Petition for Writ of Certiorari — CAT Contracting, Inc. v. Insituform Technologies, Inc.

Supreme Court, U.S.

PE FILED

| ‘961464 MAR 1 4 1997,

In Ree oo

Supreme Court of the United States

OCTOBER TERM, 1996

CAT CONTRACTING, INC., MICHIGAN SEWER

CONSTRUCTION, KANAL SANIERUNG HANS

MULLER GmbH & CO. KG, and INLINER U:S.A.,

Petitioners,

VS.

INSITUFORM TECHNOLOGIES, INC., INSITUFORM

(NETHERLANDS) B.V., and INSITUFORM GULF

SOUTH, INC.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

PETITION FOR WRIT OF CERTIORARI

EDWARD W. GOLDSTEIN

Counsel of Record

DOUGLAS H. ELLIOTT

JOHN T. POLASEK

TOBOR & GOLDSTEIN, L.L.P.

1360 Post Oak Blvd., Suite 2300

Houston, Texas 77056

(713) 877-1515

Counsel for Petitioners Cat Contracting, Inc., Michigan

Sewer Construction, Kanal Sanierung Hans Muller GmbH

& Co. KG, and Inliner U.S.A.

March 13, 1997

QUESTIONS PRESENTED

1. Whether the traditional doctrine of amendment estoppel

under Exhibit Supply Co. v. Ace Patents Corp., 315 U.S. 126

(1942), has been eviscerated sub silentio by the doctrine of

so-called “argument estoppel” adopted by the Court of

Appeals for the Federal Circuit, under which a patentee, who

has narrowed his broad claim by amendment to distinguish

prior art, can avoid limiting the range of equivalents by

making “equivocal” statements to the Patent Office.

2. Whether argument estoppel is viable, in view of this

Court’s explicit rejection of argument estoppel in Keystone

Driller Co. v. Northwest Eng. Corp., 294 U.S. 42 (1934).

LIST OF PARTIES

The only parties to this proceeding are the petitioners, CAT

Contracting, Inc., Michigan Sewer Construction, Kanal

Sanierung Hans Muller GmbH & Co. KG, and INLINER,

U.S.A, and the respondents, Insituform Technologies, Inc.,

Insituform (Netherlands) B.V., and Insituform Gulf South,

Inc.

RULE 29.6 LIST

Pursuant to Rule 29.6 of the Rules of this Court, petitioners

state the following:

The parent companies and subsidiaries (except wholly-

owned subsidiaries) of the parties are:

CAT CONTRACTING, INC.

Parent: Inliner Americas, Inc.

MICHIGAN SEWER CONSTRUCTION

KANAL SANIERUNG HANS MUELLER GMBH & CO.

KG

Parent: KMG Kanal-Muller-Gruppe

INLINER, U.S.A.

Parent: Inliner Americas, Inc.

iii

TABLE OF CONTENTS

Page

CUES TIONS PRESEN 1D irs cccescsevvsecessersecerentaccrsnses i

Se PRE CONSE canes tnbiensinssa ensivenssenesaversiousceixasiovsee ii

NG BY MEE ticks stalin dnkekenveiciqvsarsnenteyininummensiereten il

PURE, FAAS G2 ITAL S NISC wvevecsnesccsevnscontnxneniiasasonees Vv

Se EN EERIE OY sceiiskicicestinknnesvctnsiescnetsonsesaninensepiies l

EIT eidhevevicinsincehseiuiesesrissduslavenitecontenntios 2

STATUTORY PROVISIONS INVOLVED.............. 2

EAE OE GFE BEE CASE. ccvesvvcecesseresesscnavsesenne 2

REASONS FOR GRANTING THE PETITION....... 7

I. TRADITIONAL AMENDMENT ESTOPPEL

HAS BEEN EVISCERATED BY ARGUMENT

MT IRS sonst uladinlpnsbechedilcvisesebKiascioweksiasavskieevesesess 9

Il. THIS COURT SHOULD REAFFIRM ITS

REJECTION OF ARGUMENT ESTOPPEL ........ 14

SN NM iobedenitkses vacscdncenelscakmidviasebivccsyeesennsoovens 20

TABLE OF AUTHORITIES

Cases:

A.G. Spalding & Bros. v. John Wanamaker, 256 F.

SE Ee GE SPR a ieitccesintishicdhcdianrnaaontaaiin

Accord Southwall Tech., Inc. v. Cardinal IG Co., 54

FS BOT Cr Oe Ce. TOG OS ci cieskc tienes

Baltzley v. Spengler Loomis Mfg. Co., 262 F. 423

CRC AES FUER Aicks hancrcisdicocniseacoucasseicabewmigbatonse

Barrel Fitting & Seal Corp. of Am. v. American

Flange & Mfg. Co., 74 F.2d 569 (7th Cir. 1935)...

Bassick Co. v. Faultless Caster Corp., 105 F.2d 228

2S Ae 5 |, Facer SIRE Rear AN EDA SOE iy state

Black & Decker Mfg. v. Ever-Ready Appliance, 518

F.Supp. 607 (E.D.Mo. 1981), aff'd 684 F.2d 549

CRATE. SPAR) inst sphaectntecaccbuiiabensisacth eine idapucsicaiacs

Bowser, Inc. v. Richmond Eng'r Co., 166 F.Supp.

68 (E.D.Va. 1958), aff'd. in part, rev'd. in part,

BGG FZ SIS CG a, FR in csivsisacvistarverrecninnioes

Builders Concrete Inc. v. Bremerton Concrete

Products Co., 757 F.2d 255 (Fed. Cir. 1985)........

Catalin Corp. of Am. v. Catalazuli Mfg. Co., 79

F tlk Se Lae Res CPE sch tesiAibicdkancensi sian tianad possi

Coleco Indus., Inc. v. United States Int’l Trade

Comm'n, 573 F.2d 1247 (C.C.P.A. 1978).............

Computing Scale Co. of America v. Automatic Scale

Cs BO Ee OF EI F iictisicecrriivsntvidctiketenss

Denominational Envelope Co. v. Duplex Envelope

Co., 50 F.26 186-(40 Cit, 1933). ccccrsscccsesrsnacovssees

Doran Coffee Roasting Co. v. Wyott Mfg. Co., 267

PS BO CLO SIE: FGIGF ssieretactcinsasntsdccosercitaorseiess

17

vi

Page

Exhibit Supply Co. v. Ace Patents Corp., 315 U.S.

Bb CE PRE), acczirsevvincssincistsassieiadabaseveeniaaeioainein i, 8, 9, 10,

11, 13, 14,17

General Elec. Co. v. P.R. Mallory & Co., 298 F.

SFP CEE Ce, FIG) csescscesccsisaciakanassibinianinaitet 15

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

S59 US, BOS CaF ia ecco icnsviinriiaatesinaibaiune: 8,14

Haynes Int'l y. Jessop Steel Co., 8 F.3d 1573 (Fed.

ORE. FPRS Ds csissicovansssandadivmrvceessencekotoasiakaubiceeeiaaamaiine 19

Hubbell v. United States, 179 U.S. 77 (1900)............ 12

Hughes Aircraft Co. v. United States, 717 F.2d 1351

Fak: CR, BIS Vevcaincricasncorioaninatanaecoisemips nsec 17, 18

[.T.S. Rubber Co. v. Essex Rubber Co., 272 U.S.

GAD CRD IO vciscecissrivectuicinsh ovteh mudcaacanenetmaaas 12

Jonsson v. The Stanley Works, 903 F.2d 812 (Fed.

COME, BSD isvnissaieniscicesantomtbebemaanmeamemanas 18

Katz v. Horni Signal Mfg. Corp., 145 F.2d 961 (2d

Cir. 1944), cert. denied, 324 U.S. 882 (1945)....... 15

Keyes Fibre Co. v. Chaplin Corp., 97 F.Supp. 605

CED.ER: BDI I. .ccvscesvckdeevslanensibantansumiatecuatcenameitie 16

Keystone Driller Co. v. Northwest Eng. Corp., 294

U.S. O2 (SSS). nciciovesnesssssnsieaaniaeamunianas i, 8, 14, 15,

16, 18, 19

Kinzenbaw v. Deere & Co., 741 F.2d 383 (Fed. Cir.

PIPED susicaccsactennsseeoonameniaemncuanie amin air cada 19

Mark I Mktg. Corp. v. R.R. Donnelley & Sons, 66

F.36 des (0G. CW, Fed iisaehacaenk 19

Morgan Envelope Co. v. Albany Perforated

Wrapping Paper Co., 152 U.S. 425 (1894)........... 12

Vii

Page

Prodyne Enterprises, Inc. v. Julie Pomerantz, Inc.,

743 F.26 1561 (Ped. Ciz. 1964) wo. csccccccsccccescesonsecs 19

Quickey Mfg. Co. v. City Prod. Corp., 409 F.2d 876

RE Saas 2 PMID sc hiccniccnecinhasepatavieebasneceuhocedpeabicacmeoed 16

Rambusch Decorating Co. v. A. Ward Henrickson

& Co., 41 F.Supp. 512 (E.D.N.Y. 1941)............... 15

Schriber-Schroth Co. v. Cleveland Trust Co., 311

Se eR Aireniarikedvedavigiasdhcensnsteiiadotsihuebocns\tb 1]

Smith v. Magic City Kennel Club, Inc., 282 U.S.

PA Ey 3 5h BRIER Ry apes ge re rier He or TRE pen 12

Standard Oil Co. v. American Cyanamid Co., 774

ae PP UE, Gls FED recintvisostcacindstcinorseckionsisets 18

Sutter v. Robinson, 119 U.S. 530 (1886) ............00000 12

Texas Instr., Inc. v. United States ITC, 988 F.2d

SR Res CME SFE Pecutdlbnrssesecdccucaeoed tveivabvebssenacsans 19

Townsend Eng’g Co. v. Hitec Co., Ltd., 829 F.2d

SEE: TLS. PEE TA icarchobsnctica vseiasawemscobocniedunsiss 18

Warner-Jenkinson Co. v. Hilton Davis Chemical

Co., 1997 U.S. Lexis 1476, US.

fg 1 WEA AB TERRE RAE epi op, See Ia TO 7, 8, 10, 13, 14

Weber Elec. Co. v. E.H. Freeman Elec. Co., 256

eI MN RAP cd busch c eden sav ecntcesaanieoneuven 12

Wiegand v. W. Bingham Co., 106 F.2d 546 (6th Cir.

1939), cert. denied, 308 U.S. 60 (1940) ................ 16

Statutes:

tack, REP vesignssinls Attach thinodseubenniateickancioineraciond 2

Fe aes TERT Aches co ca cea piatenavntainkcpclaseosabsaebtasoninte 2

vill

Page

FO USE. STE ain cttsitintntntcheiienmarneunnatinee 2

BI OT, © TGS wine sscsvascrssscatedpnasesetieveaeossqbaaveaonenicetinges 3

Rules:

BAP, COG Bex Fa tasscrsincesepenyinancctssonbocuncieodupbaiotinniocts 2

No.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1996

CAT CONTRACTING, INC., MICHIGAN SEWER CON-

STRUCTION, KANAL SANIERUNG HANS MULLER

GmbH & CO. KG, and INLINER U.S.A.,

Petitioners,

vs.

INSITUFORM TECHNOLOGIES, INC., INSITUFORM

(NETHERLANDS) B.V., and INSITUFORM GULF

SOUTH, INC.,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Petitioners CAT Contracting, Inc., Michigan Sewer Con-

struction, Kanal Sanierung Hans Muller GmbH & Co. KGT,

and Inliner U.S.A. respectfully petition for a writ of certiorari

to review the judgment of the United States Court of Appeals

for the Federal Circuit.

OPINIONS BELOW

The opinion of the court of appeals, styled /nsituform

Technologies, Inc. vy. CAT Contracting, Inc., is published at

99 F.3d 1098 (Fed. Cir. 1996), and was entered on November

5, 1996. A copy of the opinion is reproduced at Appendix A.

A copy of the opinion of the district court, which is unpub-

lished, is reproduced as Appendix B.

JURISDICTION

The opinion and judgment of the United States Court of

Appeals for the Federal Circuit was entered on November 5,

1996. On December 13, 1996, the petition for rehearing and

suggestion for rehearing en banc were denied. A copy of the

court's order denying rehearing is reproduced at App. A-46.

This petition is filed within ninety (90) days of the denial of

the petition for rehearing. SUP. CT. R. 134. This Court has

jurisdiction under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

No statutory provisions are involved.

STATEMENT OF THE CASE

This is a patent infringement action in which the United

States District Court for the Southern District of Texas had

jurisdiction pursuant to 28 U.S.C. §§ 1338(a) and 2201.

In this case, the patent owner attempted to secure a patent

with broad claims defining his invention. The Patent Office

rejected those broad claims as unpatentable in view of the

prior art. The patent owner acquiesced to the rejection, can-

celed the broad claims and submitted a set of narrower claims,

which became part of the issued patent. Later, in a patent in-

fringement action, the patent owner alleged infringement un-

der the doctrine of equivalents and asserted a scope of

equivalents that included subject matter covered by the broad-

est of the original claims but not by the broadest of the nar-

rower allowed claims of the issued patent. Instead of

following traditional amendment estoppel principles of this

Court, both the district court and the Federal Circuit followed

an “argument estoppel” analysis, using the statements and

remarks of the patent attorney, to conclude that there was no

estoppel that prevented the doctrine of equivalents from cov-

ering petitioners’ processes. The standard of prosecution his-

tory estoppel that has been adopted by the Federal Circuit in

this case and others is directly contrary to the precedent of

this Court. It demolishes the most important limit on the doc-

trine of equivalents and provides patentees with a blueprint

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for avoiding the surrender of any coverage under the doctrine

of equivalents.

The patent in suit is U.S. Patent No. 4,336,012 (the ‘012

patent), which covers a method for impregnating (or soaking)

an absorbent flexible tube or liner with curable resin. The pat-

ent discloses and claims an impregnation method that uses a

single “vacuum cup” to draw a vacuum from inside the elon-

gated tube. As set forth in Claim 1, the broadest claim and the

only one alleged to be infringed, the liquid resin is introduced

to one end of the liner. As the resin slowly moves along the

inside of the tube, from one end to the other, a small

“window” is formed in the tube. and the vacuum cup is placed

over the window to draw air from the tube. When the moving

resin reaches the window, the cup is removed and the window

is sealed. When the cup is removed, the vacuum is inter-

rupted. Then, another window is formed downstream of the

moving resin, the cup applied over that window to again draw

vacuum, and the same steps are followed, until the entire tube

is soaked with resin. App. A-10-11.

The application leading to the ‘012 patent was filed in Feb-

ruary 1981. The original claims were broadly drafted. The

broadest claim (which was the only independent claim) was

not limited to the manner in which the vacuum was applied.

App. A-8-9. The examiner rejected all the claims in light of

the only prior art reference cited, an earlier patent granted to

Everson, U.S. Patent No. 4,182,262 (“Everson”), stating that

“{c]laims 1-6 are rejected under 35 U.S.C. § 103 as unpatent-

able over Everson et al. The claimed process does not appear

to differ in any unobvious respect from that of the reference.”

App. A-9-10. In response, the patent attorney canceled all the

original claims and submitted three new claims that became

claims 1-3 of the issued patent. All the claims required the use

of a single cup in a discontinuous or interrupted vacuum ap-

plication process. App. A-14-15.

