PLAIN TALK ABOUT INFRINGEMENT AND THE DOCTRINE OF EQUIVALENTS FROM THE SUPREME COURT OF THE UNITED STATES

The U.S. Supreme Court Decision in
Festo Corp. v. Shoketsu Kogyo Kabushiki Co., Ltd.

Part I of this paper provided the background of the Festo case, particularly focusing on the proceedings before the U.S. Court of Appeals for the Federal Court, the ruling of which shocked inventors and patent practitioners worldwide. Part II discusses the much-anticipated ruling by the U.S. Supreme Court.

PART II:
THE SUPREME COURT DECIDES

Summary

On May 28, 2002, the United States Supreme Court issued a ruling in the case of Festo Corp. v. Shoketsu Kogyo Kabushiki Co., Ltd. (“Festo”) (535 U.S. ___ (2002)). In a unanimous decision, the Court held that prosecution history estoppel may apply to any claim amendment made to satisfy the Patent Act’s requirements and not just to amendments made to avoid the prior art. The Supreme Court additionally held that estoppel need not bar suit against every equivalent to the amended claim element. The Court remanded the case for further proceedings consistent with its opinion.

Background — The Proceedings Below

Festo owns two patents for a rodless magnetic cylinder device. The patent examiner rejected the application for the first patent because of defects in the description under 35 U.S.C. § 112. In response, the applicant amended the application to add two limitations: a pair of one-way sealing rings and the outer sleeve being made of a magnetizable material. The second patent was amended during reexamination to add the sealing rings limitation. After Festo began selling its device, SMC entered the market with a similar device that used one two-way sealing ring and a nonmagnetizable sleeve. Festo filed a patent infringement suit, claiming that SMC’s device infringed Festo’s patents under the doctrine of equivalents.

The U.S. District Court for the District of Massachusetts ruled for Festo and rejected SMC’s argument that prosecution history estoppel precluded Festo from saying that SMC’s device was equivalent to the patented devices. A panel of the U.S. Court of Appeals for the Federal Circuit (CAFC) initially affirmed but the U.S. Supreme Court granted certiorari, vacated and remanded the decision in light of Warner-Jenkinson Co. v. Hilton Davis Chemical Co., which had acknowledged that competitors may rely on the prosecution history of a patent to preclude the patentee from recapturing subject matter surrendered by amendment as a condition of obtaining the patent. On remand, the en banc CAFC reversed its previous decision and held that prosecution history estoppel applied. The CAFC held that estoppel arose from any amendment that narrows a claim to comply with the Patent Act, not only from amendments made to avoid the prior art. The CAFC also held that, when estoppel applies, it bars any claim of equivalence for the element that was amended.

The Supreme Court’s Holding

The Supreme Court held that prosecution history estoppel may apply to any claim amendment made to satisfy the Patent Act’s requirements and not just to amendments made to avoid the prior art. However, the Court further ruled that estoppel need not bar suit against every equivalent to the amended claim element.

The Supreme Court’s Opinion

Two questions were before the Court:

(1) What kinds of amendments may give rise to estoppel?

(2) Does prosecution history estoppel bar the inventor from asserting infringement against any equivalent to the narrowed element or might some equivalents still infringe?

The Supreme Court reviewed the competing rationales for the doctrine of equivalents and prosecution history estoppel.

Doctrine of Equivalents

The Court set forth the positive and negative aspects associated with the doctrine of equivalents.

Noting that “the nature of language makes it impossible to capture the essence of a thing in a patent application”, the Supreme Court stated that “the language in the patent claims may not capture every nuance of the invention or describe it with complete precision the range of its novelty” but “if patents were always interpreted by their literal terms, their value would be greatly diminished. Unimportant and insubstantial substitutes for certain elements could defeat the patent, and its value to inventors could be destroyed by simple acts of copying.” The Court then stated that:

For this reason, the clearest rule of patent interpretation, literalism, may conserve judicial resources but is not necessarily the most efficient rule. The scope of a patent is not limited to its literal terms but instead embraces all equivalents to the claims described.

