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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2016

## Text

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0648%3A25. Public record. Not legal advice.