Lead Opinion
Opinion for the court 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.
We convene en banc to resolve whether, in light of the Supreme Court’s recent decision in Petrella v. Metro-Goldwyn-Mayer, Inc., — U.S. -,
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,
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 NitesTM 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™. 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™ 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 tent].... 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 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 allega
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 communicated with First Quality regarding the '646 patent. The district court proceeded with discovery and issued a claim construction order. First Quality then moved for partial summary judgment of noninfringement and for summary judgment of laches and equitable estoppel. The district court granted First Quality’s motion as to laches and equitable estoppel and dismissed the noninfringement motion as moot.
SCA appealed, and on September 17, 2014, a panel of this court affirmed the district court’s opinion on laches, but reversed as to equitable estoppel. See SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC,
With respect to the prejudice element of laches, the panel affirmed the district court’s analysis. Specifically, the panel agreed that First Quality made a number of significant capital expenditures in its adult incontinence business, and that First Quality likely would have “restructured its activities to minimize infringement liability if SCA had brought suit earlier.” Id. at 1347. Because SCA did not present any contrary evidence, the panel held that “SCA has not identified any evidence that raises a genuine issue of material fact regarding First Quality’s presumed economic prejudice.” Id. at 1348. And although the district court did not explicitly weigh the equities in determining that laches applied, the panel concluded the error was harmless. Id. Thus, the panel affirmed the district court’s grant of summary judgment on laches.
(a) In light of the Supreme Court’s decision in Petrella v. Metro-Goldwyn-Mayer, — U.S. -,134 S.Ct. 1962 ,188 L.Ed.2d 979 (2014) (and considering any relevant differences between copyright and patent law), should this court’s en banc decision in AC. Aukerman Co. v. R.L. Chaides Constr. Co.,960 F.2d 1020 (Fed.Cir.1992), be overruled so that the defense of laches is not applicable to bar a claim for damages based on patent infringement occurring within the six-year damages limitations period established by 35 U.S.C. § 286?
(b) In light of the fact that there is no statute of limitations for claims of patent infringement and in view of Supreme Court precedent, should the defense of laches be available under some circumstances to bar an entire infringement suit for either damages or injunctive relief? See, e.g., Lane & Bodley Co. v. Locke,150 U.S. 193 ,14 S.Ct. 78 ,37 L.Ed. 1049 (1893).
SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, No. 2013-1564,
We have jurisdiction under 28 U.S.C. § 1295(a)(1).
II. Viability of Laches AfteR Petrella
A
SCA contends that, after the Supreme Court’s decision in Petrella, laches is no longer available as a defense to patent infringement within the six-year damages recovery period. We last addressed our laches law en banc in Aukerman. There, we set out five rules regarding the laches defense:
1. Laches is cognizable under 35 U.S.C. § 282 (1988) as an equitable defense to a claim for patent infringement.
2. Where the defense of laches is established, the patentee’s claim for damages prior to suit may be barred.
3. Two elements underlie the defense of laches: (a) the patentee’s delay in bringing suit was unreasonable and inexcusable, and (b) the alleged in-fringer suffered material prejudice attributable to the delay. The district court should consider these factors and all of the evidence and other circumstances to determine whether equity should intercede to bar pre-filing damages.
4. A presumption of laches arises where a patentee delays bringing suit for more than six years after the date the patentee knew or should have known of the alleged infringer’s activity.
5. A presumption has the effect of shifting the burden of going forwardwith evidence, not the burden of persuasion.
Aukerman,
Four different portions of Aukerman’s reasoning are especially relevant to this case. First, we determined in Aukemnan that laches was codified in 35 U.S.C. § 282. Aukemnan explained that, “[a]s a defense to a claim of patent infringement, laches was well established at the time of recodi-fication of the patent laws in 1952.” Id. at 1029. We also credited P.J. Federico’s Commentary on the New Patent Act for its observation that the second paragraph of § 282 includes “equitable defenses such as laches, estoppel and unclean hands.” Id. (quoting P.J. Federico, Commentary on the New Patent Act, 35 U.S.C.A. 1, 55 (West 1954) (hereinafter Federico Commentary )).
Second, Aukerman addressed the argument that laches conflicts with 35 U.S.C. § 286, which limits recovery of damages to the six years prior to the complaint. We explained that “[i]n other areas of our jurisdiction, laches is routinely applied within the prescribed statute of limitations period for bringing the claim.” Id. at 1030 (citing Cornetta v. United States,
Third, we rejected the argument “that laches, by reason of being an equitable defense, may be applied only to monetary awards resulting from an equitable accounting, not to legal claims for damages.” Aukerman,
Fourth, Aukerman considered whether laches bars recovery of pre-filing damages only, or whether it precludes the entire suit. In ruling that laches prohibits recovery of pre-filing damages only, Aukerman relied on the Supreme Court’s Menendez decision. Aukerman quoted the following portion of Menendez:
Mere delay or acquiescence cannot defeat the remedy by injunction in support of the legal right, unless it has been continued so long[,] and under such eir-cumstances[,] as to defeat the right itself. ... Acquiescence[,] to avail[,] mustbe such as to create a new right in the defendant....
