Court Decision Clarifies Use of IP Protection

Originally Published MDDI December 2003

NEWSTRENDS

Erik Swain

The U.S. Court of Appeals for the Federal Circuit has made slight modifications to its infamous Festo decision that restricted the use of an intellectual property (IP) protection in patent disputes. It's not yet clear how significant the modification will prove, but it appears there is now more leeway for patent holders than there was when the original decision was issued.

Before 2000, patent holders could use the doctrine of equivalence, which offered protection beyond the literal language in the patent. It allowed a patent holder to successfully claim infringement if the technology in question was insubstantially different from that in the patent, even if it wasn't an exact copy. But on November 29, 2000, in deciding the case of Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. Ltd., the federal circuit court decreed that the doctrine of equivalence is severely limited by the principle of prosecution history estoppel. That holds, essentially, that if a firm amends a claim during the prosecution of its patent application, it cannot later use what it gave up as part of any such amendment during a patent infringement case.

The device industry and others that rely heavily on IP worried that its value would plummet if the doctrine of equivalence could no longer be used in many cases. But some relief came from the U.S. Supreme Court in 2002 when it outlined three exceptions that allow for use of the doctrine of equivalence. The latest federal circuit court decision, made in September 2003, fleshes out those exceptions. 

The first exception allows patent holders to use the doctrine of equivalence if they can demonstrate equivalence was unforeseeable at the time of the patent-claim amendment. The latest decision from the federal circuit court allows patent holders to make their case with expert witnesses and other extrinsic evidence.

The second exception comes into play if the rationale underlying the patent holder's argument bears only a tangential relation to the equivalent. The doctrine of equivalence can be used, but the court's decision restricts the evidence that can be presented. In this argument, evidence is strictly limited to the patent prosecution history.

The third exception can take effect if there is any other reason the patentee “could not reasonably be expected to describe the insubstantial equivalent in question.” The federal circuit court has narrowed that to showing reasons why the patentee was prevented from describing the alleged equivalent when the claim was narrowed. 

Also, the latest decision mandates that judges, not juries, decide whether the doctrine of equivalence can be used. Patent holders, some experts say, can more easily sway juries than judges. 

“Juries will get in the mindset that a government act took place, an examiner passed on this . . . and the inventor came out with a patent with a ribbon and seal. They see that the federal government decided you were entitled to a patent, and it is presumed valid,” says George Wheeler, a patent and IP attorney at McAndrews, Held & Malloy (Chicago). “In front of a jury, patent holders will play on that. By contrast, judges know that examiners can make mistakes and can be bamboozled.”

Wheeler notes that successful use of the doctrine of equivalence has risen slightly each year after there were none in 2000, the year of the original Festo decision. However, experts say the doctrine still doesn't hold the power it once did, even with the exceptions in place.

Some experts say that the rulings will offer more benefit to makers of truly innovative technologies than those whose devices present only incremental advancements. “Medical device companies having patents on truly cutting-edge medical technologies will have an easier time proving that the accused equivalent was ‘unforeseeable at the time the application was filed,'” says Barbara Wrigley, an attorney with Oppenheimer Wolff & Donnelly LLP (Minneapolis). “These companies will, more likely than not, be able to continue to successfully assert infringement of amended claims under the doctrine of equivalence. Conversely, patentees [with] older, well-established medical technologies will have a more difficult time alleging infringement under the doctrine of equivalence. Why? Because they probably will not be able to demonstrate that the accused equivalent was unforeseeable at the time of the application.”

But there is one product design technique that could prove a huge advantage in such situations, says Mark Barrish, practice group leader for medical devices at Townsend and Townsend and Crew (San Francisco). “If you have an application for an improvement to a device, describe it in your competitor's system,” he says. “You've shown your improvement can have been foreseen to be used somewhere else. That can be devastating to your competitor."

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