Amicus Curiae Brief — Aktiebolag v. First Quality Baby Prods., LLC, 136 S. Ct. 1824 (2016) (No. 15-927)

Supeme Coun, Lay

FILED

UN 22 205

No. 15-927 | OFFICE OF THE CLERK

In The Hupreme Court of the Hnited States

SCA HYGIENE PRODUCTS AKTIEBOLAG AND

SCA PERSONAL CARE, INC..,

Petitioners,

Vv

FIRST QUALITY BABY PRODUCTS, LLC, FIRST QUALITY

HYGIENIC, INC., FIRST QUALITY PRODUCTS, INC., AND

FIRST QUALITY RETAIL SERVICES, LLC

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Federal Circuit

BRIEF OF AMICUS CURIAE LAW PROFESSORS

IN SUPPORT OF PETITIONERS

ARIEL N. LAVINBUK

Counsel of Record

KATHLEEN SHEN

ROBBINS, RUSSELL, ENGLERT,

ORSECK, UNTEREINER &

SAUBER LLP

1801 K Street, NW

Suite 411L

Washington, D.C. 20006

(202) 775-4500

alavinbuk@robbinsrussell.com

re ee

— ee Se

i

TABLE OF CONTENTS

Page

INTEREST OF THE AMICUS CURIAE .................... l

SUMMARY OF ARGUMENT? .....00000........cccccccecseeeeeeees 2

Tdi sinceeitentinambiinibaditadsibediiniéinimanrninaniscients 3

I. LACHES IS AN EQUITABLE DEFENSE

IT.

THAT DOES NOT BAR CLAIMS FOR

LEGAL DAMAGES

A.

The Traditional Rule In American

Law Is That Laches Does Not Bar

Claims For Legal Damages. ...................

Petrella Reaffirmed The Traditional

THE PATENT ACT ADHERES TO THE

TRADITIONAL RULE

A. Congress Did Not Change The

Traditional Rule When It Enacted

meee

There Was No Common-Law

Exception To The Traditional Rule In

Patent Cases Prior To The Enactment

Of The Patent Act Of 1952 ..............0.....

ii

TABLE OF CONTENTS—Cont’d

Page

Ill. THERE ARE GOOD REASONS FOR THE

a cndsercnnansesenaneasoonen 16

A. Laches Responds To The Dangers

Inherent In Awarding Equitable

Rather Than Legal Relief........................... 16

B. These Characteristics Of Equitable

And Legal Relief Are No Different In

TR PS ies SES 19

I iacerisisiicndenstcnceiisnetdaciinnteeduiibitaanasiintiiinae 21

— |

iii

TABLE OF AUTHORITIES

Page(s)

Cases

Astoria Fed. Sav. & Loan Ass'n v. Solimino,

oc adasiicibipbhddninnn 11

Campbell v City of Haverhill,

i .sepastonbinnsecuaneel 12

Cnty. of Oneida v. Oneida Indian Nation of

N.Y.,

I iesdninunons 3,5

Consumer Prod. Safety Comm'n v. GTE

Sylvania, Inc.,

I cedilaeinmioieini ]

Cooper Indus., Inc. v. Aviall Servs., Inc.,

A AS a a 14

Cross v. Allen,

I ssduisiaisdnnesiniinmeniliod ll

eBay Inc. v. MercExchange, L.L.C.,

8 CE 7, 10, 13, 16

Foster v. Am. Mach. & Foundry Co.,

a TI 0 ccccnancvacenesecesensecanes 20

France Mfg. Co. v. Jefferson Elec. Co..,

106 F.2d 605 (6th Cir. 1939)......................:002eecseeee 14

George J. Meyer Mfg. Co. v. Miller Mfg. Co.,

Be ee CU le BD cccnccccnccesccesnscecescessescconcs 14

iV

TABLE OF AUTHORITIES—Cont’d

Page(s)

Grupo Mexicano de Desarrollo, S.A. v. All.

Bond Fund, Inc.,

EEE RIPE se 11

Haas v. Leo Feist, Inc.,

ee Ts IID scscccnonsassceconensessscostones

Hartford-Empire Co. v. Swindell Bros., Inc.,

96 F.2d 227 (4th Cir. 1938)....................ssssecseevees

Holmberg v Armbrecht,

a 5, 11

Jama v. Immigration & Customs Enforcement,

a acta cemnliiinannie

Jesinoski v. Countrywide Home Loans, Inc.,

EI EA

Kirtsaeng v. John Wiley & Sons, Inc.,

es I laiceccscnisuscincessonsosevescnennestve

Lane & Bodley Co. v. Locke,

REE

Locke v Lane & Bodley Co.,

35 F 289 (C.C.S.D. Ohio 1888)....................0006

Lyons P’ship, L.P. v. Morris Costumes, Inc.,

243 F.3d 789 (4th Cir. 2001)................ cece

Merck & Co. v. Reynolds,

a

v

TABLE OF AUTHORITIES—Cont’d

Page(s)

Middleton v. Wiley,

we ED 15

Miles v. Apex Marine Corp.,

a. cpiinenesonsionnacpeenionsns 6

Naccache v. Taylor,

SR Re 4

Nken v. Holder,

Re es ID cs ccscccccccccsccsccscessees Neciiacteibtedian 7, 8,9

Original Great Am. Chocolate Chip Cookie Co.

v River Valley Cookies, Ltd.,

Oe Pe CE es BID vcccceccccccccccccccccecvccceeces 18

Petrella v. Metro-Goldwyn-Mayer, Inc..

