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THE FEDERAL CIRCUIT REDEFINES THE EFFECT OF PROSECUTION HISTORY ESTOPPEL ON THE DOCTRINE OF EQUIVALENTS

Mark Remus (1)

In Festo Corp. v. SMC Corp. (2) the Court of Appeals for the Federal Circuit strengthened and made more readily available a potent defense to a charge of patent infringement. The court held that any amendment that narrows a claim and was made for reasons related to patentability invokes prosecution history estoppel and acts as a complete bar to the doctrine of equivalents for the amended claim element. This decision will change not only how patent cases are litigated and decided, but also how patent owners are able to obtain and use patents as competitive assets in the marketplace.

I. The Doctrine Of Equivalents And Prosecution History Estoppel Before Festo

Festo concerns infringement of a patent under the doctrine of equivalents. In Graver Tank, the Supreme Court fashioned the doctrine of equivalents to do equity and prevent a "fraud on a patent." (3) The Court recognized that:

to permit imitation of a patented invention which does not copy every literal detail would be to convert the protection of the patent grant into a hollow and useless thing. Such a limitation would leave room for--indeed encourage--the unscrupulous copyist to make unimportant and insubstantial changes and substitutions in the patent which, though adding nothing, would be enough to take the copied matter outside the claim, and hence outside the reach of the law. (4)
The doctrine of equivalents prevents a competitor from narrowly avoiding the literal language of a claim while nevertheless appropriating the essence of the invention.

The doctrine of equivalents, though, implicates two competing interests: the desire to provide an inventor full and fair protection for his invention and the right of the public to be given fair notice of the scope of a patent. (5) Because the doctrine of equivalents extends infringement beyond the literal language of the claims, it threatens the "definitional and public-notice functions of the statutory claiming requirement." (6) A competitor should be able to read a patent and the history of the prosecution before the Patent Office, and determine what constitutes an infringement of the patent and, perhaps more importantly, "what is still open to them." (7)

Towards this end, prosecution history estoppel limits the doctrine of equivalents, and enforces the public notice function of patent claims, by precluding the recapture of subject matter that was surrendered by the patent owner in order to obtain the patent from the Patent Office. Claim amendments and arguments made in order to obtain the patent give rise to prosecution history estoppel if they evidence a disclaimer or surrender of subject matter. Prosecution history estoppel thus gives effect to the public's right to rely on the record in the Patent Office as fair notice that the patent owner surrendered the ability to claim that certain subject matter is within the scope of the patent.

Prior to Festo, the range of equivalents that was available when prosecution history applied required a determination of what subject matter was actually surrendered. (8) This determination took into account the relevant prior art, the substance of the amendments, the manner in which rejections were addressed or avoided, and the reasons for the amendments. (9) In view of these factors, an estoppel could have a limiting effect on the available range of equivalents from zero to one hundred percent. This "flexible bar" approach to prosecution history estoppel came to an end in Festo.

II. Festo And The Complete Bar

In Festo the Federal Circuit made four critical holdings regarding the availability, scope, and effect of prosecution history estoppel:

1. Any claim amendment that narrows the scope of a claim for any reason related to the statutory requirements for a patent (i.e., 35 U.S.C. §§ 101, 102, 103, 112, etc.) will give rise to prosecution history estoppel. (10)

2. Any voluntary amendment (i.e., not in response to a rejection) that narrows the scope of a claim for any reason related to the statutory requirements for a patent will give rise to prosecution history estoppel. (11)

3. Whenever a claim amendment creates prosecution estoppel, no range of equivalents is available for the amended claim element. (12)

4. Unexplained amendments are not entitled to any range of equivalents. (13)

The effect of these holdings is two-fold. First, prosecution history estoppel applies to any claim amendment that narrows the scope of a claim for any reason related to patentability. Prosecution history estoppel will apply even if the amendment was voluntary and not required or in response to a rejection by the Patent Office.

