Federal Circuit En Banc Reaffirms Laches as a Defense to Patent Suits

Recently, the Federal Circuit, sitting en banc, ruled in SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC that laches remains a viable defense in patent infringement actions. In doing so, the Federal Circuit rejected the extension of the Supreme Court’s 2014 decision in Petrella v. Metro-Goldwyn-Mayer, Inc., which held that the laches defense does not apply in copyright cases because the copyright statute provides a three year statute of limitations for bringing an infringement suit.

Laches, an equitable defense based on the plaintiff’s unreasonable, prejudicial delay in commencing a lawsuit that traditionally precludes pre-suit damages, has long been recognized as a defense to patent infringement.

Similar to the copyright statute, the patent statute, under 35 U.S.C. §286, precludes the patent owner from recovering damages for infringement that was committed more than six years prior to bringing an infringement suit. However, the majority determined that this section did not preclude the laches defense because the patent statute, unlike the copyright statute, included a provision that implicitly, according to the majority, codified the defense in 35 U.S.C. § 282.

While the majority recognized that § 282 did not specifically enumerate the defense, the defense of laches was still viable because the statute granted an accused infringer the right to assert the defenses of “[n]oninfringement, absence of liability for infringement or unenforceability.” The majority further recognized that legislative history remained silent on the issue but ultimately found support for its broad interpretation by noting that 1) “laches was well established at the time of recodification of the patent laws in 1952,” and 2) commentary from a contemporaneous treatise stated that § 282 was intended to include non-enumerated “equitable defenses such as laches.”

The majority also differentiated between copyright infringement and patent infringement. It noted that “copyright infringement requires evidence of copying, but innocence is no defense to patent infringement.” Thus, it concluded that because copyright infringement requires proof of deliberate copying, “a potential defendant is typically aware of a risk that it is infringing and can estimate its exposure when making its initial investment…and accumulate evidence of independent creation to protect its investment.” However, patent cases are different because of the uncertainty as to when a patent may issue and what claims may be meritoriously asserted. Further, “[i]ndependent invention is no defense in patent law, so without laches, innovators have no safeguard against tardy claims demanding a portion of their commercial success.”

The dissent criticized the majority’s opinion as “brush[ing] aside the teachings of Petrella … based on vague legislative history and muddled case law that Congress intended to depart from the common-law principle that laches only bars equitable relief where a statutory limitations period applies.” The dissent also criticized the majority for creating a special patent rule on laches, which the Supreme Court has admonished the Federal Circuit for doing in the past, such as in the Supreme Court’s Ebay v. MercExchange opinion on injunctions.

While laches remains a viable defense in patent law, it is highly likely that this 5-4 split decision will be appealed to the Supreme Court. Gibbons will continue to monitor further developments in this case and publish any major developments.

Christopher H. Strate is a Director in the Gibbons Intellectual Property Department.
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