Aktiebolag v. First Quality Baby Prods., LLC

• Decision Date: 21 March 2017
• Docket Number: No. 15–927.,15–927.
• Citation: 137 S.Ct. 954,197 L.Ed.2d 292
• Parties: SCA HYGIENE PRODUCTS AKTIEBOLAG, et al., Petitioners v. FIRST QUALITY BABY PRODUCTS, LLC, et al.
• Court: U.S. Supreme Court

137 S.Ct. 954

197 L.Ed.2d 292

SCA HYGIENE PRODUCTS AKTIEBOLAG, et al., Petitioners

v.FIRST QUALITY BABY PRODUCTS, LLC, et al.

No. 15–927.

Supreme Court of the United States

Argued Nov. 1, 2016.

Decided March 21, 2017.

Martin J. Black, Philadelphia, PA, for Petitioners.

Seth P. Waxman, Washington, DC, for Respondents.

G. Eric Brunstad, Jr., Dechert LLP, Hartford, CT, Stephanos Bibas, Of Counsel, Martin J. Black, Kevin M. Flannery, Teri–Lynn A. Evans, Sharon K. Gagliardi, Dechert LLP, Philadelphia, PA, for Petitioners.

Mark C. Fleming, Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA, Kenneth P. George, Charles R. Macedo, Mark Berkowitz, Amster, Rothstein & Ebenstein LLP, New York, NY, Seth P. Waxman, Thomas G. Saunders, Matthew Guarnieri, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, Jason D. Hirsch, Hanna A. Baek, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, for Respondent.

Justice ALITO delivered the opinion of the Court.

We return to a subject that we addressed in Petrella v. Metro–Goldwyn–Mayer, Inc., 572 U.S. ––––, 134 S.Ct. 1962, 188 L.Ed.2d 979 (2014) : the relationship between the equitable defense of laches and claims for damages that are brought within the time allowed by a statute of limitations. In Petrella, we held that laches cannot preclude a claim for damages incurred within the Copyright Act's 3–year limitations period. Id ., at ––––, 134 S.Ct., at 1967. "[L]aches," we explained, "cannot be invoked to bar legal relief" "[i]n the face of a statute of limitations enacted by Congress." Id ., at ––––, 134 S.Ct., at 1974. The question in this case is whether Petrella 's reasoning applies to a similar provision of the Patent Act, 35 U.S.C. § 286. We hold that it does.

I

Petitioners SCA Hygiene Products Aktiebolag and SCA Personal Care, Inc. (collectively, SCA), manufacture and sell adult incontinence products. In October 2003, SCA sent a letter to respondents (collectively, First Quality), alleging that First Quality was making and selling products that infringed SCA's rights under U.S. Patent No. 6,375,646 B1 ('646 patent). App. 54a. First Quality responded that one of its patents— U.S. Patent No. 5,415,649 (Watanabe patent) —antedated the '646 patent and revealed "the same diaper construction." Id., at 53a. As a result, First Quality maintained, the '646 patent was invalid and could not support an infringement claim. Ibid. SCA sent First Quality no further correspondence regarding the '646 patent, and First Quality proceeded to develop and market its products.

In July 2004, without notifying First Quality, SCA asked the Patent and Trademark Office (PTO) to initiate a reexamination proceeding to determine whether the '646 patent was valid in light of the Watanabe patent. Id ., at 49a–51a. Three years later, in March 2007, the PTO issued a certificate confirming the validity of the '646 patent.

In August 2010, SCA filed this patent infringement action against First Quality. First Quality moved for summary judgment based on laches and equitable estoppel, and the District Court granted that motion on both grounds. 2013 WL 3776173, *12 (W.D.Ky., July 16, 2013).

SCA appealed to the Federal Circuit, but before the Federal Circuit panel issued its decision, this Court decided Petrella. The panel nevertheless held, based on a Federal Circuit precedent, A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (1992) (en banc), that SCA's claims were barred by laches.¹

The Federal Circuit then reheard the case en banc in order to reconsider Aukerman in light of Petrella . But in a 6–to–5 decision, the en banc court reaffirmed Aukerman 's holding that laches can be asserted to defeat a claim for damages incurred within the 6–year period set out in the Patent Act. As it had in Aukerman, the en banc court concluded that Congress, in enacting the Patent Act, had "codified a laches defense" that "barred recovery of legal remedies." 807 F.3d 1311, 1323–1329 (2015). Judge Hughes, joined by four other judges, dissented.² Id., at 1337–1342(opinion concurring in part and dissenting in part). We granted certiorari. 578 U.S. ––––, 136 S.Ct. 1824, 194 L.Ed.2d 829 (2016).

