The U.S. Supreme Court ‘s recent ruling involving the laches defense may impact U.S. patent lawsuits. This decision could make it easier for patentees to sue alleged infringers after having allowed the infringement to occur for up to six years.
On March 21, 2017, the U.S. Supreme Court held in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC. that laches cannot be a defense against damages where the patent infringement occurred within the six-year time period set by Congress. The patent statute specifies “except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim …”. 35 U.S.C. §286. Like in copyright cases, a statute of limitations will overrule an equitable doctrine. The Court found that the Patent Statute has a limitation even though it runs backwards (from the date of filing not from when the claim arose like most statutes of limitations).
Although the Supreme Court eliminated laches as a defense in most patent cases, it confirmed that “equitable estoppel” is still an available defense. “Laches” is a general legal defense previously available in patent cases that enabled a defendant to avoid liability where the plaintiff waited an unreasonable amount of time before filing a lawsuit, even though the plaintiff knew about the defendant’s activities much earlier.
“Equitable estoppel” is still available in patent cases and can enable the defendant to avoid liability by showing the patentee knew about the infringement but made statements and/or took actions indicating that the patentee did not intend to sue. In other words, equitable estoppel can be used to prevent a patentee from recovering for infringement if the patentee has misled the defendant into reasonably believing that a lawsuit would not be filed.
Whether or not equitable estoppel can fill the gap left by the elimination of laches will depend on the particular facts of each case.