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Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., No. 95-1066, 234 F.3d 558, 56 U.S.P.Q.2d BNA 1865 (Fed. Cir. Nov. 29, 2000).

DOCTRINE OF EQUIVALENTS - PROSECUTION HISTORY ESTOPPEL - CLAIM CONSTRUCTION - VOLUNTARY AMENDMENT - INFRINGEMENT - PATENTABILITY - 35 U.S.C. 101, 102, 103, 112 - MAGNETIZABLE SLEEVE

Amendments made for a substantial reason related to patentability, including voluntary amendments not made in response to an Examiner's rejection, preclude application of the doctrine of equivalents.

[SUMMARY] | [ISSUE & DISPOSITION] | [AUTHORITIES CITED] | [COMMENTARY]

SUMMARY

Festo Corporation ("Festo") sued Shoketsu Kinzoku Kogyo Kabushiki Company, (SMC Corporation and SMC Pneumatics, Inc.), (hereafter, "SMC") in the United States District Court for the District of Massachusetts, alleging that SMC infringed two of its patents, U.S. Patent No. 4,354,125 (the "Stoll patent") and U.S. Patent No. 3,779,401 (the "Carroll patent"). Both patents disclose and claim magnetically coupled rodless steel cylinders whose pistons include a pair of sealing rings.

Prosecution History of the Stoll and the Carroll Patents:

Stoll filed the application for the Stoll patent on May 28, 1980. In the first Office action, the examiner cited three patents as pertinent references and rejected all the original claims under 35 U.S.C. §112. In response, Stoll amended some claims and canceled others. In particular, Stoll amended claim 1 to include a "magnetizable sleeve" element. Stoll argued to the examiner that the amended claims complied with 35 U.S.C. § 112 and were patentably distinct from the prior art. Based on these arguments, the examiner allowed the amended claims after instructing that specific terms be deleted from the specification. The Stoll patent, as amended, issued on October 12, 1982.

Carroll filed the application for the Carroll patent on February 17, 1972 and the patent issued on December 18, 1973. Carroll, concerned that the PTO might find that a German patent not of record during patent's prosecution history might render claim 1 of the Carroll patent obvious, requested reexamination of the patent on March 18, 1988. The PTO found that the German patent disclosed a relevant feature not found by the examiner during prosecution of the Carroll patent and rejected claim 1 as obvious in light of this prior art. To cure the rejection, Carroll canceled claim 1, added claim 9, and amended claims 3 and 5 to make them dependent on claim 9. Carroll stated to the PTO that the claims as amended better defined the distinguishing features of his invention. Carroll further stated that the art of record did not disclose claim 9 and the German patent did not teach it. On October 25, 1988, a reexamination certificate issued for the amended Carroll patent.

Procedural History:

During summary judgment proceedings in the district court, SMC argued that it did not infringe claim 9 of the Carroll patent because the single sealing ring in SMC's piston was not equivalent to the pair of sealing rings recited in claim 9 of the Carroll patent. Festo presented expert testimony that SMC's single seal was equivalent to the two seals in claim 9. SMC argued against this idea, referring to a statement Stoll had made during prosecution of the Stoll patent that indicated that two sealing rings, as opposed to a single ring, were necessary to prevent dirt on the piston's magnet. The district court rejected SMC's argument on the ground that Stoll's statement was irrelevant to the function of the sealing rings in the Carroll patent. Accordingly, the district court granted Festo's motion for summary judgment, finding infringement under the doctrine of equivalents of claims 5, 6, and 9 of the Carroll patent.

The district court determined that SMC did not literally infringe the Stoll patent. SMC argued that because the "magnetizable sleeve" amendment was made to claim 1 of the Stoll patent in response to the first Office action, prosecution history estoppel barred application of the doctrine of equivalents to this claim element. Noting that the motivation for the "magnetizable sleeve" amendment was mysterious, as the amendment was neither related to the examiner's 35 U.S.C. § 112 rejections nor did it distinguish the invention over the prior art, the district court sent the issue of infringement to the jury for consideration under a doctrine of equivalents theory. The jury found that both the Stoll and the Carroll patents were valid and that SMC infringed claim 1 of the Stoll patent under the doctrine of equivalents. The jury then determined damages in accordance with the verdict.

