Laches defence does apply to patent cases, Federal Circuit rules

The US Court of Appeals for the Federal Circuit has ruled en banc that the laches defence does apply to patent cases, despite the US Supreme Court ruling in Petrella v Metro-Goldwyn-Mayer that it cannot be used in copyright disputes.

The federal circuit handed down its judgment on Friday, September 18, in the dispute between SCA Hygiene and First Quality Baby Products.

While the court was split 6-5 on the question of whether the laches doctrine applied in patent cases, the court agreed that laches can bar legal relief such as an injunction but will not prevent “ongoing” royalties unless “extraordinary circumstances” exist.

“Laches bar legal relief, and courts must weigh the facts underlying laches in the  eBay v MercExchange framework when considering an injunction,” Chief Judge Sharon Prost wrote.

But Prost, who was in the majority on the laches point, remanded the case back to the US District Court for the Western District of Kentucky after reversing its judgment on equitable estoppel. The district had granted First Quality’s request for summary judgment on equitable estoppel.

At the centre of the dispute is US patent number 6,375,646, which covers absorbent pants used to help those struggling with incontinence.

SCA owns the patent and complained to First Quality in 2003 that its Prevail All Nites product infringed the patent.

First Quality responded shortly after and argued that the patent was invalid.

In 2004, SCA requested re-examination of its own patent to prove its validity. Three years later the US Patent and Trademark Office (USPTO) deemed all 28 claims of the patent to be valid.

Six years later SCA sued First Quality at the Kentucky district court, the first time SCA had directly communicated with First Quality about the alleged infringement since 2003. SCA said it did notify First Quality because its actions at the USPTO were publicly available.

But the court threw out the claim after granting First Quality’s motion for summary judgment on the laches defence. Last year, a three-judge panel at the federal circuit affirmed the district court’s decision, upholding the laches defence.

SCA appealed for an en banc hearing and posed the question that the laches defence no longer applied for parties accused of infringement after the  Petrella decision was issued last year. That decision said that laches does not apply to copyright disputes.

Prost disagreed. “Congress codified a laches defence that may bar legal remedies. Accordingly, we have no judicial authority to question the law’s proprietary.”

“Nothing in Petrella casts doubt on our longstanding construction of the Patent Act ... One major difference between copyright and patent law bears mention: copyright infringement requires evidence of copying, but innocence is no defence to patent infringement.

“Independent invention is no defence in patent law, so without laches, innovators have no safeguard against tardy claims demanding a portion of their commercial success,” she added.

Judge Todd Hughes dissented on the laches point and was joined by four other judges.

He said in applying a “patent-specific” approach to the laches doctrine, the majority “overlooks Congress’ intent and Supreme Court precedent, which demonstrate that laches is no defence to a claim for damages filed within the statutory limitations period established.”

Martin Black, partner at law firm Dechert and who represented SCA, said that he agreed with the dissent’s view that patent law should be brought into line with other areas of law.

“Old habits die hard, and laches has been a fixture of patent litigation for decades, but like in copyright law, there is, in fact, no doctrinal basis for allowing courts to abridge the limitations period set by Congress,” he added.

Black concluded that because the court was narrowly split, he would be “looking closely at the potential for Supreme Court review”.