United States: "Raging Bull" And The Patent Act: Laches Still Available In Patent Cases

SCA Hygiene Products AB et al. v. First Quality Baby Products LLC et al.

The U.S. Court of Appeals for the Federal Circuit convened an en banc panel to examine the Supreme Court's "Raging Bull" decision in Petrella v. Metro-Goldwyn-Mayer, Inc. ( IP Update, Vol. 17, No. 5) in the context of deciding whether laches remains a defense in a patent infringement suit. After an in-depth analysis, the Court concluded that Congress intended for laches to apply in patent matters when it codified laches under 35 USC §282(b)(1) of the Patent Act. However, the Court made a point to note that the laches defense must be harmonized with Petrella and other Supreme Court precedent. The Court clarified that equitable principles apply whenever an accused infringer seeks to use laches as a bar to injunctions or ongoing relief, while laches will only foreclose an ongoing royalty in extraordinary circumstances. SCA Hygiene Products AB et al. v. First Quality Baby Products LLC et al., Case No. 13-1564 (Fed. Cir., September 18, 2015) (en banc) (Hughes, J., concurring-in-part and dissenting-in-part).

In 2003, SCA Hygiene Products (SCA) sent a letter to First Quality Baby Products (First Quality), a competitor in the adult incontinence market, alleging that First Quality's Prevail® All Nites" product infringed a patent held by SCA pertaining to certain aspects of adult diapers. First Quality responded to the letter stating that it had located a prior art patent describing the same diaper construction, which invalidated the SCA patent and thereby precluded infringement by First Quality.

SCA did not respond to First Quality's reply. Instead, in 2004, SCA requested re-examination of its patent in view of the prior art patent cited to it by First Quality. SCA did not notify First Quality of the re-examination proceedings, but the company presumed that First Quality was following the proceedings due to their public nature. In the meantime, First Quality believed that SCA had dropped its infringement claims, and it continued to invest in and expand its adult incontinence products line, including multimillion dollar acquisitions of competitors' businesses.

In 2007, the USPTO confirmed the patentability of SCA's patent. In August 2010, more than three years after the conclusion of the re-examination and over seven years since SCA last communicated with First Quality regarding the its patent, SCA filed a complaint for patent infringement. The district court granted First Quality's motion for summary judgment on the issues of laches and equitable estoppel. SCA appealed, arguing that the Petrella decision abolished laches in patent law. In September 2014, a panel of the Federal Circuit rejected SCA's Petrella arguments and affirmed the district court's opinion on laches, but reversed as to equitable estoppel. (See IP Update, Vol. 17, No. 5.) SCA filed a petition for rehearing en banc, and the Federal Circuit granted the petition with respect to two questions:

  1. In light of Petrella, which addressed laches under the Copyright Act, should the Federal Circuit's 1992 decision in Aukerman be overruled so that the defense of laches is not applicable to a claim of damages on patent infringement occurring within the six-year damages limitations period established by the Patent Act?
  2. Because there is no statute of limitations for claims of patent infringement, should the defense of laches be available under some circumstances to bar an entire infringement suit for either damages or injunctive relief?

Viability of Laches After Petrella

As for the first question, after examining history of the laches defenses by the courts, congressional intent, and precedential decisions in this area, the Federal Circuit reconciled Aukerman with Petrella, noting that Petrella was fundamentally concerned with the separation of powers and therefore eliminated judicially created laches because Congress had already spoke on the timeliness of infringement claims in the Copyright Act. However, the Court found a different statutory scheme in the patent law because 35 U.S.C. §286 provides for time limitations on recovery of legal remedies within six years of the filing date of the infringement action, while 35 U.S.C. §282 provides for laches as a defense to legal relief. Therefore, the Court reasoned that the same separation of powers concern that the Supreme Court discussed in Petrella is not present in matters arising under the patent laws.

The Federal Circuit also distinguished copyright and patent law on the grounds that copyright infringement requires evidence of copying, while intent (or ignorance of a patent) is not a defense to patent infringement. Accordingly, the Court determined that it makes sense to limit damages by applying laches in a patent case where an infringer may not know he is infringing. On the other hand, a potential defendant in a copyright infringement action is typically aware of the risk that he or she is infringing and can usually estimate his or her exposure and liability. Therefore, the Court determined that laches remains a viable defense to legal relief in actions for patent infringement.

The Application of Laches to Ongoing Relief

As for the extent to which laches can limit recovery of ongoing relief, the Federal Circuit reexamined Aukerman in light of Petrella, as well as the Supreme Court's eBay decision ( IP Update, Vol. 9, No. 5). The Court, noting the four-factor eBay test for injunctions in patent cases, stated that the district court should consider all material facts, including those pertaining to laches, when deciding whether to issue an injunction, with the understanding that laches could foreclose injunctive relief since patentees are not automatically entitled to an injunction.

Conversely, the Federal Circuit explained that equity normally dictates that courts award ongoing royalties, despite laches. Citing Aukerman, Petrella and the Supreme Court's 1888 holding in Menendez, the Court warned that it must recognize the distinction between estoppel and laches, as estoppel bars an entire suit, while laches does not. In this regard, the Court concluded that absent extraordinary circumstances, laches does not preclude an ongoing royalty and reinstated the earlier panel's reversal of the district court's grant of summary judgment on equitable estoppel and remanded to the district court.

"Raging Bull" And The Patent Act: Laches Still Available In Patent Cases

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
McDermott Will & Emery
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
McDermott Will & Emery
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions