The case holds that laches cannot shorten the patent statute of limitation of six years.
On March 21, 2017, a near-unanimous U.S. Supreme Court eliminated laches as a defense to federal patent infringement lawsuits, in contrast to a long line of lower court cases. Laches is a defense based on equity, meaning fairness, that can be raised in some suits when a plaintiff unreasonably puts off the filing of a suit and the delay harms the defendant.
The history of laches and patent suits
Many courts have historically allowed the laches defense in patent cases. The idea is that a party may innocently invest substantial money and time to develop and manufacture a product, not knowing that it may be infringing on another party's patent. If the patent owner is allowed to sit back and watch the defendant's efforts, suing at a later time for infringement, the defendant will have unfairly invested at a much greater level than it otherwise would have if the infringement were raised earlier.
This delay would also allow the patent holder to ask for more money in damages in part because the defendant's efforts enhanced the invention's value.
For these reasons, laches was often allowed as a defense in patent cases for many decades.
The recent Supreme Court case
SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, involved patents for incontinence products. The span of time involved in bringing the suit illustrates how the issue of laches came up:
- 2003: SCA accused First Quality of patent infringement, which First Quality denied.
- 2004: SCA asked the U.S. Patent and Trademark Office or PTO to reconsider the validity of SCA's patent.
- 2007: The PTO confirmed SCA's patent's validity.
- 2010: SCA sued First Quality for infringement.
The U.S. District Court, the trial court in this case, granted First Quality's request for summary judgment based on laches, or unreasonable delay in bringing suit to First Quality's detriment, and on equitable estoppel, another defense based on unfairness. SCA appealed and during the appeal, the Supreme Court decided another case, Patrella v. Metro-Goldwyn-Mayer, Inc., that held that laches is not available as a defense in a copyright case.
The Federal Circuit, which was considering SCA's appeal, held that laches was still available in patent cases, despite the Supreme Court holding otherwise for copyright cases in Patrella.
The SCA holding
The Supreme Court disagreed, instead saying that laches should not be allowed in patent cases just like it earlier said it was not allowed in copyright cases. At issue is the statute of limitations in each kind of claim. Specifically, federal law sets the deadline for filing copyright suits at three years from the time of infringement. Patrella said that each time an infringement occurs, the three-year period begins again, and that laches could not shorten the three-year period Congress established as a deadline.
In the new SCA decision, the court said the same logic applies to patent cases, which have a six-year statute of limitations, despite that the patent time period operates differently. The patent law states that damages for patent infringement may only be calculated for harm that goes back six years from the lawsuit filing, rather than operating as a deadline calculated prospectively.
This is an introduction to a complex patent topic. A lawyer should be consulted for any issues related to patent infringement.
The patent lawyers at the Eldredge Law firm represent entrepreneurs and businesses of all sizes and types throughout the patent process, including obtaining U.S. and international patent protections and in matters of licensing, manufacturing, nondisclosure and enforcement. The firm has offices throughout the Dallas and Houston areas as well as in Denver, Colorado.