Supreme Court Eliminates Laches Defense in Patent Cases

On March 21, 2017, the U.S. Supreme Court held, in a 7-1 decision, that laches cannot be used as a defense in patent infringement cases. In SCA Hygiene Products AB v. First Quality Baby Products LLC,^[1] the Court considered whether laches—a doctrine that bars lawsuits filed after unreasonable delays—is available as an equitable bar to pre-suit damages in patent infringement cases. The Court held that the equitable defense of laches may not be used to preclude a claim for damages within the six year limitation period prescribed by Congress in the Patent Act. The Court found no statutory or other basis to contradict Congress’ intent that “a patentee may recover damages for any infringement committed within six years of the filing of the claim.” The Court adopted its logic from Petrella v. Metro-Goldwyn-Mayer, Inc.,^[2] a 2014 copyright decision reaching the same conclusion regarding the three year limitation period in the Copyright Act.

While proponents of laches will argue that the Court’s holding flies in the face of a “century and a half of history” of lower courts routinely applying laches in patent cases, laches was rarely a successful defense to patent infringement.^[3] Over the past decade, courts have granted summary judgment barring pre-suit infringement damages based upon laches in only 18 cases.^[4] The Eastern District of Texas, which handles roughly 37 percent of all patent cases filed in the U.S., has not barred pre-suit damages based upon laches in the last decade.^[5] Therefore, the Court’s elimination of laches from patent infringement cases is unlikely to have any practical impact on litigation between patent owners and accused infringers.

Nevertheless, there may be other reasons for patent owners and accused infringers to heed the Supreme Court’s ruling. In pending litigation, patent owners should seek the dismissal of any laches defense asserted by the accused infringer. Accused infringers should expect a request, or motion, to dismiss laches defenses. They should use this as an opportunity to review and bolster other equitable defenses in the case. Outside of pending litigation, patent owners may find more value in soon-to-expire patents which may now be asserted with less fear of the intervening delay. Moreover, setting aside competitive pressures, patent owners may take more time to fully workup their infringement analysis prior to filing suit. For accused infringers this decision may encourage more aggressive demands by non-practicing entities and they should be prepared to address such demands in kind.