Source: https://patentlyo.com/patent/2015/09/maintains-defense-damages.html
Timestamp: 2019-04-25 11:52:50+00:00

Document:
On en banc rehearing, the Federal Circuit has ruled that the Supreme Court’s Petrella decision (eliminating the doctrine of laches for back-damages for copyright infringement) does not directly apply in the patent context.
The 6-5 split was on whether laches can be used to eliminate back-damages for infringement that occurred within the six-year statutory limit. Here, the majority found that laches continues to apply.
Although laches is considered a judge-made equitable doctrine, the court smartly looked to the statute in reaching its conclusion. In particular, Section 282(b)(1) of the Patent Act states that “unenforceability” is a defense to allegations of patent infringement and back when the law was passed (1952) was understood to encompass defenses such as “laches, estoppel and unclean hands.” Taking this together, the court found that Congress meant for the laches defense to continue to work alongside the six-year limit on back-damages.
Congress remained silent on the content of the laches defense. Section 282 therefore retains the substance of the common law as it existed at the time Congress enacted the Patent Act. . . . 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. . . . 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.
Challenging this point, the Dissent argued that the relevant “common law” for consideration should have come from the Supreme Court which, according to the dissent, indicated that laches was only a defense to equitable actions.
The legal history point of debate seems to be whether we should look at the general common law of laches or instead the common law of laches as applied to patent lawsuits?
Dissent: Patent law is governed by the same common-law principles, methods of statutory interpretation, and procedural rules as other areas of civil litigation.
The majority here argues correctly that we should look to the statute and see what it tells us. That approach makes sense in all patent cases, regardless of the issue.
What the majority finds is that the statute implicitly binds the court to implement the equitable defenses available in patent cases back in 1952 (when the relevant amendment was passed). At the same time, the majority appears perfectly comfortable with the notion that the scope of the equitable actions will continue to adjust over time and were in no way fixed by their incorporation into the 1952 Act. Thus, when the court asks – what are the contours of the laches defense – it does not feel constrained to limit itself to 1952 precedent but instead looks directly to the recent Supreme Court decision in Petrella.
Does anyone know where I can find transcript for oral argument for this case?
As far as I know, transcripts of the Federal Circuit decisions are not published, although they are available in audio form. The parties may have had the oral arguments transcribed.
1) I just don’t get III of the opinion, which no judge bothered to write a dissent to. This is this Court’s failure, consistently taking inherent power of the district court to exercise discretion. There is no basis to say that laches should bar ongoing royalties only in exceptional circumstances. I’m reminded of how this Court handled injunctions and attorney fees, and have yet learned from those mistakes. This opinion allows equity in legal remedies but limits it for equitable remedies. Just bizarre.
2) Most of the time before 1948, patent owners would plead equitable relief by accounting, rather than legal damages. In equity, “reasonable compensation” was available, whereas that was not codified for legal remedies until 1948. If what I say is true, then it is less likely that Congress intended to allow laches in legal remedies.
In other words, PJ Federico might have mentioned laches because he thought patent owners would still plead for equitable accounting? Keep in mind it wasn’t until Aro II in 196? that equitable accounting was disallowed.
J, thanks for the update on legislative history. It shows that Federico’s comments are not inconsistent with the use of laches for equitable remedies and equitable remedies alone. Just because he did not parse his comments between remedies should not be construed one way and not the other if the evidence is not clear as to which way he intended his remarks.
But if laches bars equitable remedies but not the legal, then we have the very peculiar situation that the patent owner would have to continually sue for future infringements rather than receiving an injunction.
Just every six years, Ned. And look, the whole point of laches means someone acted inequitably, to the infringer’s detriment. The prohibition of ongoing remedies allows the infringer flexibility to adjust. For example, negotiate a royalty or stop selling the patented invention.
If a patentee opens himself to a laches defense, that’s the patentee’s fault.
