The US Supreme Court has restored the value of millions of patents by overturning a lower court's decision on the extent of infringement claims using the doctrine of equivalents.

In a unanimous decision in the case of Festo v Shoketsu Kinzoku Kogyo Kabushiki issued by Justice Anthony Kennedy today (May 28), the Court ruled that though patent prosecution amendments can create history estoppel, estoppel itself does not bar the application of doctrine of equivalents.

"Prosecution history estoppel may apply to any claim amendment made to satisfy the Patent Act's requirements, not just to amendments made to avoid the prior art, but estoppel need not bar suit against every equivalent to the amended claim element", wrote the Court.

Added the Court: "By amending the application, the inventor is deemed to concede that the patent does not extend as far as the original claim, not that the amended claim is so perfect in its description that no one could devise an equivalent".

The Court did rule that prosecution history estoppel put the burden on patentees to prove that amendments did not surrender equivalents claims, such as when there are unforeseeable developments - a ruling that falls far short of the Federal Court of Appeals complete bar.

The Court reserved its strongest language for the lower court, criticizing what it saw as unnecessary tinkering.

"The Federal Circuit ignored [the Supreme Court's 1997 decision in the case of Warner-Jenkinson v Hilton Davis Chemical] instruction that courts must be cautious before adopting changes that disrupt the settled expectations of the inventing community. [The Warner-Jenkinson verdict] struck the appropriate balance by placing the burden on the patentee to prove that an amendment was not made for a reason that would give rise to estoppel", said the Court.

The lower court's decision was vacated and remanded.

To read the Supreme Court's judgment, go to: http://a257.g.akamaitech.net/7/257/2422/28may20021100/www.supremecourtus.gov/opinions/01pdf/00-1543.pdf

In the FESTO case the Supreme Court of the United States has reaffirmed the substantial viability of the doctrine of equivalents in patent law. FICPI's was one of more than 20 briefs asking the Court to consider the Federal Circuit's ruling of complete bar to the application of the doctrine if a claim had been amended in any (even insignificant) way. The FICPI brief was the only brief submitted with international implications for patent protection. FICPI emphasised the need for reinvigorating the doctrine so that foreign entities maintain the level of filing patent applications in the United States. The negative implications of the lower court decision on foreign inventor filings in the U.S. were a major part of the FICPI presentation.

The Court made it very clear that the law would be maintaining the flexible rule as applies to the doctrine. The Court specifically recognised the uncertainty accorded to language when attempting to define invention and the difficulty of being precise. The Court criticised and rejected the Federal Circuit's conclusion that anything but a complete bar rule is unworkable. The Court noted that the system has been working well for the last 100 years since its early case law.

OBSERVATIONS and COMMENTS

The Court's ruling emphasises and reinforces the main issue to be resolved: a patentee will not be allowed to recapture any part of the invention specifically surrendered in patent prosecution to obtain final claim language. Where the changes are merely cosmetic, there will be no application of the doctrine. The fact that the patentee changes language without reference to prior art may still cause an estoppel. As the Court noted in its Hilton Davis decision in 1997, the burden will always be on the patentee to explain why the change was made. That the change may have been made to better describe the invention may also lead to a limitation on this viability of the doctrine, that is, the application of an estoppel.

The emphasis will always be on recapture. Where the equivalent was unforeseeable at the time of the application and/or bear a tangential relation to the equivalent the patentee will be given the opportunity to rebut the presumption that an estoppel applies. The Court specifically adopted the position of the United States in its amicus brief in this regard. This rebuttal of the presumption will occur if the patentee can show that at the time of the amendment one skilled in the art "could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent." This will obviously be a hotly contested issue requiring substantial presentation by all parties.

The question will always be: Did the patentee surrender the particular equivalent in question? Certainly the patentee's burden has not become any easier and the restrictions on the patentee's rights have been clearly further restricted to not just prior art but all activity by the patentee in making claim changes. So although all past issued patents will not be subject to the complete bar rule neither are they grandfathered by the Court. The Court was clearly affected in its reasoning by the dissent of our Member of Honour, Judge Paul Michel, in his lower court dissertation on all significant past case law, and specifically references Judge Michel.

The importance of the doctrine of equivalents and its guaranteed future was recognised when the Court admitted: "Unfortunately, the nature of language makes it impossible to capture the essence of a thing in a patent application." This is just what the Federal Circuit failed to recognise in its diatribe against patentees.

The Court accepted the following necessary finding: "uncertainty as the price of ensuring the appropriate incentives for innovation". So, going forward trivial changes will not create an estoppel and will have no effect on the doctrine.

However, there remains a two-part test that will be applied: (1) Has there been an estoppel? and (2) Has that estoppel affected application of the doctrine of equivalents to a specific equivalent? Where a patentee recognises and emphasises the difference in two phrases that limitation will be taken as material. And this is true with respect to satisfying any requirement of the Patent Act, not just prior art.

The Federal Circuit was directly criticised for ignoring the guidance of Hilton-Davis. Hopefully, as the case is remanded the patentee will receive a fair review. It is unclear at the moment whether the FESTO decision will go back to the District Court or first and finally reviewed by the Federal Circuit. Looking at the specific prosecution in FESTO, the Supreme Court indicated that the alleged infringer "may well prevail" on the changes specifically expressed in the prosecution history - a completely and unnecessary gratuitous comment.