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TRENDSPOTTER: The Festo Decision and its Effects on Genomics Patents

GENOMICS is a new field in which patents have only recently been issued. The scope of protection afforded these patents had been interpreted and governed by a recognized body of law and rules. However, as a result of a recent decision, Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki , those rules have changed. These changes affect the enforceability of issued patents, license agreements, pending patent applications, and potential patent applications.

Enforceability of many issued patents is now limited because the types or products or processes that may infringe these patents have narrowed in scope. Patent claims may be infringed both literally and under the "doctrine of equivalents." In literal infringement, the accused product or process possesses each and every element of the infringed claim. However, if literal infringement is not found, infringement may still be found under the doctrine of equivalents if the accused product or process uses "equivalent" substitutes for some portions or steps of the invention. Infringement under the doctrine of equivalents is limited by the countervailing doctrine of prosecution history estoppel, so that the patentee cannot recapture subject matter that was surrendered during prosecution of the patent.

Essentially, before the Festo decision, patentees could successfully sue others for appropriating the invention exactly as claimed in the patent and also for appropriating the general idea of the invention by making only minor changes. This approach took into account what was fair for both the patentee and the accused infringer.  

Festo replaced this detailed consideration of the interests of both parties with bright-line rules. First, the decision held that any amendment made during patent prosecution for a "substantial reason relating to patentability" gives rise to prosecution history estoppel.  Prior to Festo only specific statements that the claims did not cover certain material already known to the public gave rise to this bar. Additionally, the bar only prevented the patentee from successfully suing others for altering the patented product or process in ways publicly known before the application was filed. Now amendments made during prosecution that have nothing to do with publicly known material and which relate only to choice of terms or formalities may also give rise to a bar. Furthermore, any amendments, even voluntary ones, will now be assumed to be "related to patentability" and will give rise to a bar unless something else in the prosecution history indicates otherwise. Therefore, changes for reasons as simple as terminology preferences by the inventors may now give rise to a bar.

However, the largest change worked by Festo applies to the bar itself. Festo held that any time there is prosecution history estoppel, no infringement under the doctrine of equivalents may be found. This means that any time a claim is amended during the prosecution of a patent application in a manner that narrows what is covered by the claim, the patentee will never be able to successfully sue an infringer under the doctrine of equivalents.  Therefore, only those who copy the claimed product or process exactly may be successfully sued.

This is particularly relevant to genomics patents for two reasons. First, the claims of most issued genomics patents, and in fact most issued patents, were narrowed at some point during prosecution of the application. Prior to Festo the general approach was to file a patent application claiming everything possible and then whittle down the claims through give and take with the Patent Examiner until an acceptable set of claims was developed.  This was very beneficial to patentees at the time, but now it means that those claims cannot be infringed under the doctrine of equivalents.  

This limitation brings us to the second point, which is the particular need for patent enforcement using the doctrine of equivalents in the genomics industry.  Because the field of genomics advances at such a rapid pace and because the function of codons and amino acids is often redundant, there is a very good chance that a claimed portion of a product or step of a process may be replaced by an equivalent, especially an equivalent step of a process that was entirely unknown when the patent application was filed.  Previously, if these equivalents did not represent any sort of advance in the technology of the invention and were merely a way to skirt the literal metes and bound of the patent claim, the patentee could still recover under the doctrine of equivalents. Now, it will be relatively easy for others to avoid infringement by making these slight adjustments.

This turn of events not only affects the capacity of patentees to enforce their patents, it may, as a result, affect license agreements as well. Licensees have already begun refusing to make royalty and milestone payments for some patent licenses. Though this may be a rude shock for the patentee, it is simply a logical step for the licensee. There is no reason why a licensee should pay as much for a patent that no longer covers minor changes, especially when such changes were the most likely form of infringement prior to Festo .

Fortunately, although the effects of Festo on issued patents are unavoidable, some steps may be taken to curtail the devaluation of pending patent applications and applications yet to be filed. Specifically, claims that have been amended or require amendment in the future in pending applications can be replaced with an entirely new set of claims. By proceeding in this manner it should be possible to obtain at least some claims in the issued patent that have never been amended. If the claims have never been amended, there can be no prosecution history estoppel and the claims will still be subject to infringement under the doctrine of equivalents.  

Even more can be done for applications that have not yet been filed. Most importantly, a more detailed search can be performed before the application is filed to identify publications that might be cited as bars to patentability. The application can then be written to explain or avoid these publications. Inventors can assist in this process by providing their patent attorneys with any background publications they may know of.  Inventors may also help produce more enforceable patents by suggesting clear ways to describe the invention and by doing so in conventional terms.  Finally, inventors and companies for whom patent applications are prepared should give their patent attorneys ample time to write the application before any deadlines. This will result in better applications with claims that are less likely to require amendment.

As this summary makes clear, Festo has wide ranging effects on genomics inventions.  We will continue to explore some of these effects in greater detail our next few articles.  

Rochelle K. Seide is a partner at the law firm of Baker Botts, where she specializes in biotechnology, intellectual property, and patent issues. She also has a PhD 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] .

TrendSpotter is a weekly column that focuses on how trends in politics, patent law, and the US and European markets will affect the genomics industry. The column appears every Friday. 

To access previous columns just enter the word "Trendspotter" in the archive search window on the homepage.     


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