807 F.3d 1311 (Fed. Cir. 2015), 2013-1564, SCA Hygiene Products Aktiebolag v. First Quality Baby Prods., LLC

• Docket Nº: 2013-1564
• Citation: 807 F.3d 1311, 116 U.S.P.Q.2d 1541
• Opinion Judge: Prost, Chief Judge.
• Party Name: SCA HYGIENE PRODUCTS AKTIEBOLAG, SCA PERSONAL CARE, INC., Plaintiffs-Appellants v. FIRST QUALITY BABY PRODUCTS, LLC, FIRST QUALITY HYGIENIC, INC., FIRST QUALITY PRODUCTS, INC. AND FIRST QUALITY RETAIL SERVICES, LLC, Defendants-Appellees
• Attorney: MARTIN J. BLACK, Dechert LLP, Philadelphia, PA, argued for plaintiffs-appellants. Also represented by TERILYNN A. EVANS, KEVIN MARK FLANNERY, SHARON K. GAGLIARDI. KENNETH GEORGE, Amster Rothstein & Ebenstein LLP, New York, NY, argued for defendants-appellees. Also represented by MARK BERKOWITZ, S...
• Judge Panel: Before PROST, Chief Judge, NEWMAN, LOURIE, DYK, MOORE, O'MALLEY, REYNA, WALLACH, TARANTO, CHEN, and HUGHES, Circuit Judges.[*] OPINION filed by Chief Judge PROST in which Circuit Judges NEWMAN, LOURIE, DYK, O'MALLEY, and REYNA join. Opinion concurring-in-part, dissenting-in-part filed by Circuit ...
• Case Date: September 18, 2015
• Court: United States Courts of Appeals, Court of Appeals for the Federal Circuit

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807 F.3d 1311 (Fed. Cir. 2015)

116 U.S.P.Q.2d 1541

SCA HYGIENE PRODUCTS AKTIEBOLAG, SCA PERSONAL CARE, INC., Plaintiffs-Appellants

v.

FIRST QUALITY BABY PRODUCTS, LLC, FIRST QUALITY HYGIENIC, INC., FIRST QUALITY PRODUCTS, INC. AND FIRST QUALITY RETAIL SERVICES, LLC, Defendants-Appellees

2013-1564

United States Court of Appeals, Federal Circuit

September 18, 2015

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Western District of Kentucky in No. 10-CV-0122, Chief Judge Joseph H. McKinley, Jr.

MARTIN J. BLACK, Dechert LLP, Philadelphia, PA, argued for plaintiffs-appellants. Also represented by TERILYNN A. EVANS, KEVIN MARK FLANNERY, SHARON K. GAGLIARDI.

KENNETH GEORGE, Amster Rothstein & Ebenstein LLP, New York, NY, argued for defendants-appellees. Also represented by MARK BERKOWITZ, SANDRA ADELE HUDAK, CHARLES R. MACEDO.

J. DEREK VANDENBURGH, Carlson, Caspers, Vandenburgh, Lindquist & Schuman, P.A., Minneapolis, MN, for amicus curiae The Toro Company. Also represented by JOSEPH W. WINKELS.

RICHARD DELUCIA, Kenyon & Kenyon LLP, New York, NY, for amicus curiae Medinol Ltd. Also represented by MARK ALEXANDER CHAPMAN, ELIZABETH GARDNER, ALOYSIUS ANTONY PFEFFER, JOSEPH MATTHEW PURCELL, JR., ERIC SCHREIBER; RICHARD H. PILDES, New York, NY.

GREGORY A. CASTANIAS, Jones Day, Washington, DC, for amicus curiae Intellectual Property Owners Association. Also represented by CAROLINE EDSALL, ISRAEL SASHA MAYERGOYZ; PHILIP STATON JOHNSON, Johnson & Johnson, New Brunswick, NJ; KEVIN H. RHODES, 3M Innovative Properties Company, St. Paul, MN; HERBERT CLARE WAMSLEY, JR., Intellectual Property Owners Association, Washington, DC.

ANDREW JOHN DHUEY, Berkeley, CA, for amicus curiae Morris Reese.