So far as the act complained of is completed, acquiescence may defeat the remedy on the principle applicable when action is taken on the strength of encouragement to do it[;] but so far as the act is in progress]],] and lies in .the future, the right to the intervention of equity is not generally lost by previous delay, in respect to which the elements of an estoppel could rarely arise.
Aukerman,
For over two decades, Aukerman governed the operation of laches in patent cases. However, last year in Petrella the Supreme Court held that laches was not a defense to legal relief in copyright law. Petrella calls portions of Aukerman’s reasoning into question, necessitating our present en banc reconsideration of laches.
Petrella involved an assertion that Metro-Goldwyn-Mayer’s (“MGM”) critically-acclaimed 1980 film Raging Bull infringed a copyright in a 1968 screenplay authored by Frank Petrella. Frank Petrella’s daughter, Paula Petrella (“Petrella”), renewed the copyright in 1991, but did not contact MGM until seven years later. Pe-trella,
However, the Supreme Court reversed, holding that laches is no defense to a copyright infringement suit brought within the Copyright Act’s statutory limitations period. Fundamentally, the Supreme Court reasoned that “the copyright statute of limitations, § 507(b), itself takes account of delay,” crowding out the judiciary’s power to decide whether a suit is timely. Id. at 1973. According to the Court, “[ljaches ... originally served as a guide when no statute of limitations controlled the claim.” Id. at 1975. Historically, “laches is a defense developed by courts of equity; its principal application was, and remains, to claims of an equitable cast for which the Legislature has provided no fixed time limitation.” Id. at 1973. Laches is thus “gap-filling, not legislation-overriding.” Id. at 1974. In this respect, separation of powers concerns drove the result in Petrella. Petrella consequently held that “in face of a statute of limitations enacted by Congress, laches cannot be invoked to bar legal relief.” Id. Therefore, under Petrella, “[t]o the extent that an infringement suit seeks relief solely for conduct occurring within the limitations period ... courts are not at liberty to jettison Congress’ judgment on the timeliness of suit.” Id. at 1967.
Petrella also addressed the extent to which laches should affect equitable relief. The Court explained: “In extraordinary circumstances, however, the consequences of a delay in commencing suit may be of sufficient magnitude to warrant, at the very outset of the litigation, curtailment of the relief equitably awardable.” Id. at 1977. Petrella then contrasted a Sixth Circuit case involving a copyrighted architectural design and the facts in Petrella. In the Sixth Circuit case, Chirco v. Crosswinds Communities, Inc.,
Nonetheless, the Supreme Court continued: “Should Petrella ultimately prevail on the merits, the District Court, in determining appropriate injunctive relief and assessing profits, may take account of her delay in commencing suit.” Id. The Court then laid out several considerations for the district court. In particular, the “court should closely examine MGM’s alleged reliance on Petrella’s delay.” Id. “This examination should take account of MGM’s early knowledge of Petrella’s claims, the protection MGM might have achieved through pursuit of a declaratory judgment action, the extent to which MGM’s investment was protected by the separate-accrual rule, the court’s authority to order injunctive relief on such terms as it may deem reasonable, and any other considerations that would justify adjusting injunctive relief or profits.” Id. at 1978-79 (internal quotation marks and citation omitted). In conclusion, the Court assured that, “on the facts thus far presented,” Petrella would remain entitled to an ongoing royalty. Id. at 1979 (“Whatever adjustments may be in order in awarding injunctive relief, and in accounting for MGM’s gains and profits, on the facts thus far presented, there is no evident basis for immunizing MGM’s present and future uses of the copyrighted work, free from any obligation to pay royalties.”).
Still, Petrella clearly casts doubt on several aspects of Aukerman. The following sections reexamine the availability of lach-es to bar recovery of damages incurred within the six-year limitations period.
