United States: The State Of Laches: Is Delay In Patent Law Different From Delay In Copyright Law?

Copyright and patent law, because of their shared origins in the same Constitutional clause, are inextricably linked. The rationale used in supporting decisions in the copyright context are often not just equally applicable in the patent context, but often directly cited. Thus, it is not surprising at all for decisions in either patent law or copyright law to have an impact on the other area of law.

Which is why the U.S. Supreme Court's decision last year in the "Raging Bull" copyright law case raised some concerns for those in patent law about the viability of the defense of laches. A Federal Circuit en banc opinion last week appears to have, for the moment, cleared up the matter, but larger questions remain regarding that defense — questions which may have to be answered by the Supreme Court.

The "Raging Bull" case

The case of Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962 (2014), a copyright infringement claim was brought by the daughter of the author of the screenplay for the 1980 movie, "Raging Bull," against the studio responsible for releasing the movie (and subsequent marketing and distribution activity). In that case, MGM argued that the defense of laches barred Plaintiff's claims of copyright infringement because Plaintiff (1) waited seven years after acquiring all copyrights in the screenplay to advise MGM that it was infringing, and (2) waited an additional nine years before bringing suit for the infringement. The copyright statute contains a limitation barring infringement claims where infringement allegedly took place more than three years earlier. Even though Plaintiff had waited an extended period of time to bring suit, the Supreme Court held that the suit was not barred by the copyright statute's limitation because MGM continued to engage in infringing conduct throughout the period. The Supreme Court concluded that the judicially created "gap filling" defense of laches could not supplant Congress' clear direction on the matter. By creating a three-year separate-accrual statute of limitation for copyright infringement claims (where each infringing act starts a new limitations period), Congress had set forth the only judicially recognizable time limit for bringing claims of infringement. So long as the plaintiff alleged successive violations that occurred within three years of filing her claim, the defense of laches could not bar her action.

The most important aspect of the Petrella decision was that the defense of laches, with respect to copyright infringement matters, ceased to exist. The question remained, however, as to whether the logic and rationale of Petrella would apply equally to patent law. An en banc panel of the Federal Circuit answered that question on September 18.

Sharply divided en banc Federal Circuit weighs in

On Friday, September 18, 2015, the Court of Appeals for the Federal Circuit, in a 6-5 en banc decision, confirmed that the defense of laches does still exist in patent infringement matters. In the case of SCA Hygiene Prods. v. First Quality Baby Prods., No. 2013-1564, 2015 WL 5474261 (Fed. Cir., Sep. 18, 2015)(en banc), the Federal Circuit was confronted with a patent owner who waited nearly seven years from its first accusations of patent infringement to bring suit. The accused infringer argued that Plaintiff's delay had prejudiced Defendant and that the defense of laches should bar Plaintiff's claims of infringement. Plaintiff countered that the rationale of Petrella applied to patent law and that since patent law has a six-year limit on the recovery of patent infringement damages, so long as Plaintiff alleged successive violations with this statutory limit, laches could not apply.

The majority first concluded that the statutory limit on damages presented in 35 U.S.C. §286 was akin to the statutory limit addressed in Petrella — and concluded that such a limit would require the same sort of analysis as utilized in Petrella.

The majority then concluded that the defense of laches was contemplated by the 1952 Patent Act. Though the word laches appears nowhere in the act, the majority turned to commentary, legislative history, and the broad language of the statute to conclude that 35 U.S.C. §282 specifically contemplated the defense of laches.

Thus, the same act that created the statutory limit of §286 simultaneously contemplated the defense of laches in §282. Accordingly, the majority concluded that unlike in Petrella, where Congress had expressly created a statute of limitations in copyright law that judges were not allowed to trump by allowing laches as a defense, the situation in SCA Hygiene did not present the same situation. In patent law, because Congress contemplated both the defense of laches and the six-year limitation on damages, both concepts could exist and could be compatible. Therefore, laches could be asserted even where the statutory damages limitation had not been exceeded.

The minority strongly disagreed. They argued that the majority's contortions with respect to finding the defense of laches in the 1952 Patent Act overlooks Congress' intent and Supreme Court precedent. According to the minority, laches is no defense to a claim for damages filed for successive violations within the statutory limitations period. The minority further noted that in holding as it did, the majority had, once again, ignored the Supreme Court's repeated warnings to the Federal Circuit on creating special rules for patent cases.

Next steps

So, after SCA Hygiene, the defense of laches still exists in patent law. But, there is still some question as to how long that will be the case. The sharply divided Federal Circuit decision in SCA Hygiene, while settling the question for now, strongly calls for the Supreme Court to take up this issue. And, thus begin the real questions. 

By holding that patent law is different than other areas of law where laches is preempted by statutory time limits, has the Federal Circuit set itself up to be overruled by the Supreme Court? Will the Supreme Court agree that laches in patent law differs significantly from laches in the copyright law and allow the defense of laches to continue in patent infringement cases? And perhaps most important of all, will Supreme Court changes to laches law have any real impact since this defense is rarely successfully asserted?

All these questions remain to be answered.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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