Petitioners used two impregnation methods. Both were ac-

cused of infringing claim 1 of the ‘012 patent under the doc-

trine of equivalents. The first method was a multiple-cup

ee bid. gaitthien

continuous vacuum impregnation process (“Process |” or the

“Multiple Cup Process”). In that process, from four to six

cups were used to draw a vacuum from a corresponding num-

ber of slits in the tube. When the cup closest to the advancing

resin was removed, and the slit beneath it sealed, the remain-

ing cups would continue to draw a vacuum in the tube. The

second method (“Process 2” or the “Multiple Needle Proc-

ess”) was a new method designed by the petitioners after the

lawsuit began in an effort to move yet further away from the

patent claims. In Process 2, the multiple cups of Process |

were replaced by multiple metal tubes. The metal tubes,

known as needles, were inserted through the layers of the

tube, rather than merely placed over holes in the wall of the

tube, causing them to be anchored in the tube. App. A-1 1-12.

The district court agreed that there was no literal infringe-

ment, but held that both Process | and Process 2 infringed the

‘012 patent under the doctrine of equivalents. App. A-44. The

district court held that “the doctrine of prosecution history

estoppel is not available to Defendants.” App. A-44

(emphasis added). Accordingly, the district court did not limit

the scope of equivalents so as to prevent a finding of in-

fringement. Petitioners appealed. In November 1996, the Fed-

eral Circuit rendered its decision.

The Federal Circuit affirmed the finding of no literal in-

fringement, but found the district court had erred in constru-

ing the claims, and concluded the claims were restricted to a

single cup discontinuous vacuum process. A-16. The Federal

Circuit affirmed the district court’s decision on prosecution

history estoppel. The Federal Circuit flatly rejected petition-

ers’ contention that “classical prosecution history estoppel”

prevented a finding of infringement under the doctrine of

equivalents, even though claim coverage had been surren-

dered in the Patent Office for the purpose of avoiding prior

art. App. A-17-18.

The Federal Circuit explained that its “objective” standard

for determining what subject matter was surrendered

“depend[ed] on “what a competitor, reading the prosecution

sii _

history, would reasonably conclude was given up by the ap-

plicant.” However, the court never identified any estoppel

based on the amendments, or even on the words in the claims.

The court used the statements and remarks made by the appli-

cant’s patent attorney to the Patent Office. The court analyzed

the “problems” of the prior art that were supposedly solved by

the invention. However, those aspects of the invention were

never included in the claims themselves, either expressly or

implicitly. For example, the Court’s discussion centered on

the length of the tube being impregnated, the size of the suc-

tion compressor, the distance of the vacuum from the resin

source, the sizes and locations of the vacuum sources--

features that were reflected nowhere in the claims. These be-

came the foundation for the court’s “objective” estoppel

analysis. The court went so far as to state that “the only ex-

press limitation put on the invention by Insituform was the

use of a vacuum source close to the resin,” even though the

closeness of the vacuum source to the resin was never part of

the claim language. The court’s analysis was as follows:

However, in its statement to the PTO, Insituform

specifically noted that the problem with [the prior

art] was that “[the prior art] method is ineffective

when dealing with long lengths of tube because that

method requires an exceedingly large suction com-

pressor.” The need for an exceedingly large suction

compressor occurred because the [prior art] suction

compressor was located at the far end of the tubing.

Insituform solved this problem by placing the suc-

tion source closer to the resin front, thus allowing

the use of a smaller suction compressor. Thus, Insi-

tuform unequivocally gave up coverage to a process

3 in which a single vacuum source is located at the far

end of the tube.

It is true that, in explaining its amendments, Insi-

tuform discussed the use of a single vacuum source

which was to be moved along the tube as the resin

front advanced. This suggests that Insituform envi-

sioned the use of a discontinuous vacuum created

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sequentially by only one vacuum source. However,

this statement alone is too equivocal to be read as a

statement which would estop Insituform from

equivalently covering a number of small compres-

sors spread along the tube creating a continuous

vacuum. The prosecution history makes clear that

the problem to be solved was the need for a large

compressor when the vacuum was created a signifi-

cant distance from the resin source. The use of one

vacuum source repeatedly moved down the tube as

the resin advances and the use of a number of vac-

uum sources spread along the tube so that one is al-

ways near the advancing resin both solve the

problem presented by [the prior art] by placing the

vacuum source close to the resin, thereby allowing

the use of a smaller vacuum source.

Although a patentee ’s “unmistakable assertions”

to the PTO in support of patentability will estop the

patentee from obtaining coverage over surrendered

material, here, however, it cannot be said that a

reasonable competitor could conclude that Insi-

tuform relinquished coverage of processes using

either multiple vacuum sources or a continuous

vacuum. At no point did Insituform indicate that the

[the prior art] problem could be solved only in the

manner used by Insituform, i.e., Insituform never

stated that the problem could not be soived by using

more than one vacuum source or a continuous vac-

uum. Rather, the only express limitation put on the

invention by Insituform was the use of a vacuum

source close to the resin. Thus, in light of the

equivocal nature of Insituform’s statements, no rea-

sonable competitor could conclude that Insituform

gave up coverage of continuous vacuum created by

one or more vacuum sources. We therefore con-

clude that the prosecution history does not estop

Insituform from asserting that the right to exclude

extends broadly enough to cover either Process I or

Process 2.

See Ee EN EO EE

App. A-17-20. (emphasis added, citations omitted)

The Federal Circuit remanded the case to the district court

for new findings and conclusions on the doctrine of equiva-

lents. A-21. At the time of this petition, without considering

any additional evidence, the district court had concluded that

petitioners infringed under the doctrine of equivalents. Trial

on damages, which had been bifurcated, is scheduled for June

1997.

REASONS FOR GRANTING THE PETITION

This case raises two fundamental questions about the doc-

trine of prosecution history estoppel (“file wrapper estoppel”)

that were not addressed by this Court in Warner-Jenkinson

Co. v. Hilton Davis Chemical Co., 1997 U.S. Lexis 1476, —__

U.S. __ (1997). Both questions relate to the inherent conflict

between two types of prosecution history estoppel, namely,

traditional “amendment estoppel,” based on amendments to

the claims, and “argument estoppel,”based on arguments,

statements and remarks by a patent attorney during prosecu-

tion of a patent in the Patent Office. Resolving these questions

would provide a corollary to this Court’s decision in Hilton

Davis, which addressed amendment estoppel but not argu-

ment estoppel.

The first question is whether amendment estoppel has been

eviscerated sub silentio by the Federal Circuit, through invo-

cation of argument estoppel. As sharply illustrated in the pre-

sent case, petitioners contend that amendment estoppel has

been wiped out by argument estoppel. Under argument estop-

pel, amendments do not create estoppel or limit the range of

equivalents. Nor do “equivocal” statements. Only

“unequivocal” statements by the patentee regarding what has

been surrendered or relinquished create estoppel. Petitioners

contend that this places far too much power into the hands of

patentees, giving them a virtual “blueprint” for avoiding

prosecution history estoppel entirely. By amending the

claims, but minimizing or avoiding statements and remarks to

the Patent Office, a patentee can avoid significant limits on

the scope of equivalents. Petitioners submit that this

“blueprint” annihilates amendment estoppel and dangerously

erodes the limits that have been placed on the doctrine of

equivalents for over 100 years.

The second question is whether argument estoppel is even

viable, in view of this Court’s explicit rejection of argument

estoppel in Keystone Driller Co. v. Northwest Eng. Corp., 294

U.S. 42 (1934), where the Court squarely held that a pat-

entee’s statements do not have “the force of an estoppel.”

Petitioners contend that, in spite of that holding, argument

estoppel has nevertheless become an integral part of Federal

Circuit jurisprudence. In Hilton Davis, the Court cited Key-

stone Driller with approval, but did not address whether Key-

stone Driller still stood for this Court’s rejection of argument

estoppel. Petitioners submit that a resolution of that issue is

critical, particularly in view of Hilton Davis.

In a nutshell, petitioners are requesting that this Court clar-

ify the contours of prosecution history estoppel. On the one

hand, petitioners are asking that this Court restate and revital-

ize its traditional amendment estoppel standard, set forth in

Exhibit Supply over fifty years ago but eclipsed by argument

estoppel. On the other hand, petitioners are asking this Court

to reemphasize its rejection of argument estoppel, as set forth

in Keystone Driller. Following the traditional amendment es-

toppel standard would provide much-needed clarity and pre-

dictability in patent law. Consistent with Hilton Davis,

estoppel would arise only by virtue of an amendment, al-

though not all amendments would create estoppel. An

amendment added in the Patent Office by a patentee to distin-

guish an invention from prior art would create an estoppel

only to the extent it prevents the patentee from ignoring that

limitation under the doctrine of equivalents in later litigation.

However, as to limitations in the original claims, the scope of

equivalents would be untouched. The standard would not be

inconsistent with either Hilton Davis or Graver Tank & Mfg.

Co. v. Linde Air Prod. Co., 339 U.S. 605 (1950), in that pat-

entees would not be at the mercy of unsparing verbalism.

However, the standard would preserve the notice function of

patent claims, and competitors would be able to more reliably

determine a patent’s outer boundaries. Furthermore, placing

greater weight on amendments would reinforce the policy that

patent claims should be carefully drafted and amended in the

quest of defining the outer boundaries of a patent.

I. TRADITIONAL AMENDMENT ESTOPPEL HAS

BEEN EVISCERATED BY ARGUMENT ESTOP-

PEL

A. The Federal Circuit’s Argument Estoppel Stan-

dard Ignores Claim Amendments and Provides

Patentees With a Blueprint for Avoiding Limits on

the Doctrine of Equivalents

This Court’s well-established rule on prosecution history

estoppel, set forth in Exhibit Supply, has been eviscerated sub

silentio by the Federal Circuit. This is well illustrated in the

present case, where the Federal Circuit did not measure the

estoppel in terms of the amendments, or even the words in the

claims. Rather, the court used only the statements and re-

marks made by the applicant’s patent attorney to the Patent

Office. The court analyzed the “problems” of the prior art that

were supposedly solved by aspects of the “invention.” How-

ever, those aspects of the “invention” were never included in

the claims themselves, either expressly or implicitly. For ex-

ample, the estoppel analysis focused on the length of the tube

being impregnated, the size of the suction compressor, the

distance of the vacuum from the resin source, and the sizes

and locations of the vacuum sources. Even though those

“features” were reflected nowhere in the claims, they became

the very foundation for the court’s “objective” estoppel

analysis. The court went so far as to state that “the only ex-

press limitation put on the invention by Insituform was the

use of a vacuum source close to the resin,” even though that

was never part of the claim language. A-20.

The /nsituform case thus reveals two striking features of

argument estoppel. First, argument estoppel removes ail con-

sequences from the amending of claims. The claim language

is irrelevant, and amendments have no disclaimer effect. The

words in the claims, carefully selected by the patentee and

10

agreed upon by the Patent Examiner as the “metes and

bounds” of the protected invention, have lost all legal effect

insofar as the doctrine of equivalents is concerned.

Second, only “unequivocal” remarks and arguments of the

patentee can create estoppel. Any statements that are not

“unequivocal” have no estoppel effect, and any doubts as to

what the patentee “gave up” are resolved in favor of the pat-

entee. Herein lies the “blueprint” for avoiding estoppel. Even

a patentee who has amended his claims during prosecution,

narrowing them to avoid prior art and satisfy the patent exam-

iner, can still retain the same broad scope of equivalents as

though he made no amendment at all. He or she merely needs

to follow the “blueprint” and be clever enough to minimize or

avoid remarks to the Patent and Trademark Office. Provided

no statements that qualifv as “unequivocal” surrender of cov-

erage are made, no estoppel exists to limit equivalents. The

result is an unpredictable limit, if any, on the doctrine of

equivalents. Consequently, a competitor in the marketplace,

who does not literally infringe a patent, but who has been ac-

cused of infringement under the doctrine of equivalents, will

never know until the final appeal whether he has infringed the

patent. Avoiding infringement has become a game of chance.

B. This Court Has Recognized Only Amendment Es-

toppel

The only form of estoppel ever endorsed by this Court is

amendment estoppel. In Hilton Davis, this Court affirmed the

viability of prosecution history estoppel. Hilton Davis, 1997

U.S. Lexis at *40. However, in Hilton Davis, argument estop-

pel was not an issue. There, both parties had agreed that some

estoppel was created by the amendments to the claims. The

only question was whether a particular amendment created an

estoppel so as to preclude infringement under the doctrine of

equivalents.

Before Hilton Davis, this Court had last addressed the doc-

trine of prosecution history estoppel over 50 years ago, in

Exhibit Supply. In that case, the Court likewise defined the

estoppel in terms of the amendments, not the arguments. The

11

patent covered an early version of the pinball machine, having

electrical contact switches. In the original patent application,

the claims provided for a “conductor means carried by the ta-

ble.” Exhibit Supply, 315 U.S. at 136. After the Patent Office

examiner rejected these claims as being overly broad in view

of prior art, the patentee amended his claims, by replacing the

phrase “carried by the table” with the phrase “embedded in

the table.” Jd. After this amendment, the patent issued. Later,

when suing for infringement, the patentee relied on the doc-

trine of equivalents. Although the original broad claims would

have been literally infringed, the narrower amended claims

were not. The defendant’s devices contained a nail or pin,

which was “carried by the table,” but was not “embedded in

the table.” The Court held that infringement by equivalents

was barred by amendment estoppel. The Court reasoned: “By

striking that phrase {carried by the table] from the claim and

substituting for it ‘embedded in the table’ the applicant re-

stricted his claim to those combinations in which the conduc-

tor means, though carried on the table, is also embedded in

it.” Jd. (Emphasis added.) This Court also held: “By the

amendment, [the patentee] recognized and emphasized the

difference between the two phrases and proclaimed his aban-

donment of all that is embraced in that difference.” Id. The

Court stated the principle that “recourse may not be had to

[the doctrine of equivalents] to recapture claims which the

patentee has surrendered by amendment.” /d. The Court ex-

plained that “what the patentee, by strict construction of the

claim, has disclaimed...cannot now be regained by recourse to

the doctrine of equivalents, which at most operates, by liberal

construction, to secure to the inventor the full benefits, not

disclaimed, of the claims allowed.” Jd. In Exhibit Supply, it

was the amendment that created the estoppel, nor the prior art

or the arguments or remarks made to the Patent Office.

Before Exhibit Supply, this Court had consistently recog-

nized the limiting effects of amendments on the doctrine of

equivalents. E.g., Schriber-Schroth Co. v. Cleveland Trust

Co., 311 U.S. 211, 221 (1940) (“the patentee may not, by re-

sort to the doctrine of equivalents, give to an allowed claim a

scope which it might have had without the amendments, the

12

cancellation of which amounts to a disclaimer’); Smith v.

Magic City Kennel Club, Inc., 982 U.S. 784, 789 (1931)

(“where a patentee has narrowed his claim, in order to escape

rejection, he may not ‘by resort to the doctrine of equivalents’

give to the claim the larger scope which it might have had

without the amendments which amount to disclaimer’); LT.S.

Rubber Co. v. Essex Rubber Co., 272 U.S. 429, 440, 444

(1926) (“where an applicant whose claim is rejected on refer-

ence to a prior patent, without objection or appeal, voluntarily

restricts himself by an amendment of his claim to a specific

structure, having thus narrowed his claim in order to obtain a

patent, he ‘may not by construction, oF by resort to the doc-

trine of equivalents, give to the claim the larger scope which it

might have had without the amendments which amount to a

disclaimer”); Weber Elec. Co. v. E.H. Freeman Elec. Co.,

256 U.S. 668, 677-78 (1921) (“having thus narrowed his

claim...in order to obtain a patent, the patentee may not by

construction, or by resort to the doctrine of equivalents, give

to the claim the larger scope which it might have had without

ing Scale Co. of America V. Automatic Scale Co., 204 USS.

