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New Festo Decision is a Fairer Standard for Prosecution History Estoppel

Last year we wrote about the Festo decision by the US Court of Appeals for the Federal Circuit. That decision altered standing patent law principles regarding infringement that decreased the value and enforceability of existing biotechnology patents. 


This ruling substantially limited the possibility of enforcing a patent against someone who made only minor changes to the invention. On May 28, the Supreme Court vacated the Festo decision but did not return patent law to its original status. Some changes made by the Federal Circuit remain and will continue to affect existing patents.


The Festo case can be traced to 1988 when a competitor of the ruling's namesake sold cylinders very similar--but not identical--to a cylinder Festo had already patented. Under US patent law, a patent is considered to be infringed when a product or process falls literally within the metes and bounds of a patent claim. It may also be infringed by a product or process that is not within the literal scope of a claim, but rather is equivalent to one or more elements of the claim. 


The Supreme Court established this so-called doctrine of equivalents because it was concerned that a competitor, taking advantage of the difficulties of describing an invention in words, would be able to copy the essence of the invention with only a minor change and avoid patent infringement. 


However, the doctrine of equivalents raises uncertainties that might be harmful to innovation. For example, a competitor that is afraid to develop an "equivalent" of a patented invention may steer more clearly of a patent than is actually necessary under the law.


In order to help interpret what is an equivalent, the courts have also developed the doctrine of "prosecution history estoppel." Thanks to prosecution history estoppel, a patent owner cannot amend a claim during patent prosecution to exclude something, and then turn around and assert during litigation that the excluded material is actually an equivalent of a claim element. 


Before the initial Festo ruling the Federal Circuit, following earlier Supreme Court decisions, held that prosecution history estoppel should only apply in cases where an amendment was made to avoid a prior art reference. Such estoppel only prevented the patent owner from recovering, through the doctrine of equivalents, the subject matter that had been surrendered to overcome prior art. Festo significantly changed this estoppel standard in two ways: 


First, the Federal Circuit held in Festo that if any claim element--a discrete part of a claim, such as a particular step in a method--was amended during the prosecution of a patent, the patent owner was absolutely barred from asserting any infringement under the doctrine of equivalents for that claim element. This was contrary to the previous practice of determining whether the particular equivalent had in fact been surrendered or excluded by the amendment.


In the most recent Festo ruling, the Supreme Court overruled this component. The Court recognized that Festo's "absolute bar" was unfair to those who had made amendments while prosecuting their patents with the expectation that only some, but certainly not all, equivalents of the literal claim element might be surrendered as a result of the amendment. 


The Court repeated the conclusion from its Warner-Jenkinson decision: If such a change to limit the application of the doctrine of equivalents--and therefore alter the incentives for disclosing an invention--is necessary, Congress, and not the courts, is responsible for effecting such a change.


The Court also addressed several other reasons why the absolute bar to the doctrine of equivalents was unfair or unworkable. The new Festo ruling restores the courts' ability to examine any amended claim element to determine what was surrendered during patent prosecution, and whether the alleged equivalent was a portion of the surrendered material.


The rejection of the absolute bar to the doctrine of equivalents is the most important aspect of the new Festo ruling for issued patents. Under the first Festo ruling, those patents would have suffered from serious cuts in their enforceability and value. Due to the Supreme Court's sound reasoning and its restoration of the approach in which a court determines what subject matter was surrendered by an amendment, issued patents will now be evaluated by standards closer to those in place when they were being prosecuted. 


Federal Circuit in the initial Festo also held that prosecution history estoppel applied to any narrowing amendment made for reasons related to patentability. This included amendments made to overcome prior art, as well as amendments made for a number of other reasons.


Of particular relevance to biotechnology, the decision found that prosecution history estoppel arises based on amendments made to overcome legal rejections such as "indefiniteness" rejections, like those found under 35 USC §112, in which the Patent Examiner objects to a particular term and often recommends another. In biotechnology, these rejections, in which the claimed invention is rejected as not "enabled" or not "described," are also common.   


Previously, when claims were amended to incorporate different, more "definite" terms or to overcome enablement rejections, the primary concern was to avoid any presumption or indication that such amendment was made for reasons relating to prior art. So long as the amendment did not relate to prior art, prosecution history estoppel would not preclude a finding of infringement under the doctrine of equivalents. 


The first Festo held that such amendments that are not based on overcoming prior art do give rise to prosecution history estoppel as long as they are related to patentability. 


