NOVEMBER 20, 2001 - Contrary to rampant speculation in the legal community that the doctrine of equivalents for patent claims was dead or nearly so, the U.S. Supreme Court unanimously reasserted the legal vitality of equitable patent rights in the case of Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.. The Court vacated the judgment of the Court of Appeals for the Federal Circuit on May 28, 2002. Justice Kennedy in writing for the court agreed with the lower court that a narrowing amendment in a patent application made to satisfy any requirement of the Patent Act may give rise to an estoppel. However, the Court held that a narrowing amendment gives rise only to a presumption of estoppel instead of a per se rule precluding application of equivalents to a narrowed element.
The Doctrine of Equivalents Role in Patent Protection
The doctrine of equivalents plays a major role in the protection of patent holders' property rights. Patent claims define the "metes and bounds" of patent protection. Those claims include individual elements of an invention. An infringing act, material, device, etc. must correspond to each element in a claim for a finding of literal infringement. When one element is absent in the offending object, infringement may still occur if an equivalent element is present. Thus, the scope of a patent claim may reach beyond a claim's literal interpretation using the doctrine of equivalents.
In applying the equitable doctrine, courts ask whether a device performs substantially the same function, in substantially the same way, to achieve substantially the same result as a patented device. A device that is unsubstantially different from a patented device may be a patent infringement. The doctrine serves to thwart the unscrupulous copyist from making small changes to avoid a patent.
On the other hand, prosecution history estoppel recognizes that competitors must be able to determine whether an alternative to the invention falls within a patent claim. Interpreting patent claims must be consistent with proceedings before the U.S. Patent and Trademark Office (USPTO). When a patent applicant has claimed subject matter that is later surrendered to overcome a rejection made by the USPTO, the patentee cannot later regain that subject matter in litigation against a potential infringer.
The doctrine of equivalents and prosecution history estoppel are in tension with one another and embody the competing interests of the patent holder and competitors. The Court's Festo decision again attempts to balance the legal principles behind these competing interests.
Case History preceding the Supreme Court's most recent decision
The Festo case sprang from a suit filed by Festo Corp. against Shoketsu Kinzoku Kogyo Kabushiki Co. alleging infringement of two patents relating to magnetic piston-driven devices. The plaintiff sought recovery based not from a theory of literal infringement, but infringement arising under the equitable doctrine of equivalents. A jury verdict of infringement was affirmed by the Federal Circuit but vacated by the Supreme Court after the Court decided Warner-Jenkinson Co. v. Hilton Davis Chemical Co.. The Federal Circuit then heard the case on remand en banc and reversed the jury finding of infringement. The en banc decision abandoned the "flexible bar" approach to equivalents which examined on a case-by-case basis whether prosecution history estoppel precludes application of an equivalent claim element. The effect of the court of appeal's decision was to apply estoppel to any claim amendment made to satisfy the Patent Act and bar application of the doctrine of equivalents to that claim element.
The Festo Result: a Rebuttable Presumption
The Supreme Court reaffirmed that by narrowing patent claims, an applicant concedes the range of equivalents beyond the scope of the amended claim. Often amendments are made to avoid prior art so that the claim is patentable. Some amendments are made unrelated to patentability under the Patent Act. The problem arises when the reason for an amendment is unclear.
The Federal Circuit had ruled that any amendment gives rise to an estoppel per se. The Supreme Court rejected the Federal Circuit's rule, holding instead that when a court is unable to determine the purpose underlying a narrowing amendment, a court should presume that the patent applicant surrendered the subject matter between the broader and the narrower language. The presumption may be rebutted by evidence from the patentee showing that at the time of the amendment, one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent. The Court acknowledged that after arising technology may still be an equivalent and that equivalents relating to aspects of the invention having a peripheral relationship to the amendment also may not be lost.
Of note in the Festo decision was the particularity of the Court's admonition against upsetting the expectations of the patent community. Changing substantive patent law frustrates the expectations of the inventing community, and is also unfair to patent holders who followed the existing rules and had no reason to believe that their patent rights were in doubt. Again, the Court stated that patent laws in this country were erected to protect the rights of existing and future patent holders. An inventor should be rewarded for the contribution he or she makes to society. As such, patents should be afforded the maximum protection possible.
On Remand at the Federal Circuit
On September 30, 2002, the Federal Circuit Court of Appeals requested the parties to address the following issues for an en banc hearing on remand from the U.S. Supreme Court: 1) whether rebuttal of the presumption of surrendered matter is a question of law or fact and what role a jury plays in any determination; 2) what factors are encompassed by the criteria set forth by the Supreme Court; 3) if a rebuttal determination requires factual finding in the present case requiring remand to the district court; and 4) if remanded to the district court, whether the plaintiff can rebut the presumption of the narrowing amendment.
While the strength of equitable patent rights has been reinforced by the Supreme Court's recent Festo decision, the extent of that strength remains in tension with the presumption created by the Court. Clearly, those interested in patent protection should consider the purpose of making a narrowing amendment and follow how the Federal Circuit interprets the Court's decision on remand. Where amendments are made for purposes not related to patentability, an applicant should expressly indicate as much during prosecution of the patent. Later, should the patent be litigated, the burden of the patent applicant may be lightened when an equivalent is technology arising after the patent was prosecuted. The patentee's burden will remain heightened when the equivalent exists in the patent application's prior art.