Today the U.S. Supreme Court issued an opinion, SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, in which it held that laches cannot be used as a defense to a claim of patent infringement. The opinion had been anticipated ever since the Court’s decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. ___ (2014) struck down the defense in copyright cases, using reasoning that appeared to apply to all federal actions involving causes of action subject to statutes of limitations.
Laches, an equitable doctrine that pre-dates the Patent Act (35 U.S.C. § 1, et seq.), bars relief when a plaintiff’s unreasonable delay in prosecuting a claim prejudices a defendant’s ability to defend itself. Invoking Petrella, the Court reasoned that the equitable remedy of laches cannot trump the “quintessential” legal remedy of damages when Congress has enacted a statute of limitations. Invoking separation-of-powers principles as well as “the traditional role of laches in equity,” the Court determined that, “[w]hen Congress enacts a statute of limitations, it speaks directly to the issue of timeliness and provides a rule for determining whether a claim is timely enough to permit relief.” Therefore, according to the Court, “[t]he enactment of a statute of limitations necessarily reflects a congressional decision that the timeliness of covered claims is better judged on the basis of a generally hard and fast rule rather than the sort of case-specific judicial determination that occurs when a laches defense is asserted.” With respect to the traditional role of laches, the Court stated that laches is historically a “gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill.”
The Court’s opinion also considered and rejected the argument that 35 U.S.C. § 286, which provides a “Time Limitation on Damages,” is not a “true” statute of limitations. This argument, advanced by the Respondent and the Court’s lone dissenter, Justice Breyer, posited that § 286 is a “backwards-looking” statute that limits the period of damages, rather than barring relief altogether, and that 35 U.S.C. § 282(b)(1) provides a legal remedy of “unenforceability,” which incorporates laches. The Court dismissed the distinction between “forward-looking” and “backwards-looking” statutes of limitations, and, while passing on the question of whether Congress meant for § 282(b)(1) to incorporate a laches defense “of some dimension,” nevertheless rejected the idea that such a defense could be used to invoke a bar to damages incurring within the period set out in § 286.
This ruling is significant not only because it removes a robust, potentially dispositive defense to patent infringement, but also because it, in combination with Petrella, effectively vitiates the defense of laches to all federal causes of action that include a statute of limitations.
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