II

Laches is "a defense developed by courts of equity" to protect defendants against "unreasonable, prejudicial delay in commencing suit." Petrella, supra, at ––––, ––––, 134 S.Ct., at 1967, 1973. See also 1 D. Dobbs, Law of Remedies § 2.3(5), p. 89 (2d ed. 1993) (Dobbs) ("The equitable doctrine of laches bars the plaintiff whose unreasonable delay in prosecuting a claim or protecting a right has worked a prejudice to the defendant"). Before the separate systems of law and equity were merged in 1938, the ordinary rule was that laches was available only in equity courts.³ See County of Oneida v. Oneida Indian Nation of N. Y., 470 U.S. 226, 244, n. 16, 105 S.Ct. 1245, 84 L.Ed.2d 169 (1985). This case turns on the application of the defense to a claim for damages, a quintessential legal remedy. We discussed this subject at length in Petrella .

Petrella arose out of a copyright dispute relating to the film Raging Bull. 572 U.S., at ––––, 134 S.Ct., at 1971. The Copyright Act's statute of limitations requires a copyright holder claiming infringement to file suit "within three years after the claim accrued." 17 U.S.C. § 507(b). In Petrella, the plaintiff sought relief for alleged acts of infringement that accrued within that 3–year period, but the lower courts nevertheless held that laches barred her claims. See 695 F.3d 946 (C.A.9 2012). We reversed, holding that laches cannot defeat a damages claim brought within the period prescribed by the Copyright Act's statute of limitations. Petrella, 572 U.S., at –––– – ––––, 134 S.Ct., at 1972–1975. And in so holding, we spoke in broad terms. See id ., at ––––, 134 S.Ct., at 1974 ("[I]n the face of a statute of limitations enacted by Congress, laches cannot be invoked to bar legal relief").

Petrella 's holding rested on both separation-of-powers principles and the traditional role of laches in equity. Laches provides a shield against untimely claims, id., at ––––, 134 S.Ct., at 1977, and statutes of limitations serve a similar function. When Congress enacts a statute of limitations, it speaks directly to the issue of timeliness and provides a rule for determining whether a claim is timely enough to permit relief. Id., at ––––, 134 S.Ct., at 1972–1973. The enactment of a statute of limitations necessarily reflects a congressional decision that the timeliness of covered claims is better judged on the basis of a generally hard and fast rule rather than the sort of case-specific judicial determination that occurs when a laches defense is asserted. Therefore, applying laches within a limitations period specified by Congress would give judges a "legislation-overriding" role that is beyond the Judiciary's power. Id., at ––––, 134 S.Ct., at 1974. As we stressed in Petrella, "courts are not at liberty to jettison Congress' judgment on the timeliness of suit." Id., at ––––, 134 S.Ct., at 1967.

Applying laches within the limitations period would also clash with the purpose for which the defense developed in the equity courts. As Petrella recounted, the "principal application" of laches "was, and remains, to claims of an equitable cast for which the Legislature has provided no fixed time limitation." Id., at ––––, 134 S.Ct., at 1973 ; see also R. Weaver, E. Shoben, & M. Kelly, Principles of Remedies Law 21 (2d ed. 2011); 1 Dobbs § 2.4(4), at 104; 1 J. Story, Commentaries on Equity Jurisprudence § 55(a ), p. 73 (2d ed. 1839). Laches is a gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill.⁴ Petrella, supra, at ––––, 134 S.Ct., at 1974–1975 ; see also 1 Dobbs § 2.4(4), at 108 ("[I]f the plaintiff has done only what she is permitted to do by statute, and has not misled the defendant [so as to trigger equitable estoppel], the basis for barring the plaintiff seems to have disappeared").

With Petrella 's principles in mind, we turn to the present dispute.

III

A

Although the relevant statutory provisions in Petrella and this case are worded differently, Petrella 's reasoning easily fits the provision at issue here. As noted, the statute in Petrella precludes a civil action for copyright infringement "unless it is commenced within three years after the claim accrued." 17 U.S.C. § 507(b). We saw in this language a congressional judgment that a claim filed within three years of accrual cannot be dismissed on timeliness grounds. 572 U.S., at ––––, 134 S.Ct., at 1972–1973 ; see also id., at –––– – ––––, 134 S.Ct., at 1974–1975.

The same reasoning applies in this case. Section 286 of the Patent Act provides: "Except 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 in the action." By the logic of Petrella, we infer that this provision represents a judgment by Congress that a patentee may recover damages for any infringement committed within six years of the filing of the claim.

B

First Quality contends that this case differs from Petrella because § 286 of the Patent Act is not a true statute of limitations. A true statute of limitations, we are told, "runs forward from the date a cause of action accrues," but § 286"runs backward from the time of suit." Brief for Respondents 41.

Petrella cannot reasonably be distinguished on this ground. First Quality thinks it critical that § 286"runs backward from the time of suit," Brief for Respondents 41, but Petrella described the Copyright Act's statute of limitations in almost identical terms. We said that this provision "allows plaintiffs ... to gain retrospective relief running only three years back from the date the complaint was filed ."

572 U.S., at ––––, 134 S.Ct., at 1970 (emphasis added). See also id ., at ––––, 134 S.Ct., at 1973 ("[A] successful plaintiff can gain retrospective relief only three years back from the...