The Court acknowledged that “the doctrine of equivalents renders the scope of patents less certain” and that it “may be difficult to determine what is, or is not, an equivalent to a particular element of an invention.” According to the Court:

If competitors cannot be certain about a patent’s extent, they may be deterred from engaging in legitimate manufactures outside its limits, or they may invest by mistake in competing products that the patent secures. In addition, the uncertainty may lead to wasteful litigation between competitors, suits that a rule of literalism might avoid.

However, according to the Court, these concerns with the doctrine of equivalents “were not new” and that:

[e]ach time the Court has considered the doctrine, it has acknowledged this uncertainty as the price of ensuring the appropriate incentives for innovation, and it has affirmed the doctrine over dissents that urged a more certain rule.

Finally, the Court noted that, in Warner-Jenkinson, it had “reaffirmed that equivalents remain a firmly entrenched part of the settled rights protected by the patent. A unanimous opinion concluded that if the doctrine is to be discarded, it is Congress and not the Court that should do so.”

Prosecution History Estoppel

According to the Court, when “the patentee originally claimed the subject matter alleged to infringe but then narrowed the claim in response to a rejection, he may not argue that the surrendered territory comprised unforeseen subject matter that should be deemed equivalent to the literal claims of the issued patent. On the contrary, by the amendment the patentee recognized and emphasized the difference between the two phrases, and the difference which the patentee thus disclaimed must be regarded as material.”

The Court continued:

Prosecution history estoppel ensures that the doctrine of equivalents remains tied to its underlying purpose. Where the original application once embraced the purported equivalent but the patentee narrowed his claims to obtain the patent or to protect its validity, the patentee cannot assert that he lacked the words to describe the subject matter in question. The doctrine of equivalents is premised on language’s inability to capture the essence of innovation, but a prior application describing the precise element at issue undercuts that premise. In that instance, the prosecution history has established that the inventor turned his attention to the subject matter in question, knew the words for both the broader and narrower claim, and affirmatively chose the latter.

The Court then turned to the two questions on appeal.

First Question: What Kinds of Amendments May Give Rise to Estoppel?

The Supreme Court agreed with the CAFC and held that “[e]stoppel rises when an amendment is made to secure the patent and the amendment narrows the patent’s scope.”

The Court explained that a number of statutory requirements must be satisfied before a patent can issue. The claimed subject matter must be useful, novel and not obvious. In addition, the patent application must describe, enable, and set forth the best mode of carrying out the invention. These latter requirements must be satisfied before issuance of the patent “for exclusive rights are given in exchange for disclosing the invention to the public.”

According to the Court:

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. In either case, estoppel may apply.

In applying the foregoing principle to the facts before it, the Court noted that Petitioner Festo conceded that the limitations at issue — the sealing rings and the composition of the sleeve — were made for reasons related to 112, if not also to avoid the prior art.

Second Question: Does Prosecution History Estoppel Bar the Inventor from Asserting Infringement Against Any Equivalent to the Narrowed Element or Might Some Equivalents Still Infringe?

The Supreme Court disagreed with the CAFC’s holding that prosecution history estoppel is a complete bar such that the narrowed element is limited to its strict literal terms. The Court stated that:

While this Court has not weighed the merits of the complete bar against the flexible bar in its prior cases, we have consistently applied the doctrine in a flexible way, not a rigid one. We have considered what equivalents were surrendered during the prosecution of the patent, rather than imposing a complete bar that resorts to the very literalism the equivalents rule is designed to overcome.

The Court’s reasons for rejecting the CAFC’s complete bar are summarized in the following passages:

By amending the application, the inventor is deemed to concede that the patent does not extend as far as the original claim. It does not follow, however, that the amended claim becomes so perfect in its description that no one could devise an equivalent.

After amendment, as before, language remains an imperfect fit for invention. The narrowing amendment may demonstrate what the claim is not; but it may still fail to capture precisely what the claim is. There is no reason why a narrowing amendment should be deemed to relinquish equivalents unforeseeable at the time of the amendment and beyond a fair interpretation of what was surrendered.

