In Petrella v. Metro-Goldwyn-Mayer, Inc., the Supreme Court ruled that laches is not a defense to copyright infringement.1 In light of Petrella, the Federal Circuit recently decided whether the doctrine of laches is still available as a defense for patent infringement. In its en banc decision, SCA Hygiene Products v. First Quality Baby Products, the Federal Circuit affirmed that laches is still a defense to patent infringement, but reevaluated the effect of laches on equitable principles such as injunctive relief and ongoing royalties.2
Laches acts as an equitable defense to patent infringement when a patentee delays bringing an infringement suit.3 When relying on laches, an accused infringer must establish that the patentee (1) unreasonably and inexcusably delayed filing an infringement suit; and (2) the delay caused material prejudice to the accused infringer.4 A presumption arises that the delay is unreasonable and inexcusable when the patentee delays bringing suit for more than six years after the patentee knew or should have known of the infringer’s activity.5
In Petrella, the Supreme Court explained, “in the face of a statute of limitations enacted by Congress, laches cannot be invoked to bar legal relief.”6 The Court reasoned that laches originally “served as a guide when no statute of limitations controlled the claim,”7 and is therefore “gap-filling, not legislation-overriding.”8Accordingly, because copyright law includes a three-year statute of limitations, a laches defense is not available for copyright infringement.9 The Court went on to clarify that although laches is not an available defense, laches may affect the equitable relief available to infringers, stating “in determining appropriate injunctive relief and assessing profits, [a district court] may take account of [plaintiff’s] delay in commencing suit.”10
To determine the applicability of Peterella, the Federal Circuit first addressed whether a statute of limitations exists for patent infringement. The court concluded that the concerns addressed by Petrella applied to patent law because 35 U.S.C. § 286 creates a damages limitation, and thus takes into account the permissible delay allowed by a patentee when bringing an infringement suit.11 However, the majority went on to highlight that Congress codified a laches defense in 35 U.S.C. § 282(b)(1).12 The presence of a patent-specific statute allowing for a laches defense thus distinguished patent law from copyright law. Accordingly, the majority was unwilling to extend Petrella to patent infringement.13
The majority next turned its attention to the Supreme Court’s explanation that laches may affect the equitable relief available to infringers. Under the Federal Circuit’s longstanding precedent, a finding of laches only restricted recovery ofpre-suit damages.14 This distinguished laches from the related doctrine of equitable estoppel, which bars an entire suit when the patentee’s conduct misleads the accused infringer to believe that the patentee will not assert its patent rights.15 Petrella signaled a departure from this precedent, potentially affecting a patentee’s ability to receive equitable relief, such as an injunction or ongoing royalties.
When considering whether to award an injunction, one of the four eBay factors a court considers is whether a “remedy in equity is warranted” based on the “balance of hardships between the plaintiff and defendant.”16 The majority explained that “many of the factors relevant to laches, such as the accused infringer’s reliance on the patentee’s delay, fall under the balance of the hardships factor.”17 The majority stopped short, however, of removing the distinction between laches and equitable estoppel, arguing that the remedy for estoppel is the loss of the claim, not just the forfeit of pre-suit damages. Therefore, laches may prevent an injunction, but absent “egregious circumstances,” the delay alone should not bar an ongoing royalty.18
The Federal Circuit’s opinion provides several key takeaways for patentees and accused infringers. First, laches remains a defense to patent infringement despite not applying to copyright infringement. Second, when opposing an injunction, an accused infringer should consider the timeliness of the patentee’s claim, and whether any arguments support a laches defense. Finally, the line between laches and equitable estoppel still exists. Absent “egregious circumstances,” ongoing royalties may still apply, even if injunctive relief is not available.