609, 618-20 (1907) (original claims rejected based on lack of

invention over prior patents); Hubbell v. United States, 179

U.S. 77, 83 (1900) (patentee estopped from excluding a claim

element where element was added to overcome objections

based on lack of novelty over prior patents); Morgan Enve-

lope Co. V. Albany Perforated Wrapping Paper Co., 152 U.S.

425, 429 (1894) (“[the] patentee, having once presented his

claim in that form, and the Patent Office having rejected it,

and he having acquiesced in such rejection [by amending his

claim], he 1s...n0W estopped to claim the benefit of his re-

jected claim or such a construction of his amended claim as

would be equivalent thereto.” ); Sutter v. Robinson, 119 U.S.

530, 541 (1886) (estoppel applied where, during patent prose-

cution, the applicant “was expressly required to state that [the

device’s] structural plan was old and not of his invention’).

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13

C. Amendment Estoppel Is Predictable and Fair

Petitioners are merely asking this Court to confirm its tra-

ditional amendment estoppel standard, set forth over fifty

years ago in Exhibit Supply. Petitioners contend that

amendment estoppel is both predictable and fair. Predictable

because, where a claim is amended in the Patent Office, by

adding a limitation, thus narrowing the claim and avoiding

conflict with the prior art, that amendment has predictable

consequences. Quite simply, it cannot be ignored by the pat-

entee when infringement is being asserted under the doctrine

of equivalents. If that added limitation is not present in the

product or process being accused of infringement, then there

can be no infringement under the doctrine of equivalents. This

gives competitors a rational basis for designing around a pat-

ent claim. On the other hand, if the added limitation is present

in the accused product or process, then the patentee is free to

argue infringement expansively under the doctrine of equiva-

lents. Thus, it is the amendment that identifies precisely what

can and cannot be expanded under the doctrine of equiva-

lents. Amendment estoppel is also fair, because the limit cn

the doctrine of equivalents, i.e., the added limitation, is added

voluntarily as part of the negotiation between the patentee and

the Patent Office. Moreover, because the added limitation

emphasizes what is “new” in the invention, it is therefore

critical and should not be discarded when determining

whether an accused infringer has “pirated” the invention. If

the alleged “pirate” has not at least taken what is “new,” then

how in all fairness can he be said to infringe?

The Exhibit Supply standard still works, and would supply

much-needed clarity and predictability to the limits on the

doctrine of equivalents. That standard urged by petitioners is

that any limitation added to a claim by a patentee in the Patent

Office to distinguish an invention from prior art creates an

estoppel to the extent it prevents the patentee from ignoring

that limitation under the doctrine of equivalents in later liti-

gation. As to limitations in the original claims, i.e., those that

were not added by amendment, the scope of equivalents

would be untouched. Such a standard, reflected in both Hilton

it

Davis and Exhibit Supply, would also be consistent with the

policies in Graver Tank. Patentees would not be at the mercy

of unsparing verbalism, but at the same time, patent claims

would provide their notice function, and competitors would

be able to more reliably determine a paient’s outer bounda-

ries. Events in the Patent Office would have consequences

that would be foreseeable and fair. Placing a greater weight on

amendments would reinforce the policy that patent claims

should be carefully drafted and amended in the quest of defin-

ing what is both patentable and protectable.

Il. THIS COURT SHOULD REAFFIRM ITS REJEC-

TION OF ARGUMENT ESTOPPEL

A. This Court Has Unequivocally Rejected Argument

Estoppel

Argument estoppel has never been part of this Court’s ju-

risprudence. In Hilton Davis, this Court cited Keystone

Driller as support for the viability of amendment estoppel.

See Hilton Davis at *24 (prosecution history estoppel has

historically been “tied to amendments ...”). However, what

the Court did not say in Hilton-Davis was that Keystone

Driller also stands for this Court’s unequivocal rejection of

argument estoppel, where the Court said:

We do not attribute the force of an estoppel to

what was said by the claimant in seeking to avoid

the prior art cited against his broad claims, but we

do apply the principle that where such broad claims

are denied and a narrower substituted, the patentee

is estopped to read the granted claim as the equiva-

lent of those which were rejected.

Keystone Driller 294 U.S. at 48 (emphasis added). The Court

proceeded to apply traditional amendment estoppel to find no

infringement under the doctrine of equivalents.

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B. Even After Keystone Driller, the Circuit Courts

Have Been Split Over Argument Estoppel

In spite of Keystone Driller, the circuit courts have re-

mained split on the issue of argument estoppel, i.e., whether

arguments and remarks made to the Patent Office during

prosecution of the patent application could limit the doctrine

of equivalents. Argument estoppel had been rejected by the

Second, Fourth and Seventh Circuits, but it had been adopted

by the Sixth and Eighth Circuits and by the predecessor to the

Court of Appeals for the Federal Circuit, i.e., the Court of

Customs and Patent Appeals. (However, it is perhaps signifi-

cant that the debate was always over whether argument estop-

pel could be used as an additional grounds for limiting the

scope of equivalents, not whether argument estoppel would

supersede and replace amendment estoppel.)

Before Keystone Driller, beginning as early as 1919, the

Second Circuit had rejected argument estoppel. Baltzley v.

Spengler Loomis Mfg. Co., 262 F. 423, 426 (2d Cir.

1919)(“the only purpose for which the file wrapper can be

examined is to ascertain whether estoppel has arisen through

rejected claims”); A.G. Spalding & Bros. v. John Wanamaker,

256 F. 530, 533 (2d Cir. 1919)(“we do not look at the argu-

ments of the applicant to the examiner...”); see General Elec.

Co. v. P.R. Mallory & Co., 298 F. 579, 586 (2d Cir.

1924)(“The offer of various parts of the file wrapper of the

patent at bar, consisting of attorney’s arguments, statements,

or deductions, was flatly opposed to the rule so often stated in

this circuit’).

After Keystone Driller, the Second Circuit continued to

reject argument estoppel. See, e.g., Katz v. Horni Signal Mfe.

Corp., 145 F.2d 961, 963 (2d Cir. 1944), cert. denied, 324

U.S. 882 (1945); Rambusch Decorating Co. v. A. Ward Hen-

rickson & Co., 41 F.Supp. 512, 515 (E.D.N.Y. 1941)(“in this

Circuit neither party may depend on arguments between the

Patent Office and Patent Solicitor”). According to none other

than Judge Learned Hand, “We have often stated that we

would not look at arguments used by solicitors to the

16

examiners.” Catalin Corp. of Am. v. Catalazuli Mfg. Co., 79

F.2d 593, 594 (2d Cir. 1935).

Several other circuits followed Keystone Driller and the

Second Circuit, including, for example, the First, Fourth and

Seventh Circuits. See, e.g., Bassick Co. v. Faultless Caster

Corp., 105 F.2d 228, 231 (7th Cir. 1939)(“the terms of a

claim should not be limited or extended by mere extraneous

remarks of the applicant in argument without an actual

amendment of the claim to that effect’); Barrel Fitting & Seal

Corp. of Am. v. American Flange & Mfg. Co., 74 F.2d 569,

571 (7th Cir. 1935)(“distinctions are made and limitations are

sometimes placed on language of claims by applicant’s coun-

sel which are somewhat inaccurate or made to meet a precise

prior art citation, and without much thought as to their effect

on other structures designed to avoid infringement”); De-

nominational Envelope Co. v. Duplex Envelope Co., 80 F.2d

186, 192-93 (4th Cir. 1935)(“the statement of the solicitor in

the course of the Patent Office proceeding...may not be car-

ried into the claims allowed”); Bowser, Inc. v. Richmond

Eng’r Co., 166 F.Supp. 68, 76 (E.D.Va. 1958), aff'd. in part,

rev'd. in part, 264 F.2d 595 (4th Cir. 1959)(“Mere arguments

of a patent solicitor before the Patent Office do not constitute

file wrapper estoppel especially where such arguments are

based upon limitations not carried into the claims”); Keyes

Fibre Co. v. Chaplin Corp., 97 F.Supp. 605, 613 (D.Me.

1951)(“The law is clear that this Circuit cannot look to the

arguments of counsel to the Patent Office to establish estoppel

of the patentee as to the scope of allowed claims”).

However, the Sixth, Eighth and Tenth Circuits followed a

contrary view, even after Keystone Driller. They ruled that

arguments made to the Patent Office could constitute a sepa-

rate basis for estoppel, even without a corresponding amend-

ment. E.g., Quickey Mfg. Co. v. City Prod. Corp., 409 F.2d

876 (6th Cir. 1969); Wiegand v. W. Bingham Co., 106 F.2d

546, 548 (6th Cir. 1939), cert. denied, 308 U.S. 60

(1940)(“where in the difficult art of claim draftsmanship

terms employed in effort to avoid prior art are susceptible of

construction transcending the clear limits of the inventive

epider

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17

concept, there should be no more reluctance to search for

precise meaning than in a private contract”); Black & Decker

Mfg. v. Ever-Ready Appliance, 518 F.Supp. 607, 615

(E.D.Mo. 1981), aff'd 684 F.2d 549 (8th Cir. 1982)(“File

wrapper estoppel applies equally to arguments before the pat-

ent office as to actual amendments of claims.”); Doran Coffee

Roasting Co. v. Wyott Mfg. Co., 267 F.2d 200 (10th Cir.

1959).

This Court has never addressed the conflict among the cir-

cuits over the issue of argument estoppel.

C. Adoption and Expansion of Argument Estoppel by

the Federal Circuit

Argument estoppel was also adopted and then expanded by

the Federal Circuit. The first time the Federal Circuit ad-

dressed argument estoppel was shortly after the court’s crea-

tion in 1982, in Hughes Aircraft Co. v. United States, 717

F.2d 1351 (Fed. Cir. 1983). There, the court stated the rule

that estoppel applies to “all arguments submitted to obtain the

patent.” Jd. at 1362. It cited a decision from its predecessor

court, the Court of Customs and Patent Appeals. Coleco In-

dus., Inc. v. United States Int’l Trade Comm'n, 573 F.2d 1247

(C.C.P.A. 1978). In Coleco, the CCPA held that the patentee

was estopped from covering the accused products (swimming

pools) using the doctrine of equivalents. Jd. at 1258. The

CCPA said:

We are in the position of enunciating a rule broader

than the traditional “file wrapper” doctrine. A pat-

entee having argued a narrow construction for his

claims before the United States Patent and Trade-

mark Office (PTO) should be precluded from argu-

ing a broader construction for the purposes of

infringement.

Id. at 1257 (emphasis in original). In Coleco, the court admit-

ted that Exhibit Supply applied estoppel “to amendments

only.” /d. The court also proclaimed that what it referred to as

“estoppel by admission” was a new concept that represented

18

an extension of the traditional estoppel doctrine espoused by

this Court. In justifying that extension, the court said:

There is no practical reason to restrict this estoppel

theory to the doctrine of file wrapper estoppel as

applied by the traditional view. ... We find no rea-

son not to extend the traditional estoppel doctrine

beyond estoppel by amendment to estoppel by ad-

mission.

Id. at 1258.

The Federal Circuit later sidestepped a direct conflict with

Keystone Driller in Builders Concrete Inc. v. Bremerton Con-

crete Products Co., 757 F.2d 255 (Fed. Cir. 1985). There the

patentee had cited Keystone Driller for the proposition that

“file wrapper estoppel cannot arise without an amendment.”

Id. at 258. But the Federal Circuit applied principles of tradi-

tional amendment estoppel, holding that prosecution history

estoppel limited equivalents in one claim as a result of a

limitation added to another claim. “To hold otherwise would

be to exalt form over substance and distort the logic of this

jurisprudence, which serves as an effective and useful guide

to the understanding of patent claims.” /d. at 260.

However, subsequent decisions by the Federal Circuit fol-

lowed the rule set forth in Hughes without ever discussing the

inherent conflict between Hughes and Keystone Driller. E.g.,

Jonsson v. The Stanley Works, 903 F.2d 812 (Fed. Cir. 1990);

Townsend Eng'g Co. v. Hitec Co., Ltd., 829 F.2d 1086, 1090

(Fed. Cir. 1987)(“Prosecution history estoppel applies both

‘to claim amendments to overcome rejections based on prior

art, and to arguments submitted to obtain the patent’”); see

Standard Oil Co. v. American Cyanamid Co., 774 F.2d 448,

452-53 (Fed. Cir. 1985) (no infringement where patentee ex-

pressly represented that certain ingredient was outside scope

of claims).

Recently, the Federal Circuit has vigorously expanded the

scope of argument estoppel. Now, even arguments that were

not made to overcome a prior art rejection can create estoppel.

19

In Texas Instr., Inc. v. United States ITC, 988 F.2d 1165,

1174 (Fed. Cir. 1993), the court held that “[u]nmistakable as-

sertions made by the applicant ... in support of patentability,

whether or not required to secure the allowance of a claim,

also may operate to preclude the patentee from asserting

equivalency ....” Accord Southwall Tech., Inc. v. Cardinal IG

Co., 54 F.3d 1570, 1580-81 (Fed. Cir. 1995) (“clear assertions

made during prosecution in support of patentability, whether

or not actually required to secure allowance of the claims”

could also create estoppel). In Haynes, the Federal Circuit

listed various actions taken during prosecution that could

create estoppel, including arguments submitted to obtain the

patent, statements contained in disclosure documents submit-

ted to the PTO, representations made during prosecution of

the patent, remarks made regarding prosecution of a claim not

in suit, and statements made after an examiner indicated

claims were allowable. Haynes Int'l v. Jessop Steel Co., 8

F.3d 1573, 1578-79 (Fed. Cir. 1993).

The Federal Circuit has described its standard for determin-

ing the scope of estoppel, i.e., the limits on the doctrine of

equivalents, as “objective and depends on what a competitor,

reading the prosecution history, would reasonably conclude

was given up by the applicant.” E.g., Mark I Mktg. Corp. v.

R.R. Donnelley & Sons, 66 F.3d 285, 291 (Fed. Cir. 1995).

That language originated in Kinzenbaw v. Deere & Co., 741

F.2d 383 (Fed. Cir. 1984) and later in Prodyne Enterprises,

Inc. v. Julie Pomerantz, Inc., 743 F.2d 1581, 1583 (Fed. Cir.

1984). It became established as the applicable rule for deter-

mining the scope of estoppel in Haynes, 8 F.3d at 1578-79.

Since Haynes, the standard above has been followed consis-

tently by the Federal Circuit.

Petitioners submit that argument estoppel is problematic,

unfair and unpredictable. Petitioners therefore submit that this

Court’s prior rejection of argument estoppel in Keystone

Driller should be confirmed. Perhaps argument estoppel has a

legitimate role in certain circumstances. But, at most, it

should be used to extend amendment estoppel, i.e., to provide

additional limits on the scope of the doctrine of equivalents. It

20

should never be used to abrogate amendment estoppel, and

provide the patentee with yet another way to avoid conse-

quences of decisions deliberately made in the Patent Office to

secure claims. At the very least, this Court should clarify

whether argument estoppel is viable at all, to avoid confusion

and continued adherence and further expansion of argument

estoppel by the Federal Circuit.

CONCLUSION

To resolve whether this Court’s case law regarding prose-

cution history estoppel is a viable limit on the doctrine of

equivalents, this petition for Writ of Certiorari should be

granted.

Respectfully submitted,

EDWARD W. GOLDSTEIN

Counsel of Record

DOUGLAS H. ELLIOTT

JOHN T. POLASEK

TOBOR & GOLDSTEIN, L.L.P.

1360 Post Oak Blvd., Suite 2300

Houston, Texas 77056

(713) 877-1515

Counsel for Petitioners Cat Contracting, Inc., Michigan

Sewer Construction, Kanal Sanierung Hans Muller GmbH

& Co. K.G., and Inliner, U.S.A.

March 13, 1997

APPENDIX

Appendix A

INSITUFORM TECHNOLOGIES, INC., Insituform

(Netherlands) B.V. and Insituform

Gulf South, Inc., Plaintiffs/Cross-Appellants,

Vv.

CAT CONTRACTING, INC., Michigan Sewer

Construction, Kanal Sanierung Hans

Mueller GmbH & Co KG and Inliner U.S.A.,

Defendants-Appellants.

Nos. 96-1078, 96-1099.

United States Court of Appeals,

Federal Circuit.

Nov. 5, 1996.

Harold James, James & Franklin, New York City, argued,

for plaintiffs/cross-appellants.

Edward W. Goldstein, Tobor & Goldstein, L.L.P., Hous-

ton, TX, argued, for defendants-appellants. With him on the

brief was John T. Polasek.

Before ARCHER, Chief Judge, MICHEL, and SCHALL,

Circuit Judges.

MICHEL, Circuit Judge.

Inliner' appeals from the district court’s order denying its

motion for post-verdict judgment notwithstanding the verdict

(“INOV”) of invalidity of United States Patent No.

' “Inliner” is a collective reference to four separate defendants: Cat Con-

tracting, Inc.; Michigan Sewer Construction Co.; Kanal Sanierung Hans

Mueller GmbH & Co. KG; and Inliner U.S.A.

? A JNOV is now known as a judgment as a matter of law (“JMOL”). As

JNOV was the proper terminology used at the time Inliner filed its mo-

tion, we will use it throughout this opinion.

A-2

4,336,012 (“the ‘012 patent’’), the district court’s order deny-

ing its motion to amend certain counterclaims, and the district

court’s final decision finding infringement under the doctrine

of equivalents. Insituform* cross-appeals from the district

court’s order granting Inliner’s motion for post-verdict JNOV

of no literal infringement of claim | of the ‘012 patent. The

case was submitted for decision after oral argument on July

10, 1996. We affirm in all respects, except one: we vacate the

finding of infringement under the doctrine of equivalents and

remand to redetermine infringement under the doctrine be-

cause, although the prosecution history of the ‘012 patent

does not estop Insituform from claiming that the accused

processes infringe, the district court’s doctrine of equivalents

infringement analysis was tainted by the use of an incorrect

claim construction.

The appeal and cross-appeal at bar arise from a complex

series of trials spanning five years in the U.S. District Court

for the Southern District of Texas, Case No. H-90-1690. In

February 1990, Insituform brought suit against Inliner, alleg-

ing infringement of the ‘012 patent. Inliner filed an answer, as

well as counterclaims for a declaratory judgment of nonin-

fringement, invalidity, and unenforceability of the ‘012 pat-

ent. Inliner also filed a counterclaim for tortious interference

with contractual relations which included the assertion that

“Insituform has successfully monopolized the market for

soft-lining sewer rehabilitation in the United States for many

years.” The counterclaim did not, however, refer to the federal

antitrust laws, nor was there a separate counterclaim alleging

antitrust violations.

On March 5, 1991, almost a year after Insituform had filed

its answer and counterclaims, the district court filed an order

indicating that, inter alia, “defendants’ counterclaim for

* “Insituform” is a collective reference to three separate plaintiffs: Insi-

tuform Technologies, Inc.; Insituform (Netherlands) B.V.; and Insituform

Gulf South, Inc.

A-3

antitrust violations is severed.” Shortly thereafter, Inliner

entered a motion to amend its counterclaims so as “to include

specific allegations regarding Insituform’s antitrust viola-

tions.” The district court did not take any immediate action on

Inliner’s motion.

In June 1991, the patent and state law issues in the case

were tried to a jury for two weeks. At the close of the trial, the

jury returned verdicts of infringement, no invalidity, no in-

equitable conduct, and no tortious interference with contract.

Although the jury was instructed on both literal infringement

and infringement under the doctrine of equivalents, the inter-

rogatory form asked only whether “Inliner made, used, or sold

a method that infringes claim one of the ‘012 paient,” i.e., for

a general infringement verdict. Inliner moved for JNOV on all

issues. By order dated August 28, 1991, the court granted the

JNOV motion in part, concluding that Inliner had not literally

infringed the ‘012 patent and that it was entitled to retrial on

the question of infringement under the doctrine of equiva-

lents. The court denied Inliner’s motion with respect to the

jury’s verdict of no invalidity, thus leaving that verdict intact.

In February 1995, the claim of infringement under the doc-

trine of equivalents was retried, this iime to the bench, for

three days.” On October 11, 1995, the district court denied

Inliner’s motion to amend its allegedly severed counterclaims.

In November 1995, the district court entered amended find-

ings of fact and conclusions of law, according to which two of

Inliner’s processes were found to have infringed under the

doctrine. At that time, the court also explained that its earlier

reference to the severance of an antitrust counterclaim had

been “erroneous[ ],” inasmuch as no such counterclaim had

ever existed.

* Because no such counterclaim existed, the court’s order is difficult to

comprehend as anything other than a mistake.

* In 1995, the case was reassigned from Judge Hughes, who had presided

over the first trial, to Judge Gilmore, who tried the question of infringe-

ment under the doctrine of equivalents.

A-4

Inliner appeals from the district court’s (1) August 28, 199]

order denying its motion for post-verdict JNOV of invalidity

of the ‘012 patent, (2) October 11, 1995 order denying its

motion to amend the counterclaims, and (3) final decision

finding infringement under the doctrine of equivalents despite

Inliner’s alleged prosecution history estoppel defense. Insi-

tuform cross- appeals from the district court’s August 28,

1991 order granting Inliner’s motion for post-verdict JNOV of

no literal infringement of claim | of the ‘012 patent.

We write solely on the questions of infringement, both lit-

eral and by equivalency, of the ‘012 patent. Of the issues

raised by the parties, only these infringement issues merit ex-

tended analysis. The jury’s rejection of Inliner’s attack on the

validity of the ‘012 patent is amply supported by the evi-

dence, and we discern no error in the district court’s denial of

Inliner’s motion for post-verdict JNOV on this point. The

district court’s eventual denial of Inliner’s 1991 motion to

amend its “antitrust” counterclaim was not, as Inliner con-

tends, an abuse of discretion, inasmuch as no “antitrust”

counterclaim in need of amending ever existed. The district

court’s decisions on these two points are straightforward, and

we affirm them without further discussion. Because the dis-

trict court’s grant of Inliner’s motion for post- verdict JNOV

of no literal infringement is consistent with the proper con-

struction of claim | of the ‘012 patent, we affirm that grant.

Although the district court properly determined that the

prosecution history of the ‘012 patent did not estop Insituform

from claiming infringement by the accused processes under

the doctrine of equivalents, we vacate the district court’s de-

cision that Inliner infringed under the doctrine in light of

Judge Gilmore’s reliance on a claim construction that is incor-

rect as a matter of law.

BACKGROUND

The Technology

Underground pipes, such as sewer pipes, are subjected to

great stress. As a result, over time, the pipes develop cracks

and other structural defects. Before the development of the

bint £bB Ea Saree

A-5

technology involved in the case at bar, the only way to reha-

bilitate a section of underground pipe was to dig up the bro-

ken portion and replace it.

Eric Wood, an inventor at Insituform, pioneered a process

for rehabilitating a sewer or other underground pipe without

digging it up. Specifically, in the process developed by Wood,

one inverts within the pipe a flexible tubular liner comprising

an impermeable plastic layer and a thick, resin-impregnated

felt layer, such that the resin-impregnated felt layer is held

against the inner wall of the pipe. The resin used to impreg-

nate the felt is thermosetting; in other words, although soft

while at “room” temperature, the resin hardens permanently

when exposed to heat. After the tubular liner has been put in

place--plastic layer facing in, felt side facing out--and pressed

out to conform to the pipe under repair, hot water is pumped

through the lining to harden the resin.

Early in the development of this technology, artisans

learned that they could facilitate the impregnation process, as

well as make the resulting impregnation more thorough, by

drawing air from the interior of the felt tube during impregna-

tion. In general, the processes at issue in the case at bar all

involve (a) a tube of felt with an impermeable outer layer, (b)

into which is placed a “slug” of resin large enough to impreg-

nate fully that length of tubing, (c) after which the tube is

drawn through squeezing rollers, (d) while a vacuum is drawn

through at least one opening somewhere downstream of the

“resin front.”

The Everson Prior Art Patent

U.S. Patent No. 4,182,262 to Everson (“the Everson pat-

ent’) issued in January 1980. It teaches both an apparatus and

method for impregnating the felt lining of a flexible tube with

resin at the repair site, thus eliminating the need to transport

heavier, already-impregnated tubing to the site. Col. 1, Il.

15-63. The preferred embodiment includes a vacuum pump

that is attached, by means of a hose, to the far end of the

length of tubing to be impregnated. Col. 6, |. 65--Col. 7, 1. 8.

The specification describes the drawing of the vacuum during

impregnation as follows:

As the tube passes through the throat [between

the conveyor belt and the first roller], it is flattened

therein and the resin in the bulge is spread trans-

versely of the frame from side to side within the

tube. As the conveyor transports the tube through

the apparatus, the tube passes through the flattener

commencing at the leading end so that the resin is

extruded along the tube toward said opposite end.

When the tube is engaged in the throat, the motor

driving the vacuum pump is energized, creating a

negative pressure in the reservoir, the hose, and the

end of the tube opposite the leading end. The im-

pervious outer lamina [of the tube] minimizes in-

trusion of air into the tube so that an effective

vacuum can be maintained. The negative pressure

urges the fluid resin to flow within the tube toward

said opposite end. The combined action of the flat-

tener and the vacuum system thus cause[s] the resin

thoroughly to impregnate the absorbent lamina of

the length of the tube required to line the passage-

way.

Col. 9, Il. 1-19 (diagram reference numbers omitted).

Claim | of the Everson patent recites an apparatus corre-

sponding to the preferred embodiment in “means plus func-

tion” terms. Claim 2 recites “[t]he apparatus of claim | having

a source of vacuum connected to the end of the tube opposite

said leading énd thereof, whereby the fluid material is urged

to flow within the tube toward said end thereof opposite to the

leading end.” Col. 10, Il. 40-44. Claim 3, like claim 1, recites

an apparatus, but includes a limitation reciting “vacuum

means communicating with the [far] end of [the] tube” to be

impregnated. Col. 10, Il. 52-53.

In short, Everson teaches attaching the vacuum to the tube

to be impregnated at only one place--the end opposite the

resin-containing leading end--and applying that vacuum con-

tinuously throughout the impregnation process.

The Patent in Suit

Eric Wood filed the application that matured into the ‘012

patent in February 1981. The only prior art reference Wood

cited was the Everson patent. The application included the

following description of an innovative manner of applying a

vacuum, or negative pressure, to the tube:

The vacuum may be applied through a window in

the film in the wall of the tube by means of a cup

applied to said window and connected to a source of

vacuum by means of a flexible hose, whereby the

cup can move with the tube during its movement

relative to said nip. As each section of the tube has

its resin absorbent material thus impregnated with

resin, the cup may be moved and applied to a posi-

tion spaced downstream from the previous window,

the said previous window being sealed by means of

a patch or the like, whereby the process is repeated

for respective lengths of the tube until the entire

tube length has been impregnated.

Later, in connection with describing the drawings accompany-

ing the application, Wood offered the following account of

applying the vacuum cup to the tube:

A vacuum source is provided, and a vacuum cup is

connected to the vacuum source by means of a

flexible hose. The vacuum cup is applied to the

outside of the lining tube, downstream of the mass

of resin inside the tube ... the vacuum cup being in

register with a window made in the outer membrane

of the lining tube, so that the vacuum applied to the

interior of the cup can be applied to the interior of

° Insituform (Netherlands) B.V. is the owner of the ‘012 patent. Insi-

tuform Technologies, Inc. is the exclusive licensee and has granted a sub-

license to Insituform Gulf South, Inc.

A-8

the lining tube, whereby air is drawn from the inside

of the tube to permit the effective and efficient im-

pregnation of the absorbent material with the

resin.... -

Fig. 11 shows the impregnation process at a mid-

way position, and it should be mentioned that when

one section of the impregnation of the tube has been

completed, the suction cup is removed to a down-

stream location whereat a further window is formed,

the previous window having been sealed by means

of a patch of a material compatible to the material

of the coating, the patch being suitably sealingly

bonded to the coating material. The vacuum cup is

therefore applied at intervals during the impregna-

tion process, until complete impregnation of the

resin absorbent material has been achieved.

(Diagram reference numbers omitted).

As initially filed, the Wood application contained nine

claims, only four of which are relevant to this appeal. The

original four claims with relevance to this dispute are as fol-

lows:

1. A method of impregnating a flexible tube com-

prising an inner layer of resin absorbent material

and an outer layer in the form of an impermeable

film, wherein the resin absorbent layer is

impregnated with a curable resin by applying a vac-

uum to the inside of a flexible tube whilst the resin

is brought into impregnation contact with the resin

absorbent material, the impermeable film serving as

a means to prevent ingress of air into the interior of

the tube, whilst the impregnation process is taking

place.

2. A method according to claim 1, wherein the

resin is introduced into one end of the tube in a

quantity calculated effectively to impregnate all of

the resin absorbent material of the tube, and the

+. i ll al Al On

Pe oe ee We ek

eee ee ee ee Se ee te rele SO) Sn One een

—-

A-9

vacuum is applied to the interior of the tube, down-

stream of the resin mass, so that the resin will tend

to flow towards the vacuum application region.

3. A method according to claim 2, wherein the

lining tube containing the mass of resin is fed

through a pressure applying nip, such as may be

defined by a nip roller, which, together with the

movement of the tube, squeezes the resin in a direc-

tion towards the region of the application of the

vacuum, at the same time flattening the tube and

assisting in the even distribution of the resin.

4. A method according to claim 2, wherein the

vacuum is applied through a window in the film in

the wall of the tube by means of a cup applied to

said window and connected to a source of vacuum

by means of a flexible hose, whereby the cup can

move with the tube during its movement relative to

said nip, the cup being moved and applied to a po-

sition spaced downstream from the previous win-

dow, said previous window being sealed by means

of a patch or the like, whereby the process is re-

peated for respective lengths of the tube until the

entire tube length has been impregnated.

The examiner rejected these claims in light of the Everson

patent, specifically stating that “[c]laims 1-6 are rejected un-

der 35 USC 103 as unpatentable over Everson et al. The

claimed process does not appear to differ in any unobvious

aspect from that of the reference.” In response, Wood can-

celed the original claims and submitted three new claims that

recited in new form the limitations of original claims 4

through 6. In so doing, Wood submitted the following argu-

ment:

The principal reference relied on in the rejection of

claims | to 6 is the patent to Everson (U.S.

