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From the moment the decision was handed down late last year, commentary on Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. has been vociferous and undecided. Is this sharp curtailing of the doctrine of equivalents good or bad for patent holders and competition in general? Will it encourage more knockoffs or greater creativity? Months after the Nov. 29 decision, practitioners and corporate counsel have yet to reach a consensus. But already patent holders are feeling the sting, as Festo is applied to patents that were prosecuted under an earlier, more generous (to them) understanding of the doctrine. And everyone is wondering whether the U.S. Supreme Court will grant certiorari so that it can decide whether a divided U.S. Circuit Court of Appeals for the Federal Circuit got it right. In short, the Federal Circuit’s Festo decision appears to contain all the elements of internal conflict and external interest, combined with economic importance, that would recommend it for high court review. At the heart of the debate is a judicially created doctrine designed to prevent competitors from escaping liability for infringement by making insubstantial changes to a patented invention. Under the doctrine, even where a product does not meet the literal requirements of a patent’s claims, it can still infringe if it retains the claimed invention’s essential identity. According to the Supreme Court’s classic formulation of the test for equivalency, the finder of fact should consider whether the allegedly infringing product performs substantially the same function, in substantially the same way, to produce substantially the same result as the claimed invention. The inherent problem of the doctrine of equivalents is that it conflicts with the essential policy purpose of patent claims, which is to define an invention clearly and give notice as to what is protected and what is not. Hence, the doctrine is limited by prosecution history estoppel, which prevents patentees from reclaiming during litigation any subject matter they surrendered during prosecution. Where an applicant amends claims or makes arguments for “a substantial reason related to patentability” in order to persuade the patent examiner to allow the claims, prosecution history estoppel prevents the applicant from later recapturing the surrendered subject matter. The critical issue in Festo was whether any range of equivalents is available when prosecution history estoppel applies. In an 8-4 majority opinion, the Federal Circuit, sitting en banc, held that, as a matter of law, no range of equivalents is available where the patentee amended the claim element during prosecution for “a substantial reason related to patentability.” The court also held that reasons “related to patentability” include all statutory requirements in Title 35 relating to issuance of a patent — not just those relating to whether the claimed invention is novel and not obvious in light of the prior art. For purposes of prosecution history estoppel, voluntary amendments — i.e., amendments not required by an examiner or made in response to a statutory rejection — are treated the same as amendments required by the Patent and Trademark Office. Overturning its own precedent, the Federal Circuit held in Festo that when an amendment creates prosecution history estoppel, “there is no range of equivalents available for the amended claim element � Application of the doctrine of equivalents to the amended claim element is completely barred (a ‘complete bar’).” Also, “[w]hen no explanation for a claim amendment is established, no range of equivalents is available for the claim element so amended.” Even where claims are not actually amended, prosecution history estoppel may still be created by arguments submitted by the applicant. The Federal Circuit’s embrace of a complete bar in Festo overturned its own prior precedent establishing a flexible bar in questions of prosecution history estoppel. UNHAPPY ATTORNEYS In the months since the decision, both the American Bar Association’s Section on Intellectual Property Law and the American Intellectual Property Law Association have either officially or in meetings among members strongly criticized Festo. This might be considered surprising in light of the number of amicus briefs submitted to the Federal Circuit in support of Shoketsu Kinzoku’s winning position. Litton Systems, Procter & Gamble, Hewlett-Packard, IBM, Eastman Kodak, and Ford all filed such briefs, arguing in one way or another that limiting the doctrine of equivalents through more stringent application of prosecution history estoppel would lead to greater certainty in patent law. A resolution proposed by the Intellectual Property Law Section and approved by the ABA House of Delegates on Feb. 19 states that the ABA “opposes in principle the concept that an amendment to a patent claim shall necessarily operate as a bar as to all equivalents with respect to the amended language of the claim.” This statement is directly contrary to the central holding of Festo. In the report accompanying its resolution, the Intellectual Property Law Section stated that Festo was contrary to the Supreme Court’s 1997 decision in Warner-Jenkinson Co. v. Hilton Davis Chemical Co. (The Federal Circuit relied on Warner-Jenkinson to support its central holdings in Festo.) Earlier in February, a meeting of the American Intellectual Property Law Association hosted what turned out to be a lively open forum on Festo. Some attendees reportedly took the decision as a sign that the Federal Circuit seeks to eliminate the doctrine of equivalents as an issue in most cases. Many complained that the strict and unyielding complete bar set by Festo will place a very difficult burden on patent attorneys and drafters in prosecuting patents. In general, practitioners have lamented that no one can foresee all the changes that competitors might make in an effort to avoid infringement and that the limits of language make it impossible to draft claims that will cover all possible embodiments of an invention. Some attorneys have even suggested that, in the future, claims filed with an application should be drawn very narrowly, so that any amendments will necessarily be broadening and therefore will not trigger Festo‘s complete bar. Patent attorneys have also pointed out that, in practice, Festo may discourage voluntary claim amendments made to enhance readability or to conform the claims to idiomatic English (when the claims are literal translations from a foreign language). Claims may intentionally be left more ambiguous and indefinite than they might otherwise have been. Nearly all practitioners agree that more effort and time — and consequently more expense — will have to be spent in prosecution so as to have even a chance at preserving the same range of equivalents available before Festo. DIFFERENT RESULTS Meanwhile, Festo‘s complete-bar rule is being applied today in lawsuits for infringement of patents that were issued long before November 2000. Those patents were prosecuted when a flexible-bar rule determined the range of equivalents available in the face of prosecution history estoppel. And these suits do seem to be reaching different outcomes than they might have if the flexible-bar rule still applied. The best example is the Festo case itself. The original panel decision had affirmed the district court’s entry of judgment of infringement under the doctrine of equivalents. But the en banc decision reversed the lower court’s judgment. Subsequent Federal Circuit decisions applying the Festo rule appear to have blocked application of a range of equivalents that might otherwise have reached the accused products. For example, in its Feb. 5 decision in Litton Systems Inc. v. Honeywell Inc., the Federal Circuit applied the complete-bar rule to affirm a district court’s judgment of noninfringement where a prior Federal Circuit decision in the same case had applied the flexible-bar rule and remanded for consideration of infringement under the doctrine of equivalents. Similarly, in its Jan. 23 decision in Pioneer Magnetics Inc. v. Micro Linear Corp., the Federal Circuit applied the Festo rule to find no range of equivalents because a claim limitation was added voluntarily. Before Festo, such a limitation would have been given a range of equivalents. There has also been some indication that the Federal Circuit might be prepared to restrict the doctrine of equivalents even further. The court sua sponte decided to hear a case presenting related issues en banc. On Jan. 24, the court directed the parties in Johnson & Johnson Associates Inc. v. R.E. Service Co. to brief the question of “whether and under what circumstances a patentee can rely upon the doctrine of equivalents with respect to unclaimed subject matter disclosed in the specification.” In response to this order, the ABA’s Intellectual Property Law Section proposed another resolution, also adopted by the ABA House of Delegates on Feb. 19. This resolution states that the ABA “opposes in principle an absolute bar to the application of the doctrine of equivalents with respect to unclaimed subject matter that is disclosed in the specification of a patent.” If such a bar is eventually adopted by the Federal Circuit, then, with respect to the doctrine of equivalents, failing to present claims on subject matter disclosed in the specification will have the same effect as amending claims to exclude subject matter disclosed in the specification. JUSTICES REQUIRED In short, the 169-page en banc decision in Festo — consisting of a majority opinion, four partial dissents, and two concurring opinions — appears ripe for Supreme Court review. In deciding to eliminate any range of equivalents where prosecution history estoppel applies, the majority decision relied heavily on policy arguments that advocate giving competitors greater notice and certainty regarding the scope of patent claims. It also relied heavily on the Federal Circuit’s “special expertise” as the exclusive appellate court for patent law in deciding to change the law for policy reasons, where both the Supreme Court and Congress had chosen not to. In reaching its decision, the Federal Circuit examined all prior Supreme Court cases addressing the doctrine of equivalents and prosecution history estoppel. The Federal Circuit decided that the justices had not directly answered the question of what range of equivalents is available where an amendment is made for a known patentability reason. Instead, the Federal Circuit concluded that the Supreme Court’s decision in Warner-Jenkinson was limited to the question of what range of equivalents is available where no explanation was given for the amendment. (On the other hand, Judge Paul Michel in his dissent interpreted a number of Supreme Court cases to have explicitly or implicitly held that some range of equivalents exists for a claim element that has been amended in prosecution.) After analyzing its own binding precedent and the policies behind the doctrine of equivalents and prosecution history estoppel, the Federal Circuit en banc decided to abandon the flexible-bar rule. The court concluded that the current state of the law was “unworkable,” and so it was justified in overturning its own precedent. In his dissent, Judge Randall Rader argued that barring all application of the doctrine of equivalents to amended claim elements would prevent patentees from receiving the complete benefit of their inventions where later technology used different terms to describe similar elements. He concluded that the complete-bar rule would require applicants to forfeit coverage under the doctrine that did not even exist at the time of the claim amendment. And in his dissent, Judge Richard Linn warned that the new bright-line rule “sets in place a regime that increases the cost and complexity of patent prosecution to the detriment of individual inventors, start-up companies, and others unable to bear these increased costs.” He also noted that the new rule will apply to thousands of patents prosecuted under the older rule that are no longer subject to correction. Generally, the U.S. Circuit Court of Appeals for the Federal Circuit can be left alone to manage the complexities of patent law. But given the clear lack of consensus of that court as to the doctrine of equivalents and the widely recognized economic implications of this decision, the Supreme Court itself may want to review the drastic change in patent policy represented by Festo.

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