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

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In The

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FESTO CORPORATION,

Petitioner,

SHOKETSU KINZOKU KOGYO KABUSHIKI

CO., LTD., a/k/a SMC CORPORATION

and SMC PNEUMATICS, INC.,

Respondents.

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On Writ Of Certiorari To The

United States Court Of Appeals

For The Federal Circuit

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BRIEF OF AMICUS CURIAE PHILADELPHIA

INTELLECTUAL PROPERTY LAW ASSOCIATION

IN SUPPORT OF PETITIONER

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Manny D. PoxotiLow* Joan Tart KLuGER

Caesar, Rivise, BERNSTEIN, SCHNADER HARRISON

Couen & PoxotiLow, Ltp. Seca & Lewis LLP

Seven Penn Center 1600 Market Street

1635 Market Street Philadelphia, PA 19103

Philadelphia, PA 19103. 215-751-2357

215-567-2010

SALVATORE R. GUERRIERO

Caesar, Rivise, BERNSTEIN,

Coven & PoxotiLow, Ltp.

Seven Penn Center

1635 Market Street

Philadelphia, PA 19103

215-567-2010

*Counsel of Record

Counsel for Amicus Curiae

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TABLE OF CONTENTS

TABLE OF AUTHORITIES

STATEMENT OF INTEREST

CONSENT TO FILING OF AMICUS CURIAE BRIEF. .

SUMMARY OF ARGUMENT

Reducing the Scope of Patent Protection

Decreases Incentive to Disclose Inventions ....

Amendments Necessitated by the Complexity of

Patent Law and Patented Technology Should not

Diminish a Patentee’s Right to Equivalents....

The Complete Bar Rule is Contrary to a Rational

and Sound Policy to Protect Intellectual Prop-

The Scope of Patent Claims Should be Inter-

preted Using All Intrinsic Evidence

A. Prosecution History is Intrinsic Evidence of

Patent Scope

B. Evaluating Prosecution History under a

Flexible Bar is not Unworkable

Conclusion

ii

TABLE OF AUTHORITIES

Page

FEDERAL CASES

ACLARA Biosciences, Inc. v. Caliper Technologies

Corp., 125 F. Supp. 2d 391 (N.D. Cal. 2000) ....... 12

Aronson v. Quick Point Pencil Co., 440 U.S. 257, 99

S. Ce. 1GG6 CRGVOD. 2. cvcccccccssectessuneaneeeneene 3

Autogiro Co. of America v. United States, 384 F.2d -

Cee ® eet 6, 7

Creo Products, Inc. v. Presstek, Inc., No. C.A. 99-525-

GMS, 2001 WL 637397 at 7 (D. Del. May 11,

Y ITT 12

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

Ltd., 234 F.3d 558 (Fed. Cir. 2000), cert. granted,

121 S. Ce. B5ID GATT) 2. cccvccescsecessossucss passim

Graham v. John Deere Co. of Kansas City, 383 U.S. 1,

06 S. Ce. GB6 CRBGRD. 2.00 cccccvcccnscecnacueumeeeee 10

Graver Tank & Manufacturing Co. v. Linde Air Prod-

ucts Co., 339 U.S. 605, 70 S. Ct. 854 (1950)......... 4

Kewannee Oil Co. v. Bicron Corp., 416 U.S. 470, 94

S. Ce. 1679 CIGPOD. ... ccccncinncesdevencdssnauneueeeen 3

Litton Systems, Inc. v. Honeywell, Inc., 145 F.3d 1472

(Red. Cle, T5908). . cc ccccccctcoceenseneeenneunenaeeee 7

Markman v. Westview Instruments, Inc., 52 F.3d 967

(Fed. Cir. 1995), aff'd, 517 U.S. 370, 116 S. Ct.

hog: Peer ee 10

TM Patents, LLP v. International Business Machines,

136 F. Supp. 2d 209 (S.D.N.Y. 2001)............ 11, 12

iii

TABLE OF AUTHORITIES - Continued

Page

Topliff v. Topliff, 145 U.S. 156, 12 S. Ct. 825 (1892)..... 6

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

etic iteckeeskeeseoeeocecececccoess 10

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

520 U.S. 17, 117 S. Ct. 1040 (1997)...........000ee, 2

FEDERAL STATUTES

H.R. Rep. No. 106-287(I), 106th Cong., 1st Sess.

