Patent Owners: Have an Infringement Claim? Time is (Still) of the Essence
The Federal Circuit’s recent decision in a case involving adult diapers serves as a reminder to act quickly and urgently when you believe you have a patent infringement claim. In an opinion released this month, SCA Hygiene v. First Quality Baby Products, the Federal Circuit held that the legal doctrine of laches remains a viable defense in alleged infringers’ arsenals when it comes to patent infringement suits. Laches refers to an unreasonable delay in taking action and pursuing one’s rights. In essence, it bars certain relief to rights holders who “sit on their hands” and wait too long to file a lawsuit after learning of a potential infringement. By way of example, if a patent owner becomes aware of an infringing product in 2005 but “sits on her hands” until now to file suit, and a substantial investment of time and resources have been placed into that infringing product, laches may come into play as a defense. To succeed on a laches defense, the accused infringer must demonstrate: (1) that the patent owner inexcusably and unreasonably delayed filing an infringement suit; and (2) that the accused infringer was materially prejudiced by the delay.
While the Federal Circuit has recognized laches in patent infringement cases for decades, a recent Supreme Court decision called into question whether laches is a defense to patent infringement. In Petrella v. Metro-Goldwyn Mayer, Inc., the Supreme Court held that laches could not be utilized as a defense in copyright infringement cases under the Copyright Act. Given this holding, the Federal Circuit went en banc in SCA Hygiene to determine whether laches remains a defense to patent infringement, holding in the affirmative in a narrow 6-5 decision. The court’s decision to keep the doctrine makes sense when we consider that, unlike their counterparts in copyright infringement suits, patent defendants may need to prove that the Plaintiff patent owner’s claimed invention was obvious at the time of filing, thus invalidating the patent. Thus, if a lawsuit gets postponed, it can become increasingly difficult for a defendant to discover what was known in the field or what was considered obvious when the application was filed. In sum, without laches, patent owners would be able sit back and “weather the storm” until evidence that the alleged infringer needs for a defense expires or is destroyed over time. The defense can also be helpful as a shield to combat “patent trolls,” companies or persons who purchase and use patents as legal weapons instead of practicing the claimed invention and creating new products. Further, because a patent can be innocently infringed, patent holders arguably should bear the responsibility for bringing claims of wrongdoing in a prompt and timely manner.
Although the laches defense remains, it is worth noting that the Federal Circuit’s decision was a nail-biter (a 6-5 decision). This result suggests that 5 Federal Circuit judges were convinced that Petrella changed not only copyright law, but patent law as well. Thus, this may not be the end of the road. Given the close decision, the Supreme Court may decide to take a closer look at SCA Hygiene and the viability of the laches defense in patent infringement lawsuits.