Upcoming Mallesons seminarsThe US Court of Appeals decision in the Federal Circuit case No.95- 1066 of Festo Corporation v Shoketsu Kinzoku Kogyo Kabushiki Co, Ltd, was handed down on 29 November 2000 and has created much discussion in the US. Although not directly relevant to Australian patent law, its impact may affect many Australian entities who own or license US patents or have business dealings which depend on US patented inventions.
The Court held by a majority of 8-4 that when a patent claim is amended during the examination process this creates prosecution history estoppel and no range of equivalents is then available for the element which was the subject of the amended claim. Law The doctrine of equivalents prevents a patent infringer from escaping liability for infringement by changing only minor details of an essential element of the patented invention. This doctrine attempts to balance the rights of the patent owner and the purpose of claims of a patent which is to give notice to the public of the patent’s scope. For example, if a patent owner specified in a claim in its patent that the invention had a plastic hook and this was one of the essential elements of that invention, the doctrine of equivalents would prevent a competitor from making a product exactly the same as the patented invention but using instead a metal hook. The doctrine of equivalents would dictate that the metal hook element of the competitor’s product was equivalent to a plastic hook element of the patented invention and therefore, the competitor was infringing that patent. Australia has a similar legal reasoning used to establish patent infringement. Australian patent law recognises that if a suspected patent infringer copies the patented invention “in substance” that will be enough to establish patent infringement. This occurs where the suspected patent infringer has copied all the essential elements or integers of the patented invention. In evaluating this issue, Australian courts will avoid narrowly interpreting the scope of the claims that set out the essential elements of an invention but consider whether the variation used in the suspected infringing article is material. Prosecution history estoppel prevents a patentee from using the doctrine of equivalents to include within the scope of a patent claim any subject matter that the patentee relinquished for purposes related to patentability during the examination process (or prosecution of the patent). Therefore, if a patentee alleges patent infringement against a competitor and that competitor’s product is the same as the patented invention except for one element and that element is the same as the element originally claimed by the patentee, the patentee cannot use the doctrine of equivalents to bring that element back within the scope of their patent. Therefore, a patentee cannot claim an element as an equivalent that they were not allowed to include in their patent in the first place. Australian patent law does not have a similar principle, although similar facts may give rise to a fair basing argument in Australia. Facts Festo sued Shoketsu for infringement of two patents owned by Festo - the “Stoll patent” and the “Carroll patent”. Both of these patents were for magnetic rodless cylinders whose pistons included a pair of sealing rings. These cylinders were used for robotic arms on an assembly line. The claims of the two patents which Festo alleged Shoketsu was infringing had been amended during the examination process in order to persuade the patent examiner to allow the amended claims and therefore accept the patents as valid. Festo was suing for infringement using the doctrine of equivalents to establish that infringement. Shoketsu’s product contained an outer portion of aluminium alloy, not a magnetisable material as claimed in the Stoll patent. Shoketsu’s product also had a single sealing ring, not a pair of sealing rings as claimed in the Carroll patent.
The US District Court had held that Shoketsu had infringed Festo’s Stoll patent and Carroll patent under the doctrine of equivalents. Shoketsu appealed. The majority of the Court held that Shoketsu had not infringed Festo’s patents as “prosecution history estoppel acts as a complete bar to the application of the doctrine of equivalents when an amendment has narrowed the scope of a claim for a reason related to patentability.” This means that no range of equivalents is available for an amended claim element. Therefore, as Shoketsu’s product had not copied Festo’s amended patent claims exactly, they had not infringed them. Prior to this decision, the Court has treated prosecution history estoppel as a “flexible bar” which would have a limiting effect on the range of equivalents but not eliminate the possibility of any equivalents. The majority of the Court rejected the flexible bar approach as they believed that a problem with that approach is that it is virtually impossible to predict where the line is drawn. A patentee usually tries to draw the line just short of prior art leaving a very wide range of equivalents. By comparison, the infringer tries to draw the line close to the literal terms of the claim leaving a very narrow range of equivalents. The court reasoned that if prosecution history estoppel acts as a complete bar to the application of the doctrine of equivalents, both the patentee and the public are put on notice as to the scope of that patent claim. They can look at the prosecution history of the patent (a public record) to determine if prosecution history estoppel applies and then easily determine the scope of any amended claims. The complete bar approach therefore provides certainty as to the scope of amended patent claims. The dissenting judges were strong in their criticism of the majority’s decision on this point. Judge Michel stated that: “Would be copyists would, of course, exploit the majority’s bar. ... Under the majority’s approach, anyone who wants to steal a patentee’s technology need only review the prosecution history to identify patentability-related amendments, and then make a trivial modification to that part of its product corresponding to an amended claim limitation.... The competitor will then be free to make, use, or sell an insubstantial variant of the patentee’s invention.”
This is exactly the public criticism that is now being levelled at the decision. However, large corporations including Hewlett-Packard and IBM have filed briefs in support of this decision stating that it will force applicants to draft more precise patents and therefore, patents of a more certain scope. Smaller technology companies now fear that the effect of this decision is that those who can least afford to draft patent claims precisely at first instance will fall victim to large corporations making mildly varying copies of their patented technology without fear of being sued for patent infringement. In addition, although a complete bar approach may provide certainty of scope for those patent claims which have been amended, the doctrine of equivalents will still apply to the other claims in the same patent. Festo is appealing this decision to the US Supreme Court. In the meantime, US patent owners and licensees are re-evaluating the vulnerability of patent rights and drafting patent application claims a little more carefully.
Anna Feros
Solicitor
T +61 7 3244 8054
anna.feros@mallesons.com