Amicus Curiae Brief — Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.

In the

Supreme Court of the Wnited States

FESTO CORPORATION,

SHOKETSU KONZOKU KOGYO KABUSHIKI CO., LTD.,

A/K/A SMC CORPORATION AND SMC PNEUMATICS, INC.,

RESPONDENTS.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Federal Circuit

BRIEF OF AMICUS CURIAE FEDERAL CIRCUIT BAR

ASSOCIATION IN SUPPORT OF PETITIONER

GEORGE E. HUTCHINSON CLAIRE LAPORTE

EXECUTIVE DIRECTOR, (Counsel of Record)

FEDERAL CIRCUIT MITCHELL J. MATORIN

BAR ASSOCIATION ROBERT L. BOCCHINO JR.

1300 I Street, N.W. MEGAN H. MACK

Suite 700 MARK A. REILLY

Washington, D.C. 20005 FOLEY, HOAG & ELIOT LLP

(202) 408-4000 One Post Office Square

Boston, MA 02109

(617) 832-1000

Counsel for Amicus Curiae

Federal Circuit Bar Association

TABLE OF CONTENTS

STATEMENT OF INTEREST OF AMICUS CURIAE..........++. l

SUMMARY OF THE ARGUMENT ...........scsessssseseesseesesnesseses 2

ABRISUIGIIG E 2000c.c0cccccveccsessesevcnenestanensiichebjeumnesnnnsenspaneenueseitnaiseasl 3

I. THE FESTO DECISION ANNOUNCED NEW

‘RULES OF LAW THAT SIGNIFICANTLY

EXPAND PROSECUTION HISTORY ESTOPPEL

AND NARROW THE.DOCTRINE OF

FOS V FUREY i v-csccassnccsesenensesncesenseatsaneenateutesoeneceoceeseccecae’ 4

Il. THE NEW RULES ANNOUNCED IN FESTO

WILL HAVE PROFOUND EFFECTS ON PATENT

PROSECUTION, PATENT LITIGATION, AND

BUSINESS TRANSACTIONS. ..........ccscscsesesessessseeseeseeees 8

A. By Discouraging Claim Amendments, the Festo

Decision Limits One of the Public’s Primary

Resources for Ascertaining the Scope of the

NE Rt cacenetccnscesnencansntennnsevesdnssanscessocesenaet 8

B. Festo Creates a Dilemma for Investors Who

Must Both Avoid Amendments and Avoid

Drafting Claims Too Narrowly. ..............cc0sseeceeeeeee 1]

C. Festo Will Have a Negative Impact on the

Conduct of Patent Litigation. ..................:ccccscceeeees 12

D. Festo Disrupts Investment-Backed Expectations

Based Upon Prior Settled Law...............c0cccssseeeees 13

E. Festo May Increase the Cost of Patent

Prosecution and May Discourage Inventors

from Applying for Patents. ................::ssseeeeeeeeees 16

F. Festo May Increase the Burdens on the Patent

I ee CII dercccnntenpecennensntsennsctnseseticcmn 16

Ii. FESTO RAISES IMPORTANT QUESTIONS

REGARDING APPELLATE DECISION-

TIPU TUDS cacscscnteniichctdaidddeiashsistblidisitiindstbiedniessiiaaduainete 17

CONCLUSION

**

OO 0000000000000 000 0000000000000 C OOOO OOOO OOOO OOOO OOOO OOO C OOOO COO SCeSeSe

TABLE OF AUTHORITIES

Cases

ACLARA Biosciences, Inc. v. Caliper Techs. Corp.,

125 F. Supp. 2d 391 (N.D. Call. 2000) ...........ccsccesessersnnsnnes 13

Control Resources, Inc. v. Delta Elecs., Inc.,

133 F. Supp. 2d 121 (D. Mass. 2001).............sessesrersereenees 19

Elkay Mfg. Co. v. Ebco Mfg. Co.,

BE FO Ge Ge Gk BD cccncessttccecccczcscesccczcsecesccsnesceee 10

Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,

234 F.3d 558 (Fed. Cir. 2000) ............ccccccccesseeseeeeeeees passim

Flast v. Cohen, 392 U.S. 83 (1968) ...........cccccsccecseeeeeeeneeeeeneeses 18

Graco Children’s Prods. Inc. v. Regalo Int'l LLC,

No. 97-CV-6885, 2001 WL 392886 (E.D. Pa. Apr. 17,

Ee NETO 13

Graver Tank & Mfg. Co. v. Linde Air Prods. Co.,

CE ee 1,4, 14

Hughes Aircraft Co. v. United States,

ee 6

Hughes Aircraft Co. v. United States,

og Ld 6,7

In re Morris, 12* F.3d 1048, 1054 (Fed. Cir. 1997)..............0+. 9

Johnson & Johnston Assocs., Inc. v. R.E.

