Supreme Court Tosses Laches in Patent Cases
In SCA v. First Quality Baby Products, the Supreme Court rejects the Federal Circuit’s distinction between the Copyright Act’s 3-year statute of limitations and the Patent Act’s 6-year limitation on damages, and rules that laches should not apply in either case. In light of Petrella, the Court rules that nothing less than a broad and unambiguous consensus of lower court decisions could support the inference that §282(b)(1) codifies a very different patent-law-specific rule. The Court finds no such consensus here. Thus, once again, the Court rejects the Circuit’s attempt to apply a special rule to patent cases.
SCA Hygiene Products Aktiebolag v. First Quality Baby Products, Supreme Court Case 15-927 (March 21, 2017)
In 2003, SCA notified respondents First Quality that their adult incontinence products infringed an SCA patent. First Quality responded that its own patent antedated SCA’s patent and made it invalid. In 2004, SCA sought reexamination of its patent in light of First Quality’s patent, and in 2007, the PTO confirmed the SCA patent’s validity. SCA sued First Quality for patent infringement in 2010. The District Court granted summary judgment to First Quality on the grounds of equitable estoppel and laches. While SCA’s appeal was pending, this Court held that laches could not preclude a claim for damages incurred within the Copyright Act’s 3-year limitations period. Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U. S. ___, ___. A Federal Circuit panel nevertheless affirmed the District Court’s laches holding based on Circuit precedent, which permitted laches to be asserted against a claim for damages incurred within the Patent Act’s 6-year limitations period, 35 U.S.C. §286. The en banc court reheard the case in light of Petrella and reaffirmed the original panel’s laches holding.
Held: Laches cannot be invoked as a defense against a claim for damages brought within §286’s 6-year limitations period.
(a) Petrella’s holding rested on both separation-of-powers principles and the traditional role of laches in equity. A statute of limitations reflects a congressional decision that timeliness is better judged by a hard and fast rule instead of a case-specific judicial determination. Applying laches within a limitations period specified by Congress would give judges a “legislation-overriding” role that exceeds the Judiciary’s power. Petrella. Moreover, applying laches within a limitations period would clash with the gap-filling purpose for which the defense developed in the equity courts.
(b) Petrella’s reasoning easily fits §286. There, the Court found in the Copyright Act’s language a congressional judgment that a claim filed within three years of accrual cannot be dismissed on timeliness grounds. By that same logic, §286 of the Patent Act represents Congress’s judgment that a patentee may recover damages for any infringement committed within six years of the filing of the claim.
First Quality contends that this case differs from Petrellabecause a true statute of limitations runs forward from the date a cause of action accrues, whereas §286’s limitations period runs backward from the filing of the complaint. However, Petrella repeatedly characterized the Copyright Act’s limitations period as running backward from the date the suit was filed. First Quality also contends that a true statute of limitations begins to run when the plaintiff discovers a cause of action, which is not the case with §286’s limitations period, but ordinarily, a statute of limitations begins to run on the date that the claim accrues, not when the cause of action is discovered.
(c) The Federal Circuit based its decision on the idea that §282 of the Patent Act, which provides for “defenses in any action involving the validity or infringement of a patent,” creates an exception to §286 by codifying laches as such a defense, and First Quality argues that laches is a defense within §282(b)(1) based on “unenforceability.” Even assuming that §282(b)(1) incorporates a laches defense of some dimension, it does not necessarily follow that the defense may be invoked to bar a claim for damages incurred within the period set out in §286. Indeed, it would be exceedingly unusual, if not unprecedented, if Congress chose to include in the Patent Act both a statute of limitations for damages and a laches provision applicable to a damages claim. Neither the Federal Circuit, nor any party, has identified a single federal statute that provides such dual protection against untimely claims.
(d) The Federal Circuit and First Quality rely on lower court patent cases decided before the 1952 Patent Act to argue that §282 codified a pre-1952 practice of permitting laches to be asserted against damages claims. But the most prominent feature of the relevant legal landscape at that time was the well-established rule that laches cannot be invoked to bar a claim for damages incurred within a limitations period specified by Congress. In light of this rule, which Petrellaconfirmed and restated, nothing less than a broad and unambiguous consensus of lower court decisions could support the inference that § 282(b)(1) codifies a very different patent-law-specific rule. The Federal Circuit and First Quality rely on three types of cases: (1) pre-1938 equity cases; (2) pre-1938 claims at law; and (3) cases decided after the merger of law and equity in 1938. None of these establishes a broad, unambiguous consensus in favor of applying laches to damages claims in the patent context.
ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, GINSBURG, SOTOMAYOR, and KAGAN, JJ., joined. BREYER, J., filed a dissenting opinion.