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SCA Hygiene Products Aktiebolag v. First Quality Baby Products

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Supreme Court of the United States
SCA Hygiene Products Aktiebolag v. First Baby Quality Products
Reference: 15-927
Issue: Patent law
Term: 2016
Important Dates
Argued: November 1, 2016
Decided: March 21, 2017
Outcome
Federal Circuit Court of Appeals vacated and remanded
Vote
7-1 to vacate and remand
Majority
Chief Justice John G. Roberts • Anthony Kennedy • Clarence Thomas • Ruth Bader Ginsburg • Samuel Alito • Sonia Sotomayor • Elena Kagan
Concurring
None
Dissenting
Stephen Breyer


SCA Hygiene Products Aktiebolag v. First Baby Quality Products is a case argued during the October 2016 term of the U.S. Supreme Court. Argument in the case was held on November 1, 2016. The case came on a writ of certiorari to the United States Court of Appeals for the Federal Circuit. On March 21, 2017, in a 7-1 decision by Justice Samuel Alito, the court vacated and remanded the judgment of the United States Court of Appeals for the Federal Circuit. The court held that any patent infringement case filed within the statute of limitations cannot be barred by a defendant's use of laches, which is a defense used to argue that a plaintiff has waited an unreasonable amount of time to file a claim and that this delay is prejudicial toward the defendant.

HIGHLIGHTS
  • The case: In a 2014 case, Petrella v. MGM, the U.S. Supreme Court held that a legal defense known as laches cannot be used as a way of shortening the three-year statute of limitations period in which to bring a copyright infringement claim. The court noted at that time that the Federal Circuit had a contrary rule for patent infringement claims, but did not use Petrella as a means of evaluating the Federal Circuit's rule for patent infringement claims.
  • The issue: Is the Federal Circuit's rule for permitting laches as a defense to bar patent infringement claims brought within a statutory limitations period unconstitutional in light of the Supreme Court's ruling in Petrella?
  • The outcome: On March 21, 2017, in a 7-1 decision by Justice Samuel Alito, the court vacated and remanded the judgment of the United States Court of Appeals for the Federal Circuit.


    • In brief: In certain circumstances, if a plaintiff waits too long to file a claim, a defendant can use what is known as a laches defense. Generally, a laches defense is used to show that a plaintiff has waited an unreasonable amount of time to file a claim and that this delay is prejudicial toward the defendant. In 2014, the U.S. Supreme Court held in Petrella v. MGM that laches cannot be used as a defense against copyright infringement claims if those claims were filed within the statutory period permitting such challenges. The Federal Circuit, while conforming to the Supreme Court’s ruling in Petrella for copyright cases, allows laches as a defense against timely filed patent infringement claims based on the circuit court's 1992 ruling in Aukerman Co. v. R.L. Chaides Construction Co. The statutory period of patent infringement cases is six years while the statutory period for copyright infringement cases is three years. Oral argument before the U.S. Supreme Court was held on November 1, 2016.

    You can review the Federal Circuit's opinion here.[1]

    Click on the tabs below to learn more about this Supreme Court case.

    Case


    Background

    This case concerns if a defendant in a patent infringement case is able to use a legal defense known as laches against a plaintiff in order to bar the claim, even if the plaintiff brings the claim within the legal statutory period for doing so.

    In October of 2003, SCA Hygiene Products Aktiebolag (SCA) sent correspondence to a competitor, First Quality Baby Products, LLC (First Quality), stipulating that First Quality infringed on a patent for adult incontinence products held by SCA. In November of 2003, First Quality responded, arguing that SCA's claim on the patent was invalid. Communications ceased thereafter between the two companies. In July 2004, unbeknownst to First Quality, SCA requested a reexamination of the patent by the U.S. Patent and Trademark Office (PTO). According to the appellate opinion, "SCA did not notify First Quality of the reexamination because, in SCA’s view, U.S. Patent and Trademark Office (“PTO”) reexaminations are public and First Quality could follow the proceedings itself. Yet, from First Quality’s point of view, SCA dropped its infringement allegations against First Quality after First Quality argued the patent was invalid in the November 21st letter."[1] The PTO reexamined the patent and, in March 2007, confirmed the patentability of all claims made by SCA. From 2006 through 2009, First Quality made numerous investments into their adult incontinence product line. SCA was aware of these developments but did not inform First Quality of the PTO's review. In August 2010, SCA filed a complaint against First Quality for patent infringement, nearly seven years after the October 2003 correspondence in which SCA first informed First Quality of a patent violation. First Quality filed motions for summary judgment on its laches defense, among other motions made. A federal district court granted First Quality's motion for summary judgment regarding laches. SCA appealed to the United States Court of Appeals for the Federal Circuit. A three-judge panel of the Federal Circuit affirmed the district court's summary judgment on laches. In certain circumstances, if a plaintiff waits too long to file a claim, a defendant can use laches to show that a plaintiff has waited an unreasonable amount of time to file a claim (the delay element) and that this delay is prejudicial toward the defendant (the prejudicial element).