B
First, we consider the character of 35 U.S.C. § 286. Section 286 states, in relevant part: “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.” 35 U.S.C. § 286. The parties and amici fervently debate whether § 286 is a statute of limitations or a damages limitation. By its terms, § 286 is a damages limitation. The statute does not preclude bringing a claim — instead, it limits a pat-entee’s damages recovery to compensation for only the last six years of infringement. See Standard Oil Co. v. Nippon Shokubai Kagaku Kogyo Co.,
However, this distinction is irrelevant to the resolution of this case under Petrella. As discussed above at II.A, Petrella focuses on the fact that, in enacting a statute of limitations, Congress has spoken on the timeliness of copyright infringement damages claims. Thus, the question under Petrella is whether Congress has prescribed a time period for recovery of dam- . ages. Section 286 is one such prescription. In § 286, Congress provided a six-year time period for recovery of damages. Given that laches also considers the timeliness of damages claims, § 286 — a damages-barring time provision — invokes Petrella’s logic at least as much as, and perhaps more than, a statute of limitations. Petrella,
C
Next, we determine that Congress codified a laches defense in 35 U.S.C. § 282(b)(1). Section 282(b)
The following shall be defenses in any action involving the validity or infringement of a patent and shall be pleaded:
(1) Noninfringement, absence of liability for infringement or unenforceability.
(2) Invalidity of the patent or any claim in suit on any ground specified in part II as a condition for patentability.
(8) Invalidity of the patent or any claim in suit for failure to comply with—
(A) any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable; or
(B) any requirement of section 251.
(4) Any other fact or act made a defense by this title.
By its plain terms, § 282 broadly sets out defenses available in a patent infringement or validity suit. Rather than enumerate specific defenses, subsection (1) lists categories of defenses — “[n]oninfringement, absence of liability for infringement or un-enforceability.” Subsections (2) and (3) follow this pattern, referring to invalidity based on “any ground specified in part II as a condition for patentability,” “any requirement of section 112,” and “any requirement of section 251.” And § 282(b) concludes with a catch-all provision in subsection (4): “[a]ny other fact or act made a defense by this title” is a defense within § 282(b).
The House and Senate Reports on § 282 confirm that Congress intended § 282 to have broad reach. Only one sentence in each Report describes § 282(b), but both endorse an expansive interpretation of the subsection. The Senate Report explains that “[t]he five defenses named in R.S. 4920 are omitted and replaced by a broader paragraph specifying defenses in general terms.” S.Rep. No. 82-1979 at 8-9 (1952), 1952 U.S.C.C.A.N. 2394, 2422. Likewise, the House Report clarifies that “[t]he defenses to a suit for infringement are stated in general terms, changing the language in the present statute, but not materially changing the substance.”
Contemporary commentary by “P.J. Federico, a principal draftsman of the 1952 recodification,” Diamond v. Chakrabarty,
The defenses which may be raised in an action involving the validity or infringement of a patent are specified in general terms, by the second paragraph of section 282, in five numbered items. Item 1 specifies “Noninfringement, absence of liability for infringement, or unenforce-ability” (the last word was added by amendment in the Senate for greater clarity); this would include the defenses such as that the patented invention has not been made, used or sold by the defendant; license; and equitable defenses such as laches, estoppel and unclean hands.”
Federico Commentary (emphases added).
The dissent criticizes our reliance on Federico, Dissent at 1337-38, but the Supreme Court has trusted Federico as an authority on the Patent Act at least thrice. See Warner-Jenkinson Co. v. Hilton Davis Chem. Co.,
After enactment of the law, West Publishing Company asked Federico to write a commentary on it for publication in U.S.C.A., which he did, and it was published in 1954 in the first of the volumes containing the new Title 35. Federico also submitted drafts of the commentary to Ashton and the Drafting Committee for suggestions....
Id. (footnote omitted). We therefore consider the Federico Commentary to be a sufficiently reliable source on the meaning of § 282.
To summarize, § 282 uses inclusive language, the legislative history characterizes § 282 as “broader” and “general,” and the Federico Commentary explicitly states that § 282 includes laches. The dissent does not point to anything that contradicts our understanding of § 282. Accordingly, we conclude that Congress codified a lach-es defense in § 282.
Notably, our construction of § 282 to include laches is neither novel, nor a direct response to Petrella. Rather, for decades we have held that laches was codified in § 282, including once sitting en banc in Aukerman. See Aukerman,
D
Having determined that Congress codified a laches defense in § 282, we now reach the critical question: does laches as codified in the 1952 Patent Act bar recovery of legal relief? If laches as codified in § 282 is a defense against only equitable relief, Petrella prohibits judicial application of laches to bar legal damages. If, however, laches as codified'operates as a defense to both legal and equitable relief, patent law’s statutory scheme — like the
Turning to the content of the laches defense in § 282, the text of § 282 provides little guidance. Because § 282 does not enumerate specific defenses, the statutory text says nothing on the applicability of laches to legal relief. Similarly, the legislative history is silent on the meaning of laches, and Federico does no more than mention laches’ codification in § 282.
