The Festo Decision: The Federal Circuit Scales Back the Doctrine of Equivalents
December 2001
On November 29, 2000, the US Court of Appeals for the Federal Circuit, sitting en banc, handed down its decision in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., No. 95-1066 (Fed. Cir. Nov. 29, 2000) (en banc). The Court’s decision expands the application and impact of "prosecution history estoppel" when considering the question of infringement under the doctrine of equivalents. The net result is that a patentee will be less able to rely on the doctrine of equivalents when trying to prove infringement.
INTRODUCTION
The doctrine of equivalents is a judicially created doctrine that was constructed to prevent "an accused infringer from avoiding liability for infringement by changing only minor or insubstantial details of a claimed invention while retaining the invention’s essential identity." Festo, slip. op. at 4, citing Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 229 U.S. 605, 608 (1950). The doctrine of equivalents "attempts to strike a balance between ensuring that the patentee enjoys the full benefit of his patent and ensuring that the claims give ‘fair notice’ of the patent’s scope." Festo, slip. op. at 5, citing London v. Carson Pirie Scott & Co., 946 F.2d 1534, 1538 (Fed. Cir. 1991).
Thus, a defense to infringement under the doctrine of equivalents is prosecution history estoppel. "Prosecution history estoppel precludes a patentee from obtaining under the doctrine of equivalents coverage of subject matter that has been relinquished during the prosecution of its patent application." Pharmacia & Upjohn Co. v. Mylan Pharms., Inc., 170 F.3d 1373, 1376 (Fed. Cir. 1999). Actions taken by a patentee during prosecution, including claim amendments and arguments for patentability, may give rise to prosecution history estoppel. See id. at 1376-77. "The logic of prosecution history estoppel is that the patentee, during prosecution, has created a record that fairly notifies the public that the patentee has surrendered the right to claim particular matter as within the reach of the patent." Festo, slip. op. at 5.
In its 1997 decision in Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997), the Supreme Court, while "adher[ing] to the doctrine of equivalents," id. at 40, nonetheless expressed concern that "the doctrine of equivalents . . . has taken on a life of its own." Id. at 28-29. The Court, therefore, clarified that the doctrine of equivalents "should be applied as an objective inquiry on an element-by-element basis," id. at 40; i.e., if a court determines that a finding of infringement under the doctrine of equivalents "would entirely vitiate a particular claim element," then there can be no infringement under the doctrine of equivalents. Id. at 39, n.8.
The Supreme Court’s decision also addressed the issue of prosecution history estoppel. The Court held that "prosecution history estoppel continues to be available as a defense to infringement." Id. at 40. However, "if the patent holder demonstrates that an amendment required during prosecution had a purpose unrelated to patentability, a court must consider that purpose in order to decide whether an estoppel is precluded." Id. at 40-41. If "the patent holder is unable to establish such a purpose, a court should presume that the purpose behind the required amendment is such that prosecution history estoppel would apply." Id. at 41.
The period following the Supreme Court’s Warner-Jenkinson decision caused both the district courts and the Federal Circuit to grapple with issues concerning what a "purpose unrelated to patentability" meant. Further, there remained the issue of what range of equivalents, if any, existed when prosecution history estoppel did apply. This question arose as a result of two lines of Federal Circuit opinions that reached different conclusions as to the answer. In the first, the Federal Circuit applied prosecution history estoppel as a "flexible bar." See, e.g., Hughes Aircraft Co. v. United States, 717 F.2d 1351 (Fed. Cir. 1983); Modine Mfg. Co. v. United States Intern. Trade Comm’n, 75 F.3d 1545 (Fed. Cir. 1996). Under this line of cases, prosecution history estoppel "may have a limiting effect" on the doctrine of equivalents "within a spectrum ranging from great to small to zero." Hughes, 717 F.2d at 1363. The range of equivalents, therefore, was usually determined by what was shown in the prior art or by arguments made by the patentee during prosecution.
In a second, less cited line of cases, the Federal Circuit applied a strict "no equivalents allowed" approach when prosecution history estoppel applied. See, e.g., Kinzenbaw v. Deere & Co., 741 F.2d 383 (Fed. Cir. 1984). In explaining its approach, the Court stated that it "declined to undertake the speculative inquiry" of whether the examiner in the US Patent Office would have allowed a claim with a broader amendment than the one the applicant actually submitted. Id. at 391.
THE FESTO DECISION
At least in part because of apparently conflicting precedent, in 1999 the Federal Circuit took the Festo case en banc in an effort to "resolve certain issues relating to the doctrine of equivalents that remained in wake of the Supreme Court’s decision" in Warner-Jenkinson. Festo, slip. op. at 2. The Court requested briefing directed to five specific questions concerning the doctrine of equivalents and prosecution history estoppel. Those five questions, and the Federal Circuit’s decision regarding each, are addressed in order below.
QUESTION 1
For the purposes of determining whether an amendment to a claim creates prosecution history estoppel, is it a "substantial reason it related to patentability," Warner-Jenkinson, 517 U.S. at 33, limited to those amendments made to overcome prior art under §102 and § 103, or does "patentability" mean any reason affecting the issuance of a patent?
The Court answered Question 1 as follows: "For the purposes of determining whether an amendment gives rise to prosecution history estoppel, a ‘substantial reason related to patentability’ is not limited to overcoming or avoiding prior art but instead includes any reason which relates to the statutory requirements for a patent." Festo, slip. op. at 9 (emphasis in original). Accordingly, "a narrowing amendment made for any reason related to the statutory requirements for a patent will give rise to prosecution history estoppel with respect to the amended claim element." Id.
The Court explained its answer by noting that, although the Warner-Jenkinson decision focused on amendments made to overcome prior art, "there are a number of statutory requirements that must be satisfied before a valid patent can issue and that thus relate to patentability." Festo, slip. op. at 9. The Court identified the following applicable statutory requirements: novelty (35 U.S.C. § 102); nonobviousness (35 U.S.C. § 103); patentable subject matter and usefulness (35 U.S.C. § 101); the written description, enablement and best mode requirements (35 U.S.C. § 112, ¶ 1); and the definiteness requirement (35 U.S.C. § 112, ¶ 2). Because "any one of these requirements may be a ground for invalidating an issued patent . . . , [a]n amendment related to any of these statutory requirements is an amendment made for ‘a substantial reason related to patentability’." Festo, slip. op. at 9-10. Such an amendment will thus trigger prosecution history estoppel. However, the Court noted that "if a patent holder can show from the prosecution history that a claim amendment was not motivated by patentability concerns, the amendment will not give rise to prosecution history estoppel. Id. at 12. The Court did not give any guidance as to which types of amendments qualify as those "not motivated by patentability concerns."
QUESTION 2
Under Warner-Jenkinson, should a "voluntary" claim amendment–one not required by the examiner or made in response to a rejection by an examiner for a stated reason–create prosecution history estoppel?
The Court answered Question 2 as follows: "[v]oluntary claim amendments are treated the same as other amendments. Therefore, a voluntary claim 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 as to the amended claim element." Festo, slip. op. at 12.
In answering Question 2, the Court explained that both voluntary amendments and amendments required by the US Patent Office "signal to the public that subject matter has been surrendered." Id. The Court believed this holding was consistent with what is termed "argument-based" estoppel, i.e., those situations where an applicant, in making arguments for patentability, voluntarily surrenders subject matter and thus subjects himself to prosecution history estoppel based on those arguments. See KCJ Corp. v. Kinetic Concepts, Inc., 223 F.3d 1351, 1359-60 (Fed. Cir. 2000) (concluding that "KCJ’s statements [during prosecution] reflect a clear and unmistakable surrender" of subject matter that cannot be reclaimed through the doctrine of equivalents"). The Court therefore reasoned that there is "no reason why an amendment-based surrender of subject matter should be given less force than an argument-based surrender of subject matter." Festo, slip. op. at 13.
QUESTION 3
If a claim amendment creates prosecution history estoppel, under Warner-Jenkinson what range of equivalents, if any, is available under the doctrine of equivalents for the claim element so amended?
In answering Question 3, the Federal Circuit resolved the apparent conflict in its prior decisions (see Introduction above) and held that "when a claim amendment creates prosecution history estoppel with regard to a claim element, there is no range of equivalents available for the amended claim element. Application of the doctrine of equivalents to the claim element is completely barred (a ‘complete bar’)." Festo, slip. op. at 14. The so-called "flexible bar" approach first established in the Hughes case was thus expressly overruled.
In reaching its decision, the Federal Circuit rationalized that in the intervening 17 years since it first decided Hughes, "the notice function of patent claims has become paramount, and the need for certainty as to the scope of patent protection has been emphasized." Festo, slip. op. at 26.
While acknowledging the doctrine of stare decisis, the Court explained that it believed "the current state of law regarding the scope of equivalents that is available when prosecution history estoppel applies is ‘unworkable’." Id. at 27. According to the Court:
[The] problem with the flexible bar approach is that it is virtually impossible to predict before the decision on appeal where the line of surrender is drawn. The patentee would draw the line just at or slightly short of the prior art, leaving a wide range of equivalents untouched by prosecution history estoppel. The accused infringer, however, would draw the line close to the literal terms of the claims, leaving little or no range of equivalents. These considerations, we think, contribute to the difficulty under the flexible bar approach in predicting with any degree of certainty the scope of surrender that will be found when prosecution history estoppel applies. Id. at 26-27.