Serv. Co., 238 F.3d 1347 (Fed. Cir. 2001)...............00005 17, 18

Kinzenbaw v. Deere & Co.,

pf Le 6

Litton Sys., Inc. v. Honeywell, Inc..,

238 F.3d 1376 (Fed. Cir. 2001) ..........cccccccccceeeseeeeeeees 14, 19

Markman v. Westview Instruments, Inc.,

CC TOO 12

Pickholtz v. Rainbow Techs., Inc.,

125 F. Supp. 2d 1156 (N.D. Cal. 2000) ........ccccccccceceees 10, 19

Prodyne Enters., Inc. v. Julie Pomerantz, Inc.,

743 F.2d 1581 (Fed. Cir. 1984) .o.....ccccccccccecccccscscssceseseessecees 6

Sage Prods., Inc. v. Devon Indi, Inc.,

126 F.3d 1420 (Fed. Cir, 1997) ooo. cccccecccccscseseeeeeees 11,12

Senior Techs., Inc. v. R.F. Techs., Inc.,

Nos. 00-1089, 00-1090, 2001 U.S. App.

LEXIS 4179 (Fed. Cir. Mar. 21, 2001) .........cccccccccoccccooeoees 19

Standard Oil Co. v. American Cyanamid Co.,

TPS FAB SOB OE. Cle. 1DDG) cecccccecccececscccccsceczsesscecsceseseees 10

Sun Studs, Inc. v. ATA Equip. Leasing, Inc.,

872 F.2d 978 (Fed. Cir.), vacated in part on other

grounds, 11 U.S.P.Q.2d (BNA) 1479 (Fed. Cir. 1989).......6

United States v. Fruehauf,

TT 18

Vitronics Corp. v. Conceptronic, Inc.,

DT Ce 9

Warner-Jenkinson Co. v. Hilton Davis Chem. Co.,

SPC OP Cee anstntenniiinniniiiiiininmsinniinie 1,3, 4,14

Rules

Supreme Court Rule 10(C) ............ceccccccsceccssesesseseseseeeeececeeseres 1,3

Supreme Court Rule 37.2(a) ..........c.ccccccecsssesessesseseceseesecenseeseesees ]

a l

Supreme Court Rulle 37.6.............ccccccecsscssessessssessesesessssssesseeseees |

Constitution, Statutes, and Regulation

eT A ED, 3

eR | | \ 17

ee Sn ee 4

iv

BS UBC. 6 Bei Becccccscssssssssse 4

if) oa 4

9B UB. 8 Bi Becccscccssssssssss — 4

35 U.S.C. § 154(b)............ = 19

4), a ; 20

Patent Term Guarantee Act of 1999, Pub. L. No. 106-113,

§ 4402, 113 Stat. 1501A-557.. 19

Process Patent Amendments Act of 1988,

Pub. L. No. 100-418, § 9003, 102 Stat. 1563 ..............-.-0 20

Uruguay Round Agreements Act, Pub. L.

No. 103-465, § 533(a), 108 Stat. 4988 (1994)......:......-000 20

37 CER. § 1.191(a) (2000)............0.ccessereereerersenesesseressnsnssnsnnes 17

Other Authorities

William M. Atkinson et al., Was Festo Really Necessary?,

83 J. Pat. & Trademark Off. Soc'y 111 :

(FOB. 2001 ).....0c.c.ccecececeeesesesessesesecsoserenensenssssssesssssssecssssoseseees

Cases and Recent Developments, 10 Fed. Circuit B.J.

997, 419 (BODO) ....-..ereccecceeserecsseesesscsnsscscssnssorersssesssosssssscseoss 3

Lester Horwitz & Ethan Horwitz, Intellectual Property

Counseling & Litigation, § 2.07[6] (2000)...............--. 10-11

Alex Porat, Federal Circuit Narrows Scope of Patents:

Kevin A. Wolff et al., The Unspoken Loss in Shareholder

Value: Patent Rights Take A Hit, Mealey's Litigation

Report: Patents, Apr. 2, 2001..............-. 9, 10, 14, 15, 16, 17

STATEMENT OF INTEREST OF AMICUS CURIAE

The Federal Circuit Bar Association (“FCBA”) is a

attorneys whose practice concerns the United States Court of

Appeals for the Federal Circuit in all aspects of its

jurisdiction. The FCBA offers a forum for common

concerns and dialogue between the bar and the judges of the

Federal Circuit. One of the purposes of the FCBA is to offer

assistance and advice to the federal courts, including briefs

amicus curiae, on matters affecting practice before the

Federal Circuit and lower tribunals.’

Pursuant to Supreme Court Rule 37.2(a), the FCBA has

conferred with the parties regarding the filing of this brief

amicus curiae, and both parties have consented to its filing.

Evidence of the written consent of the parties has been filed

separately herewith.

The FCBA respectfully submits this brief in support of

the petition for certiorari filed by Petitioner Festo

Corporation.’ Specifically, the FCBA seeks to provide a

practitioners’-eye view of the impact of the Federal Circuit’s

decision in Festo Corp. v. Shoketsu Kinzoku Kogyo

Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000) (“Festo”) on

' Pursuant to Supreme Court Rule 37.6, the FCBA states that no

counsel for a party authored this brief in whole or in part. No person or

entity, other than the amicus curiae, its members, or its counsel, made

any monetary contribution to the preparation or submission of the brief.

? Pursuant to Supreme Court Rule 37.1, the FCBA refrains from

reiterating the points argued by Petitioner. In particular, the FCBA does

not analyze the conflict between the Festo decision and the prior rulings

of this Court, except insofar as such conflict is relevant to the decision’s

impact on patent practitioners. See, e.g., Warner-Jenkinson Co. v. Hilton

Davis Chem. Co., 520 U.S. 17, 30-33 (1997); Graver Tank & Mfg. Co. v.