In these circumstances, the Supreme Court counsels that “[w]hen a statute covers an issue previously governed by the common law, we must presume that Congress intended to retain the substance of the common law.” Kirtsaeng v. John Wiley & Sons, Inc., — U.S. -,
This canon of construction is especially applicable here. Congress’s purpose in enacting the Patent Act was to codify the prevailing law wholesale, except where changes were expressly noted. The House' Report reveals that, while a preliminary draft of the Patent Act “included a collection of a large number of proposed changes in the law,” “[a]s a result of the comments received, it was decided not to include most of the proposed changes in a bill but to defer them for later consideration, and to limit the bill to the main purpose of codification and enactment of title 35 into law, with only some minor procedural and other changes deemed substantially noncontroversial and desirable.” H.R.Rep. No. 82-1923, at 3. Consequently, “the principal purpose of the bill [was] the codification of title 35.... ” Id. at 5; S.Rep. No. 82-1979 at 4, 1952 U.S.C.C.A.N. at 2397. While “there
As outlined above, Congress remained silent on the content of the laches defense.
Some initial background information is necessary to place the case law in context. Traditionally, patentees could seek an injunction and an accounting of profits— both equitable remedies — by filing a bill in equity courts. Alternatively, patentees could seek compensatory damages by filing an action at law. In 1870, however, Congress gave equity courts the authority to award legal damages in patent cases. Patent Act of 1870, ch. 230, § 55, 16 Stat. 198, 206 (1870). Forty-five years later, in 1915, Congress passed a general statute (§ 274b) providing that “in all actions at law equitable defenses may be interposed by answer, plea, or replication without the necessity of filing a bill on the equity side of the court.” Act of March 3, 1915, ch. 90, § 274b, 38 Stat. 956 (1915). Prior to this statute, parties wishing to raise equitable defenses in an action at law had to file a separate bill in equity seeking to enjoin the legal action. See, e.g., Kessler v. Eldred,
The merger of law and equity was completed with the advent of the Federal Rules of Civil Procedure in 1938. “[T]here has been, since 1938, only ‘one form of action — the civil action.’ ”
Finally, in the Patent Act of 1946, Congress eliminated accounting of profits as a remedy for patent infringement (except for design patents). See Act of Aug. 1, 1946, Pub.L. No. 79-587, 60 Stat. 778; see also Kori Corp. v. Wilco Marsh Buggies & Draglines, Inc.,
With all of the foregoing in mind, we now turn to the pre-1952 case law on laches. Upon review, the case law demonstrates that, by 1952, courts consistently applied laches to preclude recovery of legal damages. Nearly every circuit recognized that laches could be a defense to legal relief prior to 1952. See, e.g., Banker v. Ford Motor Co.,
The Ford case was both early and influential. In Ford, the patentee, Huff, was employed by defendant Henry Ford as an electrical and mechanical engineer. Ford,
Huff did not bring suit against Ford until fourteen years after the invention, ten years after he left the Ford Motor Company, and eight years after the patents issued. Id. at 655. The court found that Ford had established both laches and equitable estoppel — laches from the delay, and equitable estoppel from Huffs acceptance of Ford’s $10,000 payment. Id. at 657. The court then considered whether the laches and equitable estoppel defenses could be brought in a suit at law. Citing § 274b and Liberty Oil Co. v. Condon National Bank,
The only other case to expressly consider the argument that laches cannot preclude legal relief is Banker. In Banker, which involved only laches and not equitable estoppel, the Third Circuit employed similar methodology to Ford. Specifically, Banker held that “[h]ad the appellant’s suit been in equity, the evidence would have been ample for holding that recovery was barred because of laches.” Banker,
A plethora of other cases assumes laches to preclude legal relief without discussion.
Finally, the Walker patent treatise supports the conclusion that laches can preclude legal remedies. The 1937 version of the Walker treatise was published before many of the cases discussed above. 4 Walker, on Patents (Deller’s ed.1937). Nonetheless, although it does not list lach-es among the defenses in actions at law, see id. §§ 656, 687-88, Walker elsewhere explains that “[w]here a plaintiff is chargeable with laches, he cannot recover the damages he has suffered nor the profits defendant has gained.” Id. § 880B (citing George Meyer,
In sum, the case law strongly supports the availability of laches to bar legal relief. Section 282 codified whatever laches doctrine existed when Congress enacted the Patent Act in 1952. Although the development occurred over time, by 1952 nearly every circuit had approved of the proposition that laches could bar legal relief for patent infringement, and no court had held to the contrary. The Walker treatise — in 1937 and then more authoritatively in 1951 — agreed that laches precludes recovery of legal damages. The laches doctrine codified in § 282 must have meaning, and, absent any direction from Congress, it takes on its common law meaning. Following a review of the relevant common law, that meaning is clear: in 1952, laches operated as a defense to legal relief. Therefore, in § 282, Congress codified a laches defense that barred recovery of legal remedies.