SMC appealed both the district court's grant of summary judgment of infringement with respect to the Carroll patent and the jury's verdict of infringement of the Stoll patent. A panel of the Court of Appeals for the Federal Circuit ("Federal Circuit") affirmed both judgments. Subsequently, the Supreme Court decided Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, USPQ2d (BNA)1865 (1997). The Supreme Court granted SMC's petition for a writ of certiorari, and vacated and remanded the Federal Circuit's affirmance of the district court's decision for further consideration in light of Warner-Jenkinson. See 520 U.S. 17 (1997). On remand, a three judge panel of the Federal Circuit affirmed the district court's judgment with respect to infringement of the Carroll patent, vacated and remanded with respect to the Stoll patent, and reinstated their earlier decision with respect to all other issues. Subsequently, the Federal Circuit granted SMC's petition to rehear the appeal en banc and vacated the panel's decision.

ISSUE & DISPOSITION

Issue(s)

1. Whether the Warner-Jenkinson holding that only amendments made to a claim for a "substantial reason related to patentability" create prosecution history estoppel defines "reasons" as related to any of the statutory requirements for patentability.

2. Whether a voluntary claim amendment neither made in response to a specific rejection by an examiner nor required by the examiner nevertheless engenders prosecution history estoppel.

3. Whether a range of equivalents is available under the doctrine of equivalents for an amended claim element where the amendment creates prosecution history estoppel.

4. Whether a range of equivalents is available under the doctrine of equivalents for an amended claim element when no explanation is established for the amendment.

5. Whether a judgment of infringement under the doctrine of equivalents that entirely eliminates an element would violate the "all elements rule" established under Warner-Jenkinson.

Disposition

1. Yes. "A substantial reason related to patentability" includes any reason related to a statutory requirement for patentability. An amendment narrowing a claim for any reason related to the statutory requirements for patentability will engender prosecution history estoppel for that amended claim element.

2. It depends. 'Voluntary' claim amendments are treated the same as other claim amendments. Any voluntary amendment that narrows the scope of a claim for a reason related to the statutory requirements for a patent will give rise to prosecution history estoppel with respect to the amended claim element.

3. No. No range of equivalents is available for claims amended in a manner that creates prosecution history estoppel.

4. No. Where no explanation is established for an amendment, no range of equivalents is available for that amended claim element.

5. Unanswered. Courts only reach the "all elements" rule if prosecution history estoppel does not bar the application of the doctrine of equivalents. Because prosecution history estoppel applies in this case, the Federal Circuit did not address this issue.

AUTHORITIES CITED

Cases Cited by the Court

Other Sources Cited by Court

Cases Cited by the Concurring and Dissenting Opinions

COMMENTARY

State of the Law Before Festo

The doctrine of equivalents prevents a person from changing immaterial details of a claimed invention, while maintaining the invention's fundamental identity, in order to avoid liability for infringement of an existing patent. See Graver Tank & Mfg. Co. V. Linde Air Prods. Co., 339 U.S. 605, 608 (1950). Thus, the doctrine balances the need to ensure that the patentee enjoys the full benefit of his patent with the requirement that the claims give "fair notice" to the public. See London v. Carson Pirie Scott & Co., 946 F.2d 1534, 1538, 20 USPQ2d 1456, 1458-59 (Fed. Cir. 1991). "An accused product or process will infringe a claim, though outside its literal terms, if it does the same work in substantially the same way to accomplish substantially the same result as the patented product or process." Donald S. Chisum, 5A Chisum on Patents, 1-G1 (2000).

Prosecution history estoppel prevents a patent holder, in an infringement suit, from reclaiming "subject matter surrendered during the course of proceedings in the Patent and Trademark Office." 5A Chisum 18.05 (2)(D). Prosecution history estoppel creates a record that fairly notifies the public as to surrendered subject matter within a patent's reach. Pharmacia & Upjohn Co. V. Mylan Pharms., Inc., 170 F.3d 1373, 50 USPQ2d 1033 (Fed. Cir. 1999). Moreover, it precludes the doctrine of equivalents from vitiating the notice function of subject matter relinquished during the prosecution of a patent, thereby making the doctrine of equivalents subordinate to prosecution history estoppel. See Charles Greiner & Co. v. Mari-Med Mfg., Inc., 962 F.2d 1031, 1036, 22 USPQ2d 1526, 1529-30 (Fed. Cir. 1992).