In contrast, the Federal Circuit believed that a complete bar "best serves the notice and definitional function of patent claims. . . . The patentee and the public can look to the prosecution history, a public record, to determine if any prosecution history estoppel arises as to any claim element. If so, that element’s scope of protection is clearly defined by its literal terms." Id. at 29. There is thus "no speculation or uncertainty" as to the exact range of equivalents that might be available; a complete bar, according to the Court, eliminates such uncertainty. See id. at 32.
QUESTION 4
When "no explanation [for a claim amendment] is established," Warner-Jenkinson, 520 U.S. at 33, thus invoking the presumption of prosecution history estoppel under Warner-Jenkinson, what range of equivalents, if any, is available under the doctrine of equivalents for the claim element so amended?
In light of the Court’s answer to Question 3, it should be no surprise that the Court’s answer to Question 4 was also "none." "When no explanation for a claim amendment is established, no range of equivalents is available for the claim element so amended." Festo, slip. op. at 33.
QUESTION 5
Would a judgment of infringement in this case violate Warner-Jenkinson’s requirement that the application of the doctrine of equivalents "is not allowed such broad play as to eliminate [an] element in its entirety," 520 U.S. at 29. In other words, would such a judgment of infringement, post Warner-Jenkinson, violate the "all elements" rule?
The Court declined to answer Question 5. In its analysis of the specific facts of the Festo case, the Court explained that the two claim elements that the patentee Festo was trying to show were present in the defendant’s devices by equivalents were added by amendment during prosecution of the patents in suit. The Court held that the record showed the amendments narrowed the scope of the original claim, and that Festo could not establish that the amendments were made for reasons unrelated to patentability. Thus, the Court found that prosecution history estoppel applied, and as such Festo was entitled to no range of equivalents for the two elements added by amendment. The Court, therefore, reversed the finding of infringement under the doctrine of equivalents. See Festo, slip op. at 50-58.
A NEW TEST FOR DETERMINING IF THE PATENTEE MAY ASSERT INFRINGEMENT UNDER THE DOCTINE OF EQUIVALENTS
In examining the specific facts before it in the Festo case, the Federal Circuit set forth the new analysis a court should apply in determining whether infringement under the doctrine of equivalents is available to a patentee.
When infringement is alleged to occur under the doctrine of equivalents, two primary legal limitations on the doctrine are to be determined by court–those legal limitations are "prosecution history estoppel and the ‘all elements’ rule." Festo, slip. op. at 47, citing Warner-Jenkinson, 520 U.S. at 39, n.8.
The first step in a prosecution history estoppel analysis is to "determine which claim elements are alleged to be met by equivalents. Then, the court must determine whether the elements at issue were amended during prosecution of the patent. If they were not, amendment-based estoppel will not bar the application of the doctrine of equivalents. However, the court may still need to consider whether statements made during prosecution give rise to argument-based estoppel." Id. at 47-48.
If the claim elements at issue were amended, the court first must determine whether the "amendment narrowed the literal scope of the claim. If so, prosecution history estoppel will apply unless the patent holder establishes that the amendment was made for a purpose unrelated to patentability." Id. at 48. If the patentee cannot do so, "prosecution history estoppel bars the application of the doctrine of equivalents to that claim element." Id.
In analyzing whether the patentee can establish that the amendment was made for purposes unrelated to patentability, the Federal Circuit cautioned that the patentee who seeks to establish the reasons for an amendment must base his arguments "solely upon the public record of the patent’s prosecution, i.e., the patent’s prosecution history." Id. The Court determined that to allow the patentee to rely on evidence not in the public record would defeat the "public notice function of the patent record." Id. at 49. The reason must, therefore, be set forth in the prosecution history itself.
If the court determines that prosecution history estoppel does not apply, the court must move to the second legal limitation on the doctrine of equivalents: the all elements rule. "If the court determines that a finding of infringement under the doctrine of equivalents ‘would entirely vitiate a particular claim element,’ then the court should rule that there is no infringement under the doctrine of equivalents." Id. at 49-50, citing Warner-Jenkinson, 520 U.S. at 39, n.8.
ANALYSIS
The Federal Circuit’s decision in Festo will have an immediate impact on many of the thousands of patent litigations currently pending in the United States. Patentees and accused infringers alike must examine the question of whether infringement under the doctrine of equivalents is still a viable issue in light of the Festo decision. Likewise, lawyers and agents practicing patent prosecution must take the Festo decision into account when drafting claims and proposing amendments. A brief discussion of the impact the Festo decision will have on patent litigation and patent prosecution follows.
The garden-variety prosecution history will look similar to the following. The application as filed will have one or more claims directed to the broadest aspects of the invention. This is standard patent drafting practice–to try and obtain the broadest patent protection possible. Most likely, in the first office action, the claims will be rejected based on the prior art located by the examiner or submitted by the applicant. There may also be § 112 rejections.