    In the panel's opinion for the circuit court,[1]

    “

    As to the delay element, the panel opinion held that while 'SCA was not required to provide notice of the reexamination to First Quality ... SCA remained silent for more than three years after the patent came out of reexamination ... Given the circumstances, SCA should have been prepared to reassertits rights against First Quality shortly after the ... patent emerged from reexamination.' ... Therefore, the panel concluded that 'SCA has failed to raise a genuine issue of material fact regarding the reasonability of its delay.' ...
    With respect to the prejudice element of laches, the panel affirmed the district court’s analysis. Specifically, the panel agreed that First Quality made a number of significant capital expenditures in its adult incontinence business, and that First Quality likely would have 'restructured its activities to minimize infringement liability if SCA had brought suit earlier.' ... Because SCA did not present any contrary evidence, the panel held that 'SCA has not identified any evidence that raises a genuine issue of material fact regarding First Quality’s presumed economic prejudice.' ... And although the district court did not explicitly weigh the equities in determining that laches applied, the panel concluded the error was harmless. ... Thus, the panel affirmed the district court’s grant of summary judgment on laches. [2]

    		”

    SCA petitioned for en banc review of the panel's opinion before the Federal Circuit.[1] In its petition, SCA asked the court to square the U.S. Supreme Court's 2014 ruling in Petrella v. MGM, which prohibits laches as a defense against timely filed copyright infringement claims, with the Federal Circuit's 1992 opinion in Aukerman Co. v. R.L. Chaides Construction Co., which permits laches as a defense against timely filed patent infringement claims.

    SCA argued that Petrella effectively prohibited laches as a defense against timely filed patent infringement claims, but the Federal Circuit found that argument unpersuasive. In the en banc panel's view, the Supreme Court's opinion in Petrella and the Federal Circuit's opinion in Aukerman could co-exist. The panel held that the primary reason that the Supreme Court bars laches in copyright infringement cases is that the statute in question contained a limitations period and that "in face of a statute of limitations enacted by Congress, laches cannot be invoked to bar legal relief." In patent infringement cases, however, the panel held that while there is a statute of limitations in applicable patent law, namely 35 U.S.C. 286, Congress also codified laches as a defense in patent cases under 35 U.S.C. 282(b)(1). In the panel's view, this was sufficient rationale for the coexistence of the damages limitation period and the laches defense. In the panel's words, "If Congress decides that the § 286 damages limitation and the § 282 laches defense are incompatible, it can change the law. As a court, however, we must apply the law as enacted, which means that the § 286 damages limitation and the § 282 laches defense must continue to coexist."[1]

    Based on this reasoning, the en banc court affirmed the panel and district court decision permitting laches as a bar against SCA's infringement claims.

    Petitioner's challenge

    SCA Hygiene Products Aktiebolag is challenging the opinion of the United States Court of Appeals for the Federal Circuit that laches can be used as a legal defense against timely filed patent infringement claims. SCA argues that the rationale guiding the U.S. Supreme Court's opinion in Petrella for copyright infringement cases is also binding on patent infringement cases as well.[3]

    Certiorari granted

    On January 19, 2016, petitioner SCA Hygiene Products Atkiebolag initiated proceedings in the Supreme Court of the United States in filing a petition for a writ of certiorari to the United States Court of Appeals for the Federal Circuit. The U.S. Supreme Court granted SCA's certiorari request on May 2, 2016. Oral argument before the Supreme Court was held on November 1, 2016.

