Laches remains applicable in the patent context to bar pre-suit damages after an en banc Federal Circuit ruling late last week in SCA Hygiene Products Aktiebolag v. First Quality Baby Products. Last year in the “Raging Bull” decision (Petrella v. Metro-Goldwyn-Mayer), the Supreme Court held that laches could not bar copyright infringement damages within the three year statute of limitations period, because Congress had expressly legislated on the timeliness of copyright claims when it created a statute of limitations.
Under Federal Circuit precedent in A.C. Aukerman v. R.L. Chaides Construction, laches bars pre-suit damages in a patent case where there is (a) unreasonable and inexcusable delay by the patentee in bringing suit and (b) the alleged infringer suffers material prejudice attributable to the delay. The Patent Act, however, also contains a bar on patent infringement damages occurring more than six years before suit. 35 U.S.C. § 286. Some argued, on that basis, that the high court’s Raging Bull decision should limit the laches defense in patent cases.
That argument was largely resolved last week when, by a vote of six to five, the en banc Federal Circuit determined that Congress had provided for the co-existence of a six year limitation on damages and the availability of laches as an unenforceability defense under 35 U.S.C. § 282. Thus, until Congress legislates to the contrary, laches may serve as a bar to damages within the six year damages window in patent cases.
The Federal Circuit adopted some aspects of the Raging Bull decision, and other Supreme Court precedent, when it rejected Aukerman’s bright-line rule that laches could not bar prospective relief. In SCA Hygiene Products, the Federal Circuit held that courts should consider delays in bringing suit under the eBay framework when considering injunctive relief. The court also clarified that, absent extraordinary circumstances, laches does not preclude an ongoing royalty.