E
The fact that § 286 speaks to the timeliness of damages claims does not alter the outcome. Petrella fundamentally concerns separation of powers. That is, Petrella eliminates copyright’s judicially-created laches defense because Congress, through a statute of limitations, has already spoken on the timeliness of copyright infringement claims, so there is no room for a judicially-created timeliness doctrine. See Petrella,
Despite whatever tension may exist between the § 286 damages limitation and the § 282 laches defense, “we have no
F
Finally, one major difference between copyright and patent law bears mention: copyright infringement requires evidence of copying, but innocence is no defense to patent infringement. Compare N. Coast Indus. v. Jason Maxwell, Inc.,
In patent law, however, the calculus is different. For example, in the medical device industry, a company may independently develop an invention and spend enormous sums of money to usher the resultant product through regulatory approval and marketing, only to have a pat-entee emerge six years later to seek the most profitable six years of revenues. See Roche Br. 19-23; IPO Br. 19. In the high tech industry, amici advise that businesses receive demand letters every day — many of which assert unmeritorious claims — and it is often impractical for companies to determine which claims have merit. See Dell Br. 23-27. Independent invention is no defense in patent law, so without laches, innovators have no safeguard against tardy claims demanding a portion of their commercial success. Consequently, “there is a recurring risk that a stale patent claim will inflict significant hardship on a defendant who has lost the meaningful ability to choose between alternative technologies and whose investment in research, development, and further innovation may be jeopardized.” Dell Br. 27. This risk likely explains why the amici in this case — encompassing industries as diverse as biotechnology, electronics, manufacturing, pharmaceuticals, software, agriculture, apparel, health care, telecommunications, and finance — overwhelmingly support retaining laches in patent law.
The second question for en banc . review concerns the extent to which laches can limit recovery of ongoing relief. Aukerman held that laches could not bar prospective relief. Aukerman,
When a court orders ongoing relief, the court acts within its equitable discretion. See eBay,
A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
Id. at 391,
Consideration of laches fits naturally into this framework. As noted in Petrella, “the District Court, in determining appropriate injunctive relief ... may take account of [the plaintiffs] delay in commencing suit.” Petrella,
The Aukerman court, relying bn Menen-dez, based its conclusion that laches may only bar pre-suit damages on the necessity of maintaining a distinction between laches and equitable estoppel. Aukerman,
With respect to ongoing royalties, while the principles of equity apply, equity normally dictates that courts award ongoing royalties, despite laches. Menendez, an influential case contrasting laches and equitable estoppel in the trademark context, guides us here. According to Menendez, delay in exercising a patent right, without more, does not mean that the patentee has abandoned its right to its invention. Rather, the patentee has abandoned its right to collect damages during the delay. Equitable estoppel, on the other hand, is different — the patentee has granted a license to use the invention that extends throughout the life of the patent:
Acquiescence, to avail, must be such as to create a new right in the defendant. ... But there is nothing here in the nature of an estoppel; nothing which renders it inequitable to arrest at this stage any further invasion of complainants’ rights. There is no pretense of abandonment. That would require proof of non-user by the owner, or general surrender of the use to the public.... Delay in bringing suit there was, and such delay as to preclude recovery of damages for prior infringement; but there was neither conduct nor negligence which could be held to destroy the right to prevention of further injury.
Menendez,
Petrella also briefly considered the propriety of ongoing royalties. Although Petrella did not supply its reasoning, it found that, “on the facts thus far presented, there [was] no evident basis for immunizing MGM’s present and future uses of the copyrighted work, free from any obligation to pay royalties.” Petrella,
In sum, we must recognize “the distinction between ... estoppel and laches....” Id. (first alteration in original). Whereas estoppel bars the entire suit, laches does not. As outlined above, laches in combination with the eBay factors may in some circumstances counsel against an injunction. However, a patentee guilty of laches typically does not surrender its right to an ongoing royalty. Menendez,
V. CoNClusion
For the foregoing reasons, laches remains a defense to legal relief in a patent infringement suit after Petrella. Laches bars legal relief, and courts must weigh the facts underlying laches in the eBay framework when considering an injunction. However, absent extraordinary circumstances, laches does not preclude an ongoing royalty.
Finally, we reinstate the panel opinion’s reversal of the district court’s grant of summary judgment on equitable estoppel and adopt its reasoning. We thus remand to the district court for proceedings consistent with this opinion.
REVERSED AND REMANDED
Notes
. On equitable estoppel, the panel reversed the district court's grant of summary judg
. This version of § 282(b) incorporates amendments by the America Invents Act that, due to later effective dates, are inapplicable to the instant case. See Pub.L. 112-29, § 15(a), (c), 125 Stat. 284, 328; § 20(g), (j)(l), (Z), 125 Stat. 284, 334-35 (2011). Those amendments, however, would not affect our decision today. For convenience, therefore, we use the current version of the statute.
