Business Law Articles
By Julie Langdon
Dunlap Codding, Oklahoma City, Oklahoma
Today, the Supreme Court vacated a prior Federal Circuit decision when it decided that laches cannot be used as a defense against a claim for damages brought within the Patent Act’s six-year limitation of damages set forth in 35 U.S.C. § 286. SCA Hygiene Products AB et al. v. First Quality Baby Products LLC, 580 U. S. ____ (2017).
This decision stems from a dispute where the Plaintiff, SCA Hygiene Products, waited almost seven years between providing notice of the potential infringement to the Defendant, First Quality, and filing suit against First Quality; however, during the interim, the damages continued to accrue. The District Court reasoned that SCA Hygiene was time barred by laches because it unreasonably delayed in bringing its suit, and the Federal Circuit affirmed that decision.
Applying similar logic to that in its opinion in Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U. S. ___ (2014), the Supreme Court held that as long as the damages incurred within the period of limitations set forth by the statute, the equitable defense of laches does not apply. Specifically, the Court rejected the Federal Circuit’s reasoning that the Patent Act has codified a laches defense, and instead decided that by inserting a statute of limitations, Congress intended to preclude laches, and allow the recovery of damages for infringement committed within six years of filing the claim. The Supreme Court also rejected First Quality’s (and the Federal Circuit’s) position that courts for over a decade had relied on laches to reject claims for damages in patent cases. In its review of the same cases, the Supreme Court stated that the opposite was true – laches was not to be used to bar a claim for damages within the time set forth by Congress.
In closing, the Supreme Court noted the many policy reasons for laches set forth by both First Quality and the amici but indicated that policy alone was not enough to turn over Congress. The Supreme Court stated, “the doctrine of equitable estoppel provides protection against some of the problems that First Quality highlights, namely, unscrupulous patentees inducing potential targets of infringement suits to invest in the production of arguably infringing products.” 580 U. S., at ____ (slip op., at 16).
Thus, using the Court’s guidance in Petrella, there may still be opportunities to bar the claim for infringement and all associated remedies based on the doctrine of estoppel, specifically in situations such as when the “[patent] owner engages in intentionally misleading representations concerning his abstention from suit, and the alleged infringer detrimentally relies on the [patent] owner's deception.” 572 U. S., at ___ (slip op., at 19).