(Amat, 3, 1998) ooo cccccccccccccccccccccccccccccece 8, 9

Pub. L. No. 106-113, Div. B, Title TV (§§ 4001 to

4808), 113 Stat. 1501, 1501A-552 (1999)............. 8

MISCELLANEOUS

AIPLA Economic Survey, 78-79 (2001) .............-. 4,5

STATEMENT OF INTEREST?

The Philadelphia Intellectual Property Law Associa-

tion (“PIPLA”) was established to advocate the United

States Constitution provision for the promotion of science

and the useful arts; to promote the development and

administration of the patent, trademark and copyright

laws; to increase knowledge of intellectual property law;

and to further high standards of professional ethics and

promote professional relationships in the intellectual

property law field. PIPLA members and their clients

depend upon consistent application of the doctrine of

equivalents to ensure the protection of their present and

future rights under the patent laws.

PIPLA has no stake in either of the parties to this

appeal or in the outcome of the appeal, other than its

interest in seeking correct and consistent interpretation of

_the law affecting intellectual property.

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CONSENT TO FILING OF AMICUS CURIAE BRIEF

In accordance with Supreme Court Rule 37.3(a),

PIPLA has obtained written consent to the filing of this

amicus curiae brief from the counsel of record for both

parties. The written consents of the parties are being filed

with Clerk of Court and accompany this brief.

+

1 Pursuant to Supreme Court Rule 37.6, amicus curiae states

that this brief was not authored, in whole or in part, by counsel

to a party, and that no monetary contribution to the preparation

or submission of this brief was made by any person or entity

other than the amicus curiae or its counsel.

SUMMARY OF ARGUMENT

The Court of Appeals for the Federal Circuit, in Festo

Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 234

F.3d 558 (Fed. Cir. 2000) (en banc), cert. granted, 121 S. Ct.

2519 (2001) (“Festo”), has, to a substantial degree, elimi-

nated the doctrine of equivalents - a principle that this

Court reaffirmed in Warner-Jenkinson Co. v. Hilton Davis

Chem. Co., 520 U.S. 17, 117 S. Ct. 1040 (1997). PIPLA

supports a reversal by the Supreme Court of the finding

that no range of equivalents is available for a claim

element that was narrowed for reasons related to paten-

tability during prosecution. Instead, the Court is

requested to make clear that a range of equivalents

should always be available for a claimed element to the

extent that the inventor has not disclaimed the accused

element and the claim remains patentable over the prior

art.

The principle sought by PIPLA is protection of the

full scope of the invention in return for the benefit to the

public of the full disclosure by the inventor to promote

the progress of the arts as envisioned by Article 1, Section

8 of the United States Constitution.

PIPLA maintains that protection of all subject matter

disclosed and not disclaimed is imperative to provide

incentive to obtain patent protection, and thus, disclose

innovative technology. Lesser protection causes the cost

of obtaining and enforcing patents to outweigh the bene-

fit, thereby stifling incentive.

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ARGUMENT

I. Reducing the Scope of Patent Protection Decreases

Incentive to Disclose Inventions.

As this Court has often explained, the goals of the

patent laws, as authorized by Article 1, Section 8 of the

United States Constitution, are to encourage invention

and disclosure. Kewannee Oil Co. v. Bicron Corp., 416 U.S.

470, 480-81, 94 S. Ct. 1879, 1885-86 (1974); Aronson v.

Quick Point Pencil Co., 440 U.S. 257, 262, 99 S. Ct. 1096,

1099 (1979) (“First, patent law seeks to foster and reward

invention; second, it promotes disclosure of inventions, to

stimulate further innovation and to permit the public to

practice the invention once the patent expires. .. . ”). The

patent laws do so by rewarding an inventor with patent

protection of an exclusive monopoly for a limited period

of time. Id. at 480, id. at 1885 (“The patent laws promote

this progress by offering a right of exclusion for a limited

period as an incentive to inventors to risk the often

enormous costs in terms of time, research, and develop-

ment.”). The “doctrine of equivalents” further encourages

invention and disclosure and strengthens patent protec-

tion, by preventing competitors from easily avoiding

infringement:

courts have also recognized that to permit imita-

tion of a patented invention which does not

copy every literal detail would be to convert the

protection of the patent grant into a hollow and

useless thing. Such a limitation would leave

room for — indeed encourage — the unscrupulous

copyist to make unimportant and insubstantial

changes and substitutions in the patent which,

though adding nothing, would be enough to

4

take the copied matter outside the claim, and

hence outside the reach of law. One who seeks

to pirate-an invention, like one who seeks to

pirate a copyrighted book or play, may be

expected to introduce minor variations to con-

ceal and shelter the piracy. Outright and forth-

right duplication is a dull and very rare type of

infringement. To prohibit no other would place

the inventor at the mercy of verbalism and

would be subordinating substance to form. It

would deprive him of the benefit of his inven-

tion and would foster concealment rather than

disclosure of inventions, which is one of the

primary purposes of the patent system.

Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S.

605, 607;-70-S- Ct. 854, 856 (1950). Because practically all

patents are amended during the application process, it is

the view of PIPLA that the complete bar rule adopted in

Festo frustrates these goals by forfeiting all protection

under the doctrine of equivalents whenever applicants

amend their claims.

An inventor weighs the cost of obtaining patent pro-

tection against the benefit a patent provides. The Festo

decision decreases the protection afforded by a patent,

thereby tilting the scales away from obtaining patent

protection, and thus, hindering technical advancement of

the nation.

According to the American Intellectual Property Law

Association (“AIPLA”) Report of Economic Survey 2001,

the median cost of preparing a patent application is

between approximately $8,000 and $10,000. AIPLA Eco-

nomic Survey, 78-79 (2001). Further median costs associ-

ated with the prosecution of the application range

between $1,200 and $2,500 per amendment/argument

and $3,000 to $5,000 for an appeal. Id. at 79-80. In addi-

tion, the cost of enforcing a patent is often prohibitively

high - the median cost of a patent infringement lawsuit

through trial is about $499,000 if $1 million is at risk, and

$2,992,000 if more than $25 million is at risk. Id. at 84-85.

Narrowing patent scope frustrates enforcement of pat-

ents, and consequently reduces incentive to invent and

disclose the invention to the public.

By asserting the principle of full protection in

exchange for public benefits, the Supreme Court can

avoid the anomalous situation where a claim may be

infringed under the doctrine of equivalents if written in

that manner originally, but would not be infringed if by

reason of negotiation between the inventor and the

United States Patent and Trademark Office (“USPTO”),

the same claim was arrived at by amendment. This, in

turn, will preserve the integrity of the United States

patent system, which will continue to provide inventors

with the incentive to invent and protection of their inven-

tions.

II. Amendments Necessitated by the Complexity of Pat-

ent Law and Patented Technology Should not

Diminish a Patentee’s Right to Equivalents.

A flexible bar is imperative to providing patentees

with the rights to the full scope of their inventions dis-

closed to the public, and thus, incentive to obtain patent

protection. Amendments necessitated by the complexity

of patent law and patented technology should not dimin-

ish a patentee’s right to equivalents. “The very nature of

words would make a clear and unambiguous claim a rare

occurrence.” Autogiro Co. of America v. United States, 384

F.2d 391, 396 (Ct. Cl. 1967). The difficulty in claim draft-

ing gives rise to a significant percent of amended claims,

causing the majority of claims not to encompass equiva-

lents based on the complete bar rule provided under

Festo.

Patent claims define the scope of the invention.

Unlike clauses in many other legal documents, claims are

far from boilerplate terms or terms easily modified to fit

specific circumstances. Claims often require significantly

more skill in drafting than typical contract clauses, pri-

marily due to the technical subject matter. This Court

long ago characterized a patent as “one of the most

difficult legal instruments to draw with accuracy.” Topliff

v. Topliff, 145 U.S. 156, 171, 12 S. Ct. 825, 831 (1892). The

Court of Claims has commented on the difficulty of

claiming an invention, stating:

An invention exists most importantly as a tang-

ible structure or a series of drawings. A verbal

portrayal is usually an afterthought written to

satisfy the requirements of patent law. This con-

version of machine to words allows for uninten-

ded idea gaps which cannot be satisfactorily

filled.

Autogiro Co. of America v. United States, 384 F.2d 391, 397

(Ct. Cl. 1967). The doctrine of equivalents equitably

accounts for these recognized limitations of the English

language and the inability of an applicant to predict the

form of equivalent future technology, by providing pat-

entees with protection of the essence of their invention

and not merely what is literally expressed.

