Federal Circuit Applies Rebuttable Presumption of Surrender Established by Supreme Court in Festo

The opinion of the United States Court of Appeals for the Federal Circuit in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 95-1066 (Fed. Cir. Sept. 26, 2003), is the most recent in a case that has spent the better part of a decade in the courts. It comes almost a year and a half after the United States Supreme Court reversed an earlier en banc Federal Circuit decision holding that no range of equivalents for an amended claim limitation is available under the doctrine of equivalents when prosecution history estoppel applies. In lieu of such a "complete bar," the Supreme Court adopted a presumption that a narrowing claim amendment made for substantial reasons related to patentability works a surrender of all subject matter between the original claim limitation and the amended claim limitation. In its most recent opinion in Festo, the Federal Circuit considered how a patentee can rebut this presumption and who – the judge or a jury – determines whether the patentee has succeeded.

Background

Festo involved two patents relating to magnetically coupled rodless cylinders. The first application originally recited a linear motor having a piston with "sealing means at each end," a driven assembly, and a magnet arrangement. In response to a rejection under 35 U.S.C. § 112, the patentee added a limitation that the driven member include a "cylindrical sleeve made of a magnetizable material." The patentee also added a recitation of "first sealing rings" and "second sealing rings." The second application originally made no reference to sealing rings. During reexamination, the patentee added the requirement of "a pair of resilient sealing rings." The accused device did not literally infringe either patent because it included a sleeve made of aluminum (a nonmagnetizable material) and used a single two-way sealing ring. At issue was whether the patentee, despite the narrowing amendments made during prosecution, could establish infringement under the "doctrine of equivalents."

The doctrine of equivalents protects a patent holder against efforts of copyists to evade liability for infringement by making only insubstantial changes to a patented invention. A product or process that does not literally infringe the express terms of a patent claim may nonetheless be found to infringe if there is "equivalence" between the elements of the accused product or process and the corresponding claim limitations of the patented invention. However, a patentee who narrowed claims during prosecution may be estopped from later invoking the doctrine of equivalents to recapture subject matter surrendered by the narrowing amendment.

Such "prosecution history estoppel" results when the patentee amended a claim limitation for a "substantial reason related to patentability," i.e., a reason relating to any statutory requirement for a patent. Most commonly, although not exclusively, the patentee will have narrowed claims to avoid the prior art, or otherwise to address a specific concern that rendered the claimed subject matter unpatentable. A "voluntary" amendment, neither required by the patent examiner nor made in response to a specific rejection by the examiner, may also support estoppel. Under governing precedent, there is a presumption that a narrowing amendment was made for a substantial reason related to patentability, and also a presumption that prosecution history estoppel completely bars application of the doctrine of equivalents as to amended claim limitations.

However, these presumptions are rebuttable. A patentee can avoid prosecution history estoppel by showing, based solely on evidence in the prosecution history record, that a narrowing amendment was not made for a substantial reason related to patentability. Even if this showing cannot be made, the patentee can still overcome the second presumption – that a narrowing amendment surrenders the entire territory between the original claim limitation and the amended claim limitation – by showing that at the time of the amendment, one skilled in the art could not reasonably have been expected to draft a claim that literally encompassed the alleged equivalent.

Under Supreme Court precedent, a patentee may make this latter showing in three ways. First, the patentee can demonstrate that the alleged equivalent would have been "unforeseeable" at the time of the claim amendment. Second, the patentee can demonstrate that the rationale underlying the amendment bore no more than a "tangential relation" to the alleged equivalent. Finally, the patentee can demonstrate that there was "some other reason" why the patentee could not reasonably be expected to have literally claimed the alleged equivalent.

Discussion

Against this background, the Federal Circuit in Festo considered two issues of general concern to patent holders:

1. Whether rebuttal of the presumption of surrender – including the criteria of foreseeability, tangentialness, and reasonable expectations of those skilled in the art – is a question of law for the court or a question of fact for a jury; and
2. 
   
3. What factors should be considered in determining whether the presumption of surrender has been rebutted.

As to the first issue, the Federal Circuit held that rebuttal of the presumption of surrender is a question of law to be determined by the court, not a jury, even if there are underlying facts to be found. This is consistent with the traditional view of prosecution history estoppel as being equitable in nature.

As to the second issue, the Federal Circuit declined to adopt any set list of factors to be considered in determining whether the patentee has rebutted the presumption of surrender. Instead, recognizing that it could not "anticipate all of the circumstances in which a patentee might rebut the presumption of surrender," the Court "left to development on a case-by-case basis" the relevant factors encompassed by the rebuttal criteria. Nevertheless, the Court went on to provide some "general guidance."

