• Two Out Of Three Ain’t Bad (or Good): Laches Defenses in IP Cases
  • October 27, 2017 | Author: Joseph Gerald Fortner
  • Law Firm: Halloran & Sage LLP - Hartford Office
  • Over the last few years, the U.S. Supreme Court has reviewed timeliness issues in the context of intellectual property cases. Defendants in patent, copyright and trademark actions often plead equitable defenses, and laches is asserted where the defendant claims that the plaintiff’s delay– whether by design or neglect – in taking action against the accused infringer was unreasonable, thus barring relief. Where a statute of limitations exists, tension can arise if the defendant argues that claims are barred when the “delay” is for less than the limitations period.

    In the copyright (Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962 (2014)), and more recently, the patent (SCA Hygiene Products Aktiebolag v. First Quality Baby Products, 137 S.Ct. 954 (2017)) contexts, the Supreme Court has concluded that laches does not bar claims brought within the statute of limitations. In Petrella, the Court held that the Copyright Act’s 3-year statute of limitations precluded a laches defense, as Congress had set the time period for claims to be brought, 134 S.Ct. at 1973-74. The SCA Hygiene Products Court relied upon Petrella and its logic, and went so far as to reject lower court efforts to engraft a laches bar into a statute (§ 282(b)) where it was not mentioned, 137 S.Ct. at 967. In both cases, the Court left open that inequitable conduct could be considered, both where “extraordinary circumstances” caused by delay “warrant[ed], at the very outset of the litigation, curtailment of the relief equitably awardable,” Petrella, 134 S.Ct. at 1977; and as it might affect the available remedies, id. at 1978-79 ; SCA, 137 S.Ct. at 967.

    While plaintiffs in trademark actions might logically believe “we’re next,” the Petrella Court has dashed those hopes. There, the Court noted that in enacting the Lanham Act, Congress did not include a statute of limitations, but in fact did expressly include laches as one of the listed defenses. 134 S.Ct. at 1974, n.15 (citing 15 U.S.C. § 1115(b)(9)). The result is that courts continue to dismiss trademark actions on the basis of laches, even where the claim has been brought within the applicable state’s limitations period, where there is a showing of unreasonable delay and prejudice. See Fitbug, Ltd. V. Fitbit, Inc., 78 F.Supp.3d 1180 (N.D. Cal. 2015); Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc., 2017 WL 963193*15 (D.S.D., 2017). Thus, while patent and copyright owners can take solace from recent Supreme Court decisions, trademark owners cannot assume that bringing suit within their state’s statute of limitations will avoid timeliness issues.