The U.S. Court of Appeals for the Federal Circuit, sitting en banc, earlier today held that "laches remains a defense to legal relief in a patent infringement suit."SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 2013-1564 (Fed. Cir. Sept. 18, 2015). Recognizing that Congress codified a laches defense in 35 U.S.C. § 282(b)(1), the Federal Circuit found that the court had "no judicial authority to question the law’s propriety."
The dispute, between two competitors in the adult incontinence products market, began in 2003 when SCA delivered notice of infringement to First Quality. In 2007, the claims of SCA’s patent were confirmed by the U.S. Patent and Trademark Office in connection with a reexamination proceeding. In 2010, SCA filed suit against First Quality. The District Court found laches and granted summary judgment in First Quality’s favor.
A Federal Circuit panel affirmed that laches ruling. SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 767 F.3d 1339 (Fed. Cir. 2014). The panel rejected SCA’s contention that the Supreme Court’s Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014), opinion abolished laches in patent law. The panel concluded that it was bound by the Federal Circuit’s en bancruling in A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020 (Fed. Cir. 1992) (en banc) (laches may bar a claim for damages based on patent infringement). And, it found that Petrella did not disrupt the Aukerman decision.
The Federal Circuit granted SCA’s request for en banc review on two questions:
- "In light of [Petrella] (and considering any relevant differences between copyright and patent law), should [Aukerman], be overruled so that the defense of laches is not applicable to bar a claim for damages based on patent infringement occurring within the six-year damages limitations period established by 35 U.S.C. § 286?"
- "In light of the fact that there is no statute of limitations for claims of patent infringement and in view of Supreme Court precedent, should the defense of laches be available under some circumstances to bar an entire infringement suit for either damages or injunctive relief? See, e.g., Lane & Bodley Co. v. Locke, 150 U.S. 193 (1893)."
In considering the first question, the Federal Circuit began by noting the Supreme Court’s Petrella holding "that laches was not a defense to legal relief in copyright law." Petrella involved a copyright dispute between Metro-Goldwyn-Mayer ("MGM") and Paula Petrella over a screenplay and the film "Raging Bull." Petrella, owner of the screenplay copyright, filed suit many years after renewing the copyright and first raising the infringement claim. The lower courts ruled in MGM’s favor on laches, but the Supreme Court reversed and held that the Copyright Act’s "statute of limitations…takes account of delay" and governs the timeliness of suit. Petrella, 134 S. Ct. at 1973. The Supreme Court contrasted the Copyright Act with the Lanham Act, which provides a statutory basis for a laches defense in trademark law. Id. at 1974 n.15. The Supreme Court took no position on whether its decision extends to the patent context. Id.
On this background the en banc Federal Circuit found "no substantive distinction…between [the Patent Act’s] § 286 and the copyright statute of limitations considered in Petrella." However, the Federal Circuit then noted that 35 U.S.C. § 282 "broadly sets out defenses available in a patent infringement or validity suit." And, the Federal Circuit relied on commentary from P.J. Federico – "a principal draftsman of the 1952 [patent laws] recodification" that "the Supreme Court has trusted as…an authority on the Patent Act at least thrice" – expressly noting that laches is a defense under 35 U.S.C. § 282. (P.J. Federico,Commentary on the New Patent Act, reprinted in 75 J. Pat. & Trademark Off. Soc’y 161 (1993).)
With respect to the second question, the Federal Circuit determined that laches is a defense to both legal and equitable claims under the Patent Act. The court based that finding, inter alia, on a canon of statutory construction providing that "when a statute covers an issue previously governed by the common law, we must presume that Congress intended to retain the substance of the common law." (quoting Kirtsaeng v. John Wiley & Sons, Inc., 133 S.Ct. 1351, 1363 (2013).) The Federal Circuit determined that laches was a defense to legal and equitable claims under common law prior to the 1952 statute, and concluded that "in § 282, Congress codified a laches defense that barred recovery of legal remedies."
And, the court rejected "Aukerman’s bright line rule [i.e., that laches may only bar pre-suit damages] regarding the interplay between laches and injunctive relief." Instead, the Federal Circuit found that "courts must weigh the facts underlying laches in the eBay framework when considering an injunction." And,laches does not bar recovery of an ongoing royalty unless there are "extraordinary circumstances" or "egregious circumstances."
Judge Hughes filed a separate opinion, with which four other judges joined, concurring-in-part and dissenting-in-part from the majority opinion.