The Risk of Sleeping on Your Patent Rights

By Gene Quinn
May 27, 2010

Yesterday Eric Guttag wrote an article about the Federal Circuit ruling in Aspex Eyewear Inc. v Clariti Eyewear, Inc., which determined a threat of infringement followed by three years of silence barred the patent owner from being able to move forward against the alleged infringer as a result of estoppel.  See Time Bomb: CAFC Says Threat + Waiting 3 Years = Estoppel. To some this may seem strange because in most areas of law the statute of limitations is 2 or 3 years, which means if you have a grievance you need to bring that grievance to the forefront within that length of time or you are barred from recovering.  So why then could a patentee even have thought they could wait 3 years or more to bring a lawsuit?  The easy answer is that the statute of limitations for a patent infringement action is six years.

While this patent statute of limitations is an extraordinarily long statute of limitations by legal standards, and now estoppel will be on the mind of those in the patent community thanks to the Federal Circuit,  there is another very important piece to the puzzle that needs to be appreciated by those who would choose not to pursue infringers; namely the doctrine of laches, which can prevent recovery against a defendant even if infringement is conclusively proven.

While it may seem like an extreme case where a patent owner would not take action against an infringer for a period of years, such decisions are made every day, and perhaps even more common is that infringement goes unnoticed for lengthy periods of time.  This frequently happens where an small to medium sized business is involved, perhaps making the conscious choice not to purse infringers based on the costs associated with such enforcement, or perhaps because there are not meaningful mechanisms in place to identify infringement in the marketplace.  In either situation, the failure to take legal action against an infringer can have dire consequences.  Today, thanks to the increase in contingency representation for patent owners who cannot afford to pay patent litigators by the hour, there may be hope and there may not be a need to put off pursuing infringers.

The doctrine of laches is an equitable remedy subject to a Court’s discretion and dependent upon the particular facts of each case.  To prove laches a defendant needs to demonstrate that  the plaintiff unreasonable and inexcusable delayed asserting an infringement claim, as well as also showing prejudice or injury to the defendant resulting from the delay.  With respect to the first prong, a patent owner’s delay in filing suit is measured from the time infringement is discovered, or should have been discovered, until the time suit is filed.  In determining whether a party has too long “slept on its rights” it is necessary to show that the party knew or should have known that it had a right of action, yet did not act to assert or protect its rights.

The length of time that may be deemed unreasonable has no fixed boundaries, but rather depends on the circumstances of the case, although a presumption of laches arises if the patentee delays bringing suit for more than six years after actual or constructive knowledge of the defendant’s infringing activity.  Once a presumption of laches arises, the patentee may offer proof directed to rebutting the laches factors.  Such evidence may be directed to showing either that the patentee’s delay was reasonable or that the defendant suffered no prejudice.

Evidentiary prejudice can occur when delay has caused the loss of key witnesses and/or the loss of documentary evidence. Economic prejudice arises when a defendant suffers the loss of monetary investments or incurs damages that likely would have been prevented by earlier suit.

Once the relevant facts are established, the court weighs the equities in order to assess whether laches should apply to bar those damages that accrued prior to suit.  In the event that laches is found, recovery is barred for damages incurred before the complaint was filed.  It is important to remember that a successful laches defense bars damages only for conduct occurring prior to the filing of the lawsuit.

The moral of the story is that in order to maintain the integrity of the exclusive right granted in the patent, mechanisms must be in place to discover infringement.  Likewise, once infringement is discovered enforcement actions need to be taken swiftly, or else the risk of there being prejudice to the defendant rises, which could limit or preclude recovery.  Moreover, even if laches does not ultimately provide a defense, inaction on the part of the patent owner chips away at the exclusionary right and allows a competitor to gain a foothold in the patent owner’s marketplace.   Any way you look at delay in enforcement, it is costly.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 16 Comments comments.

  1. The Mad Hatter May 28, 2010 7:23 am

    Gene,

    Would this doctrine (laches) also apply to copyright and trademark law?

    Wayne

  2. Paul F. Morgan May 28, 2010 9:42 am

    Patent litigation is one of the very few torts without a true statute of limitiations or repose. The statutory 6 year limitation on the recovery of back damges prior to suit allows patent suits to be brought up to six years after the patent has expired, thus up to 23 years or more after the patent issued. This has actually happend. Irrespective of how many years the alleged infringement has been continuing and could have been discovered by product investigations by the patent owners.
    Hence, the vital importance of laches and estoppel.

  3. Gene Quinn May 28, 2010 10:11 am

    Wayne-

    I suspect that laches and estoppel both would apply to copyright law and trademark law, but likely with shorter time limits because the statute of limitations is less in both copyright and trademark law.

    These are equitable defenses, which mean that it is about fairness. Essentially, if you are lead to believe or reasonably believe your actions are acceptable, not infringing or will not be pursued then the owner of the right cannot later decide to come after you. With laches you just wait too long to bring an action, and with estoppel there is some reason to believe there is acceptance or acquiescence on the part of the owner. Both theories apply generally across the board in all areas of law.