Linde Air Prods. Co., 339 U.S. 605, 609 (1950). The FCBA agrees with

petitioner that Festo cannot be reconciled with this Court’s prior cases,

and the petition should be granted on that ground as well as on the

grounds advanced below. Sup. Ct. R. 10(c).

]

those involved in the prosecution, litigation, and licensing of

patent rights, and on the patent system as a whole.

SUMMARY OF THE ARGUMENT

1. The Supreme Court should grant the petition for

certiorari because in Festo the Federal Circuit announced

major changes in federal patent law relating to the doctrine

of equivalents and prosecution history estoppel. The new

rules enunciated in Festo have significantly changed prior

law and have overturned numerous cases on which patentees,

patent practitioners, and others had relied.

2. The new rules announced by the Federal Circuit in

Festo will have profound effects on the prosecution,

enforcement, and licensing of patents. The Federal Circuit

limited the availability of the doctrine of equivalents in order

to create more certainty regarding the scope of patent

protection. However, Festo may have the unintended effect

of discouraging practices, such as claim amendments, that

shed light on the meaning of patent claims. The practices

encouraged by Festo may also increase the costs of patent

prosecution and litigation. In addition, the changes in Festo

have diminished the rights of patent holders.

3. In Festo, the Federal Circuit solicited briefing by the

parties and amici on several broad questions not raised by

the parties, and it then enunciated several new rules of law in

response to those questions. This procedure raises questions

regarding the Federal Circuit’s appeliate decision-making

process, particularly because the court announced the new

rules en banc. Litigants and the lower federal courts are thus

likely to treat the new rules as controlling, even when those

courts are asked to apply them in factual circumstances that

differ from the facts in this case. The Court should grant the

petition so that it can address the propriety of the Federal

Circuit’s procedure.

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Developments

419 (2000) (“There are very few opinions in

Jurisprudence that so dramatically and suddenly alter

general questions in a manner that will alter the investment-

backed expectations of patentees and will force a revision,

with many unforeseen consequences, in the way the patent

bar practices its craft.

The FCBA is conscious of this Court’s reliance on the

Federal Circuit for the day-to-day development and

administration of patent law. See, ¢.g., Warner-Jenkinson

Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 40 (1997).

However, we believe that review of the Festo decision by

this Court is appropriate, because the Federal Circuit has

gone beyond the ordinary administration and development of

patent law. Rather than refining the doctrine of equivalents

in the “orderly course of case-by-case determinations,” id.,

the en banc court in Festo fundamentally changed the

doctrine in a way that may undermine the careful balance

between public disclosure of inventions and the limited

exclusivity guaranteed by Article 1, Section 8 of the

Constitution.

e

I. THE FESTO DECISION ANNOUNCED NEW

RULES OF LAW THAT SIGNIFICANTLY

EXPAND PROSECUTION HISTORY ESTOPPEL

AND NARROW THE DOCTRINE’ OF

EQUIVALENTS.

The Festo decision has wrought a fundamental change

in the interaction between two related and important rules of

patent law: the doctrine of equivalents and prosecution

history estoppel. The doctrine of equivalents grants the

patentee a degree of protection beyond the literal claims of

the patent to ensure that “unscrupulous copyist[s}” cannot

make “unimportant and insubstantial changes in the patent

which, though adding nothing, would be enough to take the

copied matter outside the claim.” Graver Tank & Mfg. Co.

vy. Linde Air Prods. Co., 339 U.S. 605, 607-08 (1950).

Prosecution history estoppel, on the other hand, ensures that

the patentee cannot, through the doctrine of equivalents,

claim subject matter that he has in fact disclaimed during

prosecution of the patent. Prosecution history estoppel

applies to claims that have been amended during prosecution

for a “substantial reason related to patentability.” Warner-

Jenkinson, 520 U.S. at 33. .

In Festo, the court expanded the doctrine of prosecution

history estoppel and narrowed the doctrine of equivalents by

announcing, in relevant part, the following new rules of law:

1. In determining what is a “substantial reason related

to patentability,” the term “patentability” is not

limited to overcoming prior art under 35 U.S.C. §§

102 and 103, but includes amendments required

under § 101 (requirement of patentable subject

matter) and § 112 (requirement of specification).

Festo, 234 F.3d at 566.

2. An amendment made voluntarily by a patentee, and

not required by the examiner, creates prosecution

history estoppel just as a required amendment does.

Festo, 234 F.3d at 568.

3. If a claim amendment creates prosecution history

estoppel, then no range of equivalents is available

for the amended claim element - i.e., prosecution

history estoppel operates as a “complete bar” to

infringement by equivalents. Festo, 234 F.3d at 569.

The first and second rules set forth above, while not

clearly contrary to prior law, underscore the Festo court’s

expansion of prosecution history estoppel and the

concomitant narrowing of the doctrine of equivalents. In

particular, the first rule (that prosecution history estoppel

may arise from amendments for purposes other than

distinguishing prior art) is a departure from established

practice. Before Festo, practitioners tended to focus on

amendments and arguments based on prior art rejections as

the basis for determining whether the patentee would be

estopped from asserting equivalents against an accused

product or process. After Festo, accused infringers will rely

on prosecution history estoppel far more in other contexts

(for example, an amendment to clarify claim language)

where historically the doctrine was not often applied.

