SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC

SCA Hygiene Products v. First Quality Baby Products, decided March 21st, 2017. By a vote of seven to one, in an opinion by Justice Alito, the Supreme Court vacated the en banc Federal Circuit in part and held that laches cannot be invoked as a defense against a claim for patent-infringement damages brought within the six-year limitations period of Section 286. Here's the brief.

In 2003, SCA Hygiene Products notified First Quality that its adult incontinence products infringed an SCA patent. First Quality replied that one of its own patents antedated SCA's and rendered it invalid. In 2004, SCA asked the Patent and Trademark Office to reexamine its patent in light of First Quality's; in 2007, the Office confirmed the SCA patent's validity. SCA sued First Quality for infringement in 2010 — some seven years after the initial notice.

The District Court granted summary judgment to First Quality on two equitable grounds, equitable estoppel and laches. While SCA's appeal was pending, the Supreme Court decided Petrella v. Metro-Goldwyn-Mayer, holding that laches could not bar a damages claim brought within the Copyright Act's three-year limitations period. A Federal Circuit panel nonetheless affirmed on laches, bound by the circuit's 1992 en banc decision in Aukerman, which permitted laches against damages claims within the Patent Act's six-year period. The full court then reheard the case en banc to reconsider Aukerman in light of Petrella — and, by six to five, reaffirmed it.

The question was whether laches remains available to bar a claim for patent damages incurred within the six-year period Congress set in Section 286.

Section 286 provides that, except as otherwise provided by law, no recovery may be had for any infringement committed more than six years before the complaint. Following Petrella, the Court read this as a congressional judgment that a patentee may recover for any infringement committed within that six-year window. Laches, by contrast, is a judge-made equitable defense against unreasonable, prejudicial delay in bringing suit. Petrella had already confronted the tension between the two doctrines in copyright, and its reasoning framed the analysis here.

The Court began with Petrella's rationale, which rested on both separation-of-powers principles and the traditional role of laches in equity. When Congress enacts a statute of limitations, it makes the judgment that timeliness is better governed by a hard-and-fast rule than by case-by-case judicial assessment. To apply laches inside that period would give courts a legislation-overriding role beyond the Judiciary's power. And because laches is a gap-filling doctrine, where there is a statute of limitations, there is no gap to fill. That logic, the Court held, fits Section 286 as easily as it fit the Copyright Act. Although the copyright and patent provisions are worded differently — the copyright period runs forward from accrual, Section 286 backward from suit — the Court found the distinction immaterial: each embodies a congressional decision about how far back a plaintiff may recover.

The Federal Circuit had reasoned that Section 286's opening phrase — "except as otherwise provided by law" — let Section 282 preserve laches as a damages defense, on the theory that laches falls within Section 282's reference to "unenforceability." The Court rejected that reading. Even assuming Section 282 incorporates laches in some form, it does not follow that laches may bar damages within the Section 286 period; it would be nearly unprecedented for one statute to supply both a limitations period and a laches defense against the same damages. Nor did the pre-1952 case law reveal a settled patent-specific practice that Congress could have codified. Justice Breyer dissented, reading the patent statute as having preserved a laches defense that predated the current limitations provision.

SCA Hygiene carried Petrella from copyright into patent law and largely eliminated laches as a defense to a claim for patent damages. Within Section 286's six-year window, delay alone — however long or prejudicial — no longer defeats a damages claim. The Court left equitable estoppel untouched, noting it still guards against a patentee who lures a competitor into investing before suing; and it did not disturb laches as a bar to equitable relief. What it rejected was the Federal Circuit's premise that Congress had carved a laches exception into the very damages the limitations period protects.

SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, 580 U.S. 328, decided March 21st, 2017. I'm Kyle Coleman. Thanks for watching.