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by Bill Zoellick
3 January, 2002
Every once in a while, the courts take on a patent case that has a big impact on the value of a company's intellectual property and on the way that companies protect IP. On Tuesday, January 8, the Supreme Court will hear oral arguments on just such a case, Festo Corporation v. Shoketsu Kinzoku Kogyo Kabushiki Co., LTD.
The Festo case will determine the scope of protection that patents provide. The outcome will matter to anyone running a company where intellectual property is important, be it software, financial services, hardware engineering, or anything else that depends on protecting and profiting from innovation.
Briefly stated, the Festo case centers on the breadth of protection that a patent provides. It is generally accepted that a device should not necessarily have to copy a patented invention precisely, in every detail, in order to be an infringement on the patent. Language is an imprecise tool for describing an invention. Consequently, courts have tried to distinguish between differences in design or construction that matter -- really constituting a new approach -- and differences that have more to do with language than the substance of the invention..
Courts approach this problem by trying to determine whether a potentially infringing device is substantially equivalent to the invention claimed in the language of a patent. If two devices perform substantially the same function, using substantially the same means, to obtain substantially the same result, then they are viewed as substantially equivalent. This "Doctrine of Equivalents" (DOE) allows an inventor to protect an invention from infringement by devices that differ from the claimed invention in only trivial ways. The DOE helps make patent protection meaningful and useful..
The Festo case revolves around the question of how the DOE applies when claims have been modified during the patent application process. Typically there is a back and forth exchange between the patent examiner and inventor wherein the examiner raises objections or seeks clarification and the inventor modifies claims until the invention is described in a way that is patentable. There is general agreement that if an inventor relinquishes some claimed territory in this process, then the inventor should not be able to go back and claim that territory again in an infringement action. This is known as Prosecution History Estoppel (PHE). Festo is about how the DOE and PHE interact.
In general, courts have used a case-by-case and fact-based approach to deciding whether PHE trumps the DOE for any particular claim of infringement -- an approach referred to as a "flexible bar." Whether or not an amendment to a claim interfered with protection under the DOE depended on questions of prior art, the nature of the claims, and other factors.
What makes the Festo case so important is that the Court of Appeals for the Federal Circuit, in reviewing Festo, threw out the flexible bar, asserting instead that ANY amended claim elements that are narrowed in order to achieve patentability cannot enjoy the benefit of DOE protection. Period.
If this ruling stands, it will almost certainly change the way we use patents. One likely impact is that, since most current patents have been amended during the application process, there will be a much broader opportunity to build functionally equivalent devices without infringing -- in short, the value of many patents will be reduced. Another likely impact would be that the cost of applying for a patent would go up in the future, since a prudent inventor would need to argue against all assertions by the patent examiner that would lead to amendment of claims. Prosecuting each claim, without room for compromise or amendment, would be expensive.\
The Court is scheduled to hear arguments on January 8, 2002. This is one that is worth watching.
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