Supreme Court Vacates Festo

Doctrine of Equivalents and the “Flexible Bar” Restored

By Ury Fischer

In a much anticipated decision, the U.S. Supreme Court has vacated the ruling of the U.S. Court of Appeals for the Federal Circuit in the Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. case. The Supreme Court’s unanimous opinion overturns a stunning ruling, handed down by the Federal Circuit in 2000, which had put in doubt the viability of a majority of the 1.2 million patents presently in force.

In the vacated decision, the Federal Circuit had ruled that an inventor who amended claims in a patent application during its prosecution before the patent office was barred from using the doctrine of equivalents against a competitor who allegedly infringed the subsequently issued patent.

Using the doctrine of equivalents, a patent holder can prove infringement even in cases where the invention is not copied exactly, or “literally”, by showing that the differences between the patented invention and the accused device or process are insubstantial. The doctrine of equivalents was created to prevent infringers from avoiding liability simply by making inconsequential changes to an otherwise copied invention.

Prior to the Federal Circuit’s Festo opinion, a “flexible bar” was the rule of law with regard to application of the doctrine of equivalents in cases where claims were amended during prosecution of the patent. The “flexible bar”, established by the U.S. Supreme Court in 1997 in the case of Warner-Jenkinson Co. v. Hilton Davis Chemical Co. requires a court to determine on a case-by-case basis: (a) whether the claim amendment was “substantially related to patentability”; and, if so, (b) to what extent the amendment surrendered “equivalents” to the amended limitation in the claim.

In its Festo decision, the Federal Circuit eliminated the “flexible bar,” which had been applied in cases involving prosecution history estoppel, in favor of an “complete bar”. The court concluded that, unless proven otherwise by the inventor, all claim amendments made during prosecution would be assumed to be “substantially related to patentability” and would completely foreclose, without further analysis, enforcement of the doctrine of equivalents with respect to the limitation of the claim which was amended. This decision left the patent community reeling since an overwhelming majority of patents are amended during prosecution and the doctrine of equivalents has become one of the primary tools used to battle infringement.

In a unanimous May 28, 2002 opinion written by Justice Kennedy, the Supreme Court reinstated the “flexible bar” of Werner-Jenkinson with two subtle, but important, modifications.

First, the Court clarified that the doctrine of prosecution history estoppel, which bars an inventor from asserting in an infringement action an equivalent which was surrendered during prosecution, applies to any claim amendment made to satisfy the Patent Act’s requirements, not just to amendments made to avoid prior art. This somewhat alters the analysis as to what constitutes an amendment which is “substantially related to patentability” since it was believed by many that only amendments made to overcome prior art fit into this category. The Supreme Court declared expressly that any amendment made to meet a requirement of the Patent Act, even those related to form, is “substantially related to patentability” if it narrows the scope of the patent and is necessary in order for the patent to issue. In this regard, the court also left untouched its holding from Warner-Jenkinson, that the burden of demonstrating that an amendment was not made for reasons “substantially related to patentability” falls on the patentee.

Second, the Court established that in any case where an amendment “substantially related to patentability” is made, a rebuttable presumption is created against the inventor that all equivalents have been surrendered. The burden now falls upon the inventor to prove that the equivalent in question was not waived during prosecution. This is a far cry from the Federal Circuit’s “complete bar” which foreclosed the inventor from making an argument at all. Nonetheless, this new standard is also far more limiting than the pre-Festo regime where the burden of proving that an equivalent had been waived fell on the alleged infringer.

Although the Supreme Court’s ruling is not the “clean” win that patent holders had been hoping for, it is still a significant victory since it restores the “flexible bar” approach and reinstates the applicability of the doctrine of equivalents to the great majority of patents presently in force and to be issued in the foreseeable future.

Notwithstanding this, the Festo “trilogy” has rightfully brought to the forefront the careful consideration that must be given by patent practitioners and inventors to claim amendments, especially in view of the unforeseeable repercussions such amendments may carry for many years into the future.

A copy of the Supreme Court’s complete opinion may be downloaded here.

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