I. Opinions. This Report summarizes opinions issued on March 21 and 22, 2017 (Part I).

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1 VOLUME 24, ISSUE 9 MARCH 29, 2017 This Report summarizes opinions issued on March 21 and 22, 2017 (Part I). I. Opinions National Labor Relations Bd. v. SW General, Inc., Certain offices within the federal government, known as PAS offices, must be filled by individuals who are nominated by the President and confirmed by the Senate. Between the time a PAS office is vacated and the time a successor is confirmed, the Federal Vacancies Reform Act (FVRA), 5 U.S.C et seq., provides that, by default, the first assistant to the vacant office shall assume the role of acting officer. Id. 3345(a)(1). The President, however, can override the default rule by directing an individual serving in a different PAS office or a senior employee within the relevant agency to assume the role of acting officer. Id. 3345(a)(2)-(3). But 3345(b)(1) places certain limitations on who may serve as an acting officer, providing that [n]otwithstanding subsection (a)(1), a person may not serve as an acting officer under this section [of the FVRA], if the President has nominated him or her for the office in question, and certain other conditions apply. In a 6-2 decision, the Court held that subsection (b)(1) s limitation on nominees serving as acting officers for the office they have been nominated to fill permanently applies to all acting officers under 3345(a), not just former first assistants serving under subsection (a)(1) s default rule. In June 2010, the general counsel for the National Labor Relations Board (NLRB), a PAS office, resigned. Pursuant to subsection (a)(3) of the FVRA, the President directed Lafe Solomon to serve as acting general counsel. Seven months later, he nominated Solomon to fill the position permanently. The Senate never acted on Solomon s nomination, and the President eventually withdrew his name in favor of another candidate who was confirmed in late The entire time, Solomon continued to serve as acting general counsel for the NLRB, where he exercised final authority to issue complaints alleging unfair labor practices. In January 2013, one such complaint was issued against SW General. An administrative law judge later found that SW General had indeed committed unfair labor practices, and the NLRB agreed. SW General petitioned for review in the D.C. Circuit, arguing that the complaint was invalid because at the time it was issued, subsection (b)(1) of the FVRA prohibited Solomon, as nominee for the PAS office, from serving as acting general counsel. The NLRB countered that subsection (b)(1) applied only to first assistants who assumed acting duties under subsection (a)(1), and not to other acting officers serving under subsections (a)(2) or (a)(3). The D.C. Circuit agreed with SW General and vacated the NLRB s order. In an opinion by Chief Justice Roberts, the Court affirmed. The Court concluded that the prohibition in subsection (b)(1) applies to anyone performing acting service under the FVRA.... The phrase [n]otwithstanding subsection (a)(1) does not limit the reach of (b)(1), but instead clarifies that the prohibition applies even when it conflicts with the default rule that first assistants shall perform acting duties. The Court first focused on the text of the provision, which (again) provides: Notwithstanding subsection (a)(1), a person may not serve as an acting officer under this section [of the FVRA], if.... The Court explained that the key words are person and section. The first encompass[es] anyone who performs acting duties under the FVRA, and not just first assistants; the second, in referring to 3345 as a whole, subsumes all of the ways a person may become an acting officer. The words are similarly paired in 2017, NAAG, 2030 M Street, NW 8 th Floor Washington, DC (202)

2 other sections of the FVRA, and [n]o one disputes that the other sections provisions apply to anyone serving as an acting officer under the FVRA, not just first assistants. If Congress had intended to limit subsection (b)(1) s reach, it could easily have chosen clearer language. Replacing person with first assistant would have done the trick. So too would replacing under this section with under subsection (a)(1). The Court further concluded that (b)(1) s introductory notwithstanding clause confirms its reading of the provision. That statutory term generally shows which provision prevails in the event of a clash here, it shows that (b)(1) s limitation applies even when it conflicts with the default rule of (a)(1) that the first assistant shall perform acting duties. It does not limit the provision s applicability to acting officers under (a)(2) and (3). The notwithstanding clause s mention of subsection (a)(1) makes sense because (a)(1) conflicts with (b)(1) in a unique manner. The former is mandatory and self-executing.... The notwithstanding clause clarifies that the language of (a)(1) does not prevail if that conflict occurs. Meanwhile, subsections (a)(2) and (a)(3) do not include freestanding directive[s] that