. The dissent asserts that the words "not materially changing the substance” indicate that § 282 is no broader than R.S. 4920. Dissent at 1336. But by the statutes' plain terms that contention is wrong. R.S. 4920 enumerated five specific defenses. Even putting aside § 282(b)(1) and the catch-all provision in § 282(b)(4), § 282(b)(2) and (b)(3) clearly broaden the statutory defenses available to accused infringers.
. While the doctrine of laches in the patent context is not strictly a matter of common law, as the patent law is statutory, the Supreme Court has treated uniform interpretations of statutes involving judicially created doctrines' as invoking common law adoption principles. In United States v. Texas,
. If we can infer anything from what Congress said, it is that Congress intended to "not materially chang[e] the substance” of the § 282 defenses. H.R.Rep. No. 821923, at 10.
. The christening of the Federal Rules of Civil Procedure did not alter any substantive law. Petrella,
. Significantly, the cases cited as examples here do not include the numerous cases that apply laches to bar an "accounting.” Because of the term's inherent ambiguity (de
. Subsequently, the Supreme Court in Ene-low — which held that § 274b changed no substantive law — cited Ford in the context of an injunction staying a legal action pending resolution of an equitable defense. Enelow,
. SCA and some amici contend that the Middleton case holds that laches cannot preclude legal relief. But Middleton merely states that the elements of laches were not proven in that case. As Middleton reasoned, delay, without prejudice, is insufficient. Middleton,
. The two patent cases cited by the dissent— both trial court cases from a single jurisdiction — are unhelpful. In the first, City of Concord v. Norton,
. See, e.g., Brief of Amicus Curiae Roche Molecular Systems, Inc. in Support of Defen
. While these passages contemplate that es-toppel will be the primary situation where delay can bar an injunction, they also allow for the possibility that the facts surrounding delay can be so extreme — without establishing estoppel — as to preclude an injunction.
Concurrence Opinion
eoneurring-in-part, dissenting-in-part, with whom MOORE, WALLACH, TARANTO, and CHEN, Circuit Judges, join.
Patent law is governed by the same common-law principles, methods of statutory interpretation, and procedural rules as other areas of civil litigation. Today, the majority adopts a patent-specific approach to the equitable doctrine of laches. In doing so, the majority overlooks Congress’ intent and Supreme Court precedent, which demonstrate that laches is no defense to a claim for damages filed within the statutory limitations period established by 35 U.S.C. § 286.
In Petrella v. Metro-Goldwyn-Mayer, Inc., — U.S. -,
The Supreme Court has repeatedly cautioned this court not to create special rules for patent cases. In light of the Supreme Court’s clear, consistent, and longstanding position on the unavailability of laches to bar damages claims filed within a statutory limitations period, we should not do so here. I respectfully dissent-in-part.
The Supreme Court in Petrella held that when Congress enacts a statutory limitations period, courts cannot invoke the equitable doctrine of laches to bar claims for legal relief filed within that period.
The Supreme Court further explained that “laches is a defense developed by courts of equity; its principal application was, and remains, to claims of an equitable cast for which the Legislature has provided no fixed time limitation.” Id. at 1973 (citing 1 D. Dobbs, Law of Remedies § 2.4(4), p. 104 (2d ed.1993)). This principle has a strong historical pedigree: “[b]oth before and after the merger of law and equity in 1938, [the Supreme Court] has cautioned against invoking laches to bar legal relief.” Id. at 1973. The Supreme Court cited several of its decisions as proof, including two cases decided prior to 1952. See id. (citing Holmberg v. Armbrecht,
Like the statute of limitations considered in Petrella, the statutory limitations period in § 286 of the Patent Act expresses Congress’ judgment on the timeliness of claims for damages. See 35 U.S.C. § 286. Section 286 prohibits recovery of damages when a claim is filed more than six years after the associated patent infringement occurs, but allows recovery of damages when a claim is filed within that six-year window. Cf. Petrella,
To overcome this conclusion, we would have to find compelling evidence that Congress incorporated laches into the Patent Act as an additional time-bar on claims for legal damages. The Supreme Court has required clear evidence to justify inferring a congressional departure from traditional common-law principles, such as the principle recognized in Petrella that laches does not apply to claims for legal relief. See, e.g., Nken v. Holder,
II
The majority brushes aside the teachings of Petrella and finds based on vague legislative history and muddled case law that Congress intended to depart from the common-law principle that laches only bars equitable relief where a statutory limitations period applies. See Maj. Op. at 1321-30. Two flaws pervade the majority’s analysis. First, the majority interprets 35 U.S.C. § 282 in isolation, without' regard to Congress’ intent expressed in § 286. Second, in addition to misreading the pre-1952 cases it cites, the majority limits the scope of its review to favorable patent cases. The majority ignores Supreme Court precedent and other federal court decisions holding that laches does not bar claims for legal relief filed within a statutory limitations period. Properly analyzed, we cannot reasonably infer from the Patent Act that Congress intended to depart from this common-law principle.
