For Patent Holders, Patent Licensors, And Patent Infringers, The Little Differences May Make All The Difference.

First published on www.ecfonet.com, March 2001

The Festo decision, handed down by the U.S. Court of Appeals for the Federal Circuit late last year, affects virtually every issued patent, every patent license, all pending patent litigation, and all pending patent applications.

Festo affects the doctrine of equivalents, discussed in a 1950 U.S. Supreme Court case and originally created to thwart an accused patent infringer who was not literally infringing every element of a claim. If you hold a patent, you can invoke the doctrine if the accused infringer changes only minor or insubstantial details of a your invention while retaining its essential identity--in other words, if the infringing device performs substantially the same function in substantially the same way to accomplish the same result as the your invention.

Since that 1950 decision, various courts have ruled that this doctrine is subservient to prosecution history estoppel: You may not invoke the doctrine of equivalents for subject matter relinquished during the prosecution of the patent application. In one such case, the Supreme Court's 1997 ruling in Warner-Jenkinson, the court determined that the doctrine of equivalents is still good law, and it noted that prosecution history estoppel continues to be available as a defense to an assertion of infringement.

The Supreme Court also held that during the prosecution of a patent application, if a claim element is amended for a "substantial reason related to patentability," then that amendment would bar you from invoking the doctrine of equivalents for that claim element. The court, however, did not define what a "substantial reason" might be.

In deciding the Festo case, the Court of Appeals ruled that any amendment that narrowed the scope of a patent claim, for a reason related to the statutory requirements for a patent, will give rise to prosecution history estoppel to the amended claim element. Even such an amendment that you made voluntarily, or an amendment for which no reason was established, would create prosecution history estoppel. And in all such cases, the court ruled, the doctrine of equivalents would be completely barred for that claim element.

A Road Map For Infringers

Since the Festo decision was applied retrospectively and not prospectively by the Court of Appeals and included no "grandfathering" provisions, it impacts virtually every unexpired patent. Normal patent practice has always included an iterative process of narrowing claims during the examination process, so virtually every unexpired patent includes one or more narrowed claim elements.

The court's dissenting opinion stated that Festo provides an easy "road map" for potential patent infringers. It maintained that anyone seeking to lawfully copy a patented technology need only:

  • Read the prosecution history for a patent that has been issued and identify any narrowing claim amendments made for patentability reasons
  • Substitute any known interchangeable structure, matter, or step for any claim element that has been narrowed
  • Copy every other claim element exactly

The dissenting opinion maintained that any minor change to even one narrowed element--no matter how unimportant or insubstantial--should be sufficient to avoid liability for infringement.

License To Lift?

Patent licensees now may have new bargaining power to renegotiate their licenses. For example, a licensee might make a minor change as discussed in the road map above, then assert that the licensed patent did not cover the newly modified product or process. The licensor might find it more difficult to legally enforce the license, but it could still assert legal rights under contract law and other bodies of law that govern the terms of licensing agreements.

Spend More, Wait More?

In the wake of Festo, you must avoid last-minute patent applications. After a thorough search of the prior art, the patent application must be carefully drafted to include many different sets of claims of varying scope. This should allow you to cancel individual claims or sets of claims and submit brand new ones, rather than risk what could be considered a narrowing claim amendment under Festo. (Arguably, under Festo, canceling a claim and adding a new one is not a narrowing amendment.)

The patent attorney will need a thorough understanding of an applicant's invention and its technical field, so claims with the proper scope can be drafted and narrowing amendments can be avoided. Such new patent application strategies will most likely increase the cost of drafting a patent application.

If your patent application is rejected, you may have to appeal to the Board of Patent Appeals of the United States Patent and Trademark Office (www.uspto.gov) or to the courts, rather than make a narrowing amendment that would be affected by Festo. The USPTO Board is already backlogged (it commonly takes years to decide an appeal); the board and the courts are unprepared to handle any large increase in patent appeals.

All in all, Festo may increase the time and expense of pursuing a patent, though the effects will be felt more by individual inventors, start-ups, and emerging companies than by larger established companies.

In light of the Festo decision, you should immediately evaluate your organization's patent portfolio and patent licenses. You should also thoroughly study your organization's patent strategy, including patent procurement, management, licensing and enforcement practices, and patent risk management procedures.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.