— passim

Roller v. Clark,

38 App. D.C. 260 (D.C. Cir. 1912)......................8. 11

Smith v. Gehring,

496 A.2d 317 (Md. Ct. Spec. App. 1985).................. 4

United States v. Mack,

SR IE SRT ne 4,5, 11

Universal Coin Lock Co. v. Am. Sanitary Lock

Co.,

DES Fe Fee Cree Cae BGI onc ccccccccccccccccccscnccccccees 14

vl

TABLE OF AUTHORITIES—Cont’d

Page(s)

Utility Air Regulatory Grp. v. Environmental

Protection Agency,

NE III... niscusnspneiisecsiiineteeesmeenalialial 10

Wehrman v. Conklin,

ERR eterno eed el * 11,19

Weinberger v. Romero-Barcelo,

| NS RIN eg ML ee 8

Statutes

rs 0 aici etn sctisuieursicruseuneciiniaaetammuiall )

ee i eiseccsissaccunsccostiensenssnniiiladeuiceissiaiaimalanae 6

es i sccccresccsaceitunssstntcotesicismemmenensaill 8,9

Be i trtenincsseuitictcnicnnsianiténtencetinnetenmigiaaaae l

Act of Mar. 3, 1897, 29 Stat. G92Z..............ccccccsssereeeees 12

Miscellaneous

Samuel L. Bray. The System of Equitable

Remedies, 63 UCLA L. Rev. 530 (2016)..... 16, 17, 18

Samuel L. Bray, A Little Bit of Laches Goes a

Long Way: Notes on Petrella v. Metro-

Goldwyn-Mayer Inc.,

67 Vand. L. Rev. En Bane 1 (2014).................. 3, 4, 8

Dan B. Dobbs, Law of Remedies (2d ed. 1993) ........... 3

— —_— 2. ee Ee ee eee OS eee ee rt OO

vil

TABLE OF AUTHORITIES—Cont’d

Page(s)

John F. Duffy, Administrative Common Law in

Judicial Review, 77 Tex. L. Rev. 113 (1998)......

Federal Trade Commission, The Evolving /P

Marketplace: Aligning Patent Notice and

Remedies with Competition (2011)....................

P.J. Federico, Commentary on the New Patent

Act, 35 U.S.C.A. 1 (West 1954) ............ccccceeeeee.

Mark P Gergen, John M. Golden & Henry E.

Smith, The Supreme Court's Accidental

Revolution? The Test for Permanent

Injunctions, 112 Colum. L. Rev. 203 (2012).......

McClintock on Equity (2d ed. 1948).......................

Restatement (Third) of Restitution and Unjust

i sousnesnnnnevecccoes

Antonin Scalia & Bryan A. Garner, Reading

Titi diniindsansadcanentedeeseseenessetienesecececes

Charles Alan Wright et al., Federal Practice &

ST III... ss cnccncsncosoncosocooscoocs

l

INTEREST OF THE AMICUS CURIAE'!

Amici are professors of law who teach and write

about subjects that include the law of remedies and

patent law. They have expertise that bears directly

on the question before this Court: Should laches be

available to bar claims for legal damages from patent

infringement that are brought within the six-year

limitations period codified at 35 U.S.C. § 286?

Amici are:

Samuel L. Bray, Professor of Law at the UCLA

School of Law.* Professor Bray’s research explores

the law of remedies and, in particular, questions

related to the functions, timing, and institutional

demands of different remedies. His latest work in

this area explains the continuing relevance oi: and

justifications for the traditional distinction between

legal and equitable remedies.

John F. Duffy, Samuel H. McCoy II Professor of

Law at the University of Virginia School of Law.

Professor Duffy has written extensively in the area of

patent law and policy. His works include law review

articles on patent law and a casebook, co-authored

with Robert Merges, on Patent Law and Policy. He

' All parties have consented to the filing of this brief. No

counsel for a party has written this brief in whole or in part, and

no counsel or party made a monetary contribution intended to

fund the preparation or submission of this brief. No person or

entity, other than the amicus curiae or its counsel, has made a

monetary contribution to this briefs preparation or submission.

2 Institutional affiliations are provided for identification

purposes only.

2

also writes on other areas of the law, and his article

Administrative Common Law in Judicial Review,

77 Tex. L. Rev. 113 (1998), examined the relationship

between statutory law and judge-made law, including

judge-made law in equity decisions.