A
The majority finds that Congress incorporated laches into § 282 because Congress chose to use broad language in that section; and because an executive-branch official said so. See Maj. Op. at 1321-23. Although the majority does not identify which particular term encompasses a defense of laches, the only possible candidates are “[n]on-infringement, absence of liability for infringement or unenforceability.” 35 U.S.C. § 282(b)(1). The remaining subsections refer specifically to other provisions of the Patent Act, none of which allude to laches. See id. at (b)(2)-(4). First Quality and several amici argue that laches falls within the term “unenforceability” in particular.
The language in § 282(b)(1) is ambiguous at best, and contains no hint of a special version of laches that applies to legal relief within a statutory limitations period. The terms “absence of liability” and “unenforceability” do not precisely refer to any particular defenses to patent-infringement suits. Although the plain meaning of these terms does not conclusively rule out the defense of laches, it does not necessarily include a defense of laches either. The majority seems to think that the indeterminate breadth of these terms helps its case, making it more likely that laches falls somewhere within their scope, whatever that may be. See Maj. Op. at 1321-22. But statutory interpretation cannot turn on this kind of guesswork. And even if laches were implicit in § 282, that would not be enough, for the question is whether Congress prescribed a variant form of laches in the Patent Act that applies to claims for legal relief.
The majority disregards an important tool of statutory interpretation that shows
The legislative history of § 286 further proves the point. Between 1874 and 1897, the federal patent statute did not contain a limitations period of any kind. See Campbell v. Haverhill,
The House and Senate Reports from 1952 also contradict the majority’s interpretation. Both sources explain that § 282 restates statutory defenses “in general terms, changing the language in the present statute, but not materially changing the substance.” H.R. Rep. 82-1923 at 10 (1952); S. Rep. 82-1979 at 9 (1952). This declaration shows that Congress intended to preserve what the language of
The majority’s only evidence that Congress intended to incorporate a defense of laches at all in § 282 is a lone statement in P.J. Federico’s Commentary on the New Patent Act. But Mr. Federico’s reference to “laches” does not suggest that Congress incorporated a distinctive version of laches that, contrary to its traditional role at common law, bars a claim for legal damages filed within a statutory limitations period. This statement therefore cannot support the majority’s conclusion. Indeed, the only interpretation of this statement that is consistent with § 286 is that Mr. Federico was referring to laches as a defense to equitable relief only. And in any event, an inference that Congress departed from a common-law principle could not properly rest entirely on a statement made two years after the enactment of the Patent Act by one person who, though central to its drafting, was not a member of Congress voting on the measure.
In Petrella, the Supreme Court was presented with a similarly vague reference to “laches” in Federal Rule of Civil Procedure 8(c), which lists the affirmative defenses available in a civil action. See
B
To find that Congress intended to codify laches as a defense to claims for legal damages, the majority relies on the canon of statutory interpretation that “[wjhen a statute covers an issue previously governed by the common law, we must pre
1
Any analysis of what the common law was at a certain point in time must start with Supreme Court precedent. See, e.g., Astoria,
Prior to 1952, the Supreme Court decided several cases holding that laches cannot bar a claim for legal relief filed within a statutory limitations period. See Holmberg,
Though a good defense in equity, laches is no defense at law. If the plaintiff at law has brought his action within the period fixed by the statute of limitations, no court can deprive him of his right to proceed. If the statute limits him to 20 years, and he brings his action after the lapse of 19 years and 11 months, he is as much entitled, as [a] matter of law, to maintain it, as though he had brought it the day after his cause of action accrued, though such delay may properly be considered by the jury in connection with other facts tending to show an estoppel.
Id.; see also McClintock on Equity § 28, p. 75 (2d ed. 1948) (“The majority of the courts which have considered the question have refused to enjoin an action at law on
Moreover, several lower courts before 1952 likewise applied this general principle in patent-infringement cases to conclude that laches does not bar a claim for legal relief. In City of Concord v. Norton,
These decisions alone defeat the conclusion that “courts consistently applied lach-es to preclude recovery of legal damages” prior to 1952. Maj. Op. at 1326. To say that a rule was “well established” when the Supreme Court clearly and repeatedly held otherwise is to give insufficient recognition to the hierarchy of federal courts. Further, laches is a general equitable defense, not a defense specific to patent infringement. For the purposes of a common-law incorporation theory, therefore, the role of laches in other areas of civil litigation is of a piece with the role of laches in patent cases.
2
Even if we could focus solely on regional-circuit law, the cases cited by the majority do not themselves show that there was a uniformly well-established rule that lach-es is available to bar legal damages otherwise permitted by § 286. Nearly all of these decisions either apply laches under a misinterpretation § 274(b) of the Judicial Code, mention laches in dicta, or apply laches to bar a claim brought in equity. The discussion of laches in these cases does not clearly demonstrate that in 1952 laches was available to bar a claim for legal damages in a civil action.