4,182,262). Everson’s method is ineffective when

dealing with long lengths of tube because that

method requires an exceedingly large suction

A-10

compressor. Applicant’s method solves the problem

of impregnating long lengths of tubing by forming a

window in the tube’s impermeable skin, drawing

the resin to the region of the window by a vacuum

while squeezing the tube to force the resin to flow

toward the evacuated region, sealing the window,

and repeating the process at another window farther

downstream. Thus by iterating and reiterating that

process, the resin is drawn along to impregnate the

entire length of the tube.

It is submitted that applicant has taught an im-

provement upon Everson’s method which makes

feasible the impregnation of long tube lengths and

that the grant of a patent on that improvement is

merited.

The examiner then allowed the claims without further argu-

ment or comment and the ‘012 patent issued on December 28,

1982. Claim 1, the only claim in suit, is as follows:

1. A method of impregnating with a curable

resin an inner layer of resin absorbent material dis-

posed in an elongate flexible tube having an outer

layer formed by an impremeable [sic] film, the

method comprising the steps of

(1) introducing into one end of the elongate

tube a mass of the curable resin sufficient to

impregnate the entire resin absorbent inner

layer of the tube,

(2) forming a window in the impermeable

outer layer of the tube at a distance from said

one end of the tube,

(3) drawing through the window a vacuum in

the interior of the tube downstream of said one

end by disposing over the window a cup con-

nected by a flexible hose to a vacuum source

which cup prevents ingress of air into the inte-

rior of the tube while the tube is being

A-ll

evacuated, the outer layer of the tube being

substantially impermeable to air,

(4) beginning at or near the end at which the

curable resin mass was introduced, passing the

tube between squeezing members which force

the resin to flow towards the region of vacuum

application as the tube progresses through the

squeezing members,

Hira rat ero 7 ne nt th Rae al a ail ii

(5) when the resin reaches the vicinity of the

region of vacuum application, removing the

cup and sealing the window,

Ae ics RR BONE LURE <i te

(6) providing another window in the imperme-

able layer of the tube downstream of the previ-

ously formed window,

(7) drawing through the new window a vac-

uum in the interior of the tube while progres-

sively moving the tube through the squeezing

members to force the resin to flow toward the

new region of vacuum application, and

(8) repeating steps 5, 6, and 7, where necessary

to impregnate the entire resin absorbent inner

layer of the flexible tube.

Col. 6, |. 37--Col. 7, |. 6.

The Accused Process

Inliner engages in two processes which are at issue here.

Both processes result in continuous vacuums.

In “Process 1” or “the Multiple Cup Process,” from four to

six cups are used to draw a vacuum from a corresponding

number of slits in the tube. As a result, when the cup closest

to the advancing resin is removed, and the slit beneath it

sealed, the remaining downstream cups continue to draw a

vacuum in the tube.

In “Process 2” or “the Multiple Needle Process,” the

A-12

multiple cups are replaced by multiple metal tubes. The metal

tubes, known as needles, are inserted through the layers of the

impregnated tube, rather than merely placed over holes in the

wall of the impregnated tube. Inliner did not develop Process

2 until 1991, after the first phase of the case had already been

tried to a jury.

ANALYSIS

Literal Infringement

Insituform cross-appeals from the district court’s grant of

Inliner’s motion for JNOV of no literal infringement. Accord-

ing to Insituform, JNOV was improper because “/ejach of

defendants’ [vacuum] cups 1, 2, 3, etc. is manipulated pre-

cisely as called for in the claim, thus constituting multiple in-

fringements.”

We review de novo the correctness of a grant of a JNOV by

reapplying the JNOV standard. Markman v. Westview Instru-

ments, Inc., 52 F.3d 967, 975, 34 USPQ2d 1321, 1326

(Fed.Cir.1995) (in banc), aff'd, --- U.S. ----, 116 S.Ct. 1384,

134 L.Ed.2d 577 (1996). Thus, as the district court was re-

quired to do upon Inliner’s motion for JNOV, we

must determine whether there exists evidence of re-

cord upon which a jury might properly have re-

turned a verdict in [the non-movant’s] favor when

the correct legal standard is applied. If there is not,

[the movant] was entitled to have the question re-

moved from the jury and decided as a matter of law.

Markman, 52 F.3d at 975, 34 USPQ2d at 1326 (quoting

Jamesbury Corp. v. Litton Indus. Prods., Inc., 756 F.2d 1556,

1560, 225 USPQ 253, 257 (Fed.Cir.1985)). In so determining,

we must uphold factual findings made by the jury unless there

is a lack of substantial evidence to support a finding in favor

of the nonmovant. /d. On the other hand, we must consider de

novo whether the legal standards applied by the jury are cor-

rect as a matter of law. Jd.

[1] Here, we are asked to determine whether there is

A-13

substantial evidence to support the jury’s finding that Inliner

literally infringed Insituform’s patent. An _ infringement

analysis consists of two steps: interpreting the claims in a pat-

ent to determine their scope and meaning and comparing the

properly construed claims to the accused product or process.

Id. at 976, 34 USPQ2d at 1326.

Here, the entire analysis turns on the proper claim con-

struction. That is because the underlying issue of claim con-

struction is whether claim | should be construed to be literally

limited to a process using one and only one vacuum cup, as

asserted by Inliner. If so limited, the claim is also inherently

limited to a process where the drawing of the vacuum inside

the tube is discontinuous, i.e., interrupted by the moving of

the cup from window to window. Such a claim cannot be in-

fringed by Process 1, because that process maintains a con-

tinuous vacuum.

(2}{3] Claim construction is a question of law which we

review de novo. Id. at 979, 34 USPQ2d at 1329. In constru-

ing claim 1, we look first to the intrinsic evidence of record,

namely the language of the claim, the specification and the

prosecution history. Vitronics Corp. v. Conceptronic, Inc., 90

F.3d 1576, 1582, 39 USPQ2d 1573, 1576 (Fed.Cir.1996).

Looking first to the claim language, we note preliminarily that

Insituform has conceded that claim | contains no terms that

have a specialized or technical meaning. Furthermore, nothing

in the text of claim 1 suggests the use of more than one cup.

Specifically, claim 1 refers to “a cup” and “the cup” repeat-

edly, suggesting that only one cup is involved. Indeed, rather

than describing the process in terms of more than one cup,

claim | specifically describes using the same cup repeatedly.

Also, claim 1 uses the phrase “region of vacuum application”

in a manner indicating that only one such region exists at any

given time. This use of the phrase “region of vacuum applica-

tion” is thus inconsistent with the use of more than one cup at

any given time, as each cup creates its own associated region

of vacuum application. Likewise, it is also inconsistent with

the creation of a continuous, rather than discontinuous, vac-

uum.

A-14

Turning to the text of the specification, we note that neither

the specification nor the drawings disclose the use of more

than one cup. For example, the specification states:

The vacuum may be applied through a window in

the film in the wall of the tube by means of a cup

applied to said window ... whereby the cup can

move with the tube.... As each section of the tube

has its resin absorbent material thus impregnated

with resin, the cup may be moved and applied to a

position spaced downstream from the previous win-

dow....

Col. 2, Il. 30-35 (emphasis added).

A vacuum source is provided, and a vacuum cup is

connected to the vacuum source by means of a

flexible hose. The vacuum cup is applied to the out-

side of the lining tube downstream of the mass of

resin inside the tube....

Col. 5, Il. 61-65 (emphasis added, diagram reference

numbers omitted).

{W]hen one section of the impregnation of the tube

has been completed, the suction cup is removed to a

downstream location.... The vacuum cup is therefore

applied at intervals during the impregnation process,

until complete impregnation of the resin absorbent

material has been achieved.

Col. 6, |. 14-24 (emphasis added, diagram reference

numbers omitted).

Likewise, the drawings of the ‘012 patent, specifically figures

10 and 11, show only a single vacuum cup.

” Although Insituform’s own witnesses confirmed this interpretation of the

claim, we need not give such testimony any weight, as the intrinsic evi-

dence alone is sufficient to resolve any ambiguity in the claim. See Vitron-

ics, 90 F.3d at 1584, 39 USPQ2d at 1578.

a

A-15

[4] In light of the language found in the claims, specifica-

tion and file history, we conclude the only correct and indeed

the reasonable interpretation of claim | limits the scope of

: that claim to a process using only one vacuum cup which in-

herently creates a discontinuous vacuum. Indeed, as Insi-

tuform concedes in its brief, “[t]here is no question but that

the patent discloses a single vacuum cup which draws a vac-

uum at one point and then, when the resin front approaches, is

removed from its initial position and repositioned to draw

vacuum at its new downstream position.” Thus, in light of the

fact that Inliner’s processes both create a continuous vacuum,

i neither can literally infringe.

ih di id is av pe

Insituform argues that such an interpretation places too

i much weight on the distinction between drawing a vacuum

and the evacuated state that exists within the tube, even as a

cup is moved from one window to another. According to Insi-

tuform, “it is not the continuity of drawing the vacuum which

is important but rather the continuity of having an effective

vacuum where the resin meets the portion of the felt to be im-

pregnated.” However, such attorney argument cannot control

in light of the language of the claim. Claim 1, and more spe-

cifically steps 3 and 7, is cast in terms of “drawing a vac-

uum,” not merely having a vacuum.

[5] Insituform also argues that claim | requires only

“manipulating the suction cup (or its equivalent) in a

particular fashion,” that each of the cups used in Process | is

manipulated in such a fashion, and that “adding something to

an infringement [i.e., more than one cup] does not avoid in-

fringement.” However, as discussed above, we believe that

claim | must be construed as reading only on a one cup, dis-

continuous vacuum process. While adding elements may, in

certain instances, fail to prevent a finding of infringement, it

will prevent a finding of literal infringement where, as here,

the claim is specific as to the number of elements (one cup)

and adding elements eliminates an inherent feature

(discontinuous vacuum) of the claim.

A-16

In light of our conclusion that claim | must be construed to

literally cover a process using only one cup, and thereby lit-

erally cover only a process using a discontinuous vacuum, and

the complete lack of evidence indicating Inliner’s Process 1

uses only a single cup, there was no evidence upon which the

jury could have reasonably returned a verdict in Insituform’s

favor when applying the correct claim construction, and the

district court’s grant of JNOV was proper. We therefore af-

firm the district court’s JNOV of no literal infringement.

Infringement Under the Doctrine of Equivalents

[6] Although we conclude the district court correctly

granted JNOV in favor of Inliner on the issue of literal in-

fringement, that does not end our analysis. Infringement may

still be established under the doctrine of equivalents if there is

“proof of insubstantial differences between the claimed and

the accused products or processes.” Hilton Davis Chem. Co.

v. Warner-Jenkinson Co., Inc., 62 F.3d 1512, 1522, 35

USPQ2d 1641, 1648 (Fed.Cir.1995) (in banc), cert. granted,

--- U.S. ----, 116 S.Ct. 1014, 134 L.Ed.2d 95 (1996). This de-

termination is a question of fact and, when made by the trial

court, reviewable for clear error. Hilton Davis, 62 F.3d at

1521, 35 USPQ2d at 1647.

{7][8] The doctrine of equivalents, however, is subject to

the doctrine of prosecution history estoppel, which acts to

limit infringement by otherwise equivalent products or proc-

esses. Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211,

1218, 36 USPQ2d 1225, 1230 (Fed.Cir.1995). Prosecution

history estoppel bars the patentee from recapturing subject

matter that was surrendered by the patentee during prosecu-

tion in order to promote allowance of the claims. Mark /

Mktg. Corp. v. R.R. Donnelley & Sons, 66 F.3d 285, 291, 36

USPQ2d 1095, 1099-1100 (Fed.Cir.1995), cert. denied, ---

U.S. ----, 116 S.Ct. 917, 133 L.Ed.2d 847 (1996); Pall Corp.,

66 F.3d at 1211, 36 USPQ2d at 1230. The application of

prosecution history estoppel is a question of law subject to de

novo review. See Mark I, 66 F.3d at 291, 36 USPQ2d at 1100.

|

A-17

The district court held that Process 1 and Process 2 did not

differ substantially from the process disclosed in the ‘012 pat-

ent. In so holding, the district court rejected Inliner’s prose-

cution history estoppel argument stating,

we (Ae sae AE Bit

There is nothing in the file history of the ‘012 patent

or the prior art which prevents claim | froni cover-

ing Defendants’ processes. The patentee originally

claimed, in claim 1, all types of vacuum application,

and in claim 4 he originally claimed the sequential

application of vacuum. The prior art cited by the

Examiner did not show that sequential vacuum

application, and by amending the claims, the pat-

entee abandoned protection broad enough to include

all types of vacuum application but properly re-

tained claims to sequential vacuum application,

which is precisely what Defendants do in all of their

processes.

Inliner contends that Insituform is precluded by “classical

prosecution history estoppel” from asserting that the right to

exclude extends broadly enough to cover Inliner’s Process 1

or Process 2. According to Inliner,

During the prosecution of the ‘012 patent applica-

tion, Mr. Wood attempted to obtain broad claim

coverage covering all vacuum application methods,

whether the drawing of a vacuum was continuous or

discontinuous.... Mr. Wood abandoned this broad

coverage and settled for significantly less, claims

limited to a single cup, inherently interrupted

drawing of vacuum.... Therefore, Insituform is now

estopped to assert a range of equivalents that was

disclaimed during prosecution. Specifically, Insi-

tuform is estopped from covering a method that

continuously draws vacuum from the liner.

We do not agree with Inliner’s contentions.

[9] In examining the prosecution history in an estoppel

analysis, we do not look to the subjective intent of the

A-18

applicant and what the applicant subjectively believed or in-

tended that he or she was giving up to the public.* Rather, the

standard for determining what subject matter was surrendered

is objective and depends on what a competitor, reading the

prosecution history, would reasonably conclude was given up

by the applicant. Mark J, 66 F.3d at 291, 36 USPQ2d at 1100;

see also Haynes Int'l, Inc. v. Jessop Steel Co., 8 F.3d 1573,

1578, 28 USPQ2d 1652, 1656 (Fed.Cir.1993) ( “The legal

standard for determining what subjective matter was relin-

quished is an objective one, measured from the vantage point

of what a competitor was reasonably entitled to conclude,

from the prosecution history, that the applicant gave up to

procure issuance of the patent.”); Prodyne Enter., Inc. v. Julie

Pomerantz, 743 F.2d 1581, 1583, 223 USPQ 477, 478

(Fed.Cir.1984) (“Prodyne is estopped from now broadening

the description of a claim element limited during prosecution

so as to encompass a structure which a competitor should rea-

sonably be entitled to believe is not within the legal bounda-

ries of the patent claims in suit.”).

[10] As noted above, the Insituform application originally

contained four claims relevant to the instant dispute. Original

claims | and 2 were broadly drafted and would likely have

read on a process using a single cup or a single needle at any

location downstream of the resin, multiple cups or multiple

needles at any location downstream of the resin, or continuous

vacuum or discontinuous vacuum created at any location

downstream of the resin. Claim 3 was also drafted broadly

and would have likely read on both continuous vacuum or

discontinuous vacuum created at any point along the tube

* This is not to say that we do not examine the purpose of the statements

made to the PTO. Thus, for example, “a concession made or position

taken to establish patentability in view of prior art on which the examiner

has relied, is a substantive position on the technology for which a patent is

sought.” Pall Corp., 66 F.3d at 1220, 36 USPQ2d at 1231. On the other

hand, “when claim changes or arguments are made in order to more par-

ticularly point out the applicant’s invention [e.g., in response to a rejection

under 35 U.S.C. § 112], the purpose is to impart precision, not to over-

come prior art.” /d.

A-19

downstream of the resin. Original claim 4 was the narrowest.

