SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC,
580 U.S. ___ (2017)

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Justia Opinion Summary

In 2003, SCA notified First Quality that its adult incontinence products infringed an SCA patent. First Quality responded that its patent antedated SCA’s patent and made it invalid. In 2004, SCA sought reexamination of its patent. In 2007, the Patent and Trademark Office confirmed the SCA patent’s validity. SCA sued for patent infringement in 2010. The district court granted First Quality summary judgment, citing equitable estoppel and laches. While SCA’s appeal was pending, the Supreme Court held that laches could not preclude a claim for damages incurred within the Copyright Act’s 3-year limitations period. The Federal Circuit nevertheless affirmed, based on Circuit precedent, which permitted laches to be asserted against a claim incurred within the Patent Act’s 6-year limitations period, 35 U.S.C. 286. The Supreme Court vacated. Laches cannot be invoked as a defense against a claim for damages brought within the limitations period. A statute of limitations reflects a congressional decision that timeliness is better judged by a hard and fast rule instead of a case-specific judicial determination. Applying laches within a statutory limitations period would give judges a “legislation-overriding” role that exceeds the Judiciary’s power and would clash with the gap-filling purpose for which the laches defense developed in the equity courts.

  • Syllabus  | 
  • Opinion (Samuel A. Alito, Jr.)  | 
  • Dissent (Stephen G. Breyer)

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader.See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

Syllabus

SCA HYGIENE PRODUCTS AKTIEBOLAG et al. v. FIRST QUALITY BABY PRODUCTS, LLC, et al.

certiorari to the united states court of appeals for the federal circuit

No. 15–927. Argued November 1, 2016—Decided March 21, 2017

In 2003, petitioners (collectively, SCA) notified respondents (collectively, First Quality) that their adult incontinence products infringed an SCA patent. First Quality responded that its own patent antedated SCA’s patent and made it invalid. In 2004, SCA sought reexamination of its patent in light of First Quality’s patent, and in 2007, the Patent and Trademark Office confirmed the SCA patent’s validity. SCA sued First Quality for patent infringement in 2010. The District Court granted summary judgment to First Quality on the grounds of equitable estoppel and laches. While SCA’s appeal was pending, this Court held that laches could not preclude a claim for damages incurred within the Copyright Act’s 3-year limitations period. Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U. S. ___, ___. A Federal Circuit panel nevertheless affirmed the District Court’s laches holding based on Circuit precedent, which permitted laches to be asserted against a claim for damages incurred within the Patent Act’s 6-year limitations period, 35 U. S. C. §286. The en banc court reheard the case in light of Petrella and reaffirmed the original panel’s laches holding.

Held: Laches cannot be invoked as a defense against a claim for damages brought within §286’s 6-year limitations period. Pp. 3–16.

(a) Petrella’s holding rested on both separation-of-powers principles and the traditional role of laches in equity. A statute of limitations reflects a congressional decision that timeliness is better judged by a hard and fast rule instead of a case-specific judicial determination. Applying laches within a limitations period specified by Congress would give judges a “legislation-overriding” role that exceeds the Judiciary’s power. 572 U. S., at ___. Moreover, applying laches within a limitations period would clash with the gap-filling purpose for which the defense developed in the equity courts. Pp. 3–5.

(b) Petrella’s reasoning easily fits §286. There, the Court found in the Copyright Act’s language a congressional judgment that a claim filed within three years of accrual cannot be dismissed on timeliness grounds. 572 U. S., at ___. By that same logic, §286 of the Patent Act represents Congress’s judgment that a patentee may recover damages for any infringement committed within six years of the filing of the claim.

First Quality contends that this case differs from Petrella because a true statute of limitations runs forward from the date a cause of action accrues, whereas §286’s limitations period runs backward from the filing of the complaint. However, Petrella repeatedly characterized the Copyright Act’s limitations period as running backward from the date the suit was filed. First Quality also contends that a true statute of limitations begins to run when the plaintiff discovers a cause of action, which is not the case with §286’s limitations period, but ordinarily, a statute of limitations begins to run on the date that the claim accrues, not when the cause of action is discovered. Pp. 5–8.

(c) The Federal Circuit based its decision on the idea that §282 of the Patent Act, which provides for “defenses in any action involving the validity or infringement of a patent,” creates an exception to §286 by codifying laches as such a defense, and First Quality argues that laches is a defense within §282(b)(1) based on “unenforceability.” Even assuming that §282(b)(1) incorporates a laches defense of some dimension, it does not necessarily follow that the defense may be invoked to bar a claim for damages incurred within the period set out in §286. Indeed, it would be exceedingly unusual, if not unprecedented, if Congress chose to include in the Patent Act both a statute of limitations for damages and a laches provision applicable to a damages claim. Neither the Federal Circuit, nor any party, has identified a single federal statute that provides such dual protection against untimely claims. Pp. 8–9.

(d) The Federal Circuit and First Quality rely on lower court patent cases decided before the 1952 Patent Act to argue that §282 codified a pre-1952 practice of permitting laches to be asserted against damages claims. But the most prominent feature of the relevant legal landscape at that time was the well-established rule that laches cannot be invoked to bar a claim for damages incurred within a limitations period specified by Congress. In light of this rule, which Petrella confirmed and restated, 572 U. S., at ___, nothing less than a broad and unambiguous consensus of lower court decisions could support the inference that §282(b)(1) codifies a very different patent-law-specific rule. Pp. 9–10.

(e) The Federal Circuit and First Quality rely on three types of cases: (1) pre-1938 equity cases; (2) pre-1938 claims at law; and (3) cases decided after the merger of law and equity in 1938. None of these establishes a broad, unambiguous consensus in favor of applying laches to damages claims in the patent context.

Many of the pre-1938 equity cases do not even reveal whether the plaintiff asked for damages, and of the cases in which damages were sought, many merely suggest in dicta that laches might limit damages. The handful of cases that apply laches against a damages claim are too few to establish a settled, national consensus. In any event, the most that can possibly be gathered from a pre-1938 equity case is that laches could defeat a damages claim in an equity court, not that the defense could entirely prevent a patentee from recovering damages.

Similarly, even if all three pre-1938 cases at law cited by First Quality squarely held that laches could be applied to a damages claim within the limitations period, that number would be insufficient to overcome the presumption that Congress legislates against the background of general common-law principles. First Quality argues that the small number of cases at law should not count against its position because there were few patent cases brought at law after 1870, but it is First Quality’s burden to show that Congress departed from the traditional common-law rule.

As for the post-1938 patent case law, there is scant evidence supporting First Quality’s claim that courts continued to apply laches to damages claims after the merger of law and equity. Only two Courts of Appeals held that laches could bar a damages claim, and that does not constitute a settled, uniform practice of applying laches to damages claims. Pp. 11–15.

(f) First Quality’s additional arguments are unconvincing and do not require extended discussion. It points to post-1952 Court of Appeals decisions holding that laches can be invoked as a defense against a damages claim, but nothing that Congress has done since 1952 has altered §282’s meaning. As for the various policy arguments presented here, this Court cannot overrule Congress’s judgment based on its own policy views. Pp. 15–16.

807 F. 3d 1311, vacated in part and remanded.

Alito, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Thomas, Ginsburg, Sotomayor, and Kagan, JJ., joined. Breyer, J., filed a dissenting opinion.

Primary Holding

Laches is not an appropriate defense against a claim for damages that is brought within the applicable statute of limitations.

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