SUMMARY OF ARGUMENT

The traditional rule in American law is that

laches is an equitable defense that does not apply to

claims for damages brought within an applicable

statutory limitations period. This longstanding rule

was recently reaffirmed by this Court in Petrella v.

Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014).

Patent law is not special in this regard. There

was no common-law exception to the traditional rule

in patent cases prior to the enactment of the Patent

Act in 1952, and Congress did not codjfy such an

exception in that act. The Federal Circuit's

conclusion to the contrary, which is based on a

smattering of inconclusive lower-court decisions and

fails to account for contrary Supreme Court

precedent, is mistaken.

The traditional rule reflects both good policy and

the superior lawmaking authority of the legislature.

The laches defense responds to certain dangers

inherent in the award of equitable relief, which

include the risk of abusive behavior by litigants and

costly judicial supervision. These dangers simply are

not present to anything like the same degree when a

plaintiff seeks only legal remedies that are already

subject to a statute of limitations. Moreover,

consistent with general separation-of-powers

principles, judge-made limitations on the timing of

remedies should yield where Congress has considered

3

and addressed the issue. All of these points are no

less true in the patent context than in any other.

Accordingly, the holding of the Federal Circuit should

be reversed.

ARGUMENT

I. LACHES IS AN EQUITABLE DEFENSE

THAT DOES NOT BAR CLAIMS FOR

LEGAL DAMAGES

A. The Traditional Rule In American Law Is

That Laches Does Not Bar Claims For

Legal Damages

The traditional rule in American law is that

laches is an equitable defense that does not bar

claims for legal damages brought within an

applicable statutory limitations period. See, e.z.,

Cnty. of Oneida v. Oneida Indian Nation of N_Y.,

470 U.S. 226, 244 n.16 (1985) (“[A]pplication of the

equitable defense of laches in an action at law would

be novel indeed.”); Restatement (Third) of Restitution

and Unjust Enrichment § 70 (2011) (explaining that

any “action for restitution may be barred by [a] lapse

of time under an applicable statuie of limitations” but

expressly restricting the defense of laches to “an

action for restitution [that] asserts a claim or seeks a

remedy originating in equity”); 1 Dan B. Dobbs, Law

of Remedies 104, 105-106 (2d ed. 1993) (“When laches

does not amount to estoppel or waiver, it does not

ordinarily bar legal claims, only equitable

remedies Courts have routinely referred to

laches as an equitable defense, that is, a defense to

equitable remedies but not a defense available to bar

a claim of legal relief.”); Samuel L. Bray, A Little Bit

4

of Laches Goes a Long Way: Notes on Petrella v.

Metro-Goldwyn-Mayer Inc., 67 Vand. L. Rev. En

Banc 1, 2-4 (2014).

This rule has a long pedigree, see, e.g., United

States v. Mack, 295 U.S. 480, 489 (1935) (“Laches

within the term of the statute of limitations is no

defense at law.”), and continues to govern in the vast

majority of state and federal courts, see Naccache v.

Taylor, 72 A.3d 149, 154 & n.9 (D.C. 2013) (collecting

cases). While a few courts do apply laches to all

claims, legal and equitable, these scattered

exceptions only demonstrate the widespread

resilience of the traditional rule. See, e.g., Smith v.

Gehring, 496 A.2d 317, 323-25 (Md. Ct. Spec.

App. 1985) (noting several outliers to the traditional

rule, including a pair of patent cases, and rejecting

them as unreasoned outliers); Bray, A Little Bit of

Laches, 67 Vand. L. Rev. En Banc at 3 (same).

B. Petrella Reaffirmed The Traditional Rule

The continuing vitality of the traditional rule

barring laches as a defense to claims for legal

damages was recently reaffirmed in Petrella v. Metro-

Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014). The

Court held that laches is not a defense to copyright

infringement claims seeking damages that are

brought within the Copyright Act’s three-year

limitations period.

As this Court reasoned, “laches is a defense

developed by courts of equity; its principle application

was, and remains, to claims of an equitable cast for

which the Legislature has provided no fixed time

limitation.” Petrella, 134 S. Ct. at 1973. “Both before

and after the merger of law and equity in 1938, this

5

Court has cautioned against invoking laches to bar

legal relief.” J/bid. (citing Holmberg v. Armbrecht, 327

U.S. 392, 395 (1946); Merck & Co. v. Reynolds, 559

U.S. 633, 652 (2010); Mack, 295 U.S. at 489; Cnty. of

Oneida, 470 U.S. at 244 n.16).

This traditional rule, the Court emphasized,

works in tandem with separation-of-powers principles

to preclude application of laches to claims for legal

damages brought within a _ statutory limitations

period. “|T]}he equitable defense of laches” is meant

to address “unreasonable, prejudicial delay in

commencing suit.” Petrella, 134 S. Ct. at 1967. But a

congressionally enacted statute of limitations

“itself takes account of delay” in the bringing of

claims and thus obviates any need for a laches

defense as to claims with the domain of the statute.