    -Gene

  4. EG May 28, 2010 10:27 am

    Wayne/Gene,

    I can tell that laches, as well as estoppel, apply equally to similar situations involving copyright and trademark infringement (I know the trademark version from personal experience). The copyright SOL I believe is 4 years. The trademark SOL depends on whether you’re talking federal or common law (state) trademark infringement. For example, in Ohio, common law trademark infringement has a 2 year SOL, so that’s the “presumptive laches” point.

  5. EG May 28, 2010 10:27 am

    Wayne/Gene,

    Sorry, in the first line of my comment, insert “you” between “tell” and “that.”

  6. EG May 28, 2010 10:29 am

    Please also note that what Paul Morgan says is very much on point about laches/estoppel in patent infringment actions.

  7. sarah mcpherson May 28, 2010 10:57 am

    But when other factors are involved. in infringement., and there is evidence to substantiate criminal activity . I believe different laws will apply as to how far a person can reach back. I don’t know for sure, but ,it would seem to me the Crimes surrounding a Case and who is behind them would way heavily on a Court.

  8. The Mad Hatter May 28, 2010 11:13 am

    Thanks – useful to know.

    Wayne

  9. IANAE May 28, 2010 1:27 pm

    I see this issue as completely separate from the statute of limitations. It’s not about how far back you can reach for damages, it’s about giving the infringer the impression that his infringement is okay with you. It counts from the threat forward, not from the litigation backward. It’s practically an inadvertent gratuitous license. Whether the infringer gets that impression from three years of inaction following a threatening letter, or from the letter saying “but actually we’re not going to sue you” is beside the point. As long as there’s no representation and reliance, you can still claim damages six years back.

    Laches is probably an even bigger deal in trademark cases, because if someone else is allowed to use a would-be-infringing mark you could lose the distinctiveness of your mark altogether, which would cost you your remedy against the whole world.

  10. The Mad Hatter May 28, 2010 3:13 pm

    Sarah,

    Ah, but patent infringement isn’t a criminal act, so civil rules apply. Gene can confirm this.

    Wayne

  11. sarah mcpherson May 29, 2010 6:02 am

    . Mine is a Case of Above the Law. Only I am crushed by the people that think they are above the Law. This is not about sitting on rights. this is about Chains. And what really strikes me as particularly amazing. that Poem called run and run and run, was not even mentioned by the Man i wrote it for. As a matter of fact he is running from my sweet observations of who he is. He is a Coward. . And oh so sadly…. I am figuritively crushed. Much unlike the literal Crushing i am still dealing with every single day of my life.
    I wrote a nice message on a thread the other day. It cut like a knife. so it wasn’t allowed. The only power i have is poetry. And i am truly surprised that is even allowed. Maybe because they think the time is passed and it is a non issue… Oh contrare

  12. The Mad Hatter May 30, 2010 7:16 am

    Laches is probably an even bigger deal in trademark cases, because if someone else is allowed to use a would-be-infringing mark you could lose the distinctiveness of your mark altogether, which would cost you your remedy against the whole world.

    What about ‘unclean hands’? Here’s a common issue – person is using term – someone trademarks term, and sues. USPTO in all it’s incompetent glory apparently doesn’t do a Google search before issuing the Trademark. Ali goes into detail about what happened to her on her website.

    I don’t know Ali, but the same thing happened to a friend of mine, and it ended up costing him big time, all because the USPTO issued as a Trademark a term that was already in common use.

    Wayne

  13. Gene Quinn May 31, 2010 12:56 pm

    Mad Hatter-

    Yes, you are 100% correct. Patent infringement is not criminal. It differs significantly in that respect to copyright infringement.

    The way I have heard the rationale for patent infringement not being criminal articulated is that with patent infringement there is typically one company fighting against another company and redress can be had in court. Additionally, it is far more difficult to infringe a patent than to infringe a copyright, so the ease of infringement and difficulty in detection suggests more than mere civil sanctions should be available. Finally, with copyrights you do not get a copyright in every country, so activities in distant lands can be infringing and leave the copyright owner with little recourse, unless the government gets involved. With patents infringement must occur in the US. If you make, use or sell outside the US there is no infringement. So we have the federal district courts set up to handle patent infringement and the ITC to stop infringing products from being imported.

    -Gene

  14. The Mad Hatter May 31, 2010 8:00 pm

    Gene,

    Depends upon the patent. I know of one that was based on a simple catalytic converter being installed in front of a diesel particulate filter. Several companies had been doing this years before the patent was applied for, and had to stop because it would have cost too much to get the patent invalidated. I could explain the technical details of why this was obvious, but it would take several pages, and I don’t have time right now :]

    BTW, you might want to read The Death Of The Fossil Fuel Companies – Sell Your Stock Now While It’s Still Worth Something where I give some of my technical background as evidence to support my thesis.

    Wayne

  15. brett December 16, 2012 4:14 pm

    I had a partner sell patent 5453191 without my knowledge to a company and without my patent attorney contacting me about the patent being sold. I’m still half owner as an assignment to the patent office. Anything I can do on this. Thanks in advance and what kind of law would a lawsuit be filed?

  16. Kyle February 10, 2013 7:41 pm

    I have a family member who had patents, one imparticular that we feel was infringed upon. He got very ill before he was supposed to renew it and now it has been 5 years since it was in good standing. We just recently found out about this and we have no idea if it could be something to pursue or just let go. Any information would be helpful. Thanks