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Monday, 21 September 2015 12:31

Federal Circuit Rules Laches Can Limit Patent Damages

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The equitable defense of laches can apply to claims of patent infringement damages suits, even when they are filed within the six year statutory period as defined by 35 U.S.C. §286, ruled the en banc Federal Circuit in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC., Fed Cir., No. 2013-1564 (Sept. 18 2015). In this narrow 6-5 decision, the court sitting en banc affirmed its earlier summary judgment, which dismissed SCA's patent infringement suit for laches, from September of last year.

Interestingly, in an earlier copyright case, Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1974 (2014), the Supreme Court ruled that the defense of laches (an unreasonable delay in bringing a lawsuit) does not preclude recovery of damages for copyright infringement during the defined statute of limitations period of three years under the Copyright Act.

Here, in a patent case, the Federal Circuit appears to defy the Supreme Court's earlier holding, by refusing to extend the earlier laches ruling also to patents. Rather, the Federal Circuit explained that patent laches is controlled by A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020 (Fed. Cir. 1992) (en banc), and can only be overruled by another en banc review or by the Supreme Court. Accordingly, because Aukerman held that a laches is a defense to infringement under the meaning of patent "unenforceability" of 35 U.S.C. §282, the majority concluded that the laches defense is intended to work alongside the six year statutory limit. In support of this notion, the majority presumes that Congress had intended to retain the substance of common law, because §282 by its plain language sets out defense in infringement and validity, and that the legislative history confirms that Congress intended the statute to have broad reach.

Arguing this point, the dissent opined that the earlier Supreme Court holding in Petrella strongly suggests that the defense of laches is not available to regulate timeliness of damages claims in patent-infringement cases, countering that the majority relies merely 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."

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Tony Guo

As a specialized technology counsel, Tony supports his clients in the high tech, creative, and online industries. His primary areas of practice include intellectual property protection, Internet law, and startups. Tony is a USPTO registered patent attorney, as well as a licensed lawyer in California and Florida. He comes from a background involving considerable hardware and software development experience, having worked in both development and IT roles in the tech and finance industries.