SCA Hygiene vs. First Quality: Laches and Patent Infringement
The Laches Debate Goes to the Supreme Court for Patent Infringement
United States Supreme Court (“Supreme Court”) rulings can alter the landscape of a market or legal practice and restructure the way corporations do business. In the last decade, the Court began evaluating a record number of patent cases that are reshaping the way IP stakeholders obtain, protect, and monetize their portfolios. SCA Hygiene Products Aktiebolag vs. First Quality Baby Products, LLC (“SCA Hygiene”) is no exception; the time-honored, equitable defense of laches is on the Court’s proverbial chopping block for patent infringement cases.
A recent white paper provides a high-level review of the doctrine of laches, the opposing parties’ positions, identifies ambiguities the Court will likely address, and offers commentary on the potential downstream effects of the decision and how innovative IP leaders are implementing new technology to stay ahead of the high court’s decisions.
On November 1, 2016, the Supreme Court will hear oral arguments in SCA Hygiene, which comes before the Court subsequent to the Federal Circuit’s en banc review of its decision that the defense of laches can preclude a patentee from damages for pre-suit infringements. The Federal Circuit rested its decision on the broad language of the Patent Act, 35 U.S.C. § 282 and cited the Congressional Commentary of P. J. Federico, one of the drafters of the 1952 Patent Act, which explicitly states the availability of laches as a defense in patent infringement cases. This ruling comes under scrutiny due to the Federal Circuit’s continued defiance in applying precedent handed down in patent cases. At issue is the Court’s lack of application of Petrella v. Metro-Goldwyn-Mayer (“Petrella”), which held the defense of laches is not available in copyright infringement claims due to a three-year statutory limitation in the Copyright Act.
The primary question the Supreme Court will review in SCA Hygiene is the extent to which the defense of laches can bar a claim for patent infringement brought within the six-year statutory limitations period under 35 U.S.C. § 286. SCA Hygiene’s Petition for Writ of Certiorari. The Supreme Court received twenty amicus briefs from several prominent bar associations and other interested parties in the IP space, the impact of this decision directly affects litigation, licensing, and negotiation strategy for corporate IP teams and IP counsel. Further, the growth in non-practicing entities (“NPE”) over the last decade also plays a significant factor in the analysis, and the Court’s ruling will have a downstream effect on the market from that perspective as well.