Yesterday, the Supreme Court held in SCA Hygiene ¹ that a laches defense cannot be raised to prevent damages within the six-year statutory limitations period of 35 U.S.C. § 286.

A six year delay in the filing of a patent infringement action generally precludes the recovery of damages. As codified under § 286, “[e]xcept 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 for infringement.” The question raised in SCA Hygiene is whether the laches defense can be raised within the statutory limitations period. In a straightforward ruling that will be readily applied by lower courts, the Supreme Court held that a laches defense cannot be raised within the statutory limitations period. Thus, patent owners may take advantage of the entire six-year period to assert patent infringement.

Leading up to this Supreme Court decision, the Federal Circuit (en banc) had erroneously held that the laches defense can preclude a patent infringement claim even if brought within the statutory limitations period. However, a 2014 Supreme Court copyright case ² held the opposite. Namely, the Supreme Court held that the laches defense cannot be used to shorten the three-year statutory limitations period of the Copyright Act. In a 7-1 decision, authored by Justice Alito, the Supreme Court extended this decision to patent law.

Now, patent owners may fully utilize the statutory limitations period without concern that their conduct may give rise to a laches defense. Patent owners, including non-practicing entities, now have a well-defined period of time to monitor alleged infringers. During the six-year period, patent owners may watch and wait as alleged infringers develop products and as those product markets mature. As a result, the value of certain patents will increase. Going forward, patent owners may use this decision to time the filing of patent infringement actions in order increase success and potential damage awards.

Although this decision will increase the risks posed by non-practicing entities, disputes between direct competitors are unlikely to be affected. Large companies will still be more likely to cross-license, or alternatively, file suit in order to block competing products.

Finally, this case illustrates that the Supreme Court does not believe that patent law is distinct from other areas of law, especially other areas of intellectual property. Copyright decisions will continue to influence patent law, and savvy practitioners would be wise to follow the trend.

This alert was written by Andrew W. Wahba and Ajay A. Jagtiani, lawyers in the Intellectual Property & Technology practice group at Miles & Stockbridge.

¹ SCA Hygiene Products AB et al. v. First Quality Baby Products LLC et al. (Case No. 15-927).
² Petrella v. Metro-Goldwyn-Mayer Inc., 134 S. Ct. 1962 (2014).

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