A recent Supreme Court decision may make it easier for patent holders to assert older patents, as the decision significantly restricts the availability of laches (i.e., unreasonable delay) as a defense to a patent infringement claim.
The doctrine of laches allows a court to deny a claim if the plaintiff delayed filing the suit and the delay was unreasonable and prejudicial. The Patent Act also includes a six-year limit on the recovery of damages for patent infringement activities.
Until now, most courts interpreted these two legal doctrines as requiring a patent holder to promptly bring suit upon learning of infringing activity, and in any event no longer than six years from the date that the patent holder places the infringer on notice of the claim. The reason for this is to prevent a patent holder from lying in wait by sending a cease and desist letter but never seeking to resolve the dispute in court.
A recent Supreme Court decision has changed this long-standing interpretation. In SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC (Mar. 21, 2017), the patent holder (SCA) sent a letter accusing First Quality of infringement in 2003. In 2010 — seven years after sending the letter — SCA filed suit against First Quality. First Quality argued that SCA’s claim was time-barred under the doctrine of laches. The district court agreed and dismissed the case. The Federal Circuit affirmed, stating that laches prevents recovery of all damages, including those incurred during the 6-year period prior to filing the suit.
The Supreme Court disagreed, noting that “[l]aches is a gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill.” Because Section 286 of the Patent Act imposes a six-year statute of limitations, the Court found that the Patent Act had no gap to fill: “Laches cannot be interposed as a defense against damages where the infringement occurred within the period prescribed by §286.”
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The U.S. Supreme Court recently agreed to review two cases that involve important IP questions in the Court’s fall 2016 session. One case will consider whether to modify or do away with the long-standing defense of laches in patent infringement cases. The other case will address the extent to which apparel can be protected by copyright.
The doctrine of laches is a defense to patent infringement that protects accused infringers if (1) the patent holder unreasonably delayed in filing the infringement lawsuit, and (2) the accused infringer was materially prejudiced by the delay. If a patentee delays bringing suit for more than six years after the date the patentee knew or should have known of the alleged infringer’s activity, laches may be presumed. In SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, et al. (Fed. Cir. Sept. 18, 2015), the accused infringer argued that a 2014 Supreme Court decision that abolished laches as a defense in copyright cases should also apply to patent cases. The Federal Circuit disagreed and held that the defense of laches is still available in patent infringement cases. The Supreme Court will now resolve this dispute and determine whether the reasoning of its previous decision under copyright law equally applies to patents.
In the second case, the Court will address the extent to which copyright law covers apparel designs. In Varsity Brands Inc. v. Star Athletica, LLC (Sixth Cir. 2015), the U.S. Court of Appeals for the Sixth Circuit ruled that several copyright registrations on cheerleader uniform designs were valid. The designs included various stripes and chevrons, and the Sixth Circuit rejected an argument that those designs were functional and found that the designs were “’pictorial, graphic, or sculptural works’ and not uncopyrightable ‘useful articles.’” The Supreme Court will now address the question: “What is the appropriate test to determine when a feature of a useful article is protectable under § 101 of the Copyright Act?”
However, the Supreme Court also denied petitions in several other IP-related cases. Notably, so far the Court has denied at least seven petitions asking for clarity of the boundaries of patent-eligibility in view of the Court’s previous decisions in Alice Corp. v. CLS Bank Int’l and Mayo Collaborative Services v. Prometheus Laboratories, Inc.. Each of those decisions addressed the scope of Section 101 of the Patent Act, and each decision has resulted in confusion and inconsistency in lower court decisions and USPTO actions that have attempted to apply those decision.