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Federal Circuit Holds Laches in Patent Cases Still May Bar Damages Within Six-Year Statute of Limitations

On September 18, 2015, the Federal Circuit held en banc in SCA Hygiene Products v. First Quality Baby Products, No. 2013-1564, that laches remains a defense to legal relief including damages in patent cases.

SCA had originally notified First Quality in 2003 that their adult incontinence product allegedly infringed SCA’s U.S. Patent No. 6,375,646. After receiving a response from First Quality alleging the patent was invalid, SCA requested reexamination of the patent but did not notify First Quality of the reexamination. Over three years after reexamination concluded, SCA sued First Quality for patent infringement in 2010.

The District Court granted First Quality’s motion for summary judgment of laches, and the Federal Circuit affirmed. SCA petitioned for rehearing en banc in light of the Supreme Court’s 2014 decision in Petrella v. Metro-Goldwyn-Mayer (sometimes referred to as the "Raging Bull" case) holding that laches was not a defense to legal relief in copyright law. SCA argued that there is “no principled distinction” between the statute of limitations in the Copyright Act and the Patent Act.

In a decision written by Chief Judge Prost (and joined by Judges Newman, Lourie, Dyk, O’Malley, and Reyna), the Federal Circuit en banc held that that Congress had codified a laches defense for patent infringement claims in 35 U.S.C. § 282(b)(1) that may bar recovery of legal remedies and which can coexist with Section 286’s six-year time limitation on the recovery of legal damages.

Petrella eliminates copyright’s judicially-created laches defense because Congress, through a statute of limitations, has already spoken on the timeliness of copyright infringement claims, so there is no room for a judicially-created timeliness doctrine. See Petrella, 134 S. Ct. at 1974 (describing laches as “gap-filling, not legislation-overriding”). The statutory scheme in patent law, however, is different. While Congress has spoken on the timeliness of patent damages claims, Congress also codified a laches defense in Section 282 [of the Patent Act.].”

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If, in light of this issue’s newfound salience, Congress decides that the … damages limitation and the … laches defense are incompatible, it can change the law.

The Court further held that, absent extraordinary circumstances, laches does not preclude an ongoing royalty.

The dissent (written by Judge Hughes, and joined by Judges Moore, Wallach, Taranto, and Chen) said the majority's decision “overlooks Congress’ intent and Supreme Court precedent.”

The opinion can be found at http://www.cafc.uscourts.gov/opinions-orders