In SCA Hygiene Products AB v. First Quality Baby Products, Appeal No. 2013-1564, the en banc Federal Circuit held that laches remains a defense in patent suits and can bar equitable relief as well as pre-suit damages. But, absent extraordinary circumstances, laches does not preclude an ongoing royalty.
In 2003, SCA sent First Quality a letter alleging patent infringement. First Quality responded by citing prior art and arguing that the patent was invalid. Communications between the parties ceased and First Quality invested heavily in its business. Nearly seven years after sending the letter, SCA sued First Quality alleging infringement of the patent addressed in the letter. First Quality moved for summary judgment of laches and equitable estoppel, which were granted by the district court. SCA appealed, and a Federal Circuit panel affirmed the finding of laches but reversed as to equitable estoppel. SCA petitioned for en banc review in light of the Supreme Court’s decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014), which held that laches was not a defense to legal relief in copyright law.
The Federal Circuit, sitting en banc, affirmed that laches remains an available defense in patent law. All eleven members of the Federal Circuit agreed that laches can bar equitable relief. But laches may only bar equitable relief of an ongoing royalty in “extraordinary circumstances.” In a 6-5 split, the majority held that laches can also bar recovery of pre-suit damages. The Federal Circuit held that 35 U.S.C. § 286 of the Patent Act is a “damages-barring time provision” rather than a statute of limitations like § 507(b) of the Copyright Act addressed in Petrella.