The third rule announced in Festo (that prosecution

history estoppel functions as a “complete bar” to the doctrine

of equivalents) departs from almost all of the pre-Festo cases

in a way that significantly limits the availability of the

doctrine of equivalents. Prior to Festo, all but two Federal

Circuit cases addressing the issue had held that prosecution

history estoppel bars infringement of the amended claim by

some equivalents but not by others. To determine whether

prosecution history estoppel barred a particular use of the

doctrine of equivalents, the court would look at facts such as

the nature and purpose of the amendment; the patentee’s own

Statements about what was disclaimed in the amendment; the

relationship between the original claim, the amended claim,

and the accused product; and (if the amendment had been

5

made to avoid prior art) the relationship between the accused

product, the invention, and the prior art. See, e.g., Hughes

Aircraft Co. v. United States, 140 F.3d 1470, 1476 (Fed. Cir.

1998) (in applying the doctrine, “a court must determine

what subject matter the patentee actually surrendered”); Sun

Studs, Inc. v. ATA Equip. Leasing, Inc., 872 F.2d 978, 987

(Fed. Cir.) (“The scope of estoppel must be determined in

light of the prior art that occasioned the change, as well as

representations made to the patent examiner as to the reason

for the change.”), vacated in part on other grounds, 11

U.S.P.Q.2d (BNA) 1479 (Fed. Cir. 1989). Under this

approach, which the Festo court termed the “flexible bar”

rule, Festo, 234 F.3d at 572, the limiting effect of

prosecution history estoppel was “within a spectrum ranging

from great to small to zero,” Hughes Aircraft Co. v. United

States, 717 F.2d 1351, 1363 (Fed. Cir. 1983), and where it

lay in that spectrum depended on the specific facts and

circumstances of the case.

Deciding that the flexible bar approach had become

“unworkable,” the Festo court rejected this approach in favor

of a “complete bar” that arises whenever “an amendment has

narrowed the scope of a claim for a reason related to

patentability.”* Jd. at 574-75. That is, a patentee may no

> The two pre-Festo cases cited by the Festo majority as inconsistent

with this approach are Kinzenbaw v. Deere & Co., 741 F.2d 383 (Fed.

Cir. 1984) and Prodyne Enterprises, Inc. v. Julie Pomerantz, Inc., 743

F.2d 1581 (Fed. Cir. 1984). In fact, while these decisions contain

language that is in tension with the flexible bar rule, the holdings even of

these cases are arguably consistent with the flexible bar. See Festo, 234

F.2d at 610 (Michel, J., concurring in part and dissenting in part).

* The court concluded that the flexible bar rule was unworkable

because, by creating uncertainty as to which equivalents are available and

which are not, it impaired the “notice function” of patent claims — i.e., the

role of patent claims in specifying exactly what the patentee has claimed

and what is available to others. See Festo, 234 F.3d at 574-78. As

discussed below, the Festo “complete bar” rule may itself impair the

notice function. See Festo, 234 F.3d at 593 (Plager, J., concurring)

6

longer assert infringement by equivalents of a claim element

that has been added for patentability reasons, regardless of

the relationship between the accused product, the invention,

and the prior art; the purpose of the amendment; or the scope

of what the patentee has actually disclaimed.

The significance of this change is illustrated by the

Federal Circuit’s 1983 holding in Hughes Aircraft, 717 F.2d

at 1351, one of many pre-Festo Federal Circuit decisions that

relied on the flexible bar rule and have been overruled either

expressly or sub silentio, or cast into doubt, by Festo.> In

Hughes Aircrajt, the invention at issue was a satellite

capable of maintaining its position while orbiting the earth.

717 F.2d at 1352. The claimed satellite and the infringing

satellite were identical in every material way save one: in

the patented invention, signals from the satellite were

transmitted to earth, where calculations used to determine

satellite position were made by a ground crew; in the

accused satellite, signals were transmitted to a computer on

board the satellite that performed the calculations. Jd. at

1360-61, 1364. Because the distinction was insubstantial,

the court concluded that the accused satellite infringed under

the doctrine of equivalents. Jd. at 1366. Although the

patentee had amended the claims to distinguish prior art, the

court ruled that prosecution history estoppel did not apply

because the infringing device did not fit within the subject

matter surrendered during prosecution. Jd. at 1362.

The outcome would have been different under Festo.

Rather than identifying what subject matter was actually

disclaimed during prosecution and comparing that

disclaimed subject matter with the allegedly infringing

device, a post-Festo court would ask only (1) whether the

(noting that “[iJn time . . . the supposed benefits of the doctrinal

improvements contained in [Festo] may prove illusory’).

> See Festo, 234 F.3d at 613-615 (Michel, J., concurring in part and

dissenting in part); see also William M. Atkinson et al., Was Festo Really

Necessary?, 83 J. Pat. & Trademark Off. Soc’y 111, 143-50 (Feb. 2001).

7

claim limitation was narrowed and (2) whether it was

narrowed for a substantial reason related to patentability.

Because the answers to these two questions were affirmative

in Hughes Aircraft, the patentee would have been left

without a remedy.

Il. THE NEW RULES ANNOUNCED IN FESTO

WILL HAVE PROFOUND EFFECTS ON PATENT

PROSECUTION, PATENT LITIGATION, AND

BUSINESS TRANSACTIONS.

