This morning the U.S. Supreme Court issued its opinion in Petrella v. Metro-Goldwyn-Mayer, Inc. (available here). Justice Ginsburg wrote the 6-3 majority opinion; Justice Breyer, joined by the Chief Justice and Justice Kennedy, dissented. It's a copyright case, but as I discussed here and here it may have some implications for patent practice as well. Although the underlying facts of the case (involving a claim of copyright infringement in a screenplay on which the movie Raging Bull allegedly is in part based) is complicated, the first two paragraphs of Justice Ginsburg's opinion concisely state the holding of the case:
The Copyright Act provides that “[n]o civil action shall be maintained under the [Act] unless it is commenced within three years after the claim accrued.” 17 U.S.C. §507(b). This case presents the question whether the equitable defense of laches (unreasonable, prejudicial delay in commencing suit) may bar relief on a copyright infringement claim brought within § 507(b)’s three-year limitations period. Section 507(b), it is undisputed, bars relief of any kind for conduct occurring prior to the three year limitations period. To the extent that an infringement suit seeks relief solely for conduct occurring within the limitations period, however, courts are not at liberty to jettison Congress’ judgment on the timeliness of suit. Laches, we hold, cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window. As to equitable relief, in extraordinary circumstances, laches may bar at the very threshold the particular relief requested by the plaintiff. And a plaintiff ’s delay can always be brought to bear at the remedial stage, in determining appropriate injunctive relief, and in assessing the “profits of the infringer . . . attributable to the infringement.” §504(b).
Petitioner Paula Petrella, in her suit for copyright infringement, sought no relief for conduct occurring outside § 507(b)’s three-year limitations period. Nevertheless, the courts below held that laches barred her suit in its entirety, without regard to the currency of the conduct of which Petrella complains. That position, we hold, is contrary to § 507(b) and this Court’s precedent on the province of laches.
The Court left open the possibility, however, that under appropriate circumstances the doctrine of estoppel could bar a claim from proceeding, stating (at p.19):
. . . when a copyright owner engages in intentionally misleading representations concerning his abstention from suit, and the alleged infringer detrimentally relies on the copyright owner’s deception, the doctrine of estoppel may bar the copyright owner’s claims completely, eliminating all potential remedies. See 6 Patry § 20:58, at 20– 110 to 20–112.21. The test for estoppel is more exacting than the test for laches, and the two defenses are differently oriented. The gravamen of estoppel, a defense long recognized as available in actions at law, see Wehrman v. Conklin, 155 U. S. 314, 327 (1894), is misleading and consequent loss, see 6 Patry § 20:58, at 20–110 to 20–112. Delay may be involved, but is not an element of the defense. For laches, timeliness is the essential element. In contrast to laches, urged by MGM entirely to override the statute of limitations Congress prescribed, estoppel does not undermine Congress’ prescription, for it rests on misleading, whether engaged in early on, or later in time.
The Court also noted that, "[s]hould 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" (p.22).
As for the implications of Petrella to patent practice, as I stated in my September 25, 2013 post (which also discusses some related matters arising under German and Japanese law):
In the U.S., the Patent Act states that “[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 in the action.” 35 U.S.C. § 286. In addition, the equitable doctrine of laches may bar a claim for pre-filing damages incurred within the past six years, and the doctrine of equitable estoppel may bar even a claim for an injunction, if the patentee delays too long in filing suit and the infringer is prejudiced as a result. See A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992) (en banc). (I would think as well that undue delay would make it more difficult for the patentee to prove the irreparable harm that is a necessary part of the eBay framework for obtaining a permanent injunction.)
The Supreme Court was careful, however, not to prejudge the applicability of Petrella to patent cases. In this regard, footnote 15 of Justice Ginsburg's opinion states:
The Patent Act states: “[N]o recovery shall be had for any infringement committed more than six years prior to the filing of the complaint.” 35 U. S. C. § 286. The Act also provides that “[n]oninfringement, absence of liability for infringement or unenforceability” may be raised “in any action involving the validity or infringement of a patent.” § 282(b) (2012 ed.). Based in part on § 282 and commentary thereon, legislative history, and historical practice, the Federal Circuit has held that laches can bar damages incurred prior to the commencement of suit, but not injunctive relief. A. C. Aukerman Co. v. R. L. Chaides Constr. Co., 960 F. 2d 1020, 1029–1031, 1039–1041 (1992) (en banc). We have not had occasion to review the Federal Circuit’s position.
For reference, here's what the Federal Circuit said about the interplay of laches and the statute of limitations in Aukerman (foonotes and citations omitted):
Extended to suits at law as well, laches became “part of the general body of rules governing relief in the federal court system.” Id. at 478. As a defense to a claim of patent infringement, laches was well established at the time of recodification of the patent laws in 1952 [footnote omitted]. The commentary of one of the drafters of the revised patent statute confirms the intention to retain the defense of laches, specifically by 35 U.S.C. § 282:
P.J. Federico, Commentary on the New Patent Law, 35 U.S.C.A. 1, 55 (West 1954). . . .
Aukerman argues, nevertheless, that the defense of laches is inapplicable, as a matter of law, against a claim for damages in patent infringement suits. For this proposition, Aukerman first argues that recognition of laches as a defense conflicts with 35 U.S.C. § 286 (1988), which provides:
. . . with respect to section 286 specifically, a six-year limitation on damages, virtually identical to section 286, has been in the patent statute since 1897. . . .
We are unpersuaded that section 286 should be interpreted to preclude the defense of laches and provide, in effect, a guarantee of six years damages regardless of equitable considerations arising from delay in assertion of one's rights. Without exception, all circuits recognized laches as a defense to a charge of patent infringement despite the reenactment of the damages limitation in the 1952 statute. . . .
Perhaps significantly, copyright has had a specific statute of limitations for a much shorter period of time, only since 1957. See Petrella, p.3. In any event, regardless of whether Aukerman remains good law or not, estoppel could continue to bar even equitable relief under appropriate circumstances; and (as I noted in my earlier post) under eBay undue delay in filing suit probably would weigh against a finding of irreparable harm (and might also tilt the balance of conveniences in favor of the defendant).