    Arguments


    Question presented

    Question presented:

    "Whether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act's six-year statutory limitations period, 35 U.S.C. §286."[3]


    Audio

    • Audio of oral argument:[4]



    Transcript

    • Transcript of oral argument:[5]

    Outcome

    Decision

    In a 7-1 decision by Justice Samuel Alito, the Supreme Court vacated and remanded the judgment of the Federal Circuit Court of Appeals. Justice Stephen Breyer wrote a dissenting opinion. In the opinion, the court held that any patent infringement case filed within the statute of limitations cannot be barred by a defendant's use of laches, which is a defense used to argue that a plaintiff has waited an unreasonable amount of time to file a claim and that this delay is prejudicial toward the defendant.[6]

    Opinion

    The question the court addressed in this dispute was a relatively simple one: does the logic of the U.S. Supreme Court's opinion in Petrella v. MGM-which prohibits the use of laches to bar timely filed copyright infringement lawsuits-also apply in patent infringement lawsuits? For a seven-justice majority, the answer to that question was yes. In an opinion by Justice Samuel Alito, the court provided the key rationale why Petrella's logic applied in patent cases. As Justice Alito wrote,[6]

    “

    Although the relevant statutory provisions in Petrella and this case are worded differently, Petrella’s reasoning easily fits the provision at issue here. As noted, the statute in Petrella precludes a civil action for copyright infringement 'unless it is commenced within three years after the claim accrued.' ... We saw in this language a congressional judgment that a claim filed within three years of accrual cannot be dismissed on timeliness grounds. ... The same reasoning applies in this case. Section 286 of the Patent Act provides: 'Except as otherwise provided bylaw, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.' By the logic of Petrella, we infer that this provision represents a judgment by Congress that a patentee may recover damages for any infringement committed within six years of the filing of the claim. [2]

    		”

    Concurring opinions

    There were no concurring opinions filed.

    Dissenting opinions

    Justice Stephen Breyer filed a dissenting opinion. Justice Breyer rejected the majority's view that laches could not be used in patent infringement cases. Justice Breyer argued that courts, for more than a century, have permitted the use of laches in patent infringement cases. He also argued that relevant differences between patent and copyright law merited continuing the practice of permitting laches in patent law. Justice Breyer noted that he would go so far as to overrule Petrella.[6]


    The opinion

    Filings

    The court granted State Farm's certiorari request on May 2, 2016.

    Merits filings

    Parties' filings

    • SCA Hygiene Produts Aktiebolag, the petitioner, filed a merits brief on July 15, 2016.
    • First Quality Baby Products, LLC, the respondent, filed a merits brief on September 12, 2016.
    • SCA Hygiene Produts Aktiebolag filed a reply brief on the merits on October 12, 2016.

    Amicus curiae filings

    The following groups filed amicus curiae briefs in support of the petitioner, SCA Hygiene Products Aktiebolag.

    • Brief of the Alliance of Inventor Groups
    • Brief of ART+Com Innovationpool, GmbH
    • Brief of various law professors


    The following groups filed amicus curiae briefs in support of the respondent, First Quality Baby Products, LLC.

    • Brief of Briggs & Stratton Corporation et al.
    • Brief of Cook Medical LLC
    • Brief of the Electronic Frontier Foundation and Public Knowledge
    • Brief of Roche Molecular Systems, Inc.
    • Brief of Universal Remote Control, Inc.
    • Brief of the Washington Legal Foundation


    The following groups filed amicus curiae briefs in support of neither party.

    • Brief of the American Intellectual Property Association
    • Brief of the Intellectual Property Owners Association
    • Brief of the Intellectual Property Owners Association of Chicago

    Certiorari filings

    Parties' filings

    • SCA Hygiene Products Aktiebolag, the petitioner, filed a petition for certiorari on January 19, 2016.
    • First Quality Baby Products, LLC, the respondent, filed a brief in opposition to certiorari on March 22, 2016.

    Amicus curiae

    The following groups filed amicus curiae briefs in support of granting certiorari

    • Brief of ART+Com Innovationpool, GmbH
    • Brief of the Toro Company

    See also

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 U.S. Court of Appeals for the Federal Circuit, SCA Hygiene Products Aktiebolag et al. v. First Quality Baby Products, LLC, et al. decided September 18, 2015
    2. ↑ 2.0 2.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    3. ↑ 3.0 3.1 Supreme Court of the United States, SCA Hygiene Products v. First Quality Baby Products, May 2, 2016
    4. ↑ Supreme Court of the United States, SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, argued November 1, 2016
    5. ↑ Supreme Court of the United States, SCA Hygiene Products Aktiebolag v. First Quality Baby Products, argued November 1, 2016
    6. ↑ 6.0 6.1 6.2 Supreme Court of the United States, SCA Hygiene Products Aktiebolag et al. v. First Quality Baby Products, LLC, et al. decided March 21, 2017
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