The claims were rejected over Everson, which discloses both

the use of a continuous vacuum and the creation of that vac-

uum from only a single vacuum source at the far end of the

tube opposite the resin source.

In response, Insituform canceled the claims and filed new,

narrower claims, including what is now claim |, which, as we

held above, is literally limited to the use of one vacuum cup

which inherently creates a discontinuous vacuum. However,

in its statement to the PTO, Insituform specifically noted that

the problem with Everson was that “Everson’s method is inef-

fective when dealing with long lengths of tube because that

method requires an exceedingly large suction compressor.”

The need for an exceedingly large suction compressor oc-

curred because the Everson suction compressor was located at

the far end of the tubing. Insituform solved this problem by

placing the suction source closer to the resin front, thus allow-

ing the use of a smaller suction compressor. Thus, Insituform

unequivocally gave up coverage to a process in which a single

vacuum source is located at the far end of the tube.

It is true that, in explaining its amendments, Insituform dis-

cussed the use of a single vacuum source which was to be

moved along the tube as the resin front advanced. This sug-

gests that Insituform envisioned the use of a discontinuous

vacuum created sequentially by only one vacuum source.

However, this statement alone is too equivocal to be read as a

statement which would estop Insituform from equivalently

covering a number of small compressors spread along the

tube creating a continuous vacuum. The prosecution history

makes clear that the problem to be solved was the need for a

large compressor when the vacuum was created a significant

distance from the resin source. The use of one vacuum source

repeatedly moved down the tube as the resin advances and the

use of a number of vacuum sources spread along the tube so

that one is always near the advancing resin both solve the

problem presented by Everson by placing the vacuum source

close to the resin, thereby allowing the use of a smaller vac-

uum source.

A-20

Although a patentee’s “unmistakable assertions” to the

PTO in support of patentability will estop the patentee from

obtaining coverage over surrendered material, Athletic Alter-

natives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573, 1582, 37

USPQ2d 1365, 1373 (Fed.Cir.1996) (citing Kinzenbaw v.

Deere & Co., 741 F.2d 383, 389, 222 USPQ 929, 933

(Fed.Cir.1984)), here, however, it cannot be said that a rea-

sonable competitor could conclude that Insituform relin-

quished coverage of processes using either multiple vacuum

sources or a continuous vacuum. At no point did Insituform

indicate that the Everson problem could be solved only in the

manner used by Insituform, i.e., Insituform never stated that

the problem could not be solved by using more than one vac-

uum source or a continuous vacuum. Rather, the only express

limitation put on the invention by Insituform was the use of a

vacuum source close to the resin. Thus, in light of the equivo-

cal nature of Insituform’s statements, no reasonable competi-

tor could conclude that Insituform gave up coverage of

continuous vacuum created by one or more vacuum sources.

We therefore conclude that the prosecution history does not

estop Insituform from asserting that the right to exclude ex-

tends broadly enough to cover either Process | or Process 2.

[11] We cannot, however, uphold the district court’s find-

ing of infringement under the doctrine of equivalents because

it is based on an incorrect claim construction. Although Judge

Hughes used the correct claim construction in concluding that

Inliner had not literally infringed, Judge Gilmore appears to

have applied a different and incorrect claim construction in

concluding that there was no infringement under the doctrine.

Specifically, in reaching her decision regarding this issue,

Judge Gilmore noted that: (1) “[nJowhere in the claim is the

licensee restricted to the use of one cup”; (2) the claim was

silent regarding “whether the vacuum in the liner is continu-

ous or not’; and (3) the vacuum in the patented invention is

continuous. Thus, as the district court’s doctrine of equiva-

lents analysis was distorted by its incorrect claim construc-

tion, we must remand for new findings regarding this issue in

accordance with the correct claim construction, e.g., whether

the use of many cups is equivalent to the use of one cup,

nent tS aE,

———EEEEeeeeeeeeeeeeeeeE eee

A-21

whether a needle is equivalent to a cup, and whether the use

of a discontinuous vacuum is equivalent to the use of a con-

tinuous vacuum.

[12] We note also that, on remand, the district court should

strive to avoid the conceptual misunderstanding perhaps pres-

ent in some of our case law. Namely, it is incorrect to refer to

a claim as being expanded or enlarged when infringement is

found under the doctrine of equivalents. Wilson Sporting

Goods Co. v. David Geoffrey & Assoc., 904 F.2d 677, 684, 14

USPQ2d 1942, 1948 (Fed.Cir.1990) (“To say that the doctrine

of equivalents extends or enlarges the claims is a contradic-

tion in terms. The claims--i.e., the scope of patent protection

as defined by the claims--remain the same and application of

the doctrine expands the right to exclude to “equivalents” of

what is claimed.”) (emphasis in original).

AFFIRMED-IN-PART, VACATED-IN-PART AND

REMANDED.

COSTS

Each party to bear its own costs.

A-22

Appendix B

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

INSITUFORM TECHNOLOGIES,

INC., INSITUFORM

(NETHERLANDS) B.V., AND

INSITUFORM GULF SOUTH,

INC.,

Plaintiffs,

CIVIL ACTION

NO. H-90-1690

vw,

CAT CONTRACTING INC.,

MICHIGAN SEWER

CONSTRUCTION COMPANY,

KANAL SANIERUNG HANS

MULLER GmbH & CO. KG, AND

INLINER U.S.A.,

Defendants.

SECOND AMENDED FINDINGS OF FACT

AND CONCLUSIONS OF LAW

FINDINGS OF FACT

Procedural History

1. In February 1990, Defendants were sued for infringe-

ment of U.S. Patents 4,009,063 of February 22, 1977 and

4,336,012 of December 18, 1982, both the inventions of Eric

Wood and both now owned by Insituform Technologies, Inc.

2. In 1991, there was a jury trial of the issues of in-

fringement and validity of the ‘063 and ‘012 patents. The jury

returned a verdict finding validity and infringement as to both

patents.

£360) 0 th eet net dF tn

A-23

3. Defendants moved for judgment notwithstanding the

verdict or new trials on to all issues. Judge Hughes granted

Defendants’ JNOV motions with respect to literal infringe-

ment of both patents, ordered a new trial with respect to the

issue of infringement by the doctrine of equivalents of both

patents, and denied Defendants’ motion in all other respects.

4. Trial of the issues of recoverable damages as against

each defendant has been bifurcated, and is not here involved,

nor was it involved in the 1991 trial.

5. The ‘063 patent expired February 22, 1984. The par-

ties have stipulated that it is no longer involved in this law-

suit.

Parties and Jurisdiction

6. Plaintiff Insituform (Netherlands) B.V. (“Insituform’’)

is a corporation of the Netherlands, with a principal place of

business at Herengracht 552, Amsterdam 1001, Netherlands.

Insituform Technologies, Inc. (“ITI”) is a Delaware corpora-

tion, having a principal place of business at 3315 Democrat

Road, Memphis, Tennessee 38118. Insituform Guif South,

Inc. (“INS”) is a Texas corporation, having a principal place

of business at 131 North Richey, Pasadena, Texas 77506.

7. Defendant Cat Contracting, Inc. (“CAT”) is a Michi-

gan corporation, having its principal place of business at 2022

FM 528, Alvin, Texas, 77518. Michigan Sewer Construction

Company (“Michigan Sewer”) is a Michigan corporation,

having a principal place of business at 21720 West Eight Mile

Road, Southfield, Michigan 48075. Kanal Mueller Gruppe

International (KMG) is a corporation of the Federal Republic

of Germany, having a place of business at 4938 Schieder-

Schwalengerg, Federal Republic of Germany. Kanal

Sanierung Hans Mueller GmbH & CO KG (“KM”), is a licen-

see of KMG for the country of Germany. Inliner U.S.A.

(“Inliner”) is a corporation of the State of Delaware, having a

principal place of business in Houston, Texas.

8. This Court has jurisdiction over the parties and the

subject matter of this case 28 U.S.C. §§ 1331, 1338(a), 2201

A-24

and 2202. Venue is proper in the Southern District of Texas.

28 U.S.C. §§ 1391 and 1400.

Background

9. Sewer pipes and the linings of sewer pipes are sub-

jected to stresses. That is particularly true in the case of un-

derground sewer pipes. It is necessary that the lining be

capable of withstanding those stresses for an appreciable pe-

riod of time, as long as 50 years.

10. To accommodate those requirements, Eric Wood,

through Insituform, pioneered a process in which the soft lin-

ers are made up of a relatively thick layer of felt which is im-

pregnated with a thermosetting resin. (A thermosetting resin

is a resin which, when subjected to heat, will become hard but

which, before the heat is applied, is soft.) After the felt liner

has been put in place within the pipe to be repaired and has

been pressed outwardly so as to conform to the pipe, the resin

is heated, by flowing hot water through the lining, causing the

resin to set. The strength of the lining thus produced is pri-

marily dependent upon the set resin which has impregnated

the lining. It is essential, if the lining is to have the desired

strength and longevity, that the impregnation of the felt by the

resin be substantially uniform.

11. Soft linings of the type in question are inserted in

lengths that are usually many hundreds of feet long. When

such linings are impregnated with resin they weigh many

tons. Some jobs have involved the use of as much of 100 tons

of resin. The felt that is used is quite dense and it is difficult

to get the resin into the felt and ensure that the felt is substan-

tially fully impregnated by the resin. A way needed to be

found to achieve a substantially complete impregnation of felt

linings of the size involved with the understanding that the

presence of any substantial amount of air in the liner after im-

pregnation would be unacceptable.

12. The major impediment to uniform impregnation of the

felt by the resin i: th , =sence of air in the felt. The resin

ome cians coal

A-25

must displace the air, and do so substantially completely, if

the felt is to be uniformly and satisfactorily impregnated.

13. Early on in the development of this technology, it was

learned that the impregnation process would be greatly facili-

tated if air were to be sucked from the interior of the felt tube.

During the impregnation process, a method was utilized

where a vacuum pump was connected at the far end for the

lining and air was sucked out of the lining from that far end

until a satisfactory vacuum was created in the lining. That is

what is shown in Everson patent 4,182,262 of 1980 and in the

British Rhys-Jones article of 1975. It took a very appreciable

length of time before sucking air from the free end of the liner

produced a satisfactory vacuum at the point in the liner where

the resin was beginning to enter the felt (the “resin front”),

and impregnation could not start until that had been accom-

plished. The lengths of the liners used at the time of Everson

and Rhys-Jones were relatively short, however, so the length

of time involved was marginally acceptable. As the length of

the liners increased, the time needed to produce the desired

vacuum at the resin front increased as the square of the dis-

tance involved -- a liner twice as long --, would need four

times as much time, and a liner four times as long would need

sixteen times as much time. It is to this problem that the pat-

ent in suit, 4,366,012 of December 28, 1982, is directed.

The Patient In Suit

14. When Mr. Wood filed the patent application, original

claim | called broadly for the application of the vacuum while

the impregnation process is taking place. Original claims 2

and 3 added to claim | that the resin was introduced into one

end of the tube and fed down the tube by means of nip rollers

and the vacuum was applied to the interior of the tube down-

stream of the resin mass. Original claim 4 added to the above

that the vacuum was applied through a window formed in the

wall of the tube by means of a cup connected to a source of

vacuum, the cup moving with the tube during its movement

relative to the nip rollers, and the cup being removed and

applied to a position spaced downstream from the previous

A-26

window, the previous window being sealed by means of a

patch or the like, whereby the process is repeated for respec-

tive lengths of the tube until the entire tube length has been

impregnated.

15. The Patent Examiner, in his first action on the merits,

rejected all of those claims on the basis of the Everson patent,

the Examiner saying: “The claimed process does not appear to

differ in any unobvious aspect from that of the reference.”

16. In response, by amendment dated April 6, 1982, appli-

cant cancelled the original claims and added the claims that

appear in the patent. Patent claim | reads as follows:

a. A method of impregnating with a curable resin

an inner layer of resin absorbent material disposed

in an elongate flexible tube having an outer layer

formed by an impermeable film, the method com-

prising the steps of

(1) introducing into one end of the elongate

tube a mass of the curable resin sufficient to

impregnate the entire resin absorbent inner

layer of the tube,

(2) forming a window in the impermeable

outer layer of the tube at a distance from said

one end of the tube,

(3) drawing through the window a vacuum in

the interior of the tube downstream of said one

end by disposing over the window a cup con-

nected by a flexible hose to a vacuum source

which cup prevents ingress of air into the inte-

rior of the tube while the tube is being evacu-

ated, the outer layer of the tube being

substantially impermeable to air,

(4) beginning at or near the end at which the

curable resin mass was introduced, passing the

tube between squeezing members which force

the resin to flow towards the region of vacuum

A-27

application as the tube progresses through the

squeezing members,

Hy (5) when the resin reaches the vicinity of the

i region of vacuum application, removing the

F cup and sealing the window,

(6) providing another window in the imperme-

able layer of the tube downstream of the previ-

ously formed window,

(7) drawing through the new window a vac-

uum in the interior of the tube while progres-

sively moving the tube through the squeezing

members to force the resin to flow toward the

new region of vacuum application, and

(8) repeating steps 5, 6, and 7, where necessary

to impregnate the entire resin absorbent inner

layer of the flexible tube.

17. Applicant explained the similarity of the new claim to

the original application claim 4 to the Examiner as follows:

“(Application) Claim 10 (ultimately patent claim 1) incorpo-

3 rates the substance of cancelled claims 1, 2, 3 and 4.” Appli-

| 4 cant’s total argument to the Examiner as to the patentability

of that claim was as follows:

The principal reference relied on in the rejection

of claims | to 6 is the patent to Everson (U.S.

4,182,262). Everson’s method is ineffective when

dealing with long lengths of tube because that

method requires an exceedingly large suction com-

pressor. Applicant’s method solves the problem of

impregnating long lengths of tubing by forming a

window in the tube’s impermeable skin, drawing

the resin to the region of the window by a vacuum

while squeezing the tube to force the resin to flow

toward the evacuated region, sealing the window,

and repeating the process at another window farther

downstream. Thus by iterating and reiterating that

A-28

process, the resin is drawn along to impregnate the

entire length of the tube.

It is submitted that applicant has taught an im-

provement upon Everson’s method which makes

feasible the impregnation of long tube lengths and

that the grant of a patent on that improvement is

merited.

Accordingly, reexamination of this application is

requested.

18. Patent claim 2 covers the subject matter of original

application claim 5, and reads as follows:

2. The method according to claim 1, further

including the step of forming an initial air seal

at the end of the flexible tube at which the

mass of resin was introduced by closing off

that end of the tube after introduction of the

mass of resin and before vacuum is applied to

the interior of tube to draw the resin toward the

region of vacuum application.

19. Patent claim 3 covers the subject matter of original

application claim 6, and reads as follows:

3. The method according to claim 1, wherein

said outer later of the flexible tube is defined

by a felt sheet coated with a synthetic resinous

material that forms said film, the method fur-

ther including the steps of

(i) sewing together adjacent edges of the ielt

sheet to form the tube, and

(ii) covering the resultant seam with a sealing

strip that is impervious to air.

20. With these explanations and clarifications to the Ex-

aminer, the application was then allowed. U.S. Patent No.

4,366,012 (‘012 Patent), entitled “Impregnation Process,” is-

sued to Eric Wood on December 28, 1982. Insituform is the

_-

ie

A-29

owner of the ‘012 patent. ITI is the exclusive licensee within

the United States, and has granted a sublicense to INS for

territory that includes the City of Houston. It is still in full

force and effect, and for purposes of this proceeding its valid-

ity is established.