This standard was upheld by the Supreme Court and may, in fact, have been somewhat broadened in that the current Fest rule indicated that some amendments that do not even relate to patentability may give rise to prosecution history estoppel. 


This Festo provides that when a claim has been amended that a patentee, in order to avoid application of prosecution history estoppel, must establish that, at the time of the amendment, "one skilled in the art" could not have reasonably been expected to write a claim that covered the allegedly infringing equivalent. This will be very difficult to establish if the alleged equivalent was covered under a broader term present in an unamended claim, but not in the amended claim that ultimately was in the issued patent. In fact, a broader term covering the equivalent were present in the patent disclosure, but not used in the claim, may also indicate that the patent applicant knew of the equivalent and intended to dedicate it to the public or otherwise surrender it.


For instance, if a method claim in an issued patent recites a step using "VEGF C", but an earlier version of the claim recited the use of "angiogenic factor" but was limited to VEGF C because of an enablement rejection during prosecution, it will likely be very difficult to overcome prosecution history estoppel to find that "VEGF A" was equivalent to VEGF C. 


Although VEGF A may actually be equivalent to VEGF C for purposes of the claimed method, VEFG A is an angiogenic factor. The group "angiogenic factor" was known to the patent applicant and was narrowed to just VEGF C during prosecution. As a result, a court would likely find that all other angiogenic factors other than VEGF C had been surrendered.  


Pre-Festo, an amendment narrowing the claim from "angiogenic factor" to VEGF C might have given rise to prosecution history estoppel for only two reasons: First, the Patent Examiner might have found a similar method using another molecule that promotes angiogenesis in the prior art--for example, an FGF. Therefore, a claim reciting "angiogenic factor" would have been found to be unpatentable. Because the claim was amended to overcome the prior art, the claim element reciting use of VEGF C would have been subject to prosecution history estoppel. 


Second, the patent applicant may have made the amendment without any explanation.  In such a case a court would presume that the amendment was related to prior art and thus gave rise to prosecution history estoppel.  As a result of the amendment, the patent owner would be barred from asserting infringement under the doctrine of equivalents based on the use of VEGF A.


Both of these situations would still give rise to prosecution history estoppel. The updated Festo rule has added more complexity. For example, the amendment may have been made because the Patent Examiner alleged that the entire group of angiogenic factors was not enabled or described under 35 USC §112. An amendment made to overcome this rejection now gives rise to prosecution history estoppel under the new Festo. 


As the above indicates, some patents may have a diminished scope of enforceability after the new Festo. Although these patents will certainly not be as limited as they would have been under the first Festo, with its absolute bar to applying the doctrine of equivalents, they will now be subject to prosecution history estoppel for amendments to overcome an enablement or written description rejection.


However, the updated Festo provides several mitigating reasons why prosecution history estoppel may not arise from a given amendment. For example, the "amendment may have been unforeseeable at the time of the application; the rationale underlying the amendment may bear no more than a tangential relation to the equivalent in question; or there may be some other reason suggesting that the patentee could not reasonably be expected to have described the insubstantial substitute in question."


Based upon these reasons, a patent owner might argue that, under the law at the time an amendment was made, there was no reason to believe it would give rise to prosecution history estoppel. Therefore, the patent owner may have not been expected to make an amendment that would include the "insubstantial substitute"--or equivalent-- in question because it would have been covered by the doctrine of equivalents and not excluded by prosecution history estoppel as those doctrines existed at that time. 


Using this example, the patent owner may have expected a claim using VEGF C in a particular step to include the use of VEGF A so long as the amendment that replaced "angiogenic factor" with VEGF C was made to overcome an enablement rejection and not to overcome prior art.


Overall, the new Festo decision restores a significant portion of the enforceability and value of biotechnology lost after the initial Festo, primarily by rejecting the absolute bar on application of the doctrine of equivalents for amended claim elements. While the new Festo decision may limit the doctrine of equivalents for claims that were amended for reasons other than prior art rejections, the new ruling provides the basis for mitigating arguments as to why subject matter was not surrendered by such amendments. 


The ruling has clarified the playing field and provided a roadmap for obtaining valid/enforceable biotechnology patents.


Rochelle K. Seide is a partner at the law firm of Baker Botts. She is experienced in biotechnology, intellectual property, and patent issues, and also has a Ph.D. in human genetics. Michelle LeCointe is an associate at Baker Botts and a registered patent agent. They can be reached at[email protected] and [email protected]

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