SCA Hygiene Products AB v. First Quality Baby Products, LLC, __ U.S. __ (Mar. 21, 2017) (ALITO for the Court (with Roberts, Kennedy, Thomas, Ginsburg, Sotomayor, Kagan); Breyer dissents) (Fed. Cir. (en banc)) (D. Ky.: McKinley) (5 of 5 stars)
In a 7-1 opinion, the Supreme Court has vacated the Federal Circuit’s en banc opinion holding that laches remains a defense in most patent infringement cases (807 F.3d 1311). The Supreme Court held that, similar to the copyright case Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014), the application of laches in patent infringement cases brought within § 286’s six-year damages period would undermine Congress’s guidance as to the term for recovering patent damages. Thus, “this provision [§ 286] represents a judgment by Congress that a patentee may recover damages for any infringement committed within six years of the filing of the claim.” Slip op. at 6. In its opinion, the Court rejects First Quality’s argument that Petrella should not apply due to the manner in which § 286 “runs backward from the time of suit,” not forward from the accrual of the cause of action. Id. The opinion also rejects the argument that there is a meaningful difference between § 286 and the statute of limitations in Petrella, noting that in Petrella, the Court also described the Copyright Act’s statute of limitations as running backward from the complaint. Id. The Supreme Court also rejects the Fed Cir’s reasoning that § 286’s reference to “except as otherwise provided by law” permitted the continued application of laches within the statutorily-defined damages period. Id. at 8-9. The Fed Cir had reasoned that § 282 codifies laches as a defense, apparently relying on that section’s reference to “unenforceability.” Id. at 8 (citing 807 F.-3d,-at 1329–30). In rejecting this analysis, the Supreme Court explains that, even if § 282 did incorporate laches as a defense, nothing in it suggests that laches could be invoked to bar a damages claim that was otherwise within § 286’s damages period. Id.
The opinion also addresses the pre-1952 Patent Act cases cited by the Federal Circuit and First Quality. The opinion explains that these cases were insufficient to justify departing from the then well-established general rule that “laches cannot be invoked to bar a claim for damages incurred within a limitations period specified by Congress.” Slip op. at 9-10. In some detail, the opinion discusses these pre-1952 cases, broken down into three categories: cases at law before 1938, cases in equity before 1938, and cases decided after the merger of law and equity in 1938. Id. at 10-15. The Court’s opinion concludes that these cases were insufficient to support the Federal Circuit’s holding because, while there was some precedent for applying laches to defeat damages claims pre-1952, there was not a sufficiently uniform practice to overcome the general rule barring laches within a Congressional statute of limitations. Id. at 15.
Lastly, in the opinion the Supreme Court explained that some of the concerns underlying the laches doctrine could be addressed through the doctrine of equitable estoppel, including potentially the instant case. Slip op. at 16. The Supreme Court declined to address the Federal Circuit’s unanimous en banc holding that the delay currently characterized as laches could be taken into account to bar equitable relief, including injunctive relief. Id. at 3 n.2.
Dissent: Justice Breyer would have found laches to still be available, largely relying on pre-Patent Act practice that, in his view, applied laches in patent damages cases “with virtual unanimity.” Dissent at 1.