Posts Tagged: "Petrella v. Metro-Goldwyn-Mayer"

Without laches, accused infringers might more frequently invoke declaratory judgment to clear their products and services upfront rather than tolerate a looming threat of suit for years…. The Supreme Court’s recent decision in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC (Mar. 21, 2017) eliminated the equitable defense of laches in patent cases.  While time will reveal the impact of the SCA decision, elimination of laches, an equitable defense against “unreasonable, prejudicial delay in commencing suit,” Id. at 3 (citing Petrella v. Metro-Goldwyn-Mayer, Inc.(2014), provides greater security to patent owners who assert claims several years after discovering potential infringement.  Conversely, the decision removes one shield—albeit a relatively modest shield—from the accused infringer’s armament of potential defenses. 

In a strong reversal of the Federal Circuit, the US Supreme Court held in SCA Hygiene Products Aktiebolag v First Quality Baby Products, LLC, No. 15-927 (March 21, 2017), that delay by a patentee will not give rise to a laches defense during the statutory six-year damages period under 35 U.S.C. § 286. Justice Samuel Alito authored the 7–1 majority opinion, extending the court’s decision in Petrella v. Metro-Goldwyn-Mayer, Inc. (2014), which held that laches is inapplicable for copyright infringement, a provision similar to Section 286 of the Patent Act… The Supreme Court noted that its determination regarding laches does not preclude a defense based on equitable estoppel…

On Tuesday, March 21st, the U.S. Supreme Court issued a decision in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, a case which looked at the issue of whether and to what extent the defense of laches may bar a claim for patent infringement brought within the six-year statutory limitations period, as defined by 35 U.S.C. Section 286. In a 7-1 vote, the Supreme Court decided that the equitable defense of laches cannot be invoked against claims for infringement occurring during the statutory period.

The equitable defense of laches has been a useful tool for defendants in intellectual property litigation for over a hundred years, but a recent case in the U.S. Supreme Court could potentially remove the defense in patent infringement cases. In SCA Hygiene Products AB v. First Quality Baby Products LLC, the Supreme Court must decide whether the doctrine of laches bars patent infringement claims filed within the six-year statutory limitation period established under 35 U.S.C. § 286 of the Patent Act… Based on oral arguments, it is expected the Court will reverse the Federal Circuit’s decision and conclude that laches do not apply to patent infringement cases brought within the six-year damages period.

Despite the Supreme Court ruling that laches is no defense to a copyright infringement action brought during the statute of limitations, the Federal Circuit ruled laches can bar recovery of legal remedies in patent infringement. The Federal Circuit explained that the 1952 Patent Act codified the common law rule, meaning that laches was codified as a defense under 35 U.S.C. 282.
The Federal Circuit, sitting en banc, followed the common law principle that, ”[w]hen a statute covers an issue previously governed by the common law, [the Court] must presume that Congress intended to retain the substance of the common law.” The Federal Circuit also ruled that laches does not preclude an ongoing royalty.