Vacating an en banc Federal Circuit decision reaffirming that court’s long-standing precedent, the Supreme Court has now held in a closely watched case that the equitable doctrine of laches (unreasonable delay in bringing suit resulting in prejudice to the defendant) can no longer be used to prevent a patent owner’s recovery of damages for patent infringement occurring within the (six-year) statutory limitations period. SCA Hygiene Products v. First Quality Baby Products, 580 U.S. __ (slip op. 15-927, March 21, 2017).
In Petrella v MGM, 572 U.S. __ (2014), the Supreme Court held that laches does not preclude a claim for copyright infringement damages incurred within the Copyright Act’s statutory limitations period. The present SCA case turned on the question whether Petrella’s reasoning also applied to patent infringement, which has a similar statute of limitations. The Court answered that question with a resounding “yes.”
Specifically, the Court ruled that where Congress has prescribed a statute of limitations, that represents a “hard and fast rule” as to the timeliness of claims that should not be overridden by a case-specific judicial application of the equitable doctrine of laches, which traditionally addressed timeliness of claims in the absence of a statute of limitations. The Court stated: “Laches is a gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill.”
The Federal Circuit held that by enacting Section 282 of the Patent Act (which refers to defenses to infringement including “absence of liability for infringement” and “unenforceability”) Congress had codified laches as an infringement defense, including as to claims for damages incurred within the statutory limitations period of Section 286 of the Act. The Federal Circuit relied on lower court patent cases decided before enactment of the 1952 Patent Act to conclude that by 1952 there was a well-established practice of applying laches to damages claims. However, after reviewing those cases, the Supreme Court flatly disagreed, stating: “[t]he most prominent feature of the relevant legal landscape at the time of enactment of the Patent Act was the well-established general rule, often repeated by this Court, that laches cannot be invoked to bar a claim for damages incurred within a limitations period specified by Congress.” (emphasis added).
The high court also rejected the Federal Circuit’s dismissal of “the significance of this Court’s many iterations of the general rule because they were not made in patent cases,” stating “[p]atent law is governed by the same common law principles, methods of statutory interpretation, and procedural rules as other areas of civil litigation.” (quoting the Federal Circuit dissenting opinion). Thus, as predicted by this commentator (see Amici Weigh In On Patent Laches Supreme Court Case, posted September 28, 2016), and taking issue with a patent-specific rule, the Supreme Court has again reversed the Federal Circuit.