It’s NOT complicated Part 1: SCA Hygiene Products v. Quality Baby Products

In SCA Hygiene Products Aktiebolag et al. v. First Quality Baby Products LLC et al., 580 U.S. ___ (2017[hereinafter ‘SCA’ and ‘First Quality’] the United States Supreme Court [hereinafter ‘the Court’]held that laches[1] does not bar U.S patent infringement awards when the lawsuit is filed by the time deadline of the U.S. patent statute. 35 U.S.C. section 286. This deadline is six years from the beginning of the infringing activity, and in this instance the patent infringement was ongoing. In so ruling, the Court concluded that its decision in Petrella v. Metro-Goldwyn-Mayer, 134 S. Ct. 1962 (2014) [hereinafter ‘Petrella’] was analogous to the present case, and even though the Petrella filing deadline was exclusively for copyright infringement. In Petrella the Court held that laches does not prevent an infringement award, because the lawsuit was filed by the copyright statute filing deadline.

In the present case, SCA developed a U.S. patented design for adult incontinence products. First Quality is a business competitor that manufactures private label disposable products. In 2003 SCA notified First Quality to cease using SCA’s patented technology without its authorization.  After First Quality asserted that SCA’s patent was invalid, SCA submitted its patent for re-examination in the U.S.  patent office.  After the patent office confirmed the patent’s validity, SCA filed a lawsuit six years and eleven months after its initial notice to First Quality addressing unauthorized use.

On summary judgment, the trial court found that SCA’s lawsuit was prevented by laches and equitable estoppel. An en banc Court of Appeals for the Federal Circuit [hereinafter the ‘Federal Circuit’] affirmed the summary judgement based upon laches with respect to timeliness. The Federal Circuit also concluded that the relevant statute implicitly includes laches as a defense to patent infringement, and even if laches was not explicitly designated therein. 35 U.S.C. section 282.The Federal Circuit also held that laches prevents money damage awards in a patent infringement lawsuit. In so ruling on this second issue the Federal Circuit relied upon patent judicial decisions related to laches in patent litigation.

The Court initially addressed the timeliness of the lawsuit and vacated in part the Federal Circuit’s decision. Instead, the Court instead found that Petrella applies and that section 286 reflects a Congressional preference for a uniform litigation commencement deadline. As a result, the implementation of the laches defense within the section 286 litigation commencement deadline would exceed judicial authority.  The Court also concluded that even if section 282(b)(1) incorporates some form of laches, the defense of laches does not prevent financial damages awards for patent infringement.  On this last point the Court further concluded that the prevailing judicial view prior to the implementation 1952 patent statute was that laches does not bar patent infringement damages.  As a result, a broad and unambiguous consensus of judicial decisions would be necessary for the contention that laches is implicitly included in the infringement defenses of section 282(b). However, the Court found that neither the Federal Circuit or First Quality had demonstrated this consensus.

 

©2017 Adrienne B. Naumann, Esq. All rights reserved.

Ms. Naumann does not sponsor or endorse the advertisements at adriennebnaumann.wordpress.com.

[1] Laches is defined as the failure to assert a claim during a lapse of time and other circumstances that thereby result in prejudice to an opposing person.

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