Nor is there any call to foreclose claims of equivalence for aspects of the invention that have only a peripheral relation to the reason the amendment was submitted. The amendment does not show that the inventor suddenly had more foresight in the drafting of claims than an inventor whose application was granted without amendments having been submitted. It shows only that he was familiar with the broader text and with the difference between the two. As a result, there is no more reason for holding the patentee to the literal terms of an amended claim than there is for abolishing the doctrine of equivalents altogether and holding every patentee to the literal terms of the patent.

The Supreme Court believed that the “Court of Appeals ignored the guidance of Warner-Jenkinson, which instructed that courts must be cautious before adopting changes that disrupt the settled expectations of the inventing community.” The Supreme Court stated that:

The petitioner in Warner-Jenkinson requested another bright-line rule that would have provided more certainty in determining when estoppel applies but at the cost of disrupting the expectations of countless existing patent holders. We rejected that approach: “To change so substantially the rules of the game now could very well subvert the various balances the PTO sought to strike when issuing the numerous patents which have not yet expired and which would be affected by our decision.”

As Warner-Jenkinson recognized, patent prosecution occurs in the light of our case law. Inventors who amended their claims under the previous regime had no reason to believe they were conceding all equivalents. If they had known, they might have appealed the rejection instead. There is no justification for applying a new and more robust estoppel to those who relied on prior doctrine.

The Court further pointed out that in Warner-Jenkinson, “we made it clear that the doctrine of equivalents and the rule of prosecution history estoppel are settled law. The responsibility for changing them rests with Congress.”

The Court then held that the patentee should bear the burden of showing that the amendment does not surrender the particular equivalent in question. According to the Court:

When the patentee is unable to explain the reason for amendment, estoppel not only applies but also “[b]ars the application of the doctrine of equivalents as to that element.” These words do not mandate a complete bar; they are limited to the circumstances where “no explanation is established.” They do provide, however, that when the court is unable to determine the purpose underlying a narrowing amendment — and hence a rationale for limiting the estoppel to the surrender of particular equivalents — the court should presume that the patentee surrendered all subject matter between the broader and narrower language.

The patentee, as the author of the claim language, may be expected to draft claims encompassing readily known equivalents. A patentee’s decision to narrow his claims through amendment may be presumed to be a general disclaimer of the territory between the original claim and the amended claim.

With respect to how a patentee can overcome the presumption that prosecution history estoppel bars a finding of equivalence, the Supreme Court stated that:

[T]here are some cases, however, where the amendment cannot reasonably be viewed as surrendering a particular equivalent. The equivalent may have been unforeseeable at the time of the application; the rationale underlying the amendment may bear no more than a tangential relation to the equivalent in question; or there may be some other reason suggesting that the patentee could not reasonably be expected to have described the insubstantial substitute in question. In those cases, the patentee can overcome the presumption that prosecution history estoppel bars a finding of equivalence.

This presumption is not, then, just the complete bar by another name. Rather, it reflects the fact that the interpretation of the patent must begin with its literal claims, and the prosecution history is relevant to construing those claims. When the patentee has chosen to narrow a claim, courts may presume the amended text was composed with awareness of this rule and that the territory surrendered is not an equivalent of the territory claimed. In those instances, however, the patentee still might rebut the presumption that estoppel bars a finding of equivalence. The patentee must show 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.

Conclusion

The Supreme Court then held that “[o]n the record before us, we cannot say petitioner has rebutted the presumptions that estoppel applies and that the equivalents at issue have been surrendered.” According to the Court:

Petitioner concedes that the limitations at issue — the sealing rings and the composition of the sleeve — were made in response to a rejection for reasons under § 112, if not, also because of the prior art references. As the amendments were made for a reason relating to patentability, the question is not whether estoppel applies but what territory the amendments surrendered. While estoppel does not effect a complete bar, the question remains whether petitioner can demonstrate that the narrowing amendments did not surrender the particular equivalents at issue. On these questions, respondents may well prevail, for the sealing rings and the composition of the sleeve both were noted expressly in the prosecution history. These matters, however, should be determined in the first instance by further proceedings in the CAFC or the district court.

For full text and footnotes, please email ffcalvetti@sgrlaw.com.