En Banc Federal Circuit Preserves The Patent Laches Defense Over Dissent

In a divided en banc decision in SCA Hygiene Products v. First Quality Baby Products, the Federal Circuit preserved the defense of laches for patent cases even though the Supreme Court eliminated that defense in copyright cases. This means that an accused infringer may be able to raise a patent laches defense in a suit brought within the 6 year period of 35 USC § 286. The court also held that laches can prevent an injunction, but made clear that in such a case the infringer could be required to pay an ongoing royalty.

The Delay At Issue

The patent at issue was SCA's U.S. Patent No. 6,375,646, directed to an absorbent pants-type diaper. In 2003, SCA sent First Quality a letter asserting that First Quality's Prevail® All Nites" product infringed the '646 patent. Less than a month later, First Quality responded to the letter and advised SCA of its opinion that the '646 patent is invalid in view of U.S. Patent No. 5,415,649. SCA did not respond to that letter, but sought ex parte reexamination of the '646 patent in view of the '649 patent. A reexamination certification was issued in March of 2007, confirming patentability of the original claims and granting new claims. In August of 2010, SCA asserted the patent against First Quality in the U.S. District Court for the Western District of Kentucky.

As summarized in the Federal Circuit opinion, between 2003 and 2010, First Quality had "invested heavily in its protective underwear business," including expanding its line of products, and spending $10 million to purchase three more lines of products. According to the Federal Circuit opinion, "SCA was aware of First Quality's activities, but never mentioned the '646 patent to First Quality during this time."

The district court granted First Quality's motion for summary judgment of laches and equitable estoppel. On appeal, a panel of the Federal Circuit affirmed as to laches, but reversed as to equitable estoppel. SCA petitioned for rehearing en banc in view of the Supreme Court's decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014).

The En Banc Questions

In Petrella, the Supreme Court held that laches is not available as a defense to a copyright infringement suit brought within the Copyright Act's statutory limitations period, and does not bar claims to legal relief brought within the statutory period. The Federal Circuit granted SCA's petition for rehearing en banc in view of Petrella to address these questions:

(a) In light of...

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