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Laches in Patent and Copyright Law: A Different Calculus

■ Adam E. Szymanski

In SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, No. 2013-1564 (Fed. Cir. Sept. 18, 2015), the Court of Appeals for the Federal Circuit, ruling en banc, held that laches remains a defense to legal relief in a patent infringement suit, despite the Supreme Court’s recent decision in Petrella v. Metro Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014) regarding laches in copyright cases.

SCA sued First Quality for infringing U.S. Patent No. 6,375,646 directed to absorbent pants-type diapers. SCA sent a letter to First Quality on October 31, 2003, asserting that First Quality’s Prevail® All Nites™ product infringed its ‘646 patent. First Quality responded on November 21, 2003, saying that U.S. Pat. No. 5,415,649 invalidated the ‘646 patent. SCA requested a reexamination, and, in March 2007, the USPTO found the patent patentable over the ‘649 patent. SCA sued First Quality three-years later on August 2010, in response to which First Quality asserted laches.

In Petrella, however, the Supreme Court held that laches cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window established for copyright infringement actions in 17 U.S.C. §507(b). Paula Petrella sued Metro Goldwyn-Mayer nine years after last contacting the Metro asserting infringement to her copyright in the film “Raging Bull.” The Court determined that the statute of limitations in §507(b) takes account of a delay in suing and removes judicial discretion in addressing timeliness.

The Federal Circuit distinguished its holding from Petrella on its reading of 35 U.S.C. §282(b)(1). Section 282 lists the defenses available in a patent invalidity or infringement action and includes a provision stating “[a]ny other fact or act made a defense by this title.” The Federal Circuit relied on the commentary of P.J. Federico, an original drafter of the 1952 Patent Act, which stated that §282 included equitable defenses like laches. Combining that with Senate and House reports stating the breadth of such defenses, the court concluded that Congress had codified a laches defense into §282 of the Patent Act. The court further concluded that laches as codified can be applied to recovery of legal relief rather than just equitable relief, finding that patent case law supported the use of laches to preclude damages.

The Federal Circuit further noted a distinction between patent and copyright law in proving infringement: “copyright infringement requires evidence of copying, but innocence is no defense to patent infringement.” Proof of access, the court found, ensures that a potential infringer is generally aware of the risk of infringement. As a safeguard, a potential infringer can seek to establish evidence of independent creation. The court concluded that for patents “the calculus is different.” Because patent law lacks independent creation, laches provides the only defense against late claims seeking to collect on a commercial windfall.

Perhaps time will tell whether the Supreme Court agrees with the Federal Circuit’s new math.

 

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