Patentees and USPTO examiners strive to draft pat-

ent claims that are clear and unambiguous to provide

notice, an important part of our patent system. Federal

Circuit Judge Newman has written,

Every patent practitioner knows how rare it is to

conclude patent examination with claims that

have not undergone amendment during pros-

ecution, based on tiie examiner’s rejections on

grounds of patentability. It is routine for claims

to be rewritten several times during the give-

and-take of the examination procedure.

Litton Systems, Inc. v. Honeywell, Inc., 145 F.3d 1472, 1479

(Fed. Cir. 1998) (Newman, J., views on the suggestion for

rehearing in banc). Patentees should not be penalized for

amendments made during the give-and-take with the

USPTO in the pursuit of perfection by implementing the

complete bar rule, which lessens patent scope.

III. The Complete Bar Rule is Contrary to a Rational

and Sound Policy to Protect Intellectual Property.

The United States patent system recently underwent

an extensive overhaul by the implementation of the

American Inventors Protection Act of 1999 (“AIPA”). See

Pub. L. No. 106-113, Div. B, Title IV (§§ 4001 to 4808), 113

Stat. 1501, 1501A-552 (1999). The AIPA legislative history

evidences Congress’ intent to maintain America’s posi-

tion as a world leader with respect to technological

advancement by streamlining our patent system and pro-

viding incentive to invent. The Federal Circuit’s holding

in Festo impedes these objectives of the AIPA.

The AIPA legislative history provides that,

The United States is by far the world’s largest

producer of intellectual property, which has

greatly benefited our balance of trade. This suc-

cess is dependent upon a rational and sound

policy of protecting intellectual property by

encouraging the development of new inventions

and processes._

H.R. Rep. No. 106-287(I), 106th Cong., Ist Sess. (Aug. 3,

1999).

The Festo decision discourages development of new

inventions and processes. Festo’s complete bar rule mini-

mizes the application of the doctrine of equivalents in

patent infringement litigation, thereby decreasing the

scope of the patent. The ease with which competitors will

be able to design around patented inventions, when there

is little or no coverage for equivalents, will provide fur-

ther disincentive to inventors from using the patent sys-

tem, which in turn deprives society of the benefits of

innovation. When a simple change in a device or process

will avoid infringement, incentive to develop significant

improvements in technology will be lost. This will dimin-

ish the United States’ position as the world’s largest

producer of intellectual property and will negatively

affect our balance of trade, which is contrary to the

important objectives of the AIPA as expressed by Con-

gress.

It is imperative that the United States provides an

efficient and effective means for obtaining patent protec-

tion to attain these objectives. Congress recognized the

importance of providing timely patent protection to meet

these objectives when it implemented the AIPA. An objec-

tive was to streamline operations at the Patent and Trade-

mark Office. See H.R. Rep. No. 106-287(I), 106th Cong., 1st

Sess. (Aug. 3, 1999). The Federal Circuit’s holding in

Festo, however, will slow down the patent prosecution

process by creating a need to obtain patent protection

without amending claims to avoid loss of protection of

equivalents by prosecution estoppel. Patentees will be

forced into adversary roles against patent examiners to

convince examiners to allow claims without amendments.

Exceedingly more cases will be appealed to avoid claim

amendment. This will greatly increase the time and

expense of patent prosecution for the USPTO and patent

applicants, and will likely deter inventors from disclosing

their inventions to seek patent protection. This may nega-

tively affect the United States’ position as the world’s

largest producer of intellectual property.

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IV. The Scope of Patent Claims Should be Interpreted

Using All Intrinsic Evidence.

A. Prosecution History is Intrinsic Evidence of

Patent Scope.

Under Festo, patent prosecution history becomes

irrelevant in numerous actions involving allegedly

infringed claim elements that were amended during pros-

ecution. The prosecution history, however, is important

intrinsic evidence, and should be weighed to evaluate all

claims of infringement. See Markman v. Westview Instru-

ments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc), aff'd,

517 U.S. 370, 116 S. Ct. 1384 (1996).

“It is well settled that an invention is construed not

only in light of the claims, but also with reference to the

file wrapper or prosecution history in the Patent Office.”

Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 33, 86

S. Ct. 684, 702 (1966). The prosecution history “is often of

critical significance,” because it may be used to determine

the scope and meaning of the claims. Vitronics Corp. v.

Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996).

Prosecution history may provide insight into claim ele-

ment equivalents even when a claim element has been

narrowed for reasons related to patentability. The reasons

for such amendments, which are likely to be provided in

the prosecution history, should be considered to deter-

mine if a range of equivalents is available. Only dis-

claimed parameters should give rise to prosecution

estoppel. This will afford inventors protection for the full

scope of their inventions, and thereby, maintain incentive

to disclose the inventions.

