SCA Hygiene Products v. First Quality Baby Products

PETITIONER: SCA Hygiene Products Aktiebolag, et al.
RESPONDENT: First Quality Baby Products, LLC, et al.
LOCATION: U.S. Court of Appeals for the Federal Circuit

DOCKET NO.: 15-927
DECIDED BY:
LOWER COURT: United States Court of Appeals for the Federal Circuit

CITATION: US ()
GRANTED: May 02, 2016
ARGUED: Nov 01, 2016

ADVOCATES:
Seth P. Waxman - for respondents
Martin J. Black - for petitioners

Facts of the case

SCA Hygiene Products Aktiebolag (SCA) produces adult incontinence products, as does First Quality Baby Products, LLC (First Quality). In 2003, SCA notified First Quality that it believed First Quality was infringing on one of its patents, and First Quality responded by arguing that, because the SCA patent in question was essentially the same as a prior-filed patent, it was invalid and therefore First Quality could not be infringing. The two companies ceased communication on the issue, but in 2004, SCA requested that the U.S. Patent and Trademark Office (PTO) reexamine its patent in light of the prior-filed one, and in 2007, the PTO determined that the patent in question was valid.

In 2010, SCA sued First Quality for patent infringement. First Quality moved for summary judgment because SCA had unreasonably delayed litigation, and the district court granted the motion. The U.S. Court of Appeals for the Federal Circuit affirmed the district court’s opinion regarding the unreasonable delay because SCA should have been able to proceed with litigation after the reexamination and had not provided evidence to justify the delay. SCA requested a rehearing before the entire appellate court to reconsider the issue in light of the Supreme Court’s decision in <i>Petrella v. Metro-Goldwyn-Mayer</i>, which held that the unreasonable delay defense cannot bar suits for copyright infringement that occurred during the three-year limitations period, and argued that the same analysis should apply to patent suits like this one. Upon rehearing, the appellate court rejected SCA’s argument and held that the Petrella decision did not affect its precedent, which stated that an unreasonable delay defense may be used in patent infringement claims brought within the six-year statute of limitations, and courts must examine the circumstances underlying those claims and the defense.

Question

Can the defense of an unreasonable delay in litigation bar claims for patent infringement that are brought within the six-year statutory period of limitations?

Media for SCA Hygiene Products v. First Quality Baby Products

Audio Transcription for Oral Argument - November 01, 2016 in SCA Hygiene Products v. First Quality Baby Products

John G. Roberts, Jr.:

We will hear argument next in Case 15-927, SCA Hygiene Products Aktiebolag v. First Quality Baby Products. Mr. Black.

Martin J. Black:

Mr. Chief Justice, and may it please the Court: In Petrella, the Court reaffirmed the principle that when Congress enacts a limitations period, that courts may not apply the doctrine of laches to shorten the statutory period. In patent law, Congress prescribed a six-year lookback period from the date of suit and a 20-year patent term.

Injecting judicial discretion into the statutory scheme would frustrate the will of Congress, and create uncertainty about something as fundamental as the timeliness of suit. There is nothing in the Patent Act which compels the creation of a unique patent law rule, and if the Court were to create an exception here, that would invite litigation in the lower courts over a wide range of Federal statutes.

John G. Roberts, Jr.:

You don't dispute that equitable estoppel applies across the board?

Martin J. Black:

That's correct, Your Honor. Equitable estoppel applied has been part of the law, on the law side of the Court, since the mid-18th century, as the Court held in -- in Dickerson in 1879.

It was originally actually called "estoppel in pays," and it became known as equitable estoppel, but it's been a legal principle for over -- well over a hundred years, and it applies to all actions at law and in equity.

Stephen G. Breyer:

For this -- for this argument I'm not sure, because of course they dispute that, and they have a long list of cases, Alsterbach -- or what, Aukerman and so forth, going back into history. And they have the man who wrote the statute, and they have words in the statute.

And they say if we look through all of those cases, what we will find is that there is a long history of applying laches in one legal context, or that it's -- that it's patents.

And anyway, almost all patent cases were equitable cases, and so it would be a big change, and you know all those arguments. Now you've come back and you have two arguments -- two cases the other way, and you say two are mistaken.

So it seems to me what I have to do on that one is read the cases.

And if I come to the conclusion that there is this long history here, then the laches should stay.

And if I come to the conclusion that no, if you really look at these cases, there isn't that history, then it should go.

But neither is it a case, one way or the other, of us making up anything. It's a question of what was the heart of the law for quite a long time before.

Martin J. Black:

Your Honor, let me address --

Stephen G. Breyer:

Is that right? I mean, that's how I'm approaching it, and I'm asking you to comment on that because I don't want to waste a lot of time reading cases I don't have to read.

Martin J. Black:

No, Your Honor.

You don't have to read the cases.

What you should read is the statute. The statute is what controls.

Stephen G. Breyer:

In the statute is the word "enforcement." And -- and when it is invalid, what's the word --

Martin J. Black:

"Unenforceability."

Stephen G. Breyer:

-- "unenforceable." And that could apply just to the -- the -- you know, monkeying around with the patent, doing bad things to the patent, or it could include laches.

And the guy who writes it says, yeah, it includes laches.

And you could read it the other way not to.

So I didn't get too far with the statute, either.

Martin J. Black:

Your Honor, let's discuss unenforceability.

One of the interesting facts about the case is that the Federal Circuit did not actually take up the position that the word "unenforceability" meant laches.

And I think part of the reason for that is for those of us who practice in this area every day, we just don't think of laches as an unenforceability doctrine. Unenforceability brings to mind rendering the patent unenforceable, may not be enforced.

And that certainly applies when there has been egregious conduct, like patent misuse or a fraud on the patent office.

But it does not apply to laches.

The patent can still be enforced in this case and any others, seeking damages from the date of suit through the date of trial. We did not have a dictionary definition here of "unenforceability," from 1952 or any other time.

Sarah from Law Aspect

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