they perform acting duties, resulting in a natural inference... that Congress left these provisions out of the notwithstanding clause because they are different from subsection (a)(1), not to exempt from the broad prohibition in subsection (b)(1) those officers serving under (a)(2) and (a)(3). The Court also found that construing (b)(1) narrowly presents another textual problem. Applying its restriction only to acting officers serving under subsection (a)(1) makes a mess of (b)(2). Subsection (b)(2) creates an exception to (b)(1) s applicability where three conditions are satisfied, the first being that the person is serving as the first assistant. A narrow interpretation of (b)(1) makes the first requirement [under (b)(2)] superfluous, a result we typically try to avoid. The Court next stated that it need not consider... extra-textual evidence of legislative history, purpose, and post-enactment practice, but found that, in any event, the NLRB s evidence on those scores was not compelling. As to legislative history, the Court found that the necessity of compromise in the legislative process was an obvious explanation for the conflict between what certain Senators may have intended (and demanded) and the law Congress actually passed. The Court likewise rejected evidence of historical practice cited by the NLRB, which relied on guidance documents from the Office of Legal Counsel and the Government Accountability Office, and on three Presidents submission of nominations without objection by Congress of individuals who were serving as acting officers under (a)(2) and (a)(3). The Court noted that [h]istorical practice is too grand a title for the Board s evidence, given that Congress enacted the FVRA in 1998 and that the 112 nominations that the Board cites make up less than two percent of the thousands of nominations to positions in executive agencies that the Senate has considered since then. In this context, the Court held, Congress s failure to speak up does not fairly imply that it has acquiesced to the NLRB s interpretation of (b)(1). Equally plausible explanations are that Congress had not noticed that certain officers were violating the FVRA or that it decided not to reject an otherwise qualified nominee just to make a point about compliance with the statute. Justice Thomas concurred in the judgment, but wrote separately to state that the Appointments Clause likely prohibited Solomon s appointment because general counsels are principal officers and the Clause forbids the President to appoint principal officers without the advice and consent of the Senate. 2

3 Justice Sotomayor filed a dissenting opinion, which Justice Ginsburg joined. She argued that the majority had given subsection (b)(1) a broader reach than the text can bear. In her view, the text, purpose, and history of the FVRA make clear that the prohibition in subsection (b)(1) applies only to a first assistant who performs the duties of a vacant office under subsection (a)(1). As to text, she argued that (b)(1) creates a conflict with (a)(1), (a)(2), and (a)(3), yet the notwithstanding clause refers only to (a)(1). That choice means that subsection (b)(1) trumps subsection (a)(1) but not subsections (a)(2) [and] (a)(3). She disagreed with the majority s reasoning that (b)(1) conflicts only with (a)(1) because only (a)(1) imposes an automatic rule. Subsection (b)(1) still overrides an appointment that (a)(2) and (a)(3) otherwise would have authorized the President to make. As to legislative history, Justice Sotomayor explained that Congress acted in 1998 in response to a specific incident: President Clinton s nomination of Bill Lan Lee. As the NLRB explained in its brief, Lee was brought from outside the government into the Civil Rights Division as first assistant to the vacant Assistant Attorney General position; Lee was then designated to perform the duties of the Assistant Attorney General on an acting basis.... The President twice re-nominated Lee to fill the role in a permanent capacity, leaving him in place performing the duties of the office when the Senate declined to confirm him. This precipitated strong congressional criticism. Justice Sotomayor maintained that subsection (b)(1) was drafted to address the Lee incident and prevent[] its recurrence. Finally, she stated that evidence showing a decade-plus practice of giving subsection (b)(1) a narrow reach should have been given more weight than the majority accorded it. Endrew F. v. Douglas County School District, The Individuals with Disabilities Education Act (IDEA) offers states funds to assist in educating disabled children on the condition that states provide those children with a free appropriate public education (or FAPE) implemented through an Individualized Education Plan (or IEP) tailored to a child s unique needs. The Court unanimously held that, to meet that obligation, a school must offer an IEP reasonably calculated to enable a child to make progress appropriate in light of the child s circumstances. Endrew F. was diagnosed with autism, which qualified him as disabled under the