Authors: Scott Lydon and Justin Durelli.
On March 21, 2017, the Supreme Court issued its opinion in SCA Hygiene Products Aktiebolag et al. v. First Quality Baby Products, LLC et al., 2017 U.S. LEXIS 2023 (2017), holding that the equitable defense of laches is not available as a defense against patent infringement claims. Until now, defendants were permitted to assert the laches defense against plaintiffs that unreasonably delayed bringing their lawsuit to the detriment of defendants.
SCA manufactures and sells adult incontinence products and owns U.S. Patent No. 6,375,646 (“the ‘646 patent”). In October of 2003, SCA sent a letter to First Quality alleging that First Quality was making and selling products that infringed the ‘646 patent, after which First Quality replied that the ‘646 patent was likely invalid over a prior art reference not cited during the prosecution of the ‘646 patent. In July of 2004, SCA voluntarily requested reexamination of the ‘646 patent in view of the recently discovered prior art. In March of 2007, the USPTO issued a certificate confirming the validity of the ‘646 patent. However, SCA did not file for patent infringement against First Quality until August of 2010, over three years after USPTO confirmed patentability of the patent and over six years after first communicating with First Quality about the ‘646 patent.
During the trial at the district court, First Quality successfully asserted the defense of laches against the claim of infringement of the ‘646 patent. SCA appealed to the Federal Circuit, where a panel of the Federal Circuit upheld the district court judgment that laches barred suit against First Quality. The full Federal Circuit agreed to hear the case en banc, and again the Federal Circuit affirmed the district court decision by a vote of 6-5.
The Supreme Court heard the case and reversed the Federal Circuit. In coming to its decision, the Supreme Court followed very similar reasoning as the reasoning the Court set forth in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014), which resolved the same laches issue presented in this case, but for copyright claims. The Court essentially found that Congress left no room for the “gap-filling” defense of laches when it enacted the six-years statute of limitations provision contained in 35 U.S.C. § 286 for patent claims. Rather, the Court held that Congress has already provided a rule for determining when a claim for infringement is timely and there is no authority for the availability of the laches defense.
The takeaway from this decision is that patentees are no longer under the threat of losing their claim against infringers simply because they waited too long to bring suit. While patentees will still be limited to collecting only the previous six years worth of damages, it may be in their best interest to wait to bring suit until it is more convenient or advantageous to do so. Accordingly, infringers will need to be more cautious of older patents or else risk liability.