MICHAEL J. FARNAN, Farnan LLP, Wilmington, DE, for amicus curiae ART+COM Innovationpool GmbH.

ARIEL LAVINBUK, Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP, Washington, DC, for amici curiae Stephanos Bibas, Samuel L. Bray, John F. Duffy. Also represented by MICHAEL E. KENNEALLY.

NANCY MERTZEL, Schoeman Updike Kaufman & Stern LLP, New York, NY, for amicus curiae American Intellectual Property Law Association. Also represented by DENISE WHELTON DEFRANCO, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Boston, MA.

STEVEN C. SEREBOFF, SoCal IP Law Group LLP, Westlake Village, CA, for amicus curiae Conejo Valley Bar Association. Also represented by MARK ANDREW GOLDSTEIN, MEENAKSHI KALA SARVAIYA.

PHILIP J. WARRICK, Klarquist Sparkman, LLP, Portland, OR, for amici curiae Garmin International, Inc., Limelight Networks, Inc., LinkedIn Corporation, Mentor Graphics Corporation, Newegg Inc., SAP America, Inc., SAS Institute Inc., Symmetry LLC, Xilinx, Inc. Also represented by JOHN D. VANDENBERG.

MITCHELL M. WONG, Ashmasons LLP, New York, NY, for amicus curiae Ashmasons LLP.

JOHN THORNE, Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC, Washington, DC, for amici curiae Dell Inc., CTIA The Wireless Association, Hewlett-Packard Company, Intel Corporation, Xerox Corporation. Also represented by AARON M. PANNER, GREGORY G. RAPAWY.

SUZANNE MICHEL, Google Inc., Washington, DC, for amicus curiae Google Inc.

DEREK SHAFFER, Quinn Emanuel Urquhart & Sullivan, LLP, Washington, DC, for amicus curiae Marvell Semiconductor, Inc.

EUGENE M. GELERNTER, Patterson Belknap Webb & Tyler LLP, New York, NY, for amici curiae Johnson & Johnson, Cordis Corporation. Also represented by GREGORY DISKANT, SCOTT B. HOWARD.

VERA RANIERI, Electronic Frontier Foundation, San Francisco, CA, for amici curiae Electronic Frontier Foundation, Public Knowledge.

KEVIN J. CULLIGAN, Goodwin Procter LLP, New York, NY, for amicus curiae Askeladden, L.L.C. Also represented by JOHN P. HANISH; BRIAN TIMOTHY BURGESS, WILLIAM M. JAY, Washington, DC.

DOUGLAS A. MIRO, Ostrolenk Faber LLP, New York, NY, for amicus curiae Universal Remote Control, Inc. Also represented by ALAN FEDERBUSH.

MICHAEL SONGER, Crowell & Moring, LLP, Washington, DC, for amicus curiae AT& T Mobility II LLC. Also represented by VINCENT JOHN GALLUZZO.

GREER N. SHAW, Snell & Wilmer, LLP, Los Angeles, CA, for amicus curiae T-Mobile USA, Inc. Also represented by TRISHA FARMER, Phoenix, AZ.

DOMINIC P. ZANFARDINO, Brinks Gilson & Lione, Chicago, IL, for amicus curiae Cook Medical LLC. Also represented by CYNTHIA A. HOMAN, ANDREW S. MCELLIGOTT.

BRETT L. FOSTER, Holland & Hart LLP, Salt Lake City, UT, for amicus curiae Hydro Engineering, Inc. Also represented by DAWN M. DAVID, MARK A. MILLER.

MARK CHRISTOPHER FLEMING, Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA, for amicus curiae Roche Molecular Systems, Inc. Also represented by ROBERT J. GUNTHER, JR., OMAR KHAN, New York, NY.

MATTHEW WOLF, Arnold & Porter LLP, Washington, DC, for amici curiae Briggs & Stratton Corp., Harley-Davidson Motor Company, Inc., Jockey International, Inc., Rockwell Automation, Inc., Wisconsin Manufacturers & Commerce.