Also, ongoing royalties are not the same as reasonable royalties. We have a better idea of a patents worth last year then what it will be worth one year in the future. Also, reasonable royalties are subject to control by a jury, while ongoing royalties are made by the judge.
And that last point makes the Federal Circuit’s decision to limit when a district court may use laches all the more confusing.
J, OK, jury finds damages = 0.5 % price per unit, but that a RR is 1.0 % price per unit. The judge must award 1.0 %. If I understand you correctly, the on-going royalties cannot fall below 1.0%?
Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.
When the damages are not found by a jury, the court shall assess them.
In either event the court may increase the damages up to three times the amount found or assessed.
Increased damages under this paragraph shall not apply to provisional rights under section 154(d).
A court is not obliged to award ongoing royalties.
Section 284 oblidges the court to award remedial, not prospective, damages. Before 1948, patentees seeking legal damages could not rely on the statute for legal damages. Most plaintiffs sought equitable accounting (remedial equitable relief), but that took too long. So 284 obliges some legal relief, in any case, so that plaintiffs no longer had to rely on equity for monetary compensation, but this says nothing of prospective relief.
Finally, if the court decides to grant equity, it may look at the RR. But if the court finds good reason (in the tradition of equity) to add or detract from that royalty, or only allow ongoing royalties for a short period so that the parties can negotiate their own royalty, the. The district court should be allowed to do so.
We all know why this came out the way it did, see footnote 11, a list of big corporations and their bar associations that filed amicus briefs in support of Aukerman. The majority cites Pharma being in support, but I see only Roche. No one from universities. No one from startups. No one other than Roche from Pharma. Nobody who rely on patents supported Aukerman.
We see once again real divide here — those who need patents vs. those who would wish the patent system did not exist.
Seriously, does anyone expect anything other that a 9-0 smacking by big brother?
I do. As you said, look at the companies who filed amicus briefs – they are the types of parties that are the main beneficiaries of the Court’s recent patent decisions. The CAFC’s majority opinion is a pro-business-as-usual decision, not favoring the patent owner lying in the weeds until the damages get really big. I expect cert. denied.
Laying in the weeds? I that an element of proof?
I think that he implies that it is an element of equity (kind of “come to the table with clean hands”).
seriously, anon, there are numbers of legitimate reasons for not bringing suit against a specific infringer. All legitimate.
There is no doubt in your latest post that there may in fact be legitimate reasons for not (or merely delaying) bringing suit.
But that does NOT mean that a court may look at reasons for delaying bringing suit and make the call that such an action is inequitable.
The mere possibility of THAT call is what (I believe) Pilgrim is referencing, and it is THAT possibly inequitable action that a court may (rightfully, under the invitation of Congress) bring into consideration.
Nothing more, and (importantly), nothing less.
there may in fact be legitimate reasons for not (or merely delaying) bringing suit.
Your English here is wanting pretty badly.
But I’m pretty sure that courts can, in fact, (1) look for reasons for the delay in bringing suit and, (2) based on those reasons, make the call that the delay resulted in inequity.
Apparently Ned said something that you understood (“there is no doubt…”), but what Ned said does not (or should I say “NOT”?) “mean” something else.
As if that weren’t unintelligible enough, you then went on another one of your pseudo-psychoanalytic bunny hops to compare what Ned’s post did “NOT” mean to what you believe another commenter might be “referencing”.
Seriously: try harder. Try a lot harder.
It’s not me that needs to “try harder” Malcolm.
No, Ned – that’s the easy Kool-Aid to swallow. Patents have NEVER been about just need. That is the “but for” feint. Don’t fall for it.
anon, there are companies that find patents to be a block on their progress. We know who they are.
There are others who need patents to obtain financing.
There are others that need patents to fund basic research.
There are others that need patents to protect the tremendous investment in developing a product that can easily be manufactured at almost no cost.
The debate is between the people in at the very top of this list with the people in the last three.