A. By Discouraging Claim Amendments, the Festo

Decision Limits One of the Public’s Primary Re-

sources for Ascertaining the Scope of the

Claimed Invention.

The primary reason advanced by the Federal Circuit for

abandoning the flexible bar approach to prosecution history

estoppel was to increase certainty regarding the scope of

available equivalents. See Festo, 234 F.3d at 574-78. A

patent’s prosecution history record, however, is important

not only to determine the scope of available equivalents, but

also to ascertain the scope and meaning of the claims for

literal infringement analysis. Indeed, the principal way in

which prosecution histories serve the public notice function

is by clarifying the literal scope of claims. As discussed

below, the disincentives that Festo creates to amend claims

during prosecution will encourage “stealth” prosecution

tactics, the effect of which will be to reduce the value of

prosecution history in elucidating the meaning of patent

claims. Further, the detrimental effect of such tactics may

outweigh the benefit of any increased certainty that the Festo

rule provides. Thus, the FCBA respectfully disagrees with

the Federal Circuit’s conclusion that the complete bar “best

serves the notice and definitional function of patent claims.”

Festo, 234 F.3d at 576.

Before Festo, patent counsel often drafted claims

broadly in anticipation of narrowing them by amendment, if

necessary, during the course of prosecution. See Kevin A.

Wolff et al., The Unspoken Loss in Shareholder Value:

Patent Rights Take A Hit, Mealey’s Litigation Report:

Patents, Apr. 2, 2001, at 29-30 (explaining that patent

practitioners prior to Festo typically drafted initial claims

broadly); Alex Porat, Federal Circuit Narrows Scope of

Patents: Design-Arounds Just Got Easier, E-Commerce,

Dec. 2000, at 5. The patent examiner usually rejected

broadly worded initial claims as anticipated or obvious in

view of the prior art, or unpatentable on other statutory

grounds. The applicant then amended the claims, explained

the invention, distinguished the prior art, or pursued some

combination of these approaches to overcome the rejection.

See In re Morris, 127 F.3d 1048, 1054 (Fed. Cir. 1997)

(“The process of patent prosecution is an interactive one.

Once the PTO has made an initial determination that

specified claims are not patentable . . . the burden of

production falls upon the applicant to establish entitlement to

a patent.”’).

This give and take between patent applicants and patent

examiners is one of the great virtues of our patent system.

The process of claim amendment usually forces applicants to

commit themselves -— at least to some extent —- to

constructions of their claims and interpretations of the prior

art. Claim amendments create a public record in which the

scope of an invention is clarified and defined. See, e.g.,

Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1583

(Fed. Cir. 1996); see also In re Morris, 127 F.3d at 1054

(“This [negotiation between applicant and examiner]

promotes the development of the written record before the

PTO that provides the requisite written notice to the public

as to what the applicant claims as the invention.”’).

Because of the high price that Festo places on most

amendments — complete loss of the doctrine of equivalents —

post-Festo applicants will probably abandon the approach of

filing broad claims initially. Instead, inventors will take

pains to avoid amendments by drafting narrow claims that

are likely to be allowed without amendment, thereby

depriving the public of the dialogue with the examiner

discussed above. See Wolff, supra, at 31.

The Festo decision will also discourage inventors from

clarifying claim language through voluntary amendments.

“Clarifying” amendments are likely to give rise to

prosecution history estoppel under Festo, because they

implicate the requirements of 35 U.S.C. § 112. See Festo,

234 F.3d at 567; Pickholtz v. Rainbow Techs., Inc., 125 F.

Supp. 2d 1156, 1162 (N.D. Cal. 2000) (statement that

amendment was “for clarification” constituted admission that

it was related to patentability under § 112, paragraph 2).

Thus, patent prosecutors will tend to avoid submitting

clarifying amendments that would increase the intelligibility

of the claims to the public.

Festo will also encourage applicants to seek interviews

with the examiner either before or immediately after the first

office action in the hope of having claims allowed without

amendment and without submitting written remarks of the

type that have also been held to create an estoppel.° The file

history of a patent prosecuted in this way is unlikely to be

illuminating as to the meaning or scope of claims, as

examiners’ notes of interviews with applicants are generally

brief, and the real substance of the interview will remain

inaccessible to the public. See Lester Horwitz & Ethan

® See, e.g., Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 979 (Fed.

Cir. 1999) (“Arguments made during the prosecution of a patent

application are given the same weight as claim amendments.”), Standard

Oil Co. v. American Cyanamid Co., 774 F.2d 448, 452 (Fed. Cir. 1985)

(“{The prosecution history includes] all express representations made by

or on behalf of the applicant to the examiner to induce a patent grant... .

Such representations include amendments to the claims and arguments

made to convince the examiner .. . .”).

10

Horwitz, Intellectual Property Counseling & Litigation,

§ 2.07[6] (2000) (“[An] advantage of examiner interviews is

that they usually produce little if any written record. . . .

[T]he examiner complete[s} an Interview Summary Record

Form PTOL-413 [that] usually includes a sketchy one or two

examiners’ rejections instead of amending claims in response

to rejections. File histories in which amendments are

rigorously avoided are less likely to provide guidance to the

public and to competitors as to the meaning and scope of

claims. All of these effects will impair the beneficial public

notice function traditionally served by patent prosecution.