Before PROST, Chief Judge, NEWMAN, LOURIE, DYK, MOORE, O'MALLEY, REYNA, WALLACH, TARANTO, CHEN, and HUGHES, Circuit Judges.^[*] OPINION filed by Chief Judge PROST in which Circuit Judges NEWMAN, LOURIE, DYK, O'MALLEY, and REYNA join. Opinion concurring-in-part, dissenting-in-part filed by Circuit Judge HUGHES in which Circuit Judges MOORE, WALLACH, TARANTO, and CHEN join.

OPINION

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[116 U.S.P.Q.2d 1543]

Prost, Chief Judge.

We convene en banc to resolve whether, in light of the Supreme Court's recent decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962, 188 L.Ed.2d 979 (2014), laches remains a defense to legal relief in a patent infringement suit. We conclude that Congress codified a laches defense in 35 U.S.C. § 282(b)(1) that may bar legal remedies. Accordingly, we have no judicial authority to question the law's propriety. Whether Congress considered the quandary in Petrella is irrelevant--in the 1952 Patent Act, Congress settled that laches and a time limitation on the recovery of damages can coexist in patent law. We must respect that statutory law.

Nevertheless, we must adjust the laches defense in one respect to harmonize it with Petrella and other Supreme Court precedent. We emphasize that equitable principles apply whenever an accused infringer seeks to use laches to bar ongoing relief. Specifically, as to injunctions, considerations of laches fit naturally within the eBay framework. In contrast, Menendez v. Holt, 128 U.S. 514, 9 S.Ct. 143, 32 L.Ed. 526, 1889 Dec. Comm'r Pat. 344 (1888), and Petrella counsel that laches will only foreclose an ongoing royalty in extraordinary circumstances.

I. Background

The present dispute arose out of litigation concerning adult incontinence products. SCA alleges that First Quality, a competitor in the adult incontinence products market, infringes U.S. Patent No. 6,375,646 ('646 patent). SCA first contended that First Quality's Prevail® All Nites[TM] product infringes the '646 patent in a letter sent to First Quality on October 31, 2003. The correspondence explained:

It has come to our attention that you are making, selling and/or offering for sale in the United States absorbent pants-type diapers under the name Prevail® All Nites[TM]. We believe that these products infringe claims of [the '646 patent].

We suggest that you study [the '646 patent]. If you are of the opinion that the First Quality Prevail® All Nites[TM] absorbent pants-type diaper does not infringe any of the claims of this patent, please provide us with an explanation as to why you believe the products do not infringe. If you believe that the products do infringe, please provide us with your assurance that you will immediately stop making and selling such products.

J.A. 544.

First Quality responded on November 21, 2003 and claimed the patent was invalid:

As you suggested, we studied [the '646 patent]. . . . In addition, we made a cursory review of prior patents and located U.S. Patent No. 5,415,649, (" the '649 Patent" ), which was filed in the United States on October 29, 1991 and is therefore prior to your client's '646 Patent. A review of Figs. 3 and 4 of the prior '649 Patent reveals the same [116 U.S.P.Q.2d 1544] diaper construction claimed by the '646 Patent. Thus, the prior '649 Patent invalidates your client's '646 Patent. As you know, an invalid patent cannot be infringed.

J.A. 547. SCA and First Quality ceased communications regarding the '646 patent after First Quality's response. However, on July 7, 2004, SCA requested reexamination of the '646 patent in light of the '649 patent. 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

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against First Quality after First Quality argued the patent was invalid in the November 21st letter.

The PTO instituted reexamination on the '646 patent and, on March 27, 2007, confirmed the patentability of all twenty-eight original claims and issued several other claims SCA added during reexamination. Meanwhile, First Quality invested heavily in its protective underwear business. In 2006, First Quality expanded its line of adult incontinence products. In 2008, First Quality acquired Tyco Healthcare Retail Group LP, which had several lines of competing products, and in 2009 First Quality spent another $10 million to purchase three more lines of protective underwear products. SCA was aware of First Quality's activities, but never mentioned the '646 patent to First Quality during this time.

On August 2, 2010--over three years after reexamination concluded--SCA filed a complaint alleging that First Quality infringes the '646 patent. Service of the complaint was the first time in nearly seven years that SCA had...