Last month, in a 7-1 decision (Justice Breyer dissenting), the Supreme Court issued an order that should warm the hearts of every originalist. In the case of SCA Hygiene Products v. First Quality Baby Products the Court ruled that judges do not have the authority to change the statute of limitations as enacted by Congress.
In 1952, Congress enacted 35 USC §282 which established a six-year statute of limitations in patent infringement cases. This statute allowed an inventor to recover damages for the six years prior to their filing a case. However, the courts had decided that Congress did not mean what Congress said.
For decades, colossal corporate conglomerates, who could afford high-priced lawyers, were able to limit their liabilities for their deliberate infringement of patent law by flipping the burden of proof. Infringers were able to limit their liability through the doctrine of “laches”. Rather than convince the court that their product did not infringe the patent, the burden shifted. Now the inventor had to prove that they were diligently observing the marketplace and their competitors to ensure that no one was violating their patent. Inventors also now had to prove to the court that they promptly initiated litigation to stop all infringement.
For the last 65 years, inventors have been arguing that they had six years to bring their patent infringement lawsuits. Inventors have been losing to infringers who successfully shifted the burden by arguing the doctrine of laches.
In 2014, the Supreme Court reviewed the doctrine of laches in a Copyright case. In the case of Petrel v. Metro-Goldwyn-Mayer, the Court held that laches could not preclude a claim for damages incurred within the Copyright’s three-year statute of limitations.
In both cases, the Court examined the separation of powers argument and the historical and traditional role of the doctrine of laches. In a nutshell, laches is an old legal principle that dates back to the common law before legislative bodies enacted “statute of limitations”. Laches is what an equity court, (a court that did not award money damages but only granted remedies like injunctions) applying the common law, would use to determine whether the inventor was entitled to an order to stop the infringer from continuing his unlawful behavior. If the inventor waited too long to bring the suit, the doctrine of laches ended the litigation.
Colossal corporate conglomerates that violate patents do not like waiting six years to see if their hand will be caught in the cookie jar. If they are going to be caught, they want it to be sooner when their ill-gotten gains are smaller. A six-year statute of limitations creates too much uncertainty for the future profits of these willful infringers. Rather than plead with Congress to change the law, these willful infringers flexed their muscles in the courts and created an environment that was more to their liking. Judges go along with the infringers because it is an easy method to eliminate cases and lighten their caseload.
Some free market thinkers might argue that this decision is harmful for American business. With the longer statute of limitations, this will mean more cases will be filed. It also means that the settlement from patent infringement cases might also be larger. Furthermore, because more litigation means fewer companies will be willing to create generics there will be less competition.
Nonetheless, as important as the free market economy is to a prosperous United States, one of our fundamental principles is private property rights. Our Founding Father’s established in the Constitution, Article one, section eight, the basic fundamental right of protecting one’s invention with a patent.
It is not the place of the courts to determine whether a business brings their patent infringement suit in enough time. The courts are supposed to call the game according to the rule book created by Congress. When the umpires are allowed to change the rules, it creates an unfair playing field that tips in the favor of the individual with the best-connected lawyers.
If you believe that patent laws need to change, you should do so through your duly elected congressman, not your local judge. There are plenty of ideas for patent reform, but the place to try these ideas is not in the courtroom.
The Supreme Court has spoken and courts cannot use the common law to create rules that overturn the will of the people by their duly elected representatives. If colossal corporate conglomerates want to limit their liability for their violations of patent law, they need to lobby their congressman.