11

Claims are initially drafted to define what the pat-

entee considers to be the scope of the invention. During

prosecution the drafting process continues with claim

scope continually being considered by the applicant and

the patent examiner. The result is a prosecution history

that may clearly evidence what the patentee and Patent

Office view as the claimed invention, including what may

or may not be reasonably included in the scope of equiva-

lents. Claim scope should not be limited when intrinsic

prosecution history evidence is available to shed light on

reasonable equivalents.

B. Evaluating Prosecution History under a Flexible

Bar is not Unworkable.

The Federal Circuit argues that evaluating prosecu-

tion history evidence in numerous circumstances is

unworkable, and defines “workable rules” as rules that

“can be relied upon to produce consistent results and

give rise to a body of law that provides guidance to the

marketplace on how to conduct its affairs.” Festo, 234 F.3d

at 575. The court, however, provides no evidence of

inconsistent results. It is unlikely that inconsistent appli-

cation of the doctrine of equivalents, as occurs with a

complete bar, would produce more consistent results than

a flexible bar that takes into consideration the circum-

stances surrounding amendments to determine the scope

of equivalents. In fact, district courts are finding the Festo

complete bar rule difficult to implement.

For example, the U.S. District Court of the Southern

District of New York, in TM Patents, LLP v. International

Business Machines, 136 F. Supp. 2d 209, 210 (S.D.N.Y.

12

2001), granted IBM’s_motion for summary judgment by

applying the-complete bar rule and finding that allegedly

“clarifying” amendments made in response to a Section

112 rejection were narrowing, and therefore, the doctrine

of equivalents could not be implemented to find infringe-

ment. In applying the complete bar rule, the Court stated:

[T]he Court is faced with one of those convo-

luted questions that bedevil those of us who are

not skilled in the art of patent law ... cana

claim limitation that cannot be infringed by

equivalents (because of Festo) be literally

infringed by the equivalent of a feature defined

in a limitation within the same claim that can be

infringed by equivalents (because it is not sub-

ject to Festo)? I confess that at present I have no

answer to this question. In fact, I can barely

articulate it.

Id. at 223. Furthermore, the U.S. District Court of the

Northern District of California proclaimed, “applying

Festo is not that simple.” See ACLARA Biosciences, Inc. v.

Caliper Technologies Corp., 125 F. Supp. 2d 391, 400 (N.D.

Cal. 2000). Similarly, the U.S. District Court for the Dis-

trict of Delaware stated:

As with all broad pronouncements, the devil is

in the details. In the immediate aftermath of

Festo, district courts (and litigants) are struggling

to interpret its breadth and applicability.

(Emphasis added.)

Creo Products, Inc. v. Presstek, Inc., No. C.A. 99-525-GMS,

2001 WL 637397 at *7 (D. Del. May 11, 2001).

By considering only that an element was narrowed

by amendment for a reason related to patentability, and

13

not considering the total circumstances surrounding the

amendment, which is often contained in the prosecution

history, significant intrinsic evidence is ignored.

V. CONCLUSION

There is already sufficient disincentive to filing pat-

ent applications because of cost. The complete bar rule

adopted in Festo further discourages technical advance-

ment by reducing incentive to invent, invest in and dis-

close new technology.

The Philadelphia Intellectual Property Law Associa-

tion supports a return to the flexible bar which applies

prosecution history estoppel only where claims are

amended for a limited set of reasons, and accordingly,

grants to patentees, protection of the full scope of their

patented inventions.

Respectfully submitted,

Manny D. PoxotiLow* Joan Tart KLuGER

Cassar, Rivise, BERNSTEIN, SCHNADER HARRISON

Cowen & PoxotiLow, Ltp. Seca, & Lewis LLP

Seven Penn Center : 1600 Market Street

1635 Market Street Philadelphia, PA 19103

Philadelphia, PA 19103 215-751-2357

215-567-2010

SALVATORE R. GUERRIERO

Caesar, Rivise, BERNSTEIN,

Conen & Poxotiow, Ltp.

Seven Penn Center

1635 Market Street

Philadelphia, PA 19103

215-567-2010

Counsel for Amicus Curiae

Philadelphia Intellectual Property Law Association

"Counsel of Record