IDEA. Although Endrew had been provided with IEPs and assistance through fourth grade, his parents became dissatisfied with his lack of progress and the school s inability to address his behavioral challenges. They enrolled Endrew in a private school that specialized in educating autistic children, where he made great strides both academically and socially. Endrew s parents then requested reimbursement for tuition at the private school, which the school district denied through an administrative proceeding. They then sought relief in federal district court, which was again denied, this time on the basis that the IDEA requires nothing more than minimal progress. The Tenth Circuit affirmed, holding that an IEP is sufficient so long as the educational benefit to the child is merely... more than de minimis. In an opinion by Chief Justice Roberts, the Court reversed. The Court had previously recognized a disabled child s rights to a FAPE in Board of Education of Hendrick Central School District v. Rowley, 458 U.S. 176 (1982), which stated that educational services for disabled children had to be calculated to confer some educational benefit. Although Rowley declined to adopt a particular test, the school district maintained that Rowley effectively established that an IEP need not promise any particular level of benefit, so long as it is reasonably calculated to provide some benefit, as opposed to none. The Court disagreed, finding that the school district was reading passages of Rowley out of context and in isolation. The Court instead concluded that Rowley and the statutory language point to a general approach: To meet its 3

4 substantive obligation under the IDEA, a school must offer an IEP reasonably calculated to enable a child to make progress appropriate in light of the child s circumstances. The Court explained that, for a child fully integrated in the regular classroom, an IEP typically should... be reasonably calculated to enable the child to achieve passing marks and advance from grade to grade (internal quotation marks omitted). For a child who is not fully integrated in the regular classroom and not able to achieve on grade level, his IEP must be appropriately ambitious in light of his circumstances. The Court stated that this standard is markedly more demanding than the Tenth Circuit s more than de minimis test. On the other hand, the Court also rejected a broader rule advanced by Endrew s parents that a FAPE should require an education that aims to provide a child with a disability opportunities to achieve academic success, attain self-sufficiency, and contribute to society that are substantially equal to the opportunities afforded children without disabilities. The Court reasoned that it had rejected this very standard in Rowley and that Congress had amended the IDEA several times without changing the FAPE definition. Finally, the Court declined to provide more specific guidance on what appropriate progress means because the adequacy of a given IEP turns on the unique circumstances of the child for whom it was created. That said, the Court cautioned that the absence of a bright-line rule should not [ ] be taken for an invitation to the courts to substitute their own notions of sound educational policy for those of the school authorities which they review (internal quotation marks omitted). Manuel v. City of Joliet, By a 6-2 vote, the Court held that a person may bring a claim based on the Fourth Amendment to contest the legality of his pretrial confinement, including confinement after the start of legal process in a criminal case here, that is, after the judge s determination of probable cause. Petitioner Elijah Manuel was a passenger in a car pulled over for a traffic violation. During the stop, police found a vitamin bottle with pills inside. Even though a field test of the pills came back negative for any controlled substance, the officers arrested Manuel. At the station, an evidence technician again tested the pills and again got a negative result. But the technician lied in his report, stating that one of the pills tested positive for the probable presence of ecstasy. The arresting officer also wrote in his report that he knew the pills were ecstasy based on his training and experience. Based on this (false) information, Manuel was charged with possession of a controlled substance and held in jail following a magistrate s probable cause finding. Some weeks later, the state crime lab tested the pills and found no controlled substance. A few weeks after that, the prosecutor dismissed the charges and Manuel was released. All told, he had spent seven weeks in jail. Manuel sued the city in federal court under 42 U.S.C for malicious prosecution on the theory that the city had violated his Fourth Amendment right against unreasonable seizure by holding him in jail based on false evidence. The district court dismissed the suit. The court relied on Seventh Circuit precedent that a pretrial detention could only be challenged under the Due Process Clause. And Manuel could not maintain a claim under the Due Process Clause because Illinois law provides a sufficient remedy. The Seventh Circuit affirmed, holding that once a person is detained pursuant to legal process, the Fourth Amendment falls out of the picture and the detainee s claim that the detention is improper becomes [one of] due process. In an opinion by Justice Kagan, the Court reversed. 4

