Supreme Court Scratches LachesMarch 23, 2017
My eyes usually glaze over about halfway through the opening paragraph of any judicial decision involving patent infringement. But the Supreme Court’s March 21, 2017 opinion in SGA Hygiene Products v. First Quality Baby Products, No. 15-927, kept my attention. The issue was whether the equitable defense of “laches” can bar a patent infringement suit filed within the Patent Act’s 6-year statute of limitations. Relying on the Court’s opinion in Petrella v. Metro-Goldwyn-Mayer, 134 S. Ct. 1962 (2014)—which held that laches cannot preclude a suit filed within the Copyright Act’s 3-year statute of limitations—the Court now has held in SGA Hygiene that the same principle applies to patent infringement suits.
Justice Alito’s opinion, joined by six other Justices, explains that “[l]aches is a gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill.” Slip op. at 5. The opinion indicates that Petrella “spoke in broad terms”—“‘[I]n the face of a statute of limitations enacted by Congress, laches cannot be invoked to bar legal relief.”’ Id. at 4 (quoting Petrella). According to the SGA opinion, “[w]hen 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. . . . applying laches within a limitations period specified by Congress would give judges a ‘legislation-overriding role’ that is beyond the Judiciary’s power.” Ibid. Thus, more fundamentally, the relationship between judicially applied laches and congressionally enacted limitations periods raises separation- of-powers concerns. See ibid. (“Petrella’s holding rested on both separation-of-powers principles and the traditional role of laches in equity.”).
Justice Breyer filed a dissenting opinion arguing that laches, which “for more than a century courts with virtual unanimity have applied laches in patent damages cases,” does fill an equitable gap in the patent arena due to the atypical language of the Patent Act’s limitations provision, 35 U.S.C. § 286. Slip op. at 1, 2 (Breyer, J., dissenting). Nonetheless, the Court in SGA Hygiene, coupled with its opinion in Petrella, has essentially eliminated the laches defense where a federal statute of limitations has been enacted: If a federal district court suit is filed within a federal limitations period, laches cannot be invoked; if a suit has been filed outside the limitations period, the federal statute bars the action. It will be interesting to see the extent to which state courts adopt the same reasoning in cases where a state statute of limitations applies.