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Festo Has Retroactive Effect on Cases Still Open on Appeal

99-1584
March 26, 2001

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Last Month at the Federal Circuit - April 2001

Judges: Schall (author), Mayer, and Michel

In Insituform Technologies, Inc. v. Cat Contracting, Inc., No. 99-1584 (Fed. Cir. Mar. 26, 2001) (nonprecedential decision), the Federal Circuit vacated the district court’s judgment of infringement under the DOE in light of its holding in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000).

Insituform Technologies, Inc. (“Insituform”) holds U.S. Patent No. 4,366,012 (“the ‘012 patent”), which discloses a process for repairing damaged sections of pipe without removing the pipe from the ground. Claim 1 defines a method of impregnating a flexible tube liner with resin prior to inserting the liner into the damaged pipe. The liner used in the process has an impermeable outer film and a resin-absorbent, felt layer on the inside. The inside of the liner is impregnated with resin using a vacuum. In particular, the claimed method includes cutting a window in the impermeable outer film, applying a vacuum cup (“cup”) over the window, and connecting the cup to a vacuum source. The window is then sealed and the process is repeated down the length of a section of the liner.

Insituform complained that two processes infringe the ‘012 patent. The first process (“process 1”) includes using 4 to 6 cups along with 4 to 6 corresponding windows to apply the vacuum to the liner interior. The second process (“process 2”) involves multiple needles penetrating the outer film and felt liner to apply the vacuum.

In a previous decision, Insituform I, the Federal Circuit affirmed a district court’s JMOL of no literal infringement and held that prosecution history estoppel did not preclude Insituform from asserting that claim 1 of the ‘012 patent was infringed under the DOE by process 1 or process 2. On remand, the district court found that both processes 1 and 2 infringed the ‘012 patent under the DOE.

The Federal Circuit, in Insituform II, upheld the district court’s finding of infringement of process 1 under the DOE, but reversed as to process 2. The case was remanded on a damages issue.

On this appeal, the Defendants asked the Federal Circuit to apply the holding of Festo to the Insituform I and II decisions. The Federal Circuit first considered whether res judicata or the law of the case doctrine permitted the Festo rule to be applied to judgments already rendered by the Federal Circuit. The Court concluded that in this case, the judgment it had rendered previously could not have a res judicata effect because it had been remanded back to the district court for further proceedings. Therefore, the Court reasoned, the judgment was still open for review on this appeal.

As to the doctrine of the law of the case, an exception has been established where controlling authority has since made a contrary decision. In this case, the Federal Circuit ruled, Festo represents an intervening change in controlling authority, which must be applied.

In applying Festo, the Court found that during prosecution, Insituform had replaced the original independent claim 1 with a new, narrower independent claim. The new claim included a limitation as to the number of vacuums to be used, which narrowed that limitation. This narrowing amendment prevents Insituform from relying on any range of equivalents for this claim limitation. Thus, the accused process 1, which uses multiple cups, cannot infringe under the DOE.

Accordingly, the Court remanded the case with instructions to vacate the previous judgment of infringement and damages award.