In many areas of the law, excessive delay in pursuing a right can be a defense in a later lawsuit. The defense is known as ‘laches’ and is based on fairness – by delaying the litigation, the person asserting the right has acquiesced in the other party’s conduct. Historically, the fairness-based laches defense applies only to fairness-based remedies, like injunctions, but does not apply to claims for money damages.
Consider the following example: Let’s say that the owner of a patent for adult incontinence products learns of an infringer and sends the infringer a demand letter. The infringer responds that the patent is invalid based on information supplied by the infringer. The infringer does not hear from the patent owner for several years. The infringer believes the patent owner has abandoned its claim and the infringer spends substantial monies expanding its business based on that belief. The infringer is mistaken. In the meantime, the patent owner asks the USPTO to reconsider the patent based on information from the infringer. The PTO concludes that the patent is still valid. Almost seven years after the demand letter, the patent owner sues the infringer for the infringement. Is the almost seven-year delay in bringing suit a defense to patent infringement?
You guessed it, these are the facts of an actual case –SCA Hygiene Products v First Quality Baby Products. In SCA Hygiene, the en banc Federal Circuit Court of Appeals, said ‘yes’ – delay in bringing suit is a defense, even to a suit for money damages.
The SCA Hygiene case is now pending in the U.S. Supreme Court, with oral argument set for November 1, 2016. We expect the Supremes to reverse the Federal Circuit because, well, that’s what the Supreme Court does to the Federal Circuit and because we believe that the Federal Circuit decision was incorrect. The Supreme Court should decide in the first quarter of 2017.
— Robert Yarbrough, Esq.