B. Festo Creates a Dilemma for Inventors Who

Must Both Avoid Amendments and Avoid

Drafting Claims Too Narrowly.

Although inventors will now face severe consequences

if they narrow their claims during prosecution, they cannot

respond to Festo simply by drafting very narrow claims. If

they do, they may find that they have no access to

equivalents under other Federal Circuit cases. In Sage

Products, Inc. v. Devon Industries, Inc., 126 F.3d 1420 (Fed.

Cir. 1997), the Federal Circuit held that patentees who have

failed to claim foreseeable alternatives will be held to the

limited scope of their claims and cannot reach unclaimed

alternatives under the doctrine of equivalents. See id. at

1424-26 (finding noninfringement under doctrine of

equivalents where patentee could have sought “broad patent

protection”; patentee “must bear the cost of its failure to seek

protection for this foreseeable alteration of its claimed

structure”’).

Thus, “for a patentee who has claimed an invention

narrowly, there may not be infringement under the doctrine

11

of equivalents in many cases, even though the patentee might

have been able to claim more broadly.” Jd. at 1424. Read

together, therefore, Festo and Sage Products create a

dilemma: an inventor who successfully avoids the Scylla of

Festo may encounter the Charybdis of Sage Products.

C. Festo Will Have a Negative Impact on the

Conduct of Patent Litigation.

The consequences of Festo for patent litigation are no

less significant than its impact upon patent prosecution.

Claim amendments have been particularly important in

patent litigation, where they have assisted courts and litigants

in construing the literal meaning of claims under this Court’s

decision in Markman v. Westview Instruments, Inc., 517 U.S.

370 (1996). Through the doctrine of prosecution history

estoppel, claim amendments have also prevented patentees

from claiming infringement for ideas that were clearly

surrendered during the application process. In both cases,

the amendments were read in context within the prosecution

history in order to discern their meaning.

By contrast, in the wake of Festo, there are likely to be

fewer claim amendments to provide information about the

literal scope of claims. Ultimately, having less informative

prosecution histories may add to the difficulty, expense, and

uncertainty of litigation. Patent litigation — already a lengthy

and expensive undertaking — will only become more so if

applicants succeed in minimizing amendments and other

written interactions with examiners.

Where there are amendments, litigants who dispute the

applicability of the doctrine of equivalents will no longer

focus on the negotiation between an applicant and an

examiner as a narrative that informs the outer contours of

available equivalents. Instead, they will concern themselves

with collateral questions such as whether a particular

amendment is a “narrowing” amendment, or what precisely

constitutes an “element” of a claim as to which prosecution

12

history estoppel applies. See Festo, 234 F.3d at 569 (“When

a claim amendment creates prosecution history estoppel with

regard to a claim element, there is no range of equivalents

available for the amended claim element.”) (emphasis

supplied).

In ACLARA Biosciences, Inc. v. Caliper Techs. Corp.,

125 F. Supp. 2d 391, 400-03 (N.D. Cal. 2000), for example,

the court addressed the meaning of the term “element” in

attempting to determine whether prosecution history estoppel

should apply. Breaking down one clause or “element” into

three separate components, or “limitations,” the court

concluded that there was no estoppel. Jd. at 402-03. See

also Graco Children’s Prods., Inc. v. Regalo Int’! LLC, No

97-CV-6885, 2001 WL 392886, at *4 (E.D. Pa. Apr. 17,

2001). Under pre-Festo law, these courts would have

engaged in a genuine examination of what the patentee had

surrendered during prosecution. In view of Festo, however,

the ACLARA court instead concerned itself with the question

of how to define an “element,” while the Graco court

f on whether a particular amendment was

“narrowing.”

D. Festo Disrupts Investment-Backed Expectations

Based Upon Prior Settled Law.

The potential effects of Festo on the patents prosecuted

under the old rules are extensive. Amendments have long

been such an established part of the prosecution process that,

as Judge Newman observed, a mere ten to fifteen percent of

simple patents make it through the process without

amendments, while the number of complex applications that

escape amendment is “vanishingly small.” Festo, 234 F.3d

at 638 n.21 (Newman, J., concurring in part, dissenting in

part). Judge Michel estimated in his Festo dissent that the

decision will affect the scope of most of the approximately

1.2 million unexpired and enforceable patents. Jd. at 618

(Michel, J., concurring in part, dissenting in part). The

13

expanded doctrine of prosecution history estoppel announced

in Festo appears to weaken the rights of those existing

patentees. See Festo, 234 F.3d at 638 (Newman, J.,

concurring in part, dissenting in part); see also Litton Sys.,

Inc. v. Honeywell, Inc., 238 F.3d 1376 (Fed. Cir. 2001);

Wolff, supra, at 31 (“The recent decision in Litton . . . bears

witness to the sudden change in the value of patents that has

resulted from Festo.”).

By expanding the types of claim amendments that

trigger prosecution history estoppel and simultaneously

treating any such amendments as an absolute bar to

infringement by equivalents, the Festo court has eliminated

the doctrine of equivalents as a viable source of protection

for many existing patents. As a result, the rights of existing

patentees in amended claims risk becoming precisely what

this Court has stated they should not be: a “hollow and

useless thing.” Graver Tank, 339 U.S. at 607. This Court in

Warner-Jenkinson expressly rejected such substantial mid-

course changes to patent law as unfairly disruptive of

established expectations:

To change so substantially the rules of the game now

could very well subvert the various balances the PTO

sought to strike when issuing the numerous patents

which have not yet expired and which would be affected

by our decision.