Id. at 1973. The “legislation-overriding” that occurs

when individual judges “set a time limit other than

the one Congress prescribed .. tug{s] against the

uniformity Congress s{eeks} to achieve when it

enact(s]” a limitations period, and upsets the proper

division of labor between courts and Congress. /d. at

1974-75; cf. Lyons P’ship, L.P. v. Morris Costumes,

Inc., 243 F.3d 789, 798 (4th Cir. 2001) (“Separation of

powers principles preclude us from applying the

judicially created doctrine of laches to bar a federal

[copyright] claim that has been timely filed under an

express statute of limitations.”).

Although Petrella addressed the availability of

laches to claims for legal damages brought within the

Copyright Act’s limitations period, its holding was

based on principles that apply more generally. The

conclusion that “laches is a defense developed by

courts of equity” and is therefore inapplicable to

6

claims for legal remedies, 134 S. Ct. at 1973, is not

unique to copyright, but rather derives from

generally applicable common-law principles

developed in cases decided before and after the

merger of law and equity, and in a variety of legal

contexts. See id. at 1973-74. Similarly, the command

that when Congress speaks, the courts must follow,

see id. at 1973-74, is hardly limited to copyright, or

even to statutes of limitations. See, e.g., Miles v

Apex Marine Corp., 498 U.S. 19, 27, 31 (1990) (in

admiralty context, holding that where “Congress has

spoken directly” to remedial questions, courts must

not “supplement” Congress’ answer by prescribing “a

different measure of damages,” “a different statute of

limitations,” or “a different class of beneficiaries”). In

sum, nothing in Petrella suggests that its reasoning

or conclusion is limited to the copyright context.

Il. THE PATENT ACT ADHERES TO THE

TRADITIONAL RULE

The decision below departs from the traditional

rule. According to the Federal Circuit, such

departure is the will of Congress—which, that court

held, “codified a laches defense in

(35 U.S.C. § 282(b)(1)}.” Pet. App. 36a. But Congress

did no_ such thing. Properly construed,

section 282(b)(1) provides no reason to think that

Congress intended for laches to apply to claims for

legal damages in the patent context.

The Federal Circuit's construction of

section 282(b)(1) rests on two assertions, neither of

which is sound. The first is that the purportedly

“inclusive language” of section 282(b)(1),_ in

combination with its legislative history and certain

7

post-enactment statements by one of its principal

draftsmen, evidences Congress's deliberate intent to

make laches applicable to all kinds of patent claims,

legal and equitable. The second is that Congress's

intent in this regard merely “codified [the] laches

defense” as it existed in case law at the time of

section 282(b)(1)’s enactment, and that laches “barred

recovery of legal remedies” under such case law.

Pet. App. 18a—34a

But nothing in the text or legislative history of

section 282(b)(1) suggests that Congress intended to

expand the availability of the laches defense beyond

its traditional domain—and neither does the case law

in existence at the time the provision was enacted.

Indeed, even when taken together, the factors relied

upon by the Federal Circuit fall far short of the

“clear|] express{ion|” of legislative intent that is

required to justify a departure from the traditional

rules governing remedies. See, e.g., Nken v. Holder,

556 U.S. 418, 433 (2009) (refusing to imply a

departure from traditional equitable principles where

Congress had not “clearly express[ed] such a

purpose”). And in the absence of such a clear

expression, section 282(b)(1) should be construed to

invoke, rather than alter, the traditional rule that

laches does not bar claims for legal relief brought

within an applicable limitations period.

A. Congress Did Not Change The Traditional

Rule When It Enacted Section 282(b)

This Court has recently and repeatedly said that

congressional departures from traditional principles

of equitable remedies are not to be implied lightly.

See, e.g., Nken, 556 U.S. at 433; eBay Inc. vy.

8

MercExchange, L.L.C., 547 U.S. 388, 391 (2006); see

also Weinberger v. Romero-Barcelo, 456 U.S. 305, 313,

320 (1982). That is not to say that Congress cannot

make changes to the law of remedies when it wishes.

See Jesinoski v. Countrywide Home Loans, Inc., 135

S. Ct. 790, 793 (2015). But such a purpose must ie

“clearly express[ed].” Nken, 556 U.S. at 433. Absent

such a clear expression, courts are to read federal

statutes in a manner that is consistent with, rather

than one that alters, the common law of equitable

remedies. Romero-Barcelo, 456 U.S. at 320; see also

Bray, A Little Bit of Laches, 67 Vand. L. Rev. En

Banc at 15-17 (giving rationales).

No clear statement expressing an intent to depart

from the traditional rules governing laches appears

anywhere in section 282(b)(1). The section provides

that:

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.