And no doubt, the people at the top like to use words like “troll” to impugn their opponents. But there is a word that described the host of people trying to undermine the patent system to feather their own nests. The word I am thinking about begins with P, ends with an E, and in the middle has an I and a RAT.
I am merely pointing out that the reliance on the word “need” paints an incorrect picture as to why we have the patent system.
“But for” (or “need”) is a good and valid reason for having a patent system.
But by NO means is it the only good and valid reason.
Silly Ned! We have a patent system so “anon” and his cohorts can shove cash into their pockets at the expense of everyone else. Didn’t you know?
Do you think that I have the law wrong? Do you think the policy behind the law does not align with what I say?
Or is this just yet another instance that you cannot help yourself from being an arse?
Did you have a point to make, Malcolm?
I do. My point is that everything you do and say is consistent with your desire to stuff your pockets with cash at the expense of the patent system and everybody else. I’m happy to provide more detail except it would bore everyone else.
LOL – I meant in law, not in what your precious “feelings” are about me.
I don’t give a rip – and rightly so – that you think (gasp) that I help my clients get money through the patent system.
Gents do you happen to have any references that tell us about the propriety, or impropriety, of reading limitations out of the claim at the PTO? Board decisions or Fed Circ, or a good MPEP section?
meaning, the claim term receives no patentable weight?
As for authority: MPEP 2111 in general.
I thank you but yes I already looked in 2111. I’m talking about more blatantly interpreting claims such that limitations no longer have any meaning (or practically no meaning, either or).
6 wants a “blatant” “Gist/Abstract” sword for the initial Office work, clearly desiring to cement the “un in unreasonable.
But isn’t it strange to be wanting to ignore claim limitations in applications, rather than the opposite – arguing distinctions that are not in the claims?
Office folk’s behavior ceased to amaze me long ago. Now a days it’s more just funny.
Thank you though good sir.
That’s a good cite there Paul but I’m talking more about interpreting the claim limitation so broadly that it no longer has any meaning, not outright failing to consider the term. (I know, I know, in reality they’re practically the same thing and have the same effect).
Nah bro, not printed matter I’m talking about just ordinary structural features or steps.
Hey, 6, maybe you can provide everyone with a modestly specific example so we can appreciate exactly what’s bugging you.
Oh sorry. I mean I was just looking for a more general type of citation on the subject. One rather specific thing I’m looking for is a situation where an examiner has insisted that a limitation is entirely meaningless (explicitly insisted that if possible). And was reversed with an explanation as to why the BRI in view of the specification does not extend to interpretations where the term is rendered meaningless.
wherein the pedal has a rectangular shape.
Prior art shows a bike, frame, wheel pedal but the pedal is a triangular shape. Examiner insists that the rectangular hand grip meets the limitation of the pedal that has a rectangular shape because “the pedal limitation is meaningless under my construction”.
Sorry MM, also the prior art shows a rectangular hand grip.
Ned has shared a form factor case previously.
Not sure Malcolm will be able to help you here as this is just a mere aggregation instance that is already covered under the claim as a whole doctrine – quite in fact this shows how b@nal his pet theory is (no part of a claim, or claim element sounding in [new thought] necessary).
(Fed. Cir. 2007)); Ex Parte Miles, Appeal 2010-000959, Application 11/153,681 (same).
The Examiner does not cite to a passage of Music, Hordis or Edwards disclosing a window blind and security shutter in which at least one side of the blades has a reflective surface as recited in claim 26. Instead, the Examiner interprets the term “reflective” by finding that “all materials ‘reflect’, whether it be heat, light, rain, sound, flying debris, etc.” (Ans. 8). By concluding that all materials reflect, and as a consequence are “reflective,” the Examiner interprets the term “reflective” as used in claim 26 to be superfluous. Our reviewing court disfavors any claim interpretation which would render a claim term superfluous. Stumbo v. Eastman Outdoors, Inc., 508 F.3d 1358, 1362 (Fed. Cir. 2007).
6 said: I’m talking more about interpreting the claim limitation so broadly that it no longer has any meaning, not outright failing to consider the term.
