Federal Circuit's En Banc Decision Expands Role Of Laches

On September 18, 2015, the en banc Federal Circuit upheld the viability of the laches defense in patent infringement suits. SCA Hygiene Products v. First Quality Baby Products, No. 13-1564, September 18, 2015. More specifically, the court ruled that in the patent context: (i) "[l]aches bars legal relief," (ii) "courts must weigh the facts underlying laches in the eBay framework when considering an injunction," and (iii) "absent extraordinary circumstances, laches does not preclude an ongoing royalty."

SCA Hygiene Products and First Quality Baby Products are competitors in the adult incontinence products market. In October 2003, SCA wrote a letter to First Quality, expressing the belief that one of First Quality's products infringed U.S. Patent No. 6,375,646 ('646 patent). In November 2003, First Quality responded, claiming that the patent was invalid. SCA did not reply, but in July 2004, SCA requested reexamination of the '646 patent. In March 2007, the PTO confirmed the patentability of all original claims of the '646 patent and issued several other claims. Then, in August 2010, SCA filed a patent infringement suit against First Quality based on the '646 patent. At that point, it had been nearly seven years since SCA and First Quality had communicated regarding the '646 patent, and in that time, First Quality had invested heavily in its protective underwear business.

In the district court, First Quality moved for summary judgment, raising the laches defense among others. The district granted summary judgment on laches, and SCA appealed.

Laches is an equitable defense, often defined as unreasonable, prejudicial delay in commencing suit. It has long been recognized as a defense in patent cases. At the same time, 35 U.S.C. § 286 limits damages to the six years prior to the filing of the complaint in a patent infringement suit. In A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020 (Fed. Cir. 1992), the en banc Federal Circuit held that there was no conflict between the equitable defense of laches and the statutory limitation on recovery codified at 35 U.S.C. § 286. The Aukerman court further held that laches bars a patentee's claim for damages prior to suit, but that laches could not bar the entire suit. While SCA's appeal was pending, the U.S. Supreme Court addressed the viability of the laches defense in the copyright context, where 17 U.S.C. § 507(b) bars the bringing of a copyright suit more than three years after the claim...