Second, and most profoundly, prosecution history estoppel acts as a complete bar to the doctrine of equivalents for the amended claim element. There is absolutely no range of equivalents for the amended claim element, regardless of the nature or reason for the amendment to the claims. The Federal Circuit retired the flexible bar in favor of an unwavering complete bar.

The majority made this change in the law because they found the flexible bar to be "unworkable." (14) The flexible bar, according to the majority, impeded the realization of three important objections: (1) giving effect to a narrowing amendment's operation as a disclaimer of subject matter, (2) preserving the notice function of patent claims, and (3) promoting certainty in patent law. (15) The flexible bar analysis was uncertain and "a speculative inquiry should not be required to determine the scope of equivalents . . . available for a claim element." (16) The court found that the complete bar "best serves the notice and definitional function of patent claims." (17)

Yet, as noted by Judge Paul R. Michel (concurring-in-part, dissenting-in-part), this change in the law comes with a high price. (18) Over fifty separate opinions and twenty years of precedent were effectively overruled by Festo. (19)

The effects of Festo will be enormous because claim amendments during prosecution are nearly ubiquitous. Rare is the case where a patent is allowed without any amendments to the claims. During the past twenty years, patent practitioners prosecuted patents with the understanding and expectation that, through the right words and explanation, the limiting effect of an amendment could be minimized or, in some cases, eliminated. Now, previously innocuous amendments threaten to eviscerate the competitive value of patents that were once powerful weapons in the marketplace. Patent lawsuits that began under a different set of rules, may now quickly disappear because an amendment that could have been easily explained away under the old rules, now acts as a complete bar to the doctrine of equivalents. As stated by Judge Michel, the "majority's rule will reduce the effective scope, and thus, the value, of most of the 1,200,000 patents that are unexpired and enforceable." (20) Festo will have an immediate and profound impact on the ability of companies to enforce their patents.

Going forward, Festo will cause a fundamental change in the way companies obtain, use, and avoid patents. No longer will patent applications be filed with a range of broad and narrow claims, where the broad claims are amended during prosecution to obtain the broadest scope acceptable to the Patent Office. Instead, because of the increased price of amending a claim, there will be a greater emphasis on filing patent applications with claims that are patentable and ready for allowance. The consequences of not filing suitable claims with the application will be severe. If the claims are too narrow, the invention will not be adequately protected and the invention is subject to being pirated by competitors. If the claims are too broad, the patentee will have to amend the claims and surrender all equivalents of the amended claim element. In either scenario, competitors will be able to appropriate the core of the invention while avoiding liability for patent infringement. (21)

III. Questions Not Answered By Festo

Festo makes it clear that a narrowing amendment that was made for reasons related to patentability precludes application of the doctrine of equivalents to the amended claim element. Two very important questions, though, were not presented and answered in Festo.

First, Festo does not address the extent to which arguments in support of patentability limit the doctrine of equivalents. Previously, the determination of whether an argument invoked prosecution history estoppel was consistent with the flexible bar analysis. In order for an argument to give rise to prosecution history estoppel, the totality of the circumstances had to indicate that the patentee made a clear and unequivocal surrender of subject matter. (22) The question that presents itself now is whether arguments will continue to be evaluated under the flexible bar analysis or whether any argument whatsoever, regardless of the substance or reason for the argument, acts as a complete bar to the doctrine of equivalents as to the claim element that is the subject of the argument.

Second, Festo does not address the extent to which an amendment to one claim affects the range of equivalents available to another claim. Under the flexible bar analysis, the differences between the two claims could be taken into account. The complete bar of Festo, however, is not as forgiving. For example, two claims may differ greatly in scope but nonetheless share a common claim element. Should an amendment to the common claim element in one claim affect the other claim, even though the other claim may have been patentable for much different reasons? (23) The estoppel that is created by amending one claim may have no relevance to another much different claim, yet should the same claim element have two different ranges of equivalents when present in two different claims? (24)

The Federal Circuit will have to answer these and other questions as they arise in the wake of the Festo decision.