Background
Two judicially created doctrines play leading roles in the Festo decision: the doctrine of equivalents and prosecution-history estoppel. The doctrine of equivalents allows a patentee to establish infringement where the accused device or process does not literally satisfy one of the limitations of a patent claim, but nevertheless performs substantially the same function in substantially the same way to achieve substantially the same result as that element of the patented invention. As the Federal Circuit has repeatedly said, "[t]he doctrine was established to make it impossible for 'the unscrupulous copyist to make unimportant and insubstantial changes and substitutions in the patent which, though adding nothing, would be enough to take the copied matter outside the [literal scope of the] claim, and hence outside the reach of law.' "
The principal limitation on the use of the doctrine of equivalents is prosecution-history estoppel. The essence of prosecution-history estoppel is that patent owners may not obtain, through litigation, coverage of subject matter they surrendered during prosecution. Specifically, it prevents patent owners from using the doctrine of equivalents during later litigation to argue that a patent claim should be interpreted as if limitations added explicitly by a narrowing amendment or implicitly by argument during prosecution were never actually made.
In its widely publicized Festo decision of November 2000, the en banc Federal Circuit explored the interaction of these two judicially created patent principles. In particular, the Federal Circuit addressed the following two critical questions: (1) Does prosecution-history estoppel operate whenever a claim limitation is narrowed through amendment in order to achieve patentability, or only where the claim is narrowed to exclude prior art; and (2) does prosecution-history estoppel, when applicable, bar any and all assertions of infringement by equivalents on a claim limitation, an approach known as the "complete bar" rule?
On the first issue, the Federal Circuit concluded that prosecution-history estoppel is applicable whenever a claim limitation is narrowed through amendment in order to achieve patentability, and the court went on to make clear that "patentability" means any of the requirements of the Patent Act. Specifically, the Court held that prosecution-history estoppel applies whether the narrowing amendment was intended to exclude prior art under §102 and §103, or to satisfy the other requirements of the Patent Act, such as §112's requirements that the specification describe the subject matter that the applicant regards as his invention, and that the claim particularly point out and distinctly define that invention, 35 U.S.C. §112, ¶¶ 1 & 2.
On the second issue, the Federal Circuit adopted the complete-bar approach, holding that a patent owner is entirely precluded from asserting infringement under the doctrine of equivalents on a patent claim limitation if, during prosecution, the patent owner narrowed the limitation by amendment for reasons related to patentability. Notably, this complete-bar approach represented a per se rule, as it precluded any judicial inquiry into whether the alleged equivalent was surrendered or lost by the amendment.
Prior to its Festo decision, the Federal Circuit had gone back and forth between utilization of the complete-bar approach and what was known as the "flexible-bar" standard. Under the latter, a narrowing amendment would not bar a patent owner from relying on the doctrine of equivalents so long as the accused equivalent device or process was not one actually, specifically surrendered to achieve patentability. In finally rejecting the flexible-bar approach for the complete-bar rule, the Federal Circuit in its en banc Festo decision expressly stated that it wanted to provide the greatest degree of certainty to would-be competitors: "[B]oth the public and the patentee kn[ew] that once an element of a claim [was] narrowed by amendment for a reason related to patentability, that element's scope of coverage [would] not extend beyond its literal terms."
In June 2001, the Supreme Court accepted the Festo case for review, and in January 2002 it heard arguments from both parties as well as from the Solicitor General of the United States. As would later prove to be central to the Supreme Court's decision, the Solicitor General, both in his brief and at oral argument, proposed a middle-ground rule between the "complete bar" and the "flexible bar." Under the Solicitor General's proposed approach, a narrowing amendment related to patentability would create a presumptive bar to invocation of the doctrine of equivalents, rather than serving as a complete bar. The patent owner could only overcome this presumption by showing either "that the assertedly equivalent element is itself an innovation that was not known to persons of ordinary skill in the art at the time the applicant amended the claim," or that, "owing to the nature of the subject matter at issue, it was not possible for one of ordinary skill in the art to draft a claim amendment that literally encompassed the allegedly equivalent element while disclaiming the surrendered subject matter."
The Supreme Court's Holdings and Reasoning
In its Festo decision, the Supreme Court announced three significant holdings.
First, the Court held that the Federal Circuit was correct in concluding that "a narrowing amendment made to satisfy any requirement of the Patent Act may give rise to an estoppel." Although the Supreme Court acknowledged that its prior decisions had only estopped patent owners from relying on the doctrine of equivalents in the context of amendments made to avoid prior art, the Court made clear that estoppel is equally applicable where the amendment is made to establish any of the other requirements of patentability – e.g., utility, novelty and non-obviousness, and "to describe, enable, and set forth the best mode of carrying out the invention."
In reaching this conclusion, the Court was mindful of the basic equitable purpose underlying the doctrine of prosecution-history estoppel, which is to hold a patentee to its representation before the PTO. As the Court explained, "[a] patentee who narrows a claim as a condition for obtaining a patent disavows his claim to the broader subject matter, whether the amendment was made to avoid the prior art or to comply with § 112. We must regard the patentee as having conceded an inability to claim the broader subject matter or at least as having abandoned his right to appeal a rejection."
