On Tuesday, the Supreme Court held that laches is not a defense to otherwise timely claims for damages for patent infringement. SCA Hygiene Products AB et al. v. First Quality Baby Products LLC et al., Case No. 15-927.
Laches is an equitable doctrine that may prevent the recovery of damages based on a patent owner’s unreasonable delay in filing suit. In a 7-1 decision, the Court held that laches cannot be used as a defense to claims brought within the Patent Act’s six-year statute of limitations set forth in 35 U.S.C. § 286.
Writing for the majority, Justice Alito reasoned:
The enactment of a statute of limitations necessarily reflects a congressional decision that the timeliness of covered claims is better judged on the basis of a generally hard and fast rule rather than the sort of case-specific judicial determination that occurs when a laches defense is asserted. Therefore, applying laches within a limitations period specified by Congress would give judges a ‘legislation-overriding’ role that is beyond the judiciary’s power.
This decision extended to the realm of patent infringment the Court’s similar 2014 ruling barring laches as a defense to damages for copyright infringement claims. See, Petrella v. Metro-Goldwyn-Mayer Inc. et al., Case No. 12-1315.
This decision likely will be a boon to patent owners, who now will have significant time to analyze potential infringement claims before filing suit without fear of an unreasonable delay defense. It also likely will allow parties to evaluate earlier and with more certainty the economics of and claims in patent litigation, which may lead to increased and quicker settlements.
Critics of the Court's reasoning have argued that patent owners, especially those who do not practice the patents but merely own rights in the technology, could sit on their infringement claims for years to maximize potential damages. Others are concerned that the holding will disincentivize patent owners from practicing their patents, and instead will allow others in the industry to develop products and services and then sue for infringement. Despite these arguments, the Supreme Court reasoned it could not overrule Congress’s clear intent in the Patent Act based on its own policy concerns.
Regardless of the arguments on both sides, the Court now has set a definitive rule that laches cannot be asserted to bar otherwise valid claims of patent infringement within the six years prior to filing suit.