35 U.S.C. § 282(b)(1). As is evident from its text, the

statute does not even mention laches. Though it may

be true, as the Federal Circuit held, that the text of

section 282(b)(1) is sufficiently “broad” and

“inclusive” as to encompass a defense of laches

generally, Pet. App. 19a, 22a, it cannot be said that

the text is so clear and specific as to evidence a

congressional intent to deviate from the traditional

rule confining laches to claims for equitable relief.

———_-- 7 —_

9

Cf. Nken, 556 U.S. at 428-433 (finding that statutory

provision limiting courts’ authority to “enjoin the

removal of any alien,” 8 U.S.C. § 1252(f)(2), did not

evidence a congressional intent to deviate from

traditional principles regarding stays, despite

“functional overlap” between a stay pending appeal

and a preliminary injunction). On this point—the

only one that matters here—the statute is altogether

silent.

Nor can any such clear expression of purpose be

found in the legislative history of the statute. As the

Federal Circuit acknowledges, the relevant House

and Senate Reports each contain just one sentence

addressing section 282(b). Pet. App. 19a. Neither

addresses either the availability or the scope of a

laches defense. Ibid. Likewise, the drafter’s

commentary on which the Federal Circuit relies

states only that the term “unenforceability” in

section 282(b)(1) was meant to “include __. equitable

defenses such as laches.” /d. at 20a (quoting P.J.

Federico, Commentary on the New Patent Act, 35

U.S.C.A. 1, 55 (West 1954)). Putting aside whether

this post-enactment statement by a Patent Office

official should be accorded any authoritative weight

at all,* it provides no evidence of any intent to apply

the equitable defense of laches to claims for legal

damages. Because neither the text of

section 282(b)(1) nor its legislative history suggest

’ Cf. Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc.,

447 U.S. 102, 117-18, 120 (1980) (repeating “the oft-repeated

warning that” a “post huc statement” of a single legislator “is far

from authoritative as an expression of congressional will”).

10

that Congress intended to depart from familiar

equitable principles, the statute should be construed

to adhere to those principles and provide for laches as

a defense only to equitable claims. Cf. eBay, 547 U.S.

at 391-92 (holding that the “familiar principles”

governing permanent injunctive relief “apply with

equal force to disputes arising under the Patent Act”

in the absence of any indication that Congress

intended otherwise).

Indeed, the conclusion that Congress intended to

leave the traditional scope of the laches defense

undisturbed is bolstered when the words of

section 282 are properly construed “in their context

and with a view to their place in the overall statutory

scheme.” Utility Air Regulatory Grp. ev.

Environmental Protection Agency, 134 S. Ct. 2427,

2441 (2014). The six-year statutory limitations

period set out in section 286 expresses Congress’

judgment as to the timeliness of a damages claim,

lending further support to the conclusion that

whatever laches defense may be contemplated by

section 282 adheres to traditional equitable principles

and dves not apply to claims for legal relief brought

within the limitations period. See Petrella, 134 S. Ct.

at 1967 (noting that because “courts are not at liberty

to jettison Congress’ judgment on the timeliness of

suit,” laches “cannot be invoked to _ preclude

adjudication of a claim for damages brought within

the three-year” statutory limitations period).

1]

B. There Was No Common-Law Exception To

The Traditional Rule In Patent Cases

Prior To The Enactment Of The Patent

Act Of 1952

The Federal Circuit’s holding is not saved by the

majority's analysis of the common law at the time

that section 282 was enacted in 1952. While it is true

that a statute that “covers an issue previously

governed by the common law” is presumed to “retain

the substance of the common law,” Pet. App. 24a

(quoting Kirtsaeng v. John Wiley & Sons, Inc., 133 S.

Ct. 1351, 1363 (2013)), that presumption applies only

to principles that are “well established.” Astoria Fed.

Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 108

(1991). In 1952, there was no such well-established

principle permitting laches as a defense to claims for

legal relief brought within a limitations period.

On the contrary, this Court had several times

stated the opposite: “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.” Wehrman v. Conklin, 155 U.S.

314, 326 (1894); see also Holmberg, 327 U.S. at 395;

Mack, 295 U.S. at 489; Cross v. Allen, 141 U.S. 528,

537 (1891). Nor was there any uniform practice

among lower federal courts permitting laches as a

defense to claims for legal relief. See, e.g., Roller v.

Clark, 38 App. D.C. 260, 266 (D.C. Cir. 1912)

(“Laches, though a good defense in equity, is no

defense at law.”). Nor, for that matter, should any

change in the scope of laches be expected to follow

from the procedural merger effected by the Federal

Rules of Civil Procedure. See, e.g., Grupo Mexicano

12

de Desarrollo, S.A. v. All. Bond Fund, Inc., 527 U.S.

308, 322-23 (1999). The established rule was (and is)

that laches applies only against equitable claims.