As the Federal Circuit explained, the first criterion presents an objective inquiry, asking whether the alleged equivalent would have been unforeseeable to one of ordinary skill in the art at the time of the amendment. An alleged equivalent that represents later-developed technology or technology that was not known in the relevant art "usually" would have been unforeseeable. Old technology, in contrast, would more likely have been foreseeable. The Federal Circuit observed that, in determining whether an alleged equivalent would have been unforeseeable, a district court may hear expert testimony and consider other extrinsic evidence (i.e., evidence outside the patent and prosecution history) as to the state of the art and the understanding of a hypothetical person of ordinary skill in the art at the time of the amendment.

The second criterion requires a patentee to demonstrate that the rationale underlying the narrowing amendment bore "no more than a tangential relation to the equivalent in question." In other words, according to the Federal Circuit, this criterion asks whether the reason for the narrowing amendment was peripheral, or not directly relevant, to the alleged equivalent. An amendment made to avoid prior art that contains the equivalent in question is not tangential, but rather central to allowance of the claim. The inquiry into whether a patentee can rebut the presumption of surrender under the "tangential" criterion focuses on the patentee's objectively apparent reason for the narrowing amendment. That reason must be discernible from the prosecution history record. Thus, whether the patentee has established a merely tangential reason for a narrowing amendment is for the court to determine from the prosecution history record without the introduction of additional evidence. As an exception, the court may, when necessary, consider testimony from those skilled in the art as to the interpretation of that record.

The third criterion requires a patentee to establish "some other reason" for why the patentee could not reasonably be expected to have described the alleged equivalent when it narrowed the claim. Observing that this category is necessarily "narrow," the Federal Circuit suggested "shortcomings of language" as a possible "other reason." A decision by the patentee not to include literally within the claims known "inferior" designs will not qualify. Although the Federal Circuit advised that a district court should limit itself to the prosecution history record when determining whether a patentee has satisfied the third rebuttal criterion, the Court left open the possibility of considering extrinsic evidence.

Turning to the particulars of the case, the Federal Circuit held that the patentee could not satisfy the "tangentialness" or "other reason" criteria. As the Court explained, the narrowing claim amendments –requiring a sleeve of "magnetizable" material and two sealing rings – either were unexplained, were made to distinguish prior art designs, or could have been phrased literally to encompass the alleged equivalents. However, as to the first criterion, the Court concluded that factual issues remained as to whether one of ordinary skill in the art would have thought the accused designs to be unforeseeable equivalents of the claimed elements at the time of the amendments in question. The Court therefore remanded the case to the district court to allow the parties to introduce evidence on this issue.

Conclusion and Comment

Festo confirms that the application of prosecution history estoppel, and, consequently, the availability of the doctrine of equivalents, turns upon the nature of, and reasons for, claim amendments. The Federal Circuit outlined three avenues by which a patentee can rebut the presumption that narrowing amendments work a surrender of all subject matter between the broader and the narrower range. Aside from providing some guiding principles, the Court left the relevant factors encompassed by these rebuttal criteria to be developed on a case-by-case basis. In the meantime, several points are particularly notable for practitioners and potential litigants.

First, the Festo framework has full retroactive effect; it applies to all granted patents and to all pending litigation that has not been concluded with a final judgment, including appeals.

Second, because the Federal Circuit largely restricted a court's inquiry as to prosecution history estoppel to the patent and the prosecution history (with the exception of what equivalents would have been foreseeable at the time of the narrowing amendment), as a practical matter prosecution history estoppel defenses will, in many instances, be resolvable by summary judgment.

Third, the Federal Circuit characterized the resolution of the Festo presumptions as a matter of law for the court, albeit a matter of law that may be dependent on some underlying fact-finding. As a result, separate "Festo hearings" (akin to "Markman hearings") may come to take place in patent cases in which prosecution history estoppel has been raised.

Finally, if an inventor is obliged to claim equivalents foreseeable at the time narrowing amendments are made (or risk estoppel under Festo), the same obligation arguably should apply when the inventor is drafting the original claims. If there is evidence that the alleged equivalent was reasonably foreseeable at the time of the application and, a fortiori, where the inventors actually foresaw the alleged equivalent and declined to claim it, defendants ought to be ready to argue that the doctrine of equivalents should operate only with respect to equivalents that were not reasonably foreseeable at the time of the application. This contention, raised in the concurring opinion of Judge Rader, has been neither squarely embraced nor rejected by the Federal Circuit as a whole. It is a promising argument that ought to be advanced in appropriate cases.

For further information about the Festo case and its potential implications for your business, please contact:

Greer N. Shaw participated in the preparation of this publication.

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