520 U.S. at 32 n.6.

If upheld, the bright-line rule announced in Festo is

likely to provide a windfall to the competitors of existing

patentees. Simply by reviewing a patent’s prosecution

history, competitors will be able to determine the claim

elements for which there will be no range of equivalents.

They will not be put to the trouble of determining the scope

of what has been disclaimed by an amendment. If any claim

element has been narrowed for a reason relating to

patentability, a competitor need only identify that element

14

and introduce an insubstantial change to it without fear of

infringement liability. Festo, 234 F.3d at 616 (Michel, J.,

concurring in part, dissenting in part) (Festo “provides

copyists a fail-safe method to avoid liability for

Moreover, “any claim drafted in current technological

terms [can] easily be circumvented after the advent of an

advance in technology.” Festo, 234 F.3d at 619 (Rader, J.,

concurring in part, dissenting in part). Before Festo, such

technological advances were accounted for, at least to a

degree, by the doctrine of equivalents. Post-Festo,

technological advances may provide loopholes to infringers.

The Festo decision, in the short term, is likely to provide

incentives to competitors to copy rather than innovate, thus

reducing the incentives provided by the patent system for

investing in research and development. See Porat, supra,

at 5.

Festo will also upset business decisions made in reliance

on prior patent practice. Patentees that have relinquished

trade secret protection in their inventions in exchange for

patent protection may come to regret their decisicns.

Businesses that have decided whether to develop particular

products or license certain patents by weighing the

opportunities against the risk of infringement liability may

find their decisions undermined. Business decisions such as

these are backed by significant investments, the value of

which has abruptly been altered by Festo. See Wolff, supra,

at 31. The sudden weakening of existing patents is

particularly troubling for companies and industries built

around the value of their patent portfolios. In such

industries, public and private investors have made significant

decisions in reliance on the value of patents that were

prosecuted according to prior practice and may now be

significantly diminished in scope.

15

E. Festo May Increase the Cost of Patent

Prosecution and May Discourage Inventors

From Applying for Patents.

The price that Festo places on amending patent claims

will inerease the up-front cost of patent prosecution. Festo

raises the stafidard of practice for patent prosecutors,

requiring that they do more extensive research into the prior

art before filing an application in an effort to turn up prior art

that might later require them to amend their claims. Patent

prosecutors will similarly be burdened by the need to devote

much greater effort at the stage of the initial application in

drafting the claims and claim elements in a manner most

likely to avoid the need to amend. See Wolff, supra, at 34-

36 (referring to this approach as the “Robust Status Quo”

response to Festo). The additional care (and additional

claims) required in light of Festo may raise the cost of patent

protection to a point where it becomes less available to

individual inventors and small businesses. This result, in

turn, will diminish the effectiveness of the patent system as a

spur towards invention.

Another effect of increased patent costs may be to

encourage inventors to protect their inventions as trade

secrets, rather than disclose them to the public in exchange

for (weakened) patent protection. This result would be

contrary to the patent system’s objective of encouraging the

disclosure of inventions.

F. Festo May Increase the Burdens on the Patent

and Trademark Office.

Festo may also increase the burdens on the PTO and,

ultimately, the Federal Circuit. Applicants disappointed by

an examiner’s rejection of claims will have an incentive to

appeal the refusal through the administrative and legal

16

process instead of simply amending their claims.’ Such

appeals threaten to add substantial delays to an already

deliberate process and increase the costs of prosecution not

only for patentees, but for the public. These additional costs

may favor large companies with substantial resources over

smaller companies and individual inventors.

One commentator has noted that patentees facing the

prospect of a claim amendment may choose a “slash and

burn” approach, canceling all claims of the application and

replacing them with a completely new set of claims. See

Wolff, supra, at 36-37. This approach could successfully

fend off the danger of prosecution history estoppel presented

by Festo, because “canceling all the claims and offering a

complete new set of claims will frustrate (the) mapping of

claim elements and make it difficult to determine if the

claims have been narrowed.” Id. Such an approach to patent

prosecution hardly serves the public interest. It increases the

burden on patent examiners and may also increase the

duration of the patent prosecution process.

Ill. FESTO RAISES IMPORTANT QUESTIONS

REGARDING APPELLATE DECISION-MAKING.

Finally, the Federal Circuit’s procedure of soliciting

briefing on certain abstract legal questions and then

answering them, en banc, separately from its analysis of the

facts of the dispute at hand, raises questions regarding the

court’s approach to appellate decision-making. As this

’ Rejection of claims by patent examiners can be appealed as of right

to the Patent Office’s Board of Patent Appeals and Interferences, and

then to the Federal Circuit. See 28 U.S.C. § 1295(a)(4)(A); 37 C.F.R.

§ 1.191(a) (2000). .

* Recently, the Federal Circuit has indicated an intention to provide

answers en banc to certain other general questions relating to the doctrine

of equivalents. In January 2001, the court issued an order, sua sponte,

that it would hear a pending case en banc. Johnson & Johnston Assocs.,

Inc. v. R.E. Serv. Co., 238 F.3d 1347 (Fed. Cir. 2001). It asked the

17

> iets

Court has advised, “the business of federal courts” is to

resolve “questions presented in an adversary context and in a

form historically viewed as capable of resolution through the

judicial process.” Flast v. Cohen, 392 U.S. 83, 95 (1968);

see also United States v. Fruehauf, 365 U.S. 146, 157

(1961).