See, e.g., Petrella, 134 S. Ct. at 1973-74; see also

McClintock on Equity (2d ed. 1948) (“The majority of

the courts which have considered the question have

refused to enjoin an action at law on the ground of

the laches of the plaintiff at law ”).4

In light of these repeated statements by the

Supreme Court, it is impossible to conclude that

there was any “well-established” common-law

principle permitting the application of laches to legal

claims, let alone that Congress silently endorsed that

principle when it enacted section 282. Cf. Antonin

Scalia & Bryan A. Garner, Reading Law 322 (2012)

(Congress is presumed to be aware of administrative

or judicial interpretation of statutory language only

when it is “by the highest court in a jurisdiction” or “a

uniform interpretation” by lower courts).

' The Federal Circuit suggests that Lane & Bodley Co. v.

Locke, 150 U.S. 193 (1893), is to the contrary. See Pet. App.

$2a-—33u. This view is mistaken. Lane & Bodley was a suit in

equity seeking equitable relief, not legal damages. Locke v.

Lane & Hodley Co., 35 F. 289, 290 (C.C.S.D. Ohio 1888), reu‘d,

150 U.S. 193. Moreover, Lane & Bodley was decided at a time

when there was no general statute of limitations for patent law.

See Campbell v. City of Haverhill, 155 U.S. 610, 614 (1895)

(“[T]he {1870 Act's] federal statute of limitation has no

application to any infringement committed since June 22,

1874.”); see also Act of Mar. 3, 1897, ch. 391, § 6, 29 Stat. 692,

694 (predecessor to § 286). The Court was thus free to apply

laches or borrow an analogous state statute of limitations

without “jettison[ing] Congress’ judgment on the timeliness of

suit.” Petrella, 134 S. Ct. at 1967.

13

The Federal Circuit elides these cases by speaking

exclusively about so-called “laches patent common

law” (Pet. App. 26a)—a phrase never before

appearing in any reported judicial decision or

secondary commentary. But laches is not a creature

of patent law; it is a general equitable defense. See,

e.g., Petrella, 134 S. Ct. at 1973-74 (looking to cases

arising under the Federal Farm Loan Act, the

Securities Exchange Act, the National Prohibition

Act, and federal common law of Indian land rights for

guidance regarding the scope of laches in a copyright

action). And as previously discussed, nothing in the

Patent Act suggests that Congress intended to create

a patent-specific form of laches (or that it had any

intention with respect to laches at all). In the

absence of any such clear indication that patent is

special when it comes to laches, generally applicable

equitable principles must be applied. Cf. eBay, 547

U.S. at 393 (rejecting the Federal Circuit's “general

rule, unique to patent disputes,” and applying

instead generally applicable equitable principles).

In any event, no well-established principle

permitting the application of laches to claims for

damages within the limitations period can be

conjured up out of the so-called “laches patent

common law” as it existed in 1952. See Pet. App.

55a-—64a (Hughes, J., concurring in part and

dissenting in part) (finding that, “contrary to the

majority's narrow analysis of regional-circuit cases,

the pre-1952 case law did not clearly establish that a

plaintiffs laches may preclude recovery of legal

damages’). In fact, many of the cases that applied

laches to bar claims for patent damages did so

without so much as mentioning the statutory

limitations provision that became section 286. See,

14

e.g., Universal Coin Lock Co. v. Am. Sanitary Lock

Co., 104 F.2d 781, 781 (7th Cir. 1939); George J.

Meyer Mfg. Co. v. Miller Mfg. Co., 24 F.2d 505, 507-08

(7th Cir. 1928). In these cases, the question of

whether laches can be applied to bar claims for lega!

damages brought within a limitations period merely

“lurk{[s] in the record, neither brought to the

attention of the court nor ruled upon,” and they

cannot “be considered as having been so decided as to

constitute precedents.” Cooper Indus., Inc. v. Aviall

Servs., Inc., 543 U.S. 157, 170 (2004).

Other cases decided in the lower courts before

1952 suggested some openness to applying laches to

claims for legal damages, but they did not actually do

so. E.g., France Mfg. Co. v. Jefferson Elec. Co., 106

F.2d 605, 609 (6th Cir. 1939); Hartford-Empire Co. v.

Swindell Bros., Inc., 96 F.2d 227, 232-33 (4th Cir.

1938), modified in part on other grounds, 99 F.2d 61

(4th Cir. 1938). Even assuming that these opinions

could be read to endorse the availability of laches for

damages claims—and that is far from clear—any

such endorsements are dicta. As such, they “do not

lend any additional weight to the argument that

Congress ratified a settled judicial construction.

Dictum settles nothing, even in the court that utters

it.” Jama v. Immigration & Customs Enforcement,

543 U.S. 335, 351 n.12 (2005).

And in Middleton v. Wiley, which was decided the

same year that the provisions in question were

enacted (1952), the Eighth Circuit reversed the trial

court’s application of laches on the basis of, among

other things, the Patent Act’s statute of limitations:

It is clear that, under the statute,

recovery of compensatory damages for

15

infringement of a patent is not a matter

of judicial grace but of legal right, and

that the damages awarded may not be

less than a reasonable royalty.