Ex Parte Wilkins says: By concluding that all materials reflect, and as a consequence are “reflective,” the Examiner interprets the term “reflective” as used in claim 26 to be superfluous. Our reviewing court disfavors any claim interpretation which would render a claim term superfluous. Stumbo v. Eastman Outdoors, Inc., 508 F.3d 1358, 1362 (Fed. Cir. 2007).
In other words, the examiner in Wilkins “considered” the term “reflective,” but construed it so broadly that it no longer had any meaning.
That seems on point to me, but perhaps I’m misunderstanding the question.
You are misunderstanding the request made by 6.
6 wanted support to “get away with” doing what was expressly denied in the case you presented.
It’s not that it is not “on point” as it surely is; but rather, it is not the point that 6 wanted.
Yes, I agree – it’s not what 6 was looking for. Too bad for him.
Yes that was what I was looking for anon. The rendering of terms superfluous (or reading them out of the claim, or interpreting them so broadly they have no meaning) is a gd plague happening in various edges of the office.
QUITE GOOD! I thank you good sir!
Glad I could help. Give ‘m heck.
I agree with your assessment of the plague. Stumbo is one of my favorite cases, for that reason. It seems to be pretty effective.
6, for prior art purposes (102/103) one cannot ignore limitations that are otherwise valid for 101 purposes. Your avenue of inquiry lies in 112.
Your statement here of “that are otherwise valid for 101 purposes” is clear and unmistakeable legal error.
You are merely trying to bootstrap your “Point of Novelty” view for 101 somehow into the conversation.
It is an absolute Amd rather ungrateful F A I L.
I obviously agree Ned, the thing is I’m deliberating on the subject with someone internally who is of the belief that through “broad interpreting” we are A OK with rendering superfluous/ignoring/interpreting as meaningless or practically meaningless. My issue is how to persuade this individual to stop this practice, not on a case by case basis, but on an ongoing basis.
The framing the dissent against the majority seems to hint at how someone thinks the Supreme Court would deal with this issue.
No doubt, the Feds think this one IS going up. They both did the best job they could to support their views.
As noted by Dennis, the main distinction here is whether one looks at patent cases from the circuit courts or the more general Supreme Court authority on laches. But the majority seems to not understand that Supreme Court authority prevails if there is a conflict between the two.
But Congress prevails over both, and here the majority’s view is that in enacting the 1952 Patent Act, Congress chose to codify the circuit courts’ patent decisions, not the more generalized, non-patent Supreme Court decisions.
Alas Pilgrim, here be one area that Ned’s pronouncement of your heresy may have some ground to stand on, as Congress explicitly shared its power with the courts of equity, and a measure of “common law” per the courts’ control may prevail.
Of course, the on going learning lesson is to contrast those things that Congress has shared its power and those things (101) where it has not.
Where is the evidence for that Choice?
Because Congress includes laches in 282 – it supplements 286’s time bar on damages.
That is congress “choosing” – as I said, pretty weak.
I also think the dissent could have done a better job arguing against the majority’s policy argument based on the Petrella’s discussion. For example, 6 years instead of 3 because patents get 20 years instead of a bazillion like copyright.
Ned, what do you think of the dissent’s reading of pre-52, pre-52 to merger of equity and law, pre merger-of equity and law construction to support the idea that laches [in all areas, unless congress has explicitly moved it into “law”] only bars equitable actions.
BTW, the dissent reminded me of J. Newman’ Lemelson-case dissent objecting to any kind of “prosecution laches” defense [no matter how many serial continuations or how many years of delay] and her later opinion limiting its application.
Since 28 USC 398 is a general statute, not specific to patents, one would have thought it pertinent to the decision in Petrella. It was not pertinent because equitable defenses include estoppel which “can” bar a legal claim.
The specific question at bar is laches vs. a statute of limitations. That is answered by controlling Supreme Court authority on this more narrow issue.
