The Supreme Court just gave patent holders a big victory by expanding their rights to the inventions they own-rights that lower courts recently have eroded.
The Court's decision in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. Ltd. makes it easier for patent holders to prove someone else has violated their patent rights, and makes it harder for someone to claim that a variation of a patented item does not infringe the patent. At stake are a company's most precious resources: its proprietary products and processes, its innovations and breakthroughs. Many big companies like IBM and Procter & Gamble hold tens of thousands of patents, and most small manufacturers hold at least a few patents on which their products and businesses are based.
Festo concerns the "Doctrine of Equivalents," which determines how far a patent's protection extends. The Doctrine of Equivalents, a judge-made rule, helps an inventor reap all the benefits of his or her innovation by preventing a copyist from making an insubstantial change to a patented article to avoid infringement.
Under the Doctrine of Equivalents, patent protection applies not only to the literal elements claimed in a patent, but also to the reasonable equivalents of the recited elements. An equivalent is something that performs substantially the same function as a recited element, in substantially the same way, to achieve substantially the same result. Thus, a person can infringe a patent by making a product that is covered either by the literal elements of a patent claim or by the reasonable equivalent of those elements.
Courts have limited the application of the Doctrine of Equivalents by holding that amendments made to patent claims during the application process can eliminate some equivalents on which the patent holder might later wish to rely. The patentee "surrenders" equivalents when he narrows a patent claim by adding an element or more narrowly reciting an existing element. If the surrender rule is applied inflexibly, the patentee loses all the equivalents to an amended claim element. But courts have also employed a flexible approach in which the reasons for an amendment are analyzed to determine the range of equivalents surrendered.
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The United States Court of Appeals for the Federal Circuit, which hears all appeals in patent infringement cases, for years failed to choose between the flexible and inflexible approaches to surrender. Litigants sometimes complained that the rule applied depended on which judges of the Federal Circuit were assigned to the case.
In a controversial 2000 ruling, the Federal Circuit substantially weakened the Doctrine of Equivalents by finally voting for the inflexible surrender rule. The court announced that all equivalents would be deemed surrendered for any claim element that had been narrowed by an amendment made for "a substantial reason related to patentability." This broad category swept in any amendment related to compliance with the patent laws, as well as any amendment for which no explanation was given. The Federal Circuit also held that the inflexible rule of surrender would apply to all U.S. patents now in existence or issued in the future.
Many people reacted harshly to the Federal Circuit's decision, because the inflexible surrender rule threatened to narrow the scope of any patent with an amended claim. In effect, the Federal Circuit had greatly diminished the total value of the patent portfolio held in the United States.
In Festo, the Supreme Court reversed the Federal Circuit and announced that courts must employ the flexible approach in applying the Doctrine of Equivalents to amended claim elements. The Supreme Court rejected the Federal Circuit's preference for a simple "bright-line" test for determining which equivalents have been surrendered, acknowledging that some uncertainty is the price of ensuring appropriate incentives for innovation. The inflexible approach puts too many patents at risk and reduces the value of patent protection to inventors.
In determining the available range of equivalents after Festo, a court in a patent infringement action must examine the subject matter surrendered by a narrowing amendment. The patentee must show that the amendment does not surrender the equivalent that is at issue. Only if the patentee cannot explain the reason for an amendment should the court presume that the patentee surrendered all the equivalents relating to the narrowed claim language.
The Doctrine of Equivalents is a powerful tool for increasing a patent's protection beyond its literal language, but the inflexible surrender rule threatened to eviscerate the doctrine. By mandating the use of a flexible approach in applying the Doctrine of Equivalents to amended claim elements, the Supreme Court has preserved for patentees the opportunity to show that they did not surrender valuable equivalents during the application process. Courts following the Festo rule will interpret patents more broadly, giving patentees the advantage in their never-ending battle against infringers.
Brij K. Agarwal is an attorney in the Intellectual Property Department of the national law firm Eckert Seamans Cherin & Mellott LLC. He can be reached at (412) 566-6000.