In response, the applicant may try to argue that the rejections are improper. The more common practice, however, is to amend the claims to add limitations in order to overcome the rejections and push the application to issuance. See concurring-in-part, dissenting-in-part opinion of Judge Michel ("the vast majority of patent applications contain claims that are initially rejected in view of the prior art and are only allowed after being amended"). Under Festo, these amendments now create prosecution history estoppel that will bar any range of equivalents to the limitations added by amendment.
For patents currently in litigation, the file history must be reexamined to determine what limitations, if any, were added by amendment. Given the fact that, in nearly every case, the amendment will have narrowed the scope of the claim and the patentee will be unable to show that the amendment was not made for reasons unrelated to patentability, the patentee’s doctrine of equivalents case may now be foreclosed in light of Festo.
What happens in those cases where the applicant cancelled the original claim and added a new claim? The Festo case presented just such a factual scenario. There, the applicant cancelled an independent claim in response to an office action and added a new independent claim by amendment. The new claim had a limitation present that was not in the cancelled claim. The Federal Circuit held this new claim was tantamount to narrowing the scope of the original claim, and that the patentee had not satisfactorily shown that the new claim was added for reasons unrelated to patentability. See Festo, slip. op. at 57-58. Thus, the Court found that prosecution history estoppel applied to the limitation added in the new claim.
When examining Festo in the context of patent prosecution, some observations may be made. First, it may be advisable to do a prior art search before drafting claims in order to become familiar with the present state of the art. This will allow you to more carefully craft claims around the prior art in advance in order to reduce the likelihood that the claims will need to be narrowed by amendment during prosecution.
In light of the Festo decision, it now may also make sense to be cautious when writing the first set of claims. See concurring opinion of Judge Plager ("patent counsels may decide that past practice gives up too much under the new rules, and instead may start claiming narrowly with the hope of avoiding rejections and . . . amendments"). There will be the opportunity to submit broader claims after the first office action, if the prior art cited by the examiner appears to permit broader claims than those originally presented.
The Festo decision may also result in patent prosecutors approaching responses to office actions with a new strategy. First, if it becomes apparent from the prior art that the claims will have to be amended to add a new limitation, it may be possible to work around the Festo decision by adding the new limitation in means-plus-function format in accordance with § 112, ¶ 6. A patentee is entitled to a range of equivalents for claim elements written in means-plus-function format when considering the issue of literal infringement. See Festo, slip. op. at 54 ("a claim element recited in means-plus-function language literally encompasses the corresponding structure and its equivalents"). It, therefore, may be advantageous to use means-plus-function language when it becomes apparent that a claim limitation is going to have to be added during prosecution.
WHAT'S NEXT?
The Federal Circuit's en banc decision in Festo is now the controlling law concerning the doctrine of equivalents. However, it may not be the final word. Given the controversial nature of the opinion and the fact that four of the 12 judges dissented at least in part with the majority opinion and that certain concurring opinions showed an unenthusiastic endorsement of the majority opinion, it is very possible that the Supreme Court may decide to grant certiorari (if filed) and review the Festo decision. See concurring opinion of Judge Plager ("in time then, the supposed benefits of the doctrinal improvements contained in today's opinion may prove illusory"); concurring-in-part, dissenting-in-part opinion of Judge Michel ("I must dissent from the majority's response to Question 3 because I believe it contradicts Supreme Court precedent and policy"); concurring-in-part, dissenting-in-part opinion of Judge Rader ("[today's] result [as to Question 3] defies logic"); concurring-in-part, dissenting-in-part opinion of Judge Newman ("today's majority opinion departs from the holdings of Warner-Jenkinson in three important ways").
In recent years, the Supreme Court has demonstrated a willingness to hear approximately one patent-related case per term. See, e.g., Florida Prepaid Postsecondary Educ. Expense Bd. v. College Sav. Bank, 527 U.S. 627 (1999) (Patent Remedy Act); Dickinson v. Zurko, 527 U.S. 150 (1999) (review of factual findings made by the Patent Office); Pfaff v. Wells Elecs., 525 U.S. 55 (1998) (on-sale bar under 35 U.S.C. § 102); Warner-Jenkinson, 520 U.S. 17 (1997) (doctrine of equivalents); Markman v. Westview Instruments, 517 U.S. 370 (1996) (claim construction). Certainly there will be no more high profile or controversial patent case this year than the Festo decision. It would seem that the odds are good that the high court will review the Federal Circuit's holding in Festo.
CONCLUSION
The Federal Circuit's decision in Festo marks an important change in the law concerning infringement under the doctrine of equivalents. The Federal Circuit's opinion, however, may not be the last word on the subject in light of the almost certain appeal to the Supreme Court. For now, though, every patent practitioner must be aware of the Festo decision and take it into account in their daily practice.