5 The Court began with the straightforward observations that the Fourth Amendment bars unreasonable... seizures and that Manuel claims that his detention (a seizure) was unreasonable. It follows, held the Court, that Manuel s claim fits the Fourth Amendment, and the Fourth Amendment fits Manuel s claim, as hand in glove. The Court found that its precedents supported this conclusion. The Court expressly held in Gerstein v. Pugh, 420 U.S. 103 (1975), that a claim challenging pretrial detention fell within the scope of the Fourth Amendment. Gerstein reasoned that the Fourth Amendment was tailored explicitly for the criminal justice system, and it[] has always been thought to define the appropriate process for seizures of person[s]... in criminal cases, including the detention of suspects pending trial. And the plurality opinion in Albright v. Oliver, 510 U.S. 266 (1994), tracking... Gerstein s analysis, concluded that the same was true when that deprivation occurs after legal process commences. As the Court explained here, the Fourth Amendment prohibits government officials from detaining a person in the absence of probable cause. That can happen when the police hold someone without any reason before the formal onset of a criminal proceeding. But it can also occur when legal process itself goes wrong when, for example, a judge s probable-cause determination is predicated solely on a police officer s false statements. Under either scenario, a person is confined without constitutionally adequate justification. The Court rejected the dissent s contention that a grand jury indictment or preliminary examination is an intervening event that expunge[s] such a Fourth Amendment claim. The Court closed by discussing but not resolving the parties dispute over when Manuel s Fourth Amendment claim accrued, which will determine whether he filed his suit within the applicable two-year statute of limitations. The Court offered two comments on that issue. It noted that courts are to look first to the common law of torts when defining the contours and prerequisites of a 1983 claim. But it added that [c]ommon-law principles are meant to guide rather than to control the definition of 1983 claims.... In applying, selecting among, or adjusting common-law approaches, courts must closely attend to the values and purposes of the constitutional right at issue. The Court then explained the parties competing contentions. Manuel maintains that a Fourth Amendment claim such as his is analogous to the common-law tort of malicious prosecution and therefore accrues only upon the dismissal of criminal charges. The city contends that such a Fourth Amendment claim is analogous to false arrest and therefore accrues on the date of the initiation of criminal process. The Court remanded to allow the Seventh Circuit to consider that dispute in the first instance. Justice Alito filed the principal dissent, which Justice Thomas joined. Justice Alito stated that the question presented asked whether a malicious prosecution claim may be brought under the Fourth Amendment. The straightforward answer to that question, he concluded, was no because [t]here is a severe mismatch between the elements of a malicious prosecution claim (which requires subjective bad faith and includes a favorable-termination rule) and the Fourth Amendment. Justice Alito then disagreed with the majority that a seizure can be a continuing condition. In his view, a seizure is a single event ; a pretrial detainee is not seized over and over again as long as he remains in custody. Justice Thomas filed a short separate dissenting opinion to add a few thoughts on the accrual-date issue. 5

6 Czyzewski v. Jevic Holding Corp., By a 6-2 vote, the Court held that [a] distribution scheme ordered in connection with the dismissal of a Chapter 11 case cannot, without the consent of the affected parties, deviate from the basic priority rules that apply under the primary mechanisms the [Bankruptcy] Code establishes for final distributions of estate value in business bankruptcies. One respondent, a trucking company, filed for Chapter 11 bankruptcy. Petitioners, who are former employees of the trucking company, were high-priority unsecured creditors because they had won a lawsuit against respondent under the Worker Adjustment and Retraining Notification Act. Over the objection of these workers, the bankruptcy court approved a structured dismissal under which lower-priority general unsecured creditors received some funds from the estate but the workers did not. (The secured creditors agreed to give up some of the money to which they would otherwise have been entitled so as to settle a fraudulent conveyance claim the bankruptcy estate had brought against them.) The bankruptcy court approved