The defendant Wiley asserts, in effect,

that the plaintiff lost his right to

damages because he waited too long to

bring his action. But persistence in the

unauthorized use of a _ patented

invention is a continuing trespass, and

mere delay in seeking redress cannot

destroy the right of the patentee to

compensatory damages.

195 F.2d 844, 847 (8th Cir. 1952).° As Middleton

demonstrates, there simply was no consensus that

laches could be applied to bar patent-infringement

claims for legal damages brought within the

limitations period.

®° The Federal Circuit majority attempts to circumvent

Middleton's clear statement against the applicability of an

equitable defense to a claim for damages brought within the

limitations period by focusing on subsequent language in that

case finding “no basis fur applying the doctrine of laches,”

Middleton, 195 F.2d at 846. According to the Federal Circuit,

this subsequent language means that Middleton “assumes

laches to preclude legal relief.” Pet. App. 32a & n.9. Not so.

But even assuming arguendo that this subsequent language in

Middleton demonstrated a certain openness to applying laches,

the ambiguity of the court's position regarding the propriety of

laches for a claim for legal relief brought within the limitations

period defeats the conclusion that there was any well-

established rule expanding the availability of laches under the

“laches patent common law.”

16

Ill. THERE ARE GOOD REASONS FOR THE

TRADITIONAL RULE

The traditional rule that laches does not apply to

a claim for a legal remedy is not merely a historical

artifact. It reflects characteristic differences between

legal and equitable relief that remain relevant

today—including in the patent context. The Federal

Circuit's attempt to defend its “general rule,’ unique

to patent disputes,” eBay, 547 U.S. at 393, should,

even as a matter of policy, give way to general

equitable principles.

A. Laches Responds To The Dangers

Inherent In Awarding Equitable Rather

Than Legal Relief

Consider, for example, why laches even exists as a

defense. One answer is that there are familiar

problems from long-delayed suits—memories fade,

stories change, documents are lost, and so on. That

answer is good as far as it goes, but it is also the

reason for a statute of limitations. By itself, that is

not a reason for a more flexible time limit, like the

one embodied in the laches defense. And it is

certainly not a reason to set aside a statute of

limitations—Congress’s bright-line answer to these

general timeliness concerns. It is Congress's

prerogative to choose between a bright-line rule and a

flexible standard, and its choice of the former should

be respected. The equitable defense of laches must

have other purposes.

“|E]quitable remedies have certain characteristic

costs,” which generally are not present with claims

for legal relief. Samuel L. Bray, The System of

Equitable Remedies, 63 UCLA L. Rev. 530, 577

17

(2016). Laches responds to these dangers inherent in

the award of equitable relief. One danger is that

equitable remedies will be abused by litigants

because they have asymmetric effects on the parties.

See generally id. at 577-78. In real property, the

classic example is the landowner who knowingly

allows an encroaching neighbor to build an expensive

structure on his land because, once the structure is

built, an injunction to tear it down will give the

landowner powerful leverage to exact concessions.

The leverage comes from the asymmetric effect of the

injunction: tearing down the neighbor's structure will

help the landowner a little, but it will hurt the

neighbor a lot. This asymmetric effect and the

resulting hold-up danger is of course well-known for

injunctions in intellectual property But it is almost

wholly absent for damages. An award of damages is

money, and the amount of money paid by the

defendant is the same as the amount of money

received by the plaintiff. There is no pervasive

asymmetry of effect.

Another danger is that litigants will abuse

equitable remedies because of a temporal asymmetry

The benefit the plaintiff would derive from an

injunction, accounting, constructive trust, or specific

performance may fluctuate dramatically based on

prices, variation in_ profits over time, or

circumstances that lock the defendant in to a course

of conduct. This danger, too, is acute for intellectual

property. See, e.g., Mark P. Gergen, John M. Golden

& Henry E. Smith, The Supreme Court's Accidental

Revolution? The Test for Permanent Injunctions, 112

Colum. L. Rev. 203, 243-44 (2012) (noting the concern

that some entities will “sit back while others make

costly investments based on an apparent absence of

18

relevant patent rights, not knowing that the

[plaintiff] will assert a claim of infringement after

designing around the [plaintiffs] patent rights

becomes much more expensive”); Haas v. Leo Feist,

Inc., 234 F. 105, 108 (S.D.N.Y. 1916) (L. Hand, J.)

(noting this risk as a reason to apply laches to an

equitable remedy in copyright). But none of these

reasons for temporal asymmetry is typically present

with damages, which do not require the transfer of

property and are thus relatively immune from

subsequent market fluctuations.

A final danger is costly supervision of the parties.

Equitable remedies are more likely to require

continuing judicial oversight, whether because of the

possibility of noncompliance or the possibility that

they will need alteration as circumstances change.