The holding in Ford is consistent with this understanding of § 274(b). The court found that the plaintiffs claim was barred under a theory of equitable estoppel, which is an appropriate ground for enjoining an action at law for damages. See Dickerson v. Colgrove,
The Third Circuit in Banker, however, took Ford beyond its holding and applied laches in an action at law based on a misinterpretation of § 274(b). Although the court cited Ford for its interpretation of § 274(b), the court went further and held that this provision “authorizes equitable defenses in actions at law theretofore applicable only in equity.” Banker, 69
Several other cases cited by the majority involve courts of equity barring a plaintiffs suit due to laches. In one of these cases, the precluded relief included damages. See George J. Meyer Mfg. Co. v. Miller Mfg. Co.,
These cases do not support the conclusion that laches was well understood to bar legal damages in 1952. Courts of equity had discretion to dismiss a claim on equitable grounds such as laches or unclean hands. Because the patent statute required courts of equity to award damages upon a finding of infringement, see Patent Act of 1870, ch. 230, § 55,16 Stat. 198, 206 (1870), the court’s equitable discretion to reject a patent-infringement claim allowed it to bar legal damages in that equity court. But a plaintiff also had the option to seek damages in a court of law. And it was well established that, although a court of equity could refuse to grant damages itself, it could not enjoin a court of law from doing so. See, e.g., Wehrman,
That principle necessarily endures after the merger of law and equity. See Stainback,
The majority’s remaining support is minimal. See, e.g., Brennan v. Hawley Prods. Co.,
C
The majority’s policy concerns do not alter this conclusion. The majority argues that, because a copyright holder must prove a defendant’s access to a work to establish infringement, potential defendants are more likely to know they are at risk of being sued. See Maj. Op. at 1330. But innocence is no defense to direct patent infringement, and thus a defendant is less likely to be aware of its potential liability for infringement. See id. at 1330. The majority argues that a defense of laches is therefore more useful to defendants in patent-infringement suits. See id. at 1330.
The Supreme Court’s decision in Petrel-la did not depend on policies specific to copyright law. It turned on the conflict between laches and a statutory limitations period, and the longstanding principle that laches cannot bar a claim for legal relief. See
In any event, the majority’s policy concerns are not the only consequences at stake. Patent owners often have good reason for delaying suit. As the Seventh Circuit observed:
Frequently the position of the patentee (financial and otherwise) prevents the institution of suits. The patent litigation is often prolonged and expensive. Moreover from the very nature of the thing he cannot be fully cognizant of all infringements that occur throughout the length and breadth of this country.... Then, also, the validity of his patent and the infringement thereof may be, as here, disputed. These defenses present mixed questions of fact and law concerning which there is necessarily some doubt and uncertainty.
George J. Meyer Mfg. Co.,
Ill
The Supreme Court in Petrella reiterated the principle that laches does not apply to claims for legal relief governed by a statutory limitations period. The evidence of congressional intent and the pre-1952 case law is insufficient to justify departing from this principle in patent-infringement cases. Following the Supreme Court’s longstanding precedent, I read § 286 to express Congress’ exclusive judgment on the timeliness of a claim for damages. Laches is not available as a further defense. Accordingly, I respectfully dissent-in-part.
. I agree with the majority that laches is available to bar equitable relief. I therefore join Part III of the majority opinion.
. Section 286 and its predecessor contain virtually identical language. Compare 35 U.S.C. § 286 ("[N]o 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.”), with Rev. Stat. § 4921 (1897) ("But in any suit or action brought for the infringement of any patent there shall be no recovery of profits or damages for any infringement committed more than six years before the filing of the bill of complaint or the issuing of the writ in such suit or action....").
. The Supreme Court has found that a post-hoc statement, even from members of Congress, "does not qualify as legislative ‘history,’ ... [and] is consequently of scant or no value” for statutory interpretation. Graham Cty. Soil & Water Conservation Dist. v. U.S. ex. rel. Wilson,
. The majority implies that the Supreme Court’s decision in Lane & Bodley Co. v. Locke,
. The majority argues that a Senate floor statement claiming that the Patent Act "codi-fie[d] the present patent laws,” 98 Cong. Rec. 9323, justifies its narrow focus on the role of laches in patent cases only. See Maj. Op. at 1329. But unlike the doctrine of contributory infringement, a judicial doctrine expressly incorporated into the Patent Act of 1952, laches is not a patent law specific to patent cases. It is a general equitable defense to liability. Congress' codification of “patent laws” therefore does not support an assumption that Congress only looked to the application lach-es in patent cases, and not to fundamental equitable principles announced by the Supreme Court.