the dismissal because, in its view, the bankruptcy estate was in such dire circumstances that the workers would not have received anything under Chapter 11 or Chapter 7 anyway. The structured dismissal at least allowed some lower-priority creditors to receive something from the bankruptcy estate, which was better than the alternative. The Third Circuit affirmed, reasoning that the Bankruptcy Code does not explicitly prohibit dismissals that deviate from the normal priority rules and that bankruptcy courts need the flexibility in rare instances like this one to approve structured dismissals that do not adhere to the Bankruptcy Code s priority scheme. In an opinion by Justice Breyer, the Court reversed. After first rejecting respondents argument that the workers lacked standing, the Court stated the basic question presented: Can a bankruptcy court approve a structured dismissal that provides for distributions that do not follow ordinary priority rules without the affected creditors consent? The answer, held the Court is no. The Court had earlier explained that the Bankruptcy Code establishes a basic system of priority, which ordinarily determines the order in which the bankruptcy court will distribute the assets of the estate. Secured creditors come first, then highpriority unsecured creditors, then general unsecured credits. It now found that [t]he priority system... has long been considered fundamental to the Bankruptcy Code s operation and thus one would expect more than simple statutory silence if, and when, Congress were to intend a major departure. And although the Code authorizes a bankruptcy court to dismiss a Chapter 11 case, the word dismiss itself says nothing about the power to make nonconsensual priority-violating distributions of estate value. Rather, Chapter 11 s dismissal sections seek a restoration of the prepetition financial status quo. The Court acknowledged that 11 U.S.C. 349(b) allows a judge, for cause, to orde[r] otherwise. But, reasoned the Court, this authorization appears designed to give courts the flexibility to make the appropriate orders to protect rights acquired in reliance on the bankruptcy case, not to make distributions that would be flatly impermissible in a Chapter 7 liquidation or a Chapter 11 plan. In short, the word cause is too weak a reed upon which to rest so weighty a power. Finally, the Court noted that it was not deciding whether structured dismissals in general are permissible, only that structured dismissals may not deviate from the Bankruptcy Code s priority scheme. Justice Thomas filed a short dissenting opinion, which Justice Alito joined. The dissent argued that the petition for certiorari should have been dismissed as improvidently granted because petitioners had changed the question presented from the one advanced in their petition. 6

7 Star Athletica, L.L.C. v. Varsity Brands, Inc., Under the Copyright Act, although a useful article such as a chair or a shirt cannot be copyrighted, the article s component features or elements may be copyrighted if they are capable of being identified separately from, and... existing independently of, the utilitarian aspects of the article. 17 U.S.C The Court elaborated on the meaning of that provision and, applying it, held by a 6-2 vote that graphic twodimensional designs of chevrons, stripes, and the like incorporated onto a cheerleader uniform are separable and therefore eligible for copyright protection. Respondents have more than 200 copyright registrations for designs appearing on the cheerleading uniforms they create and sell. They sued petitioner, which also sells cheerleading uniforms, for copyright infringement. The district court entered summary judgment for petitioner, concluding that the designs were not protectable because they served the useful function of identifying cheerleading uniforms and therefore could not be physically or conceptually separated from the uniforms utilitarian function. The Sixth Circuit reversed, finding that the graphic designs were separately identifiable because the designs and a blank cheerleading uniform can appear side by side one as a graphic design, and one as a cheerleading uniform. The court also found that the designs were capable of existing independently because they could be incorporated onto the surface of different types of garments, or hung on the wall and framed as art. In an opinion by Justice Thomas, the Court affirmed. The Court first rejected respondents contention that the Court did not even need to apply the separability analysis of 101. That is so, insisted respondents, because the surface decorations in this case are two-dimensional graphic designs that appear on useful articles, but are not themselves designs of useful articles. Under their theory, two-dimensional artistic features on the surface of useful articles are inherently separable. The Court found that argument inconsistent with the text of 101, which speaks to the design of a useful article something that can include two-dimensional pictorial and graphic features. The Court then turned to 101 s separability