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FESTO:A NEW DECISION PROVIDES FURTHER DEFINITION

October 2003

The tangled web of Festo Corporation v. Shoketsu Kinzoku Kogyo Kabushki Co., Ltd., and with it that of the Doctrine of Equivalents, may have become a bit less entangled with the recent en banc decision from the United States Court of Appeals for the Federal Circuit.

On September 26, 2003, the Federal Circuit issued its decision on the issues presented on remand from the United States Supreme Court in the Festo case. The Festo case concerns the application of the Doctrine of Equivalents, particularly the circumstances under which prosecution history estoppel bars application of the Doctrine of Equivalents, to expand the scope of patent claims beyond the literal meanings of the terms of the claims.

In Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 533 U.S. 915 (2001), the United States Supreme Court confirmed that a narrowing amendment made to a claim during patent prosecution to satisfy any requirement of the Patent Act may give rise to an estoppel, and remanded the case to the Federal Circuit. The Supreme Court ruled that a narrowing amendment creates a presumption that surrenders the entire territory between the original claim limitation and the amended claim limitation. The Supreme Court further ruled that the presumption can be rebutted by 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.” Id. at 741.

In its September 26, 2003 decision, the Federal Circuit announced a three-part test to be applied by a judge for determining whether prosecution history estoppel applies to preclude the application of the Doctrine of Equivalents. The test is based on prior court decisions, including the Supreme Court’s Festo decision, and appears to be an attempt to balance the certainty desired for evaluating the scope of patent claims with the need for flexibility in the face of copying by minute innovations on a patented article.

The first part of the test concerns the question of whether the amendment narrows the literal scope of a claim. If the amendment does not narrow the literal scope of the claim, there is no estoppel and the Doctrine of Equivalents applies. If the amendment narrows the scope of the claim, however, additional inquiry is necessary.

The second part of the test involves the question of whether the reason for the amendment is a substantial one relating to patentability. Certainly, an amendment made to obviate prior art is a substantial one related to patentability; however, the Federal Circuit reinforced prior precedent that when no reason is stated in the prosecution history for the amendment, it is presumed that the amendment is a substantial one relating to patentability. Furthermore, the Federal Circuit reinstated a holding in a prior vacated Festo decision that evidence to rebut the presumption is restricted to the prosecution history. If the amendment is not substantially related to patentability, the Doctrine of Equivalents may be applied.

Under the third part of the test, if the amendment is narrowing and related to patentability, then the Doctrine of Equivalents is presumed to apply unless one skilled in the art could not reasonably be expected to have drafted the claim to literally encompass the alleged equivalent. The presumption can be rebutted by establishing one of three criteria which occupy the main focus of the Federal Circuit’s en banc decision. If a patent owner establishes any of the three criteria, prosecution history estoppel does not apply and the scope of the claim may encompass equivalents.

The first criterion, which will likely be the most widely applied by litigants, is whether the alleged equivalent would have been unforeseeable to one of ordinary skill in the art at the time of the amendment. The Federal Circuit opined that “…if the alleged equivalent represents later-developed technology (e.g., transistors in relation to vacuum tubes, or Velcro® in relation to fasteners) or technology that was not known in the relevant art, then it would not have been foreseeable.”, as opposed to technology known in the prior art. Under the Federal Circuit’s en banc ruling, expert testimony and other intrinsic evidence may be used in evaluating this criterion.

The second criterion addresses whether the amendment has only tangential relationship to the equivalent in question. The Federal Circuit interpreted this criterion as asking “…whether the reason for the narrowing amendment was peripheral, or not directly relevant, to the alleged equivalent.” The focus, under the Federal Circuit’s ruling, concerns the patentee’s objective apparent reason for the narrowing amendment and must be established based only on the prosecution history save for any extrinsic evidence necessary for the interpretation of the prosecution history.

The third criterion is involves some other reason suggesting that the patentee could not reasonably be expected to have described the insubstantial substitute in question. The Federal Circuit stated that this generic category must be applied in a narrow sense and interpreted this criterion as applying “…when there was some reason, such as the shortcomings of language, why the patentee was prevented from describing the alleged equivalent when it narrowed the claim.” The Federal Circuit indicates that evidence for this criterion should be limited to the prosecution history.

Although the Federal Circuit’s en banc decision of September 26, 2003 does not seemingly break “new ground” in light of the prior Festo ruling of the Supreme Court and, indeed, in light of prior Festo rulings from the Federal Circuit, the decision does provide further guidance to both patent owners and their attorneys. The decision reinforces that patent prosecutors must fully and concisely explain all claim amendments or risk having a non-narrowing amendment presumed as one that narrows the scope of the claim. The need for full explanation is particularly necessary because the only evidence allowed by the Federal Circuit to overcome this presumption, as well as for some of the criteria under the third part of the Federal Circuit’s test, may not be available when it is really needed: when a competitor is pilfering an invention and contending in litigation that the patent owner is estopped from applying the Doctrine of Equivalents. For litigators, the Federal Circuit’s en banc decision signals that the foreseeability criterion may be the most useful way to avoid estoppel when faced with a narrowing amendment.