The Supreme Court, in Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 33 (1997), focused on claim amendments made to overcome or avoid prior art to satisfy novelty and non-obviousness requirements set forth in 35 U.S.C. 102 and 103. In Warner-Jenkinson, the prior art taught an ultrafiltration process at a pH of above 9.0. The patentee's claim was amended to recite a pH from 6.0 to 9.0. Although it was clear that the upper limit of 9.0 was added to distinguish prior art during prosecution, it was unclear why the patentee, apparently voluntarily, made the amendment to add the lower limit. The Supreme Court placed the burden on the patentee to establish the reason for any amendment made during the prosecution process and asserted that an amendment made for "a substantial reason related to patentability" created prosecution history estoppel. The Court ruled that a patentee's failure to establish an explanation for an amendment creates a rebuttable presumption that the amendment was made for a substantial reason related to patentability. In those circumstances, no range of equivalents is available for the amended claim element. See Warner-Jenkinson, 520 U.S. at 33. The Warner-Jenkinson decision, however, confirmed that some amendments not driven by concerns related to patentability over the prior art, or voluntary amendments, may not preclude infringement by equivalents of that element. The Court did not explicitly resolve which reasons for amendments do not create prosecution history estoppel. See 5A Chisum 18.05 (2)(D).

The Warner-Jenkinson Court reasoned that under the "all elements rule" and the prosecution history estoppel doctrine, the public receives fair notice as to the scope of a patent; yet, the rights of patentees to assert infringement of some equivalents remain protected. The "all elements rule" provides that every limitation of a claim is material, and that an accused product lacking a particular element cannot infringe the claim. Furthermore, the Supreme Court held that the doctrine of equivalents "is not allowed such broad play as to eliminate [an] element in its entirety." Warner-Jenkinson, 520 U.S. at 29.

The Federal Circuit, in the past, treated prosecution history estoppel as a "flexible bar," recognizing that it may have a "limiting effect" on the available range of equivalents. See Hughes Aircraft Co. v. United States, 717 F.2d 1351, 219 USPQ (BNA) 473 (Fed. Cir. 1983). Although an amendment would bar infringement under the doctrine of equivalents with respect to a claim similar to the prior art that had instigated the amendment, use of the flexible bar approach indicates that prosecution history estoppel does not prevent all applications of the doctrine of equivalents. Therefore, prosecution history estoppel limited the "available range of equivalency," but it did not, along with the prior art, eliminate all equivalents. See Modine Mfg. Co. v. United States Int'l Trade Comm'n, 75 F.3d 1545, 1555-56, 37 USPQ2d (BNA) 1609, 1616 (Fed. Cir. 1996).

The Federal Circuit, however, has also used a more exacting approach to the application of prosecution history estoppel. In Kinzenbaw v. Deere & Co., 741 F.2d 383, 222 USPQ (BNA) 929 (Fed. Cir. 1984), the Court held that a patent holder could not rely on the doctrine of equivalents to establish an infringement where an alleged infringer adopted an element that the patent holder eliminated for the purpose of avoiding the examiner's rejection. The Kinzenbaw opinion created uncertainty as to whether the Court would continue to use the flexible bar approach or, alternatively, utilize the exacting, "Kinzenbaw" approach, when deciding what range of equivalents is available after a court finds and employs prosecution history estoppel.

Effect of Festo on Current Law

Issue 1:

The Federal Circuit broadens the types of amendments made for “a substantial reason related to patentability” that will give rise to prosecution history estoppel. In its opinion in Warner-Jenkinson, the Supreme Court focused on amendments relating to only two of the statutory requirements for patentability – nonobviousness and novelty – in its discussion of amendments substantially related to patentability. The Federal Circuit, however, rules that the language used by the Supreme Court did not limit the application of prosecution history estoppel to amendments made to avoid or overcome prior art. The Federal Circuit holds that amendments related to any of the statutory requirements for patentability, including the requirements of utility, best mode, enablement and written description, constitute amendments made for “a substantial reason related to patentability.” Under this reasoning, a restrictive amendment made for any reason relating to the statutory requirements for patentability under the Patent Act will now evoke the doctrine of prosecution history estoppel for that amended claim element.