I think the specific question at bar is unenforceability as a defense codified in 35 USC 282 vs. the 35 USC 286 limitation on damages, which is a different question than was raised in Petrella. Petrella involved a common law defense vs. a statute of limitations. This case involves the application of two different statutory provisions — a codification of “unenforceability” defenses, including laches, and the 6-year period on limitation of damages.
Unenforceability at the time was well understood — fraud or patent misuse.
This is N OT actually “laches vs. a statute of limitations” because the patent statute limit to six years before a suit is filed to recover back damages is NOT a true or normal statute of limitations, and there is no other statute of limitations for patents. That statute provides NO time limit on how long one can delay bringing suit against and infringer after knowledge of the infringement. Without laches a patent suit could be delayed for the entire life of the patent plus up to six years after the patent expires.
Paul, except in limited circumstances where method claims are involved, where a product is marked, or where the patentee is not selling products at all, a patentee must give notice to collect damages. The statue provides 6 years as the damages period. It seems to be a no-brainer that Congress gave us an implied time limit for bringing such an action. 6 years. Only after 6 years should we consider that period of time as potentially within the scope of laches if laches even is available to bar a legal remedy.
But, historically, if there is no statute of limitations, a legal remedy may be brought at any time. Thus traditionally, an action to evict a trespasser may be brought within 20 years. I see no difference with the patent.
The better doctrine to apply in the case of long on non-enforcement of a patent is abandonment. But where the patent owner is continuously prosecuting infringers, that one infringer may not be sued within a period of time may only be because he is next on a long list. It may further be because his infringement may not be sufficient to justify the cost of a lawsuit.
See the reply to Paul.
As for evidence, maybe the statute’s plain language? 35 USC 282 says that “unenforceability” is a defense to any action for infringement. Section 282 by its plain terms makes no distinction between whatever remedies (equitable vs. legal) are being sought by the infringement suit.
Had Federico mentioned that laches was a defense to a claim for damages, as opposed to an action for an injunctions, or a mixed case asking for both remedies, his commentaries would have been more persuasive on this issue.
I agree with you on that, which is probably why Judge Prost’s opinion was fairly narrow on relying on Federico. But the Circuit Court decisions specifically on point are another factor.
So you really believe that Congress intended to enact circuit court decisions that were not consistent with controlling Supreme Court case law without any clear evidence that Congress deliberately made that choice?
You might want to consider Taylor v. Sturgell where the Supreme Court emphatically overruled the idea of equitable balancing of factors to determine privity. It appeared that the circuit courts, and many of them, had developed a diffuse weighing of different factors determine whether it would be “fair” under totality of circumstances environment to find that that a nonparty in particular circumstances should be bound by a judgment against another. The Supreme Court would have none of it, and overruled the whole concept of equitable balancing.
It is interesting when enacting 35 USC §315(b) that Congress specifically referred to Taylor v. Sturgell. But what do the patent office due in its guidelines. It talked about equitable balancing as if it never read the opinion of the Supreme Court. Clearly Congress did not intend to enact the circuit court decisions that the Supreme Court overruled in that case. That is a bizarre interpretation.
Similarly, vague statements by Federico cannot substitute for looking at controlling law as opposed to law that is inconsistent with controlling law. Unless Congress specifically said that is intending to overrule the Supreme Court, the Supreme Court case law must be respected.
That is just not accurate Ned.
Clearly, if the direct words of Congress contradict the Supreme Court, no such “announcement” by Congress is required.
Courts, even (especially) the Supreme Court, is of limited power.
Such as no advisory proclamations and present time case or controversy (see Lujan). See also the Federalist Papers for the danger of a Court without proper restraint. See also the warning from Judge O’Malley against those pushing the courts to breach the separation of powers and take on the role that belongs to the legislators.
Does anyone not see the explicit (and necessary) words?
Does everyone have a basic understanding of the difference between statutory law and common law?

References: § 282
 v. 
 v. 
 v. 
 §315
 v.