SCA Hygiene AB v. First Quality Baby Products. LLC (Docket No. 15-927, S. Ct.)
In SCA Hygiene AB v. First Quality Baby Products LLC,the Supreme Court will consider “[w]hether 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.”
In its 2014 decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 695 F.3d 946, 952-53 (2012), the Supreme Court held that laches is not a defense to copyright infringement. The Court explained that laches, an equitable defense, does not limit the legal remedies available during the three-year statute of limitations period in Section 507(b) of the Copyright Act.
Although Section 286 of the Patent Act also limits the period in which a plaintiff can recover damages for patent infringement to six years prior to the filing of the complaint, the Federal Circuit has repeatedly held that the laches defense is available in patent cases.
- In 1992, the en banc Federal Circuit heldthat the Patent Act codified the laches defense. A.C. Aukerman Co. v. R.L. Chaides Construction Co., 960 F.2d 1020, 1029 (Fed. Cir. 1992). The appellate court focused on Section 282(b)(1), which provides that “[n]oninfringement, absence of liability for infringement[,] or unenforceability” shall be a defense. The Federal Circuit reasoned that: (a) the laches defense does not conflict with Section 286; and (b) the merger of law and equity courts allows laches to bar legal relief. 960 F.2d at 1030-31.
- In 2015, the Federal Circuit next held in a 6-5 en banc decision that laches remains a viable defense in patent cases despite the Supreme Court’s 2014 Petrella decision. SCA Hygiene v. First Quality, 807 F.3d 1311 (Fed. Cir. 2015).[1] The court highlighted distinctions between copyright and patent law, including that: (i) Section 286 of the Patent Act is not a statute of limitations, unlike Section 507(b) of the Copyright Act; and (ii) because the Patent Act imposes liability for innocent infringement, “innovators have no safeguard against tardy claims demanding a portion of their commercial success” with a laches defense. 807 F.3d at 1330 (citations omitted).
Before the Supreme Court, First Quality again argued that, “[a]bsent laches, nothing prevents a patentee from sitting silently on its rights while an innocent infringer invests substantial time and resources to independently develop and commercialize a product, only to have the patentee emerge six years later to seek the most profitable six years of revenues.” Opp. Br. 18. More than thirty large companies, including Dell, Google, and Intel, submitted briefs supporting First Quality’s position.
On its part, SCA Hygiene countered that it did not sit silently on its rights. SCA emphasized that it had already put First Quality on notice and is subject to a laches defense only because it submitted its patent to reexamination before filing suit. SCA further argued that policy considerations cannot trump the plain text of Section 286.
If SCA prevails, even patentees who intentionally delay bringing suits to lock in innocent infringers will not be barred from seeking damages by the laches defense.
Impression Prods., Inc. v. Lexmark Int’l, Inc. (Docket No. 15-1189, S. Ct.)
In Impression Products, Inc. v. Lexmark International, Inc., the Supreme Court will consider the scope of the common law doctrine of patent exhaustion.
The case involves Lexmark’s sales of printer ink cartridges with two different options for the consumer. Option A was a typical sale that exhausted Lexmark’s patent rights. Option B allowed for lower prices, but with post-sale restrictions barring multiple uses or resale. After Impression sold refilled cartridges that had been purchased from Option B consumers who had violated the post-sale restrictions, Lexmark sued Impression for patent infringement.
Lexmark prevailed before the Federal Circuit. The appellate court agreed with Lexmark that, when a patentee sells a patented article under otherwise proper restrictions on resale communicated to the buyer at the time of sale, the patentee does not confer authority on the buyer to engage in the prohibited resale or reuse.
The first question before the Supreme Court is whether a “conditional sale” that transfers title to a patented item, but also restricts the article’s use or resale post-sale, avoids the patent exhaustion doctrine. The second question is whether a sale of a patented article (i) occurring outside the United States but (ii) with the U.S. patentee’s authorization exhausts the U.S. patent rights in that article.
The parties agreed to various stipulations to simplify the issues for resolution. For example, they agreed that the restrictions were clearly communicated, that there were no patent misuse or antitrust issues, and that the lower price option reflected limitations on Lexmark’s conveyance of patent rights.
Lexmark has argued that Section 271 of the Patent Act and Supreme Court and Federal Circuit precedent allow post-sale restrictions. Impression, by contrast, has argued that post-sale restrictions violate the exhaustion doctrine. In support of Impression’s position, the Solicitor General has argued that the Federal Circuit’s decision “would substantially erode the exhaustion doctrine” if left unchanged. (Brief for the United States as Amicus Curiae at 5.)
If the Supreme Court affirms the Federal Circuit’s decision, patentees are likely to apply post-sale restrictions with greater frequency.
Life Techs. Corp. v. Promega Corp. (Docket No. 14-1538, S. Ct.)
Section 271(f)(1) of the Patent Act provides for infringement liability against an exporter of all or “a substantial portion of the components of a patented invention.” At issue in Life Technologies Corp. v. Promega Corp. is what that phrase means.
The asserted patents claimed methods or kits for DNA testing andwere exclusively licensed to Promega. The defendant, Life Technologies, exported the enzyme Taq polymerase for use in genetic testing occurring outside the United States. A jury subsequently found Life Technologies’ liable for infringement, based on its worldwide sales, due to its exportation of Taq polymerase from the United States.
The trial court granted judgment as a matter of law of non-infringement, and the Federal Circuit reversed. The appellate court held that “a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States.” Promega Corp. v. Life Technologies Corp.,773 F.3d 1338, 1353 (Fed. Cir. 2014).
The specific question before the Supreme Court is “[w]hether the Federal Circuit erred in holding that supplying a single, commodity component of a multi-component invention from the United States is an infringing act” that “expos[es] the manufacturer to liability for all worldwide sales.”
The Supreme Court’s decision should clarify the scope of Section 271(f)(1). In particular, it should address whether a defendant can be exposed to liability for damages on its worldwide sales, based on its supply of a single component from the United States. If the Supreme Court affirms, U.S. entities will have to exercise greater caution when exporting components of a multi-component invention to avoid the risk of paying damages on worldwide sales.
In re Aqua Prods., Inc. (Case No. 2015-1177, Fed. Cir.)
Section 316(d) of the Patent Act governs the patentee’s amendment of patent claims during inter partes review (“IPR”) proceedings. Section 316(e) specifies that “the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.” Current Patent...
