Opinion analysis: Justices reject application of laches in patent cases
on Mar 21, 2017 at 1:17 pm
The refrain is in some ways familiar. The Federal Circuit early on adopts a patent-specific rule grounded in the particularities of patent procedure and practice. Decades pass, in which the rule is applied without serious challenge to dozens (hundreds?) of cases. When the issue finally reaches the Supreme Court, the justices reject the Federal Circuit’s decision out of hand, typically paying little or no attention to the patent-specific factors that seemed so important to the Federal Circuit.
This week’s chapter in that story is SCA Hygiene Products v. First Quality Baby Products. The specific question is whether the equitable doctrine of “laches” permits a court to reject a suit to enforce a patent based on the plaintiff’s unreasonable and prejudicial delay in bringing suit, even if the suit is brought within the Patent Act’s statute of limitations. At the Federal Circuit, the primary consideration was (to steal a well-turned phrase from Justice Stephen Breyer) a “century and a half of history” of routine lower-court application of laches in patent cases. At the Supreme Court level, however, the most obvious authority is the court’s decision three terms ago in Petrella v. Metro-Goldwyn-Mayer, which considered a nearly identical question under the Copyright Act. In Petrella, Justice Ruth Bader Ginsburg wrote for a majority of the court, holding that because Congress adopted a specific statute of limitations for copyright cases, courts should not use vague equitable doctrines like laches to bar suits as untimely when they are brought before the deadline set in the statute. With five members of the Petrella majority still on the bench (all but the late Justice Antonin Scalia), the oral argument suggested that the weight of that precedent would be dispositive.
Against that backdrop, not a word of the opinion of Justice Samuel Alito surprises. He lays out the issue in the case as “the application of the defense [of laches] to a claim for damages,” remarking that “[w]e discussed this subject at length in Petrella.” He then proceeds to summarize Petrella in broad and unqualified terms. First, as to its general principle, he explains: “When Congress enacts a statute of limitations, it speaks directly to the issue of timeliness and provides a rule for determining whether a claim is timely enough to permit relief. … Therefore applying laches within a limitations period specified by Congress would give judges a ‘legislation-overriding’ role that is beyond the Judiciary’s power” (quoting Petrella). Summarizing, he concludes even more firmly: “Laches is a gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill.”
After such a categorical summary, it is no surprise when the opinion begins its analysis of the issue at hand with the statement that “Petrella’s reasoning easily fits the provision at issue here.” The court notes a Patent Act provision (Section 286) that bars relief “for any infringement committed more than six years prior to the filing of the complaint.” Because that provision bars suits more than six years after the fact, it is all that the justices need to resolve the dispute: “By the logic of Petrella, we infer that this provision represents a judgment by Congress that a patentee may recover damages for any infringement committed within six years of the filing of the claim.”
All that is left is for the court to address the long line of lower-court cases that motivated the Federal Circuit to adhere to a contrary rule. The court’s basic answer is that it is unimpressed by the long line of lower-court patent cases on which the Federal Circuit relied. For the justices at the Supreme Court, what is important is the long line of their own cases on which they based Petrella – none of them involving patents – holding that laches generally should not apply when Congress has adopted a statute of limitations. Having generously described the court’s own cases, Alito easily dismisses the authorities on which the court of appeals relied: “In light of the general rule regarding the relationship between laches and statutes of limitations [in our cases], nothing less than a broad and unambiguous consensus of lower court decisions could support the inference that [the Patent Act] codified a very different patent-law-specific rule. No such consensus is to be found.”
Few will find this decision remarkable. It would have been surprising for the justices who joined in Petrella to resolve the case differently. But this case is a little different from most of the cases in which the court has rejected the Federal Circuit’s patent-specific proclivities. As a rule, most of those Federal Circuit decisions broadened the rights of patentholders in one way or another, by expanding the remedies available to them or adopting a more capacious understanding of patentability. Here is a case, though, in which the Federal Circuit toed a strong historical line to rein in litigation conduct by patentholders that is aggressive at best. And the Supreme Court steps in, dismissing that history as irrelevant and brushing aside the specific risks of abuse in patent litigation (chronicled in Justice Breyer’s dissent), all in the service of the extension to patent law of a rule that was in truth not all that clear until the decision in Petrella just three years ago. It goes without saying that the vigor of the decision sends a message to the Federal Circuit about how it should balance history against general interpretive doctrines, but it also has some more immediate relevance. Specifically, my main thought when I reread this opinion is what I would be saying if I were one of the advocates trying to frame the “special rule for patent venue” question the justices will hear next week in TC Heartland v. Kraft Foods Group Brands.