requirement. The Court found that its text imposes two requirements for a pictorial, graphic, or sculptural featur[e] incorporated into the design of a useful article to be eligible for copyright protection: That it (1) can be identified separately from, and (2) is capable of existing independently of, the utilitarian aspects of the article. The Court stated that the first requirement separate identification is not onerous and is met if a two- or three-dimensional element on the useful article appears to have pictorial, graphic, or sculptural qualities. It found that the second requirement independent existence is ordinarily more difficult to satisfy, but is met if the separately identified feature could exist apart from the utilitarian aspects of the article. The Court explained that this makes 101 essentially the mirror image of 113(a), which gives copyright protection to an artistic copyrighted work that is later applied to a useful article (such as affixing a copyrighted picture onto a t-shirt). In short, held the Court, a feature of the design of a useful article is eligible for copyright if, when identified and imagined apart from the useful article, it would qualify as a pictorial, graphic, or sculptural work either on its own or when fixed in some other tangible medium. The Court concluded that the designs of respondents cheerleader uniforms satisfy that test. The decorations on the uniforms can be identified as having pictorial or graphic features; and if the arrangement of colors, shapes, stripes, and chevrons on the surface of the cheerleading uniforms were separated from the uniform and applied on some other medium for example, on a painter s canvas they would qualify as two-dimensional... works of... art. Further, imagina- 7

8 tively removing the surface decorations from the uniform and applying them in another medium would not replicate the uniform itself. The Court rejected petitioner s (and the dissent s) contention that the decorations are not separable because imaginatively removing them from the uniforms and placing them on some other medium of expression a canvas, for example would create pictures of cheerleader uniforms. The Court held that [t]his is not a bar to copyright : Just as two-dimensional fine art corresponds to the shape of the canvas on which it is painted, twodimensional applied art correlates to the contours of the article on which it is applied. (That said, the shape of a cheerleader uniform is not copyrightable.) The Court also rejected petitioner s contention that a design feature is copyrightable only if the useful article would remain equally useful after the design feature is removed. (The United States argued that the question was whether the useful article would remai[n] similarly useful. ) The Court held that 101 does not impose that requirement; the focus of the separability inquiry is on the extracted feature and not on any aspects of the useful article that remain after the imaginary extraction. Indeed, the statute expressly protects applied art, which by its nature seeks to improve the utility of that to which it is applied. Finally, the Court rejected as atextual petitioner s suggestion that courts look at the designer s intentions and the marketability of the imagined separate piece of art. Justice Ginsburg concurred in the judgment but would not have employed a separability test; she would have ruled for respondents based on 113(a). Justice Breyer wrote a dissenting opinion, which Justice Kennedy joined. The dissent contended that the designs at issue cannot be imaginatively extracted from the useful article because, if imagined separately, they would simply depict a cheerleading uniform: neckline, waist, skirt, sleeves, and overall cut. Because the dissent viewed the only copyrightable feature of the cheerleading uniforms to be the two-dimensional art on the surface of the uniforms, the dissent suggested that respondents could have sought a design patent or copyright on a textile design to prohibit reproduction of the surface designs on a uniform or other expressive medium. But the dissent would not acknowledge respondents copyright to prevent others from creating cheerleading uniforms that are identical in cut, shape, or dimensions. It rejected the majority s separability conclusion because there is nothing to separate out but for the dress-shaped lines that replicate the cut and style of the uniforms. SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, By a 7-1 vote, the Court held that the equitable defense of laches cannot be raised against a claim for patent damages brought within the Patent Act s six-year limitations period, located at 35 U.S.C Petitioner SCA manufactures and sells incontinence products. In 2003, it told respondent First Quality that First Quality was making products that infringed one of SCA s patents involving diaper construction. First Quality disputed the validity of SCA s patent, prompting SCA to ask the Patent and Trademark Office (PTO) to reexamine the patent s validity. In 2007, the PTO confirmed its validity. Three years later, in 2010, SCA filed this patent infringement action against First Quality. The district court granted summary judgment to First Quality on the grounds of equitable estoppel and laches, finding that SCA had unreasonably delayed bringing the claim. On appeal, the Federal Circuit first a panel, then by a 6-5 en banc vote affirmed the district court s laches holding based on Federal Circuit precedent. The en banc decision affirmed the laches holding even though, in Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. (2014), the Supreme Court held that laches cannot defeat a copyright damages claim brought within the Copyright Act s three-year limitations period. In an opinion by Justice Alito, the Court reversed. 8

