP Report
Laches Is a Defense to Patent Infringement No More
By George Schooff
Categories: Patent Infringement, The Software IP Report
The United States Supreme Court recently held that under the Patent Act, laches is not a defense to claim for damages when the infringing acts occurred within the six-year time limitation provided for recovering damages under 35 U.S.C. §286. SCA Hygiene Prods. AB v. First Quality Baby Prods., LLC, slip op. No. 15-927 (U.S. Sup. Ct. March 21, 2017).
In October 2003, SCA sent a letter to First Quality alleging that First Quality was making and selling adult diapers that infringed SCA’s rights under U. S. Patent No. 6,375,646 (‘646 patent). First Quality responded that one of its patents—U.S. Patent No. 5,415,649 (‘649 patent)—issued before the ‘646 patent and disclosed “the same diaper construction.” Id. at 2. First Quality thus asserted that the ‘646 patent was invalid and could not support an infringement claim. SCA sent no further correspondence to First Quality regarding the ‘646 patent, and First Quality began marketing and selling the accused product. Id.
In July 2004, SCA asked the Patent and Trademark Office (PTO) to reexamine its ‘646 patent in view of First Quality’s ‘649 patent. In March 2007, the PTO held SCA’s ‘646 patent valid over First Quality’s ‘649 patent. Id.
In August 2010—seven years after SCA sent the letter charging infringement—SCA sued First Quality for infringing the ‘646 patent’s claims. First Quality moved for summary judgment asserting SCA’s claims were barred by laches and equitable estoppel. The district court granted the motion on both grounds. A Federal Circuit panel upheld the district court’s decision on laches, but reversed on equitable estoppel. The Federal Circuit reheard the case en banc, and reaffirmed the original panel’s decision. Id. at 2-3.
The Supreme Court vacated and remanded. According to the Court, when Congress enacts a statute of limitations, like §286’s six-year time limit, Congress is speaking directly to the issue of timeliness and providing a hard and fast rule when a claim is timely enough to permit relief. Thus, “applying laches within a limitations period specified by Congress would give judges a ‘legislation-overriding’ role that is beyond the Judiciary’s power.” Id. at 4 (citing Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962, 1974-75 (2014)).
Moreover, the Court noted that applying laches within a limitations period would clash with the purpose for which the defense developed—to bar claims of an equitable cast for which a Legislature has provided no fixed time limitation. In other words, laches “is a gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill.” Id. at
Finally, the Court pointed out that while laches is not available as a defense to a damage claim brought within §286’s six-year time limit, equitable estoppel is. And, equitable estoppel would protect against unscrupulous patentees that induce potential targets of infringement suits to invest in the production of arguably infringing products. Id at 16.