by Dennis Crouch
SCA Hygiene Products v. First Baby Products (Fed. Cir. 2015) (en banc)
On en banc rehearing, the Federal Circuit has ruled that the Supreme Court’s Petrella decision (eliminating the doctrine of laches for back-damages for copyright infringement) does not directly apply in the patent context.
All eleven members of the court agreed that, in the patent context, laches continues to be available in the context blocking equitable relief such as an injunction or ongoing royalties – when warranted by the equities. However, the court indicated (dicta here) that laches should only apply to ongoing royalties in “extraordinary circumstances.”
The 6-5 split was on whether laches can be used to eliminate back-damages for infringement that occurred within the six-year statutory limit. Here, the majority found that laches continues to apply.
Although laches is considered a judge-made equitable doctrine, the court smartly looked to the statute in reaching its conclusion. In particular, Section 282(b)(1) of the Patent Act states that “unenforceability” is a defense to allegations of patent infringement and back when the law was passed (1952) was understood to encompass defenses such as “laches, estoppel and unclean hands.” Taking this together, the court found that Congress meant for the laches defense to continue to work alongside the six-year limit on back-damages.
Congress remained silent on the content of the laches defense. Section 282 therefore retains the substance of the common law as it existed at the time Congress enacted the Patent Act. . . . Upon review, the case law demonstrates that, by 1952, courts consistently applied laches to preclude recovery of legal damages. Nearly every circuit recognized that laches could be a defense to legal relief prior to 1952. . . . Following a review of the relevant common law, that meaning is clear: in 1952, laches operated as a defense to legal relief. Therefore, in § 282, Congress codified a laches defense that barred recovery of legal remedies.
Challenging this point, the Dissent argued that the relevant “common law” for consideration should have come from the Supreme Court which, according to the dissent, indicated that laches was only a defense to equitable actions.
The legal history point of debate seems to be whether we should look at the general common law of laches or instead the common law of laches as applied to patent lawsuits?
Majority: If Congress looked to the common law, it likely looked to the common law of patents rather than to more general principles.”
Dissent: Patent law is governed by the same common-law principles, methods of statutory interpretation, and procedural rules as other areas of civil litigation.
With a one-judge majority, the law remains that laches is “a defense to legal relief in a patent infringement suit.”
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The majority here argues correctly that we should look to the statute and see what it tells us. That approach makes sense in all patent cases, regardless of the issue.
What the majority finds is that the statute implicitly binds the court to implement the equitable defenses available in patent cases back in 1952 (when the relevant amendment was passed). At the same time, the majority appears perfectly comfortable with the notion that the scope of the equitable actions will continue to adjust over time and were in no way fixed by their incorporation into the 1952 Act. Thus, when the court asks – what are the contours of the laches defense – it does not feel constrained to limit itself to 1952 precedent but instead looks directly to the recent Supreme Court decision in Petrella.