Background of Earlier Proceedings

21. In early 1989, after reading about KM’s proprietary

sewer rehabilitation technology in a trade magazine, Mr.

Guilio Catallo, the president of CAT, contacted KM for the

purpose of obtaining a license for that technology. In March

1989 he traveled to Europe to observe KM’s process for im-

pregnating and installing liners in underground sewer lines,

and to negotiate a license from KM.

22. On March 17, 1989, Mr. Catallo signed a letter of in-

tent with KM to license the technology. On March 21, he

submitted a bid on behalf of CAT Contracting and Michigan

Sewer to perform pipe rehabilitation services for the City of

Houston, specifically, Wastewater Job Nos. 3907-12 and

3907-16, sometimes referred to as the “Sims Bayou Con-

tracts.” CAT/Michigan Sewer (a joint venture) submitted the

low bid and was eventually awarded the contract.

23. During the bidding process, Mr. Catallo received a

letter dated April 7, 1989 from Insituform’s attorney, Mr.

Harold James, notifying CAT and Michigan Sewer that if

they practiced the process being utilized by KM, they would

infringe U.S. Patents 4,009,063 (‘063 patent) and 4,786,345

(‘345 patent). The letter did not mention the ‘012 patent, nor

was Mr. Catallo notified of the ‘012 patent until this lawsuit

was filed.

24. On February 2, 1990, Plaintiffs filed an original com-

plaint against Defendants in the Eastern District of Michigan,

alleging infringement not only of the ‘063 and ‘345 patents,

but also of the ‘012 patent. In May 1990 the case was trans-

ferred to the Southern District of Texas. The Plaintiffs filed an

amended complaint in this court, realleging infringement of

the ‘063 and ‘012 patents, but dropping charges relating to the

A-30

~345 patent. Defendants filed an answer, alleging that, among

other things, the patents were not infringed.

25. In June 1991, after a two-week trial, a jury returned a

verdict that included the finding that both patents were in-

fringed. Defendants filed motions for new trial and judgement

notwithstanding the verdict. In pertinent part, the Defendants

argued that the evidence showed that Plaintiffs were legally

estopped from construing claim | to cover Defendants’ Mul-

tiple Cup Process (“Process 1,” discussed in greater detail

below), either literally or by the doctrine of equivalents.

26. In August 1991 this Court partially granted Defen-

dants’ motions, ordering a judgment notwithstanding the

verdict on the issue of literal infringement of both patents, and

granting a new trial on the issue of infringement under the

doctrine of equivalents. The issue of damages had previously

been bifurcated from the issue of infringement by order of the

Court dated March 5, 1991. Although the March 5, 1991 or-

der also erroneously referred to the bifurcation of the defen-

dants’ counterclaim for antitrust violations, the Defendant’s

motion for leave to amend to add a claim for antitrust viola-

tions was never granted, and has been subsequently denied by

this Court.

27. In January 1995 Plaintiffs dismissed with prejudice

their charges of infringement of the ‘063 patent, leaving as the

only issue whether Defendants infringe the ‘012 patent under

the doctrine of equivalents. In addition to the Multiple Cup

Process (Process 1), the Plaintiffs are alleging that the Multi-

ple Needle Process (Process 2) also infringes the ‘012 patent.

Process 2 was not accused of infringement in the original

trial, nor had Process 2 been disclosed by the Defendants at

the time of the first trial.

Defendants’ Accused Impregnation Processes

28. Defendants have carried out in this country or, in the

case of KM, have induced the carrying out of processes for

the rehabilitation of pipelines using a lining formed primarily

of an appropriate thickness of felt impregnated with a

A-31

thermosetting resin, which lining when soft is inserted into

the damaged pipe, urged out toward the pipe interior, and

subjected to heat in order to set the resin. The strength of De-

fendants’ linings, like that of plaintiffs’ lining, depends upon

the thickness of the lining and the substantially complete im-

pregnation of the felt by the unset resin. Defendants have over

the years varied the impregnation process that they employed,

but in all of those processes the felt is in tubular form with an

impermeable film on the outside, a mass of resin sufficient to

impregnate a predetermined extensive length of the liner

(sometimes the entire length of the liner) is introduced into

the tube, an opening is made in the impermeable film at a

predetermined distance from the resin, vacuum is drawn

through that opening, the lining is caused to move through

squeezing rollers located upstream of the resin mass, and

when that resin mass, because of the movement of the lining

through the squeezing rollers, approaches the opening through

which suction is being exerted, that is to say, the vicinity of

the region of vacuum application, the vacuum source is re-

moved from that opening, the opening is sealed, a new open-

ing is provided in the impermeable layer downstream of the

resin, vacuum is drawn through the new opening, the lining

being progressively continuously moved and the process is

repeated for whatever number of times are required for the

given length of lining and the amount of resin introduced.

29. There are three variations in the impregnation process

carried out by Defendants. In one, which Mr. Catallo testified

at the first trial was carried out about 20% of the time, the

vacuum was applied by means of a single vacuum cup which

remained in place throughout the impregnation process.

30. Ina second process described at the first trial and here

called Process | by Defendants, a plurality of vacuum cups

(usually four) were simultaneously applied to a corresponding

plurality of openings along the length of the liner. When the

resin front approaches the region of vacuum application (the

leading cup), it is removed and that opening is sealed, the

second cup is removed and the first cup is put in its place, the

third cup is removed and the second cup is put in its place,

A-32

and so on until finally the last cup is removed, a new opening

is formed in the impermeable layer downstream of the last

then-existing opening, and the last cup is placed over that new

opening. The lining is moved continuously through the nip

rollers as this goes on.

31. Since the first trial, Defendants have gone to a third

process, here called Process 2 by Defendants, which modifies

Process I in two respects. First, instead of using a vacuum

cup, they use a tube (they call it a “needle”) connected at one

end to the vacuum pump with its other end penetrating the

impermeable film and being exposed to the felt, vacuum be-

ing drawn through that tube. Second, instead of shifting all of

the tubes when the first tube approaches the resin front, they

leave tubes 2 and 3, etc. in place and when the first tube is

removed and its hole sealed, that first tube is moved to a po-

sition downstream from the last tube, where it is caused to

penetrate the lining and draw a vacuum.

32. In both of these multi-cup Processes | and 2, Defen-

dants are removing the suction source (cup or tube) from the

hole close to the resin front, sealing that hole, making a new

opening downstream and applying the suction source (cup or

tube) to that new hole, and continuing that procedure sequen-

tially while the lining is continuously moving through the

squeezing rollers and over the mass of introduced resin.

33. K-M also uses an impregnation process involving the

sequential application of vacuum to the liner, which was

demonstrated to Mr. Catallo when he visited Germany and

before he commenced his activities complained of in this law-

suit. In that process an opening is formed relatively near the

resin front and a vacuum cup is applied. When that opening

approaches the resin front, a second opening is made down-

stream of the lining and a second vacuum cup is applied, the

first vacuum cup is removed, the first opening is sealed, and

the process is continued sequentially for as long as is appro-

priate.

A-33

The Function of the Vacuum

34. What the vacuum does in the impregnation process is

ensure that there is as little air as possible in the felt at the

resin front, where the resin is entering the felt. The presence

of air elsewhere in the felt is of no direct significance. It is

only the vacuum in the felt at the resin front which determines

the degree to which impregnation of the felt by the resin oc-

curs.

35. The felt before impregnation is quite dense, so that air

flow through it is restricted. That is one reason why, when

suction is exerted only from the far end of the liner, it takes

many hours to produce an adequate degree of suction at the

resin front, and that is why the suction process disclosed in

the Everson and Rhys-Jones prior art references, while mar-

ginally practical when employed with relatively short and nar-

row linings, is totally impractical if employed with longer and

wider linings such as are commonplace today.

36. When the suction source (cup or tube) approaches the

resin front and is removed, exposing the opening through

which suction had previously been drawn, air tends to enter

the lining through that opening and reduce the degree of suc-

tion within the lining, and particularly at the resin front. How-

ever, it is only a matter of five second or less to remove the

suction source and seal the opening, and during that time very

little air enters the lining and reaches the resin front. Simi-

larly, only a very few seconds is involved between making the

second opening, through which air tends to enter, and cover-

ing that second opening with the suction source, and in prac-

tice only about 15-20 seconds is involved in the entire

procedure of removing the section source, sealing the open-

ing, making the new opening and applying the suction source

to the new opening. During that time, the degree of vacuum at

the resin front does decrease somewhat, but not to a material

degree. In practice the impregnation process continues unin-

terrupted during that time, with the lining continuously mov-

ing forward at a constant speed and the resin continuously

impregnating newly presented portions of the felt.

A-34

37. Hence, in the single-cup process disclosed in the ‘012

patent, while the act of sucking air from the liner is inter-

rupted during the few seconds required to effectuate the shift

in position of the suction cup, and the degree of suction at the

resin front decreases as a result, there is always a sufficient

degree of vacuum at the resin front to provide for effective

substantially complete impregnation of the felt. The vacuum

within the liner, and particularly the vacuum at the resin front,

is not interrupted or discontinuous. It is variable, but to a de-

gree which makes no difference insofar as substantially com-

plete felt impregnation is concerned.

38. The claim of the patent calls for forming a window

and disposing a cup over that window to create a vacuum.

Nowhere in the claim is the licensee restricted to the use of

one cup. Insituform and its licensees have used multiple suc-

tion cups spaced along the length of the liner for many years

prior to Defendants’ existence. Insituform licensees some-

times use the single-cup process, but more often the multiple-

cup process, because the multiple-cup process more rapidly

achieves the desired vacuum at the resin front when relatively

wide or thick liners are being impregnated. The reason wide

or thick liners call for multiple cups is that with them the

cross-sectional area of the felt exposed to the resin is quite

large, making the obtaining of an adequate vacuum more dif-

ficult. The more suction cups that are working at any one time

the more rapidly is the requisite degree of vacuum achieved at

the resin front. The shifting of cups in the multiple-cup proc-

ess results in a lessening of the vacuum at the resin front, just

as in the case of the single-cup process, but the difference in

degree in either the single-cup or multiple-cup process is not

material in the overall carrying out of the impregnation proc-

ess.

39. The claim calls for “an outer layer formed by an im-

permeable film.” The purpose and function of that outer layer

is to keep the resin in the felt during the impregnation proc-

ess. Defendants’ processes involve the use of a plastic layer

immediately outside the felt layer which is also impermeable

during the impregnation process, and which keeps the resin in

A-35

the felt during the impregnation process. The function of the

impermeable layer is to keep the resin in the felt layer during

impregnation. The plastic layer performs this function in the

claim 1 method performed by the Plaintiff and in the Process

1 and 2 methods performed by the Defendant even though the

Defendant has a very thin felt layer on top of the impermeable

layer.

40. Defendant has presented evidence to attempt to dem-

onstrate the substantiality of the differences between the

methods that they use in Processes | and 2 and the Plaintiff's

method in Claim 1 of the patent to avoid a finding of in-

fringement under the doctrine of equivalents. Defendants de-

scribe the substantiality of the differences as follows:

Multiple Cup Process (Process 1)

41. The Multiple Cup Process (Process 1) was based on

KM’s process used in Europe. It involves a process whereby a

quantity of curable resin is introduced inside one end (the up-

stream end) of an elongated hose-like liner, which has felt as

its outermost surface. A plastic layer is sandwiched between

the outer felt layer and an inner felt layer. The liner is posi-

tioned along a tilted conveyer belt, causing the resin to flow

downstream. Slits are formed 10-15 feet apart in the outer felt

and plastic layer of the liner. Multiple vacuum cups (typically

4-6) are then positioned over the slits. A vacuum pump is

connected to the cups by hoses. The cups apply vacuum si-

multaneously along the liner, to pull air from the inner felt

layer, allowing the flowing resin to evenly soak or impregnate

the inner felt.

42. Interruption of vacuum during the process is avoided

by using the multiple cups to draw a continuous vacuum be-

yond the isolated region closest to the resin. The continuous

vacuum zone extends approximately 30-50 feet along the

liner. When the cup closest to the resin is removed, the re-

maining cups positioned farther downstream continue to draw

vacuum on the inner felt. The presence of those cups insures

that a continuous uninterrupted vacuum is maintained.

A-36

Multiple Needle Process (Process 2)

43. The Multiple Needle Process (Process 2) was devel-

oped by CAT in 1991 to replace Process 1. In Process 2, mul-

tiple hollow needles (typically 4-6), are positioned

approximately 10-15 feet apart along the liner. Those needles

apply a continuous vacuum to the liner.

44. A quantity of curable resin is introduced inside one

end (the upstream end) of the elongated hose-like liner. As in

Process |, the outermost surface of the hose-like liner is made

of felt, and the liner is positioned along a tilted conveyer belt,

causing the resin to flow downstream.

45. Each needle is used to puncture the liner, such that the

needle tip is positioned in the inner felt. The needles are in-

serted so that they point horizontally in the direction of the

resin. Each needle is anchored to the liner, and is connected to

the vacuum pump by a hose. When the vacuum pump is acti-

vated, the needles draw a vacuum from the inner felt through

the tip of the needle. The needles apply vacuum simultane-

ously along the liner, to pull air from the inner felt layer, al-

lowing the flowing resin to evenly soak or impregnate the

inner felt.

46. A continuous uninterrupted vacuum is maintained at

all times on the inner felt. When the resin approaches the first

needle, that needle is removed and the hole sealed. When that

needle is removed, the remaining needles positioned farther

downstream continue to draw vacuum on the inner felt. Inter-

ruption of vacuum is avoided, since the needles continue to

draw a vacuum beyond the isolated region closest the resin.

The continuous vacuum zone extends approximately 30-50

feet along the liner.

Conclusory Findings

47. The Court has considered the evidence of the substan-

tiality of the differences between Plaintiff's patent Claim |

and the processes used by the Defendants. Defendants’ Proc-

esses | and 2 do not differ substantially from the process dis-

closed in the ‘012 patent. They correspond in every detail to

A-37

claim | of the ‘012 patent, perform the same function

(producing effective vacuum at the resin front) by the same

means (sequential application of vacuum to the interior of the

liner at points along the liner as the liner is moved) and

achieve the same result (uniform impregnation of the felt by

the resin).

48. Defendants’ Process | is the full equivalent of the

process described in claim | of the ‘012 patent. It does the

same thing by the same means to accomplish the same result.

That is true of claim | as a whole. With respect to the indi-

vidual elements of claim 1, Defendants’ Process | is the

equivalent (same thing, same means, same result).

49. Defendants’ Process 2 is the full equivalent of the

process described in claim | of the ‘012 patent. It does the

same thing, by the same means to accomplish the same result.

The purpose, function and result of the cup, as claim | points

out in section (3), is to “prevent(s) ingress of air into the inte-

rior of the tube while the tube is being evacuated”, which is

precisely the purpose, function and result of the tube. Both the

cup and the tube are, as claim | states, “connected by a flexi-

ble hose to a vacuum source”, both are the means provided for

the application of vacuum, they both do the same thing (suck

a vacuum) by the same means (being connected to a vacuum

source) to achieve the same result (produce a satisfactory vac-

uum at the resin front).

50. The vacuum at the resin front when carrying out the

multiple-cup Process | or multiple-needle Process 2 may be

somewhat more efficient, during the time that the vacuum

cups are being shifted, however, modification by the addition

of multiple cups to the process to create this additional effi-

ciency does not avoid infringement by equivalency because

the multiple cups perform the same function in the same way

to achieve the same results.

