Finding IP Value
Laches Remains Patent Infringement Defense…For Now
Defense attorneys often rely on the legal defense of laches when faced with a claim of patent infringement. This defense bars recovery when a party claims legal injury but unreasonably delays in pursuing the claim in a way that prejudices the opposing party. The laches defense has come under close examination in the SCA Hygiene Products v. First Quality Baby Products, Inc. case. 1
The facts giving rise to the case began when SCA, the patent holder, suggested in a 2003 letter to First Quality, its competitor in the adult incontinence market, that First Quality products were infringing on one of SCA’s patents. After exchanging letters for several years, SCA filed suit in 2010, alleging patent infringement. The District Court granted the defendant’s motion for summary judgment primarily under laches grounds.
Then, in a ruling previously discussed on this blog, a three-judge panel of the Federal Circuit affirmed the grant of laches as a defense to patent infringement. This came despite the Supreme Court’s 2014 holding in Patrella v. Metro-Goldwyn-Mayer, Inc. 2 that laches cannot be invoked to bar a claim for copyright infringement. In light of the Patrella ruling, the Federal Circuit vacated its SCA Hygiene Products ruling on December 30, 2014, ordering an en banc hearing of the court, meaning all the judges sitting on the court would preside.
In a sharply divided 6-5 ruling, the en banc panel upheld the laches defense in patent cases, despite the Supreme Court’s taking it away in copyright cases. The court differentiated between copyright and patent statutes, stating that the court in A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1041 (Fed. Cir. 1992) (en banc) held that 35 U.S.C. § 282(b)(1) codified the doctrine of laches, although it did not do so verbatim. The Aukerman court had stated “[a]s a defense to a claim of patent infringement, laches was well established at the time of recodification of the patent laws in 1952.” Id. at 1029. Although this appears to conflict with the six-year statute of limitations period in 35 U.S.C. § 286, the court stated that laches is “routinely applied within the prescribed statute of limitations period for bringing [a] claim.”
The five judges who dissented only did so in part. The dissenters agreed with the majority that laches should be available as an equitable defense. However, they maintained that “laches is no defense to a claim for damages filed within the statutory limitations period established by 35 U.S.C. § 286.”
Thus, for the time being at least, laches remains available as a patent defense. As mentioned in this blog’s previous discussion of this case, the laches defense is a useful tool against patent trolls. Patent defense attorneys should not consider the ruling as set in stone, however. Given the 6-5 en banc breakdown, and the previous interest shown by the Supreme Court involving laches issues in intellectual property cases, the case could be heard once and for all in the United States Supreme Court.