9 The Court explained why Petrella s logic controlled the outcome in the patent context: Petrella s holding spoke in broad terms and rested on both separation-of-powers principles and the traditional role of laches in equity. Because laches is a defense to untimely claims, [w]hen Congress enacts a statute of limitations, it speaks directly to the issue of timeliness and provides a rule for determining whether a claim is timely enough to permit relief. Applying laches during a limitations period set by statute would give judges a legislation-overriding role that is beyond the Judiciary s power. Further, because laches is an equitable, gap-filling doctrine, it is incongruous within a limitations period: where there is a statute of limitations, there is no gap to fill. That reasoning, held the Court, easily fits the provision at issue here. The Court then considered and rejected three main arguments offered by First Quality and the Federal Circuit majority. First, First Quality asserted that 286 of the Patent Act is not a true statute of limitations because it runs backward from the time of suit, whereas a true statute of limitations (such as the one at issue in Petrella) supposedly runs forward from the date the cause of action accrues. In rejecting that argument, the Court noted that Petrella had characterized the Copyright Act s limitations period as running backwards from the date the complaint was filed. Second, the Court rejected the Federal Circuit and First Quality s reliance on 282(b)(1) of the Patent Act, which provides that unenforceability is a defense. First Quality asserted that laches is a defense based on unenforceability. The Court disagreed, noting that such a reading would reflect an exceedingly unusual, if not unprecedented decision by Congress to adopt dual untimeliness provisions. Finally, the Court rejected the argument that the 1952 Patent Act codified a pre-1952 judicial practice of applying laches to defeat patent damages claims for damages incurred within the thenextent statute of limitations. The Court explained that [i]n light of the general rule regarding the relationship between laches and statutes of limitations, nothing less than a broad and unambiguous consensus of lower court decisions could support the inference that 282(b)(1) codifies a very different patent-law-specific rule. The Court, after surveying pre-1938 equity cases, pre-1938 claims at law, and cases decided after the merger of equity and law in 1938, could find [n]o such consensus. Justice Breyer dissented, asserting that for more than a century courts with virtual unanimity have applied laches in patent damages cases. In drafting the statute in 1952, he stated, Congress must therefore have intended to codify that judicial practice. Specifically, he noted that 286 of the Patent Act provides a six-year limitations period except as otherwise provided by law, and concluded that 282 clarifies that otherwise means the unenforceability of any patent claim which contemplates that the long-running equitable defense of laches may be a bar to enforceability. Justice Breyer also argued that a gap remained to be filled because, whereas most limitations statutes set forth a period of time in which to sue, the Patent Act s limitation permits suit at any time but simply limits damages to those caused within the preceding six years. 9

10 The Supreme Court Report is published biweekly during the U.S. Supreme Court Term by the NAAG Center for Supreme Court Advocacy. SUPREME COURT CENTER STAFF Dan Schweitzer Director and Chief Counsel NAAG Center for Supreme Court Advocacy (202) Denise M. Harle Supreme Court Fellow (202) John Nielsen Supreme Court Fellow (202) Patrick B. Hughes Supreme Court Fellow (202) Laura E. Howell Supreme Court Fellow (202) The views and opinions of authors expressed in this newsletter do not necessarily state or reflect those of the National Association of Attorneys General (NAAG). This newsletter does not provide any legal advice and is not a substitute for the procurement of such services from a legal professional. NAAG does not endorse or recommend any commercial products, processes, or services. Any use and/or copies of the publication in whole or part must include the customary bibliographic citation. NAAG retains copyright and all other intellectual property rights in the material presented in the publications. 10