5i. Neither does the substitution of the needle for the cup

avoid infringement by equivalency because the mere modifi-

cation of this feature does not avoid the fact that the basic

features of Claim | of the patent have been adopted. This new

A-38

feature performs substantially the same function, in substan-

tially the same way, to achieve substantially the same result.

This apparatus distinction is irrelevant in the determination of

whether the Defendants’ processes infringe under the doctrine

_ of equivalents.

52. There is nothing in the file history of the ‘012 patent

or the prior art which prevents claim | from covering Defen-

dants’ processes. The patentee originally claimed, in claim 1,

all types of vacuum application, and in claim 4 he originally

claimed the sequential application of vacuum. The prior art

cited by the Examiner did not show that sequential vacuum

application, and by amending the claims, the patentee aban-

doned protection broad enough to include all types of vacuum

application but properly retained claims to sequential vacuum

application, which is precisely what Defendants do in all of

their processes.

53. The patent claims say nothing about whether the vac-

uum in the liner is continuous or not. In fact, the vacuum in

the liner, including the vacuum at the resin front, is continu-

ous in the process disclosed in the ‘012 patent. The sucking of

air from the liner is discontinued during the time involved in

shifting the vacuum cup, but a substantial and operatively ef-

fective vacuum remains active on the resin front throughout

the process.

CONCLUSIONS OF LAW

1. The Constitution of the United States authorizes Con-

gress to enact laws to promote the progress of science and

useful arts by granting inventors exclusive rights to their in-

ventions for limited periods. These grants, known as

“patents”, serve the advancement of science because, after the

grant period of seventeen (17) years expires, the invention is

given to the public for free use by all. As part of the Depart-

ment of Commerce, the United States Patent and Trademark

Office was set up for the purpose of granting patents. It is

made up of individuals with technical and legal training

whose job it is to carefully review all applications of patents

and to issue the patents when appropriate. Because patent

A-39

examiners have technical and legal expertise, their decisions

as to patentability are given great weight. Congress has passed

a statute which requires courts to respect the decisions of

these experts by resolving doubts as to whether granted pat-

ents are valid in favor of the inventor. This is known as the

“presumption of validity”. United States Constitution, Article

I, Section 8, Clause 8; Title 35 United States Code.

2. A patent has one or more claims. The claims measure

the invention. Each claim defines a separate, independent in-

vention. Continental Paper Bag Co. v. Eastern Paper Bag

Co., 210 U.S. 405, 419, 52 L. Ed. 1112, 28 S. Ct. 748 (1908);

Ballantyne Inst. & Electronics, Inc. v. Wagner, 345 F.2d, 671

(6th Cir. 1965).

3. Because the parent is presumed valid, to exercise the

rights granted by the ‘012 patent, what the patent owner must

do is prove that his patented invention is being used without

his permission. This is called infringement. Plaintiff must

prove infringement by a preponderance of the evidence. Once

that is proved, the patent owner is then entitled to prevent

further unauthorized use of the invention by means of an in-

junction, and to compensation for past unauthorized use. 35

U.S.C. 271, 283, 284; Uniroyal, Inc. v. Rudkin-Wiley Corp.,

837 F.2d 1044, 1054 (Fed. Cir. 1988) cert. denied 57

U.S.L.W 3281 (1988).

Infringement Generally

4. Whoever without authority makes, uses, or sells any

patented invention within the United States during the term of

the patent therefor, infringes the patent. 35 U.S.C. § 271. The

party who asserts infringement has the burden of proving in-

fringement by a preponderance of the evidence. Braun, Inc. v.

Dynamics Corp., 975 F.2d 815, 819 (Fed. Cir. 1992).

5. Infringement can be proved in either one of two ways.

One way is by showing literal infringement. If Defendant’s

method falls clearly within the language of the claims, literal

infringement is made out and that is the end of it. Graver

A-40

Tank & Mfg. Co. v. Linde Air Products, Co., 339 U.S. 605,

607, 94 L. Ed. 1097, 70 S. Ct. 854 (1950).

6. One may avoid literal infringement by using the es-

sence of an invention, but not duplicating it exactly. To over-

come this problem, and preserve to inventors what is

rightfully theirs, it is well settled that even if there is no literal

infringement, one can infringe if one employs a step or steps

which are equivalent to those steps in the patent claim which

are not met exactly. This rule, called the “doctrine of equiva-

lents”, prevents infringers from beating the system by making

insignificant changes in the process to avoid literal infringe-

ment. Graver Tank &. Mfg. Co. v. Linde Air Products Co.,

339 U.S. 605, 607, 94 L. Ed. 1097, 70 S. Ct. 854 (1950);

Corning Glass Works v. Sumitomo Elec. USA, Inc., 68 F.2d

1251, 1258 (Fed. Cir. 1989). Laitram Corp. v. Cambridge

Wire Cloth Co., 863 F.2d 855, 856-7 (1988).

7. This case involves process claims. Equivalency is

made out if the steps of Defendants’ accused processes are

either the same as the Plaintiff's claim (literal infringement)

or the Defendants’ processes perform substantially the same

function as the corresponding step set forth in the claim in

substantially the same way to obtain substantially the same

result. Pennwalt Corp. v. Durand-Wayland Inc., 833 F.2d

931, 934 (Fed. Cir. 1987). This is known as infringement by

equivalents. Something is “equivalent” if it does not substan-

tially change the way in which the function of the claimed

invention is performed. Pennwalt, at p. 935. A process may

be found to be equivalent if after considering the substantial-

ity of the claimed differences in the new process, the fact

inder can conclude that the new process represents an insub-

stantial change. Hilton Davis Chemical Co. v. Warner-Jenk-

inson Co., No. 93-1088, 1995 U.S. App. LEXIS 21069 (Fed.

Cir. August 8, 1995) (per curiam).

8. The issue of equivalency is a question of fact. Du-

rango Associates Inc. v. Reflange Inc., 843 F.2d 1349, 1357

(Fed. Cir. 1988); Uniroyal Inc. v . Rudkin-Wiley Corp., 837

F.2d 1044, 1057 (Fed. Cir. 1988); Hartness International Inc.

ER nT ee

Add

v. Simplimatic Engineering Co., 819 F.2d 1100, 1110 (Fed.

Cir. 1987).

9. In accordance with equitable principles, for infringe-

ment to exist under the doctrine of equivalents an accused

method must perform substantially the same function, in sub-

stantially the same way, to achieve substantially the same re-

sult as the invention defined by the claims. Graver Tank &

Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 608, 94

L.Ed. 1097 (1950).

10. To properly apply the Graver Tank “function-way-

result” test, the function, way and result of each accused proc-

ess (Process | and Process 2) are compared to the function,

way and result of the method claimed in the ‘012 patent.

Malta v. Schulmerich Carillons, Inc., 952 F.2d 1320, 1327

(Fed. Cir. 1991); Lear Siegler, Inc., v. Sealy Mattress Co. of

Mich., 873 F.2d 1422, 1425-26 (Fed. Cir. 1989).

11. If the evidence shows that even one of these condi-

tions is not satisfied, there can be no infringement by equiva-

lents. London, 946 F.2d at 1539; Johnston v. IVAC Corp., 885

F.2d 1574, 1581 (Fed. Cir. 1989); Lear Seigler, 873 F.2d at

1581.

12. Each of the three components (function-way-result)

must be separately met. Universal Gym Equip., Inc. v. ERWA

Excercise Equip. Ltd., 827 F.2d 1542, 1548 (Fed. Cir. 1987).

Defendants’ Process 1 and Process 2 perform substantially the

same function and achieve substantially the same results in

substantially the same way as the method claimed in the ‘012

patent.

13. The doctrine of equivalents is subservient to the doc-

trine of prosecution history estoppel. Uniroyal, Inc. v. Rudkin-

Wiley Corp., 939 F.2d 1540, 1544 (Fed. Cir.), reh’g denied,

(1991). Prosecution history estoppel limits the doctrine of

equivalents. Charles Greiner, 962 F.2d at 1036. Prosecution

history estoppel is an equitable tool for determining the per-

missible scope of patent claims. Mannesmann DeMag Corp v.

A-42

Engineered Metal Products Co., 793 F.2d 1279, 1284-85

(Fed. Cir. 1986).

14. Although the prior art also limits equivalents, prose-

cution history estoppel and the prior art are separate and dis-

tinct concepts. The limits on equivalency imposed by

prosecution history estoppel can be, and frequently are,

broader than those imposed by the prior art. Haynes Intern.,

Inc. v. Jessup Steel Co., 8 F.3d 1573, 1579 (Fed. Cir. 1993),

modified on reh'g, 15 F.3d 1275 (Fed. Cir. 1994). In this case,

the issue is whether prosecution history estoppel limits the

doctrine of equivalents.

15. Prosecution history estoppel limits a patentee’s reli-

ance on the doctrine of equivalents by preventing him from

contending later in an infringement action that his claims

should be interpreted as if limitations added by amendment

were not present. Jonsson v. Stanley Works, 903 F.2d 812,

821 (Fed. Cir. 1990).

16. Under the doctrine of prosecution history estoppel,

where a patent applicant cancels a claim in the Patent Office

to distinguish his invention from prior art, and replaces that

claim with another claim, the patent owner is deemed to have

surrendered the subject matter covered by the original claim,

and cannot recapture that subject matter through the doctrine

of equivalents. Haynes, 8 F.3d at 1577-78; Wang Laborato-

ries, Inc. v. Toshiba Corp., 993 F.2d 858, 868 (Fed. Cir.

1993); Charles Greiner, 962 F.2d at 1036; Diversitech Corp.

v. Century Steps, Inc., 850 F.2d 675, 681 (Fed. Cir. 1988).

There is no surrendered subject matter under the facts of this

case.

17. The legal standard for determining what subject matter

was surrendered is an objective one, measured from the van-

tage point of what a competitor was reasonably entitled to

conclude, from the prosecution history, that the application

gave up to procure issuance of the patent. Haynes, 8 F.3d at

1577-78.

A-43

18. Whether or not estoppel exists is a question of law,

Wang Laboratories Inc. v. Toshiba Corp., 993 F.2d 858, 867

(Fed. Cir. 1993), and is determined in the context of the entire

prosecution history of the patent -- the prior art, the Exam-

iner’s rulings and the patentee’s arguments. In Wang, 993

F.2d at 858, when the original claims (for a circuit board with

memory chips) were rejected as being unpatentable in view of

prior art, the applicant cancelled those claims, replacing them

with new claims that required the memory chips to be

“mounted in a single row.” Id. at 867. Those claims eventu-

ally issued as part of the patent. The Defendants’ accused de-

vices (“lateral memory modules”) had two rows of memory

chips and therefore lacked the very limitation added by

amendment (memory chips “mounted in a single row”). The

district court permitted the jury to find infringement by

equivalents. The Federal Circuit reversed. The court held that

“prosecution history estoppel should have been applied to

reach the conclusion that the accused lateral memory modules

were surrendered during prosecution and therefore do not in-

fringe under the doctrine of equivalents.” /d. at 868. Even

though the specific accused lateral memory modules were not

cited prior art during prosecution, the Federal Circuit held that

coverage of those devices was surrendered. /d. at 867-68.

19. The facts of the present case are distinguishable from

the facts in Wang. In Wang, estoppel was found because in

that case the patentee, in arguing to the Examiner, stressed the

significance of mounting chips “only in a single row” and that

limitation was added to the claims. There estoppel was found

excluding multiple row mounting as antithetical to the argu-

ments presented to the Examiner. Similarly in Charles

Greiner & Co. Inc. v. Marri-Med Mfg. Inc., 962 F.2d 1031

(Fed. Cir. 1992), the applicant during prosecution of the pat-

ent added to the claims the recitation that certain elements

were located “only” at a particular location. Since in the ac-

cused device there was a different location, estoppel was

found. There is nothing corresponding to that in this case.

20. When originally presented but abandoned claims con-

tained limitations in dispute with respect to the applicability

A-44

of the doctrine of equivalents, as is the case here, that is an

important factor indicating the lack of applicability of the es-

toppel doctrine to those limitations. /nsta-Foam Products Inc.

v. Universal Foam Systems Inc., 906 F.2d 698, 703 (Fed. Cir.

1990):

For the reason that the allowed claim contains the

same limitation regarding the connection between

the trigger and plunger means as did the abandoned

claim, the patent applicant did not disclaim anything

relating to the manner by which the plunger and

trigger are connected.

See also LaBountry Mfg., Inc. v. U.S. International Trade

Commission, op. cit. supra.

21. In view of the facts in this case the doctrine of prose-

cution history estoppel is not available to Defendants.

22. Defendants’ single-cup process as described in Find-

ing of Fact 29 does not infringe claim | of the ‘012 patent,

under the doctrine of equivalents.

23. Defendants’ Process | infringes claim | of the ‘012

patent under the doctrine of equivalents.

24. Defendants’ Process 2 infringes claim | of the ‘012

patent under the doctrine of equivalents.

25. Plaintiffs are entitled to an immediate injunction

against the carrying out by the Defendants of any of the in-

fringing processes here dealt with and from carrying out any

other impregnation process which infringes those claims.

26. Defendants are hereby enjoined from carrying out ei-

ther of the two impregnation processes described herein

which infringes upon the Plaintiff's claim.

27. An appeal as a matter of right is now appropriate un-

der 28 U.S.C. §1292(c)(2), on the issues of the validity of the

‘012 patent and infringement of that patent by the Defendants

under the doctrine of equivalents or by literal infringement.

a cere aera

Signed this _day of , 1995.

VANESSA D. GILMORE

UNITED STATES DISTRICT JUDGE

A-46

Appendix C

UNITED STATES COURT OF APPEALS FOR THE

FEDERAL CIRCUIT

TOBOR & GOLDSTEIN

DEC 17 1996

RECEIVED

96-1078,-1099

INSITUFORM TECHNOLOGIES, INC., INSITUFORM

(NETHERLANDS) B.V. and INSITUFORM GULF

SOUTH, INC,

Plaintiffs-Cross/Appellants,

v.

CAT CONTRACTING, INC., MICHIGAN SEWER

CONSTRUCTION, KANAL SANIERUNG HANS

MUELLER GmbH & CO KG and INLINER U.S.A.

Defendants-Appellants.

ORDER

A-47

UNITED STATES COURT OF APPEALS FOR THE

FEDERAL CIRCUIT

ORDER

A combined petition for rehearing and suggestion for re-

hearing in banc having been filed by the APPELLANTS, and

the petition for rehearing having been referred to the panel

that heard the appeal, and thereafter the suggestion for rehear-

ing in banc having been referred to the circuit judges who are

in regular active service,

UPON CONSIDERATION THEREOF, it is

ORDERED that the petition for rehearing be, and the same

hereby is, DENIED and it is further

ORDERED that the suggestion for rehearing in banc be,

and the same hereby is, DECLINED.

The mandate of the court will issue on December 20, 1996.

FOR THE COURT,

JAN HORBALY, CLERK

Dated: December 13, 1996 By_/s/ Brian P. LeDuc

Brian P. LeDuc

Associate Chief Deputy Clerk

cc: EDWARD W. GOLDSTEIN

HAROLD JAMES

INSITUFORM TECH V CAT CONTRACTING, 96-1078,

-1099 (DCT - H-90-1690) FILED

U.S. COURT OF APPEALS FOR

THE FEDERAL CIRCUIT

DEC 13 1995

CLERK

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Note: Pursuant to Fed. Cir. R. 47.6, this order is not

citable as precedent. It is a public record.

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