Second, having decided that narrowing amendments for reasons of patentability warrant application of prosecution-history estoppel, the Court then turned to consider, and ultimately reject, the Federal Circuit's conclusion that such narrowing amendments are a complete bar to any and all claims of infringement by equivalents. Crucial to the Supreme Court's rejection of the Federal Circuit's complete-bar rule was the fact that, in the Court's estimation, the rule produced a harsh and unfair result in cases where the alleged equivalent was either unknown or unknowable when the patent was prosecuted. Returning again to the premise underlying prosecution-history estoppel – namely, that by narrowing the limitation, "the inventor is deemed to concede that the patent does not extend as far as the original claim" – the Court reasoned that a patent owner who had no knowledge of the equivalent at the time of the amendment cannot fairly be deemed to have surrendered irrefutably the equivalent device or process. Put differently, the Court simply believed that, in such instances, it would be unreasonable (or, more aptly, unfair) to hold patentees just to the literal limitations of the patent claims where, as a practical matter, they never had an opportunity to craft the limitation to cover an unforeseen equivalent.
Third, having concluded that the Federal Circuit's complete-bar rule was overbroad, the Court then effectively established what is likely to be known as the "Festo presumption," which operates as a near-but-not-complete bar. Under the Festo presumption, the patent owner, as the author of the claim language, is "expected to draft claims encompassing readily known equivalents," and, so, is estopped from later trying to recapture the accused equivalent.
Yet, the Court went on to acknowledge that there are "some cases . . . where the amendment cannot reasonably be viewed as surrendering a particular equivalent," and, in particular, the Court identified those instances where "[t]he equivalent may have been unforeseeable at the time of the application." It is here that the complete bar gives way, and the Festo presumption comes into play: The Court reasoned that, in these limited number of cases, the patent owner should have the opportunity to overcome a presumption of prosecution-history estoppel by demonstrating that "at the time of the amendment one skilled in the art could not [have] reasonably be[en] expected to have drafted a claim that would have literally encompassed the alleged equivalent."
Notably, in unanimously announcing this new presumption, the Court expressly acknowledged that it was adopting the "sound" "approach advocated by the United States" in the brief of the Solicitor General.
How Will the Supreme Court's Decision Affect Patents?
While it is true that the Supreme Court's decision rejects the complete-bar rule in favor of a somewhat less-certain "Festo presumption," it is not at all clear that the decision will change the results in the main run of cases. As was true with the complete-bar rule, where an equivalent was foreseeable at the time of patent application but, through a narrowing amendment, was excluded from the literal language of the limitation, this failure will be placed squarely on the shoulders of the patent owner.
The difference, however, is this: Instead of being completely barred from asserting infringement by equivalents, patent owners will now have to prove that, at the time of prosecution, there was no way they reasonably could have drafted a claim that literally covered the accused equivalent. This may not be an easy presumption to overcome; as the Solicitor General explained in his brief, under his vision of the Festo presumption, "patent holders will face a substantial obstacle in overcoming the presumption that their narrowed claims encompass no more than they literally embrace."
To be sure, there will be some increased uncertainty to follow the Supreme Court's ruling. In particular, those who would compete with patent owners by utilizing, producing, or marketing arguably equivalent processes or devices will, in deciding to do so, face the increased risk that a patent owner who otherwise narrowed the literal claim limitation will nonetheless be able to assert infringement under the doctrine of equivalents where the foreseeability of the purported equivalent at the time of patenting is questionable. Yet, by allowing patent owners to establish that the equivalent was unforeseeable at the time of patenting, and, therefore, that the equivalent reasonably was not included in the literal terms of the amended claim limitation, the new rule provides an additional measure of fairnessfor patent owners who simply could not have known of a particular equivalent at the time of patenting.
But questions remain. What, exactly, does "foreseeability" or "inability to draft a claim" mean? Do the terms "foreseeable" and "readily known" mean the same thing? Will these issues be decided according to an objective or subjective standard? Will these issues of foreseeability and ready knowledge be decided by a judge as a matter of law, or a jury as a question of fact? What will be the role of expert testimony in the litigation of these questions? How will the Federal Circuit review these determinations when they are made by district courts? How will the Festo presumption apply, if at all, to assertedly narrowing arguments made to the PTO in the course of obtaining a patent? The answers to these and similar questions await continued development by the United States Court of Appeals for the Federal Circuit.
The Supreme Court's limited step back from the complete-bar rule is likely to affect some industries more than others. The most likely beneficiaries of the Festo presumption will be patent owners in industries that experience rapid technological advances, such as biotechnology, computer software, telecommunications, and aerospace. Indeed, the Solicitor General, in advocating the Festo presumption in his brief to the Court, acknowledged as much, stating that overcoming the presumption "would not be insurmountable if the technology is complex or the alleged distinctions are trivial."
But even for these industries, the effect on future patent-infringement cases may still prove to be slight, because the burden of proof in establishing that an equivalent was not foreseeable at the time of patenting remains on the patent owner. Rapid technological change in some of these industries is a certainty, so the Federal Circuit may approach contentions of unforeseeability with a degree of skepticism, particularly if the alleged equivalent develops shortly after the patent issues.
Whatever else, one thing does appear certain after the Supreme Court's decision: The development of the Festo presumption is going to come about through future case-by-case (panel-by-panel) applications of that presumption by the United States Court of Appeals for the Federal Circuit.
Further Information
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