Issue 2:

The Federal Circuit clarifies that voluntary amendments, those not required by the examiner and not made in response to an examiner’s rejection, create prosecution history estoppel. Such amendments must both narrow the scope of the claimed element and be related to a statutory requirement for patentability. The Court finds no reason to distinguish between voluntary amendments and amendments required by the examiner because both types of amendments surrender subject matter covered by the patent as originally drafted. Likewise, statements made voluntarily by a patentee during prosecution may lead to prosecution history estoppel if they constitute a surrender of subject matter. The Federal Circuit rules that such argument-based surrender should not be treated differently from a voluntary amendment-based surrender of subject matter. The Federal Circuit easily reconciles its ruling with the Supreme Court’s decision in Warner-Jenkinson, noting the Supreme Court's holding that the patentee’s apparently voluntary amendment – adding a lower pH limit – could evoke the doctrine of prosecution history estoppel.

Issue 3:

In perhaps the most controversial part of the opinion, the Federal Circuit bars all use of the doctrine of equivalents when prosecution history estoppel applies. The majority argues that the "flexible bar approach" to the use of the doctrine of equivalents when prosecution history estoppel applies creates confusion as to the scope of material being protected in a given patent. The majority cites precedents where the court granted latitude to patent holders invoking the doctrine of equivalents to protect amended portions of their patents, thereby trumping the assumption of prosecution history estoppel. Additionally, the majority cites other precedents in which prosecution history estoppel barred any use of the doctrine of equivalents. The majority argues that it was impossible for a patent holder or the public at large to know what material a patent actually covers when the court uses such a flexible, case-by-case approach. Deciding that such an approach was unworkable, the majority bars any use of the doctrine of equivalents where prosecution history estoppel applies. This complete bar of the doctrine of equivalents will occur where 1) there is an amendment to a patent application, 2) the amendment narrows the scope of the patent claim, and 3) this amendment was made for the purpose of complying with statutory requirements. To invoke the doctrine of equivalents for an amendment, the patent holder must overcome a presumption that an amendment that narrows the scope of the patent claim was made in order to comply with these requirements and may only use information appearing in the prosecution history to overcome this presumption. According to the majority, this approach will allow patent holders and the public to know what material a patent covers and will encourage ingenuity and improvements in products.

Issue 4:

The Federal Circuit, citing Warner-Jenkinson and providing no additional comments, states that an amendment without an accompanying explanation will receive no protection under the doctrine of equivalents.

Issue 5:

Finally, the Federal Circuit finds that the amended claims at issue do invoke prosecution history estoppel. Because the patentee made the amendments, which narrowed the scope of the claimed elements, for reasons substantially related to patentability, the amended claims are not protected by the doctrine of equivalents. Consequently, the majority had no opportunity to reach the final issue of whether the application of the doctrine of equivalents in this case would violate the “all elements” rule.

Concurring and Dissenting Opinions:

Concurring, Judge Plager labels the Federal Circuit’s resolution “a second-best solution to an unsatisfactory situation.” The Judge criticizes the majority’s use of bright-line rules, concerned that while these rules may eliminate the problems of uncertainty and lack of predictability, they do so at the cost of imposing a degree of rigidity upon the court. Judge Plager suggests a better solution would be for the Federal Circuit to decree that the doctrine of equivalents is firmly rooted in equity principles and to act accordingly. Judge Plager reasoned that if the doctrine of equivalents were treated as an equitable doctrine, courts could develop “a set of known factors that could be applied predictably” to determine when and under what circumstances the doctrine of equivalents would apply. These factors would give parties the comfort of predictability while simultaneously allowing courts to retain flexibility in applying the factors. The ability of courts to reach beyond the literal scope of one’s legal rights when fairness and equity call for such a departure is a “hallmark of equitable adjudication.”