Precisely because the judicial process is best equipped to

resolve concrete rather than abstract disputes, this Court has

consistently encouraged the lower federal courts to adhere to

the facts of the actual controversies before them. By doing

so, courts Over time construct doctrines on a case-by-case

basis, with each holding tied to the facts at issue. As new

cases arise, litigants can rely upon or distinguish these cases

depending on the specific factual circumstances of each

dispute. Doctrines develop incrementally in a way that

encourages litigants and the courts to focus on the specific

facts of each case and discourages the enunciation of rules

whose application to facts not before the court might produce

unanticipated results.

Since Graver Tank, the lower federal courts, including

the Federal Circuit, developed the doctrine of prosecution

history estoppel — itself a judicially-created doctrine — in just

this way. In Festo, however, the questions set forth and

answered en banc were notably more expansive than the

questions actually presented by the facts of the case. The

dispute between the parties did not require that new general

principles be announced, yet the parties became bystanders

as the court, en banc, propounded questions and then

enunciated a series of rules intended to govern all future

prosecution history estoppel cases involving claim

amendment. These rules were not limited to the issues raised

by Festo’s patents, their prosecution, or the specific

allegations of infringement. Only after announcing its new

parties to brief certain abstract legal questions and invited the

participation of amici curiae on those questions. Id.

18

general rules did the court address the parties’ specific

dispute using those rules.

The weight of authority that attends an en banc decision

will inevitably cause other panels and lower courts to

continue to apply the broad rules announced in Festo, even

though those rules are, when applied beyond the facts in

Festo, merely dictum. Indeed, the Federal Circuit itself and

the district courts have already followed the new rules

announced in Festo as if they were controlling authority that

could not be distinguished. See, e.g., Senior Techs., Inc. v.

R.F. Techs., Inc., Nos. 00-1089, 00-1090, 2001 U.S. App.

LEXIS 4179, at *17 (Fed. Cir. Mar. 21, 2001); Litton Sys.,

238 F.3d at 1380-81; Pickholtz, 125 F. Supp. 2d at 1162.

Parts of the Festo opinion more closely resemble a

legislative enactment than a judicial decision. Like a statute,

which is typically drafted so as to apply to a wide variety of

circumstances, the Festo decision, with its broad questions

and answers, purports to have general future application. In

addition, like a legislative body, the Festo court relied

extensively on public policy to justify its conclusions.

Unlike legislative bodies, which can commit considerable

resources in order to evaluate the costs and benefits of

adopting certain policies, however, courts are not similarly

equipped.'° This Court should grant the petition for

% Indeed, one district court, while clearly regarding itself as

constrained to follow the new rules announced in Festo, has criticized

those rules because of the apparent unfairness that resulted from their

application to the case then before that court. See Control Resources,

Inc. v. Delta Elecs., Inc., 133 F. Supp. 2d 121, 125, 136-37 (D. Mass.

2001).

'© Congress may be better equipped to evaluate and adopt far reaching

policies in the patent area. Within the past fifteen years, Congress has

actively revised the patent laws and, in particular, has expanded both the

term of patents as well as the scope of infringement. See, ¢.g., Patent

Term Guarantee Act of 1999, Pub. L. No. 106-113, § 4402, 113 Stat.

1501A-557 (codified at 35 U.S.C. § 154(b)) (providing extension of

patent term where application is pending in PTO beyond three years),

19

certiorari so that it can address the advisability of the Federal

Circuit’s practice of posing and answering, en banc, abstract,

general questions that are intended to govern all future cases

implicating those questions.

CONCLUSION

For the foregoing reasons, amicus curiae Federal Circuit

Bar Association respectfully requests that this Court grant

the Petition for Writ of Certiorari.

Respectfully submitted,

GEORGE E. HUTCHINSON CLAIRE LAPORTE

EXECUTIVE DIRECTOR, (Counsel of Record)

FEDERAL CIRCUIT MITCHELL J. MATORIN

BAR ASSOCIATION ROBERT L. BOCCHINO JR.

1300 I Street, N.W. MEGAN H. MACK

Suite 700 MARK A. REILLY

Washington, D.C.20005 FoLey, HOAG & ELIOTLLP

(202) 408-4000 One Post Office Square

Boston, MA 02109

(617) 832-1000

Counsel for Amicus Curiae

The Federal Circuit Bar

Association

Dated: May 9, 2001

Uruguay Round Agreements Act, Pub. L. No. 103-465, § 533(a), 108

Stat. 4988 (1994) (codified in various subsections of 35 U.S.C. § 271)

(adding prohibition on offering to sell or importing into United States an

invention patented in United States); Process Patent Amendments Act of

1988, Pub. L. No. 100-418, § 9003, 102 Stat. 1563-64 (codified at 35

U.S.C. § 271(g)) (adding prohibition on importation into Unit States,

sale, or use within United States of a product made by a process , atented

in United States). Despite undertaking these revisions, Congress has not

altered the state of the law regarding either the doctrine of equivalents or

prosecution history estoppel.

20