June 5, 2002

Supreme Court Reaffirms Patent Protection Under Doctrine of Equivalents

Joshua C. Krumholz

On May 28, 2002, the Supreme Court reversed in substantial part the controversial decision of the Federal Circuit in Festo Corp. v. Shoketsu Kihzoka Kogyo Kabushiki Co., Ltd.  At the heart of its decision lay a disagreement with the Federal Circuit over the proper scope of a legal principle known as the doctrine of equivalents.  In Festo Corp., the Federal Circuit dramatically scaled back the application of that principle.  As a result, the value of many patents was substantially reduced, and proving infringement of those patents became much more difficult.  By rejecting the Federal Circuit’s approach, the Supreme Court essentially reaffirmed prior law. 

The Application of the Doctrine of Equivalents

The doctrine of equivalents is a principle applied when determining potential infringement of a patent.  Under U.S. patent law, a patent may be infringed either literally -- where every element in a patent claim is literally found in an accused product -- or by equivalents -- where the product varies to some degree from the actual claim, but the difference is insubstantial.  The doctrine of equivalents was created in recognition of the fact that language does not always capture in full the essence of an invention.  The doctrine of equivalents protected patent holders from efforts by competitors to exploit the inherent limits of language by making only slight or insignificant changes to the invention claimed in the patent.

The problem with this approach, however, was the uncertainty that resulted.  If an innovator with a new idea could be sued for something “equivalent” to a claimed invention, it became harder to predict the boundaries of that patent. To temper this concern, the Supreme Court previously had held that the public may look to the public record behind the patent to better understand its limitations. Known as prosecution estoppel, the Supreme Court previously held that patent holders would be limited by the representations they made to the Patent & Trademark Office (PTO) to get their patent allowed. If a patent holder “gave up” a portion of its claim in order to persuade the PTO to allow its patent (for instance, if it narrowed the scope of its claimed invention to avoid a claim that someone had already conceived of the invention), the patent holder could not later claim infringement by practicing in the same area that the patent holder had disclaimed.

The Federal Circuit's Decision in Festo Corp.

Although in place for many years, in Festo Corp., the Federal Circuit declared this system unworkable. The Court held that, in practice, deciding whether a particular subject area had been disclaimed by a patentee led to too much unpredictability. It therefore created a “bright line” rule. It concluded that, whenever patent language was narrowed to respond to a patent examiner’s concerns about patentability, the patent automatically was limited to that amended language. No equivalents would be available to the patentee in that instance, whether or not the patentee actually had disclaimed the subject matter that was claimed in the lawsuit.

The effect on business and litigation was immediate. The sudden change in rules raised concerns that patent portfolios in virtually every field had lost value. Patent holders that believed that their patents covered a reasonably anticipated range of equivalents, found instead that their patents may have been limited in ways that they had never contemplated. Litigators found that entire theories of recovery had immediately vanished. Patent practitioners as a whole were left to devise new ways to deal with the new rules.

Reaffirmation of the Doctrine of Equivalents by the Supreme Court

In its recent decision, the Supreme Court, recognizing the problems that the changes had wrought, rejected the Federal Circuit’s bright line rule. While it acknowledged the need for predictability, it held that this concern had to be balanced against the constitutional right to patent protection. Under the Federal Circuit’s arbitrary bright line, it would be too easy to avoid a patent simply by making insubstantial changes to an accused device.

Instead, the Supreme Court reverted back to its “flexible” bar, where in each case a court must determine whether a patentee surrendered the subject matter that it later claimed had been infringed.  In so holding, the Court also gave guidance in one area that will affect both patent prosecution and litigation. In some instances, a claim element is narrowed, but no reason for that narrowing is apparent from the PTO record. In that instance, the Supreme Court held that a court should presume that the amendment was related to patentability reasons, and the doctrine of equivalents is therefore not available for the area the patentee gave up. That presumption may be overcome, however, if the patentee can show that someone ordinarily skilled in the art at the time could not have reasonably been expected to have literally drafted the claim about which it now seeks protection.

Implications for the Future

What does this mean in the future? To those prosecuting patents, maintaining a clear written record before the PTO becomes even more imperative. It is particularly incumbent upon applicants to insure that the reasons for any amendments are stated as clearly as possible. To litigators, the practice of prosecuting patents itself has become fair game in the courtroom. Where discussion once focused primarily on the interpretation of the patent and the PTO record, the Supreme Court’s decision now opens debate on what the patent should have said, and what could have been written.

What kind of evidence will litigators need to present, and need to counter, about what the patent claims should have said and could have said? Will the judge and jury be treated, once again, to patent lawyers testifying about the scope of prior art, the points of novelty, and the language required to distinguish over the prior art and yet include the accused device?  Such testimony was routinely offered, and occasionally received, in patent trials in the 1980s and before.  The Markman case, however, as well as closer adherence to the Federal Rules of Evidence had, for the most part, put an end to patent lawyer testimony.  It may well be that we will face such testimony again.

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