See, e.g., Original Great Am. Chocolate Chip Cookie

Co. v. River Valley Cookies, Ltd., 970 F.2d 273, 281

(7th Cir. 1992) (“[E)quitable relief is costly to the

judicial system, especially in a case such as this

where the relief sought would cast the court in a

continuing supervisory role.”); 13A Charles Alan

Wright et al., Federal Practice & Procedure § 3531.2

(3d ed. 2002) (“To award damages, it need only be

determined that the specific activities involved with

this case were unlawful. To award an injunction,

much more precise determinations may become

necessary.”); Bray, System of Equitable Remedies, 63

UCLA L. Rev. at 572-76. Many of these costs are

externalities to the parties and will not be fully

incorporated into their decisionmaking. Again, these

costs are not characteristic of damages.

eo

19

B. These Characteristics Of Equitable And

Legal Relief Are No Different In The

Patent Context

In its effort to justify its departure from the

traditional rule, the Federal Circuit relies on a so-

called special body of “laches patent common law,”

Pet. App. 26a; emphasizes that pre-1952 patent

damages actions were “unlike typical damages

actions in that” damages could be recovered in

actions at either law or equity, Pet. App. 34a-35a;°

and points to the fact that “innocence is no defense to

patent infringement,” which it characterizes as a

“major difference between copyright and patent law,”

Pet. App. 37a. At bottom, these various arguments

can be boiled down to one central rationale: Patent

law is special.

While that is no doubt true in some respects,

patent law is utterly ordinary when it comes to the

foundational remedial principles that underlie the

traditional rule governing laches. See Pet. App. 45a

(Hughes, J., concurring in part and dissenting in

part) (“Patent law is governed by the same common-

law principles, methods of statutory interpretation,

and procedural rules as other areas of civil

litigation.”). As with other areas of law, the award of

equitable relief in patent is sometimes susceptible to

* This distinction is far less meaningful than the Federal

Circuit suggests, in light of Supreme Court precedent holding

that a court sitting in equity could not enjoin a court sitting in

law from awarding legal damages on the basis of laches. See

Wehrman, 155 U.S. at 326-27 (“Though a good defense in equity,

laches is no defense at law.”).

20

certain dangers, such as asymmetric costs to the

parties, temporal asymmetry, and costly judicial

supervision. See, eg., Fed. Trade Comm'n, The

Evolving IP Marketplace: Aligning Patent Notice and

Remedies with Competition 215 (2011)

(acknowledging that, in certain circumstances, an

injunction has the “ability to generate [a] hold-up

that can distort competition among technologies,

raise prices and deter innovation”); Foster v. Am.

Mach. & Foundry Co., 492 F.2d 1317, 1324 (2d Cir.

1974) (acknowledging the concern that “[ajn

injunction to protect a patent against infringement,

like any other injunction, .. {could be used] as a club

to be wielded by a patentee to enhance his

negotiating stance.”).

And as with other areas of the law, these dangers

typically are not present when the remedy in

question is damages: the amount of money received

by a successful patent-infringement plaintiff is the

same as the amount of money paid by an

unsuccessful patent-infringement defendant; the

benefit a successful patent-infringement plaintiff

derives from damages for a particular act of

infringement is relatively invulnerable to post hoc

market fluctuations;’ and the costs of complying with

‘ Of course, the value of each actionable act of infringement

may vary, even if the value of damages associated with that act

of infringement does not change over time. This feature of the

patent law does not justify abandonment of the traditional rule

regarding laches. As this Court reasoned with respect to an

analogous feature of copyright law in Petrella, “(ijt is hardly

incumbent on [patent] owners to challenge each and every

actionable infringement,” and “there is nothing untoward” about

2]

an order to pay damages are relatively low. To the

extent that there is reason to fear delay by patent-

infringement litigants, that concern has_ been

addressed by Congress’ provision of the limitations

period set forth in section 286. See Pet. App. 5la

(Hughes, J., concurring in part and dissenting in

part) (“Congress’ decision to create a fixed statutory

limitations period in § 286 strongly suggests that

it did not intend to codify a defense of laches that

further regulates the timeliness of damages claims.”).

Nothing about patent law justifies the Federal

Circuit’s departure from _ traditional equitable

principles.

CONCLUSION

The judgment of the court of appeals should be

reversed.

waiting tu see whether the harm posed by an act of infringement

justifies the cost of litigation. 134 S. Ct. at 1976. To otherwise

require patent holders to “sue soon, or forever hold [their] peace”

would result in a profusion of litigation over potentially

innocuous infringements. /bid.

22

Respectfully submitted.

July 2016

ARIEL N. LAVINBUK

Counsel of Record

KATHLEEN SHEN

ROBBINS, RUSSELL, ENGLERT,

ORSECK, UNTEREINER &

SAUBER LLP

1801 K Street, NW

Suite 411L

Washington, D.C. 20006

(202) 775-4500

alavinbuk@robbinsrussell.com