In a concurring opinion, Judge Lourie addresses the concerns of those proponents of the flexible bar rule. He stresses that the firmer, complete bar rule adopted by the majority was in the “best interest of the patent system.” Under the majority’s reasoning, competitors will now be able to create products beyond the scope of a claimed invention without fear of infringement litigation. According to Judge Lourie, the majority’s rule will encourage innovation by reducing uncertainty and decreasing the amount of unnecessary litigation concerning the scope of patent claims.

Judge Michel concurs with the majority on all of the issues except the range of equivalents available to amended claim elements under the doctrine of equivalents. He argues that the majority effectively prevents most patentees from asserting infringement under the doctrine of equivalents. The majority thereby disrupts the balance, established by the Supreme Court in Warner-Jenkinson, between the patentee’s need to protect against infringement and the public’s need for adequate notice as to the metes and bounds of a patentee’s claims. Judge Michel criticizes the majority for surveying only six Supreme Court cases before concluding that the Supreme Court never “answered or addressed” whether a patentee retains a range of equivalents after adding a claim limitation for reasons of patentability. Furthermore, he argues that the majority failed to provide an adequate or satisfactory explanation for its decision to overturn earlier Federal Circuit cases concerning the “flexible bar” approach. Finally, Judge Michel warns that the majority’s ruling allows competitors and copyists to avoid infringement liability by (1) reading the prosecution history, (2) finding a narrowing amendment made for reasons affecting patentability, and (3) introducing an interchangeable, equivalent structure for the amended claim element. This ruling thus eviscerates the effective scope (and thus the value) of most currently outstanding and unexpired patents.

Judge Rader, concurring-in-part and dissenting-in-part, argues that the complete bar rule adopted by the majority fails to satisfy one of the primary justifications for the doctrine of equivalents: accommodating after-arising technology.

Judge Linn, also concurring-in-part and dissenting-in-part, criticizes the majority for insufficiently justifying the dramatic policy shift created by the adoption of the complete bar rule. Judge Linn argues that the majority “unfairly tips the balance away from the patentees and toward competitors” by establishing a regime that will increase the cost and complexity of patent prosecution. Judge Linn reasons that the public-notice function of prosecution history estoppel is often better served by a compromise between the patentee and the examiner during the prosecution process. Such a dialogue between the patentee and the examiner would help to clarify the true scope and meaning of the claim limitations at issue.

In her separate opinion, also concurring-in-part and dissenting-in-part, Judge Newman attacks the majority for “providing a blueprint for ready imitation of patented products.” She identifies three ways in which the majority’s decision departs from the Supreme Court’s holding in Warner-Jenkinson. First, the majority’s holding that any narrowing amendment related to the statutory requirements for patentability will invoke the doctrine of prosecution history estoppel would consequently prevent a court from inquiring into the reasons for amendment. Judge Newman emphasizes that the Supreme Court, in Warner-Jenkinson, remanded the case to the Federal Circuit to address this prohibited inquiry regarding what subject matter the patentee surrendered and why. Second, the rule created by the majority limits the evidence available to rebut the presumption that any amendments were made for reasons relating to patentability. Judge Newman attacks this rule because the purpose of the prosecution history is to “establish whether the presumption arises at all, not whether it has been rebutted.” She also argues that the majority “inappropriately” broadened the scope of amendments made for “reasons related to patentability,” because not all rejections based on the provisions of the Patent Act necessarily implicate the substantive grounds of patentability. Finally, Judge Newman criticizes the majority for failing to address the application of the “all elements” rule to the claims at issue. She writes that by not reaching this issue, the majority ignores part of the reason the Supreme Court ordered its “grant, vacate, and remand” order to reconsider this case in light of the Supreme Court’s decision in Warner-Jenkinson.

Unanswered Questions

What sort of explanation would sufficiently rebut the presumption that the reason for a given amendment is substantially related to patentability?

What type of amendments, if any, would not be considered to have been made for "substantial reasons related to patentability" and thus not subject to prosecution history estoppel?

How will Festo, in application, impact all patents and currently pending U.S. Patent applications?

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