If a plaintiff files an infringement action against a defendant, federal law imposes a statute of limitations that there can be no recovery for infringement more than six years before filing of the complaint or counterclaim asserting infringement. 35 USC § 286. Separately, the concept of "laches"is a defense that can be used by a defendant to prevent enforcement of a patent where there was undue delay in bringing the action. Prior to last week, it was possible for a defendant to assert laches as a defense even if the infringement occurred less than six years before suit, if there was support for this equitable defense. The US Supreme Court ruled on March 21 that this is no longer the law. In SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, No. 15-927 (March 21, 20-17), the court held that delay by a patent holder does not provide a laches defense for infringing actions that occur within six year prior to the lawsuit. This reversed a prior decision by the Federal Circuit, the appellate court which decides patent infringement appeals from the U.S. district courts. The Supreme Court noted the difference between a laches defense, which is decided on a case by case basis, and a statute of limitations, which gives a hard and fast time frame for bringing a lawsuit.
Here the Court said that to deny an infringement action via a laches defense, where the action is brought within the statute of limitations, equates to the Courts overriding Congress which legislated a specific time frame. Thus, the equitable laches defense cannot be used where the alleged infringement activity occurred less than six years prior to the lawsuit.
While the laches defense now disappears for a defense of infringement six years prior to suit, it is still possible a defendant can assert equitable estoppel, saying that the plaintiff engaged in an improper act that misled the defendant in some manner (such as indicating the defendant's activity did not infringe).
Thus, if a plaintiff wants to wait to determine if the accused infringer's activity results in commercial damage, for example, they will not be penalized if they wait no longer than six years. However, they must still be cautious to not mislead a potential defendant where they may induce the defendant to invest in production of what is an infringing product, and then bringing legal action.
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