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Rewriting Dependent Claims into Independent Form Resulted in a Narrowing Amendment Leading to Prosecution History Estoppel and a Bar to DOE

April 18, 2008

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Last Month at the Federal Circuit - May 2008

Judges: Newman (dissenting), Rader (author), Dyk

[Appealed from: D. Del., Judge Sleet]

In Honeywell International, Inc. v. Hamilton Sundstrand Corp., No. 06-1602 (Fed. Cir. Apr. 18, 2008), the Federal Circuit affirmed the district court’s judgment that the patentee was barred from asserting DOE. The Court held that the patentee could not show that the alleged equivalent was unforeseeable at the time of the narrowing amendment or that the narrowing amendment bore no more than a tangential relation to the alleged equivalent.

Honeywell International, Inc. and Honeywell Intellectual Properties, Inc. (collectively “Honeywell”) brought suit against Hamilton Sundstrand Corporation (“Sundstrand”) for infringement of certain claims of U.S. Patent Nos. 4,380,893 and 4,428,194. These patents claim technology to control airflow surge in auxiliary power units (“APUs”). An APU is a gas turbine engine that generates electricity for an aircraft and includes a load compressor to supply compressed air for starting the aircraft’s main engines and for controlling the cabin’s environment during flight. APUs must be able to control against surges in flight. Honeywell’s patents claim a more efficient APU surge control system utilizing adjustable inlet guide vanes (“IGVs”). During prosecution, the independent claims had no reference to IGVs for use in surge control systems. The independent claims were cancelled in light of prior art and the dependent claims that recited IGVs were rewritten into independent claims. Sundstrand manufactures an APU device with a surge control system that overcomes a phenomenon at high flow levels known as the double solution problem by using, in part, IGVs.

A jury found that Sundstrand infringed the Honeywell patents under DOE and awarded damages to Honeywell. The district court denied Sundstrand’s motions for JMOL and a new trial. Both parties appealed. The Federal Circuit held that Honeywell’s act of rewriting dependent claims into independent form coupled with the cancellation of the original independent claims created a presumption of prosecution history estoppel. The Court vacated and remanded for a determination of whether Honeywell could rebut the presumption. On remand, the district court held a two-day bench trial to determine whether prosecution history estoppel barred Honeywell from asserting DOE. The district court held that Honeywell could not rebut the presumption of surrender by demonstrating that the alleged equivalent was not foreseeable at the time of the narrowing amendment or that the rationale underlying the narrowing amendment bore more than a tangential relation to the equivalent in question. Honeywell appealed from these two determinations and from the district court’s rulings with respect to whether damages should be limited and whether the evidence was sufficient to support the jury’s infringement verdict.

On appeal, the Federal Circuit agreed with the district court’s interpretation that the narrow equivalent proposed by Honeywell was foreseeable and, thus, precluded by estoppel principles. The Court reiterated that the goal of the principle of foreseeability is to “ensure that the claims continue to define patent scope in all foreseeable circumstances, while protecting patent owners against insubstantial variations from [the] claimed element in unforeseeable circumstances.” Slip op. at 13. In evaluating whether Honeywell could overcome the presumption of surrender, the Court assumed that Honeywell’s proposed articulation of the equivalent element was correct. The Court examined whether the use of IGV position to detect flow was later-developed technology and, thus, unforeseeable at the time of the amendments. The Court noted that foreseeability only requires that one of ordinary skill in the art would have reasonably foreseen the proposed equivalent at the pertinent time.

The Court found that Sundstrand developed its equivalent well after Honeywell’s amendments, but stated that the mere temporal relationship of the equivalent to the patent acquisition and amendment process did not make the equivalent unforeseeable. The Court commented that the evidence suggested that the IGV solution may have been foreseeable. The Court acknowledged Honeywell’s contention that during the relevant time frame, surge control systems did not use IGV position to ascertain the existence of flows for surge control. However, the Court found that it was known that the control of surge was important, that systems had been developed for that purpose, and that IGVs were routinely used in surge control systems and affected the air flow rate. The Court observed that the record supported the district court’s finding that a person of ordinary skill in the art would have known of the use of IGV position to distinguish between flows to resolve the double solution problem. It concluded that Honeywell could have foreseen and included the alleged equivalent in the claims when they were amended. Accordingly, it agreed with the district court that Honeywell did not rebut the presumption of surrender with evidence of unforeseeability.

The Court also rejected Honeywell’s procedural challenges to the district court’s foreseeability conclusion, finding no fatal error in the district court’s refusal to estop Sundstrand from reversing its prior position that its accused product and its particular use of IGV position was unique (and perhaps unforeseeable). The Court stated that judicial estoppel only applies when the party had been successful and had prevailed based on the former position. Here, noted the Court, the record did not link Sundstrand’s success on any issues based on its former position. In sum, the Court found no error in the district court’s foreseeability conclusion.

On the tangential relation prong, the Court found that Honeywell was not able to rebut the presumption that the patentee’s objectively apparent reason for the narrowing amendment bore more than a tangential relation to the equivalent in question. In so finding, the Court noted that the tangential relation criterion for overcoming the Festo presumption is very narrow and focuses on the “patentee’s objectively apparent reason for the narrowing amendment.” Id. at 18 (quoting Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 480 F.3d 1335, 1369 (Fed. Cir. 2007)). It explained that to rebut the estoppel presumption with tangentiality, a patentee must show that the narrowing amendment was peripheral, or not directly relevant, to the alleged equivalent. The Court looked to the context around the examiner’s statement that the dependent claims would be allowed if rewritten into independent form. It noted that the original independent claims were rejected as obvious in light of the prior art and that the dependent claims were then rewritten into independent form and incorporated the limitations of the rejected independent claims. Thus, the Court found the key to the tangential relation inquiry was the content of the original dependent claims, which included the IGV limitation. Accordingly, the Court found that the IGV limitation was added to the claimed invention and that because the alleged equivalent focused on the IGV limitation, the amendment “bore a direct, not merely tangential, relation to the equivalent.” Id. at 20. Therefore, the Court concluded that tangentiality did not help Honeywell to overcome the presumption of surrender.

Finally, because Honeywell was not able to rebut the prosecution history estoppel presumption, the Court dismissed as moot Honeywell’s challenges to the district court’s ruling with respect to whether damages should be limited and whether the evidence was sufficient to support the jury’s infringement verdict.

Judge Newman dissented. She disagreed with the application of the “new presumption of surrender to all equivalents of the claim elements and limitations that originated in dependent claims that were neveramended and that were not the subject of prosecution history estoppel.” Newman Dissent at 1. On the issue of foreseeability, she stated that while the prior art showed that the problem was not new, recognition of the problem did not render the solution foreseeable if the solution was discovered a decade later. According to her, presenting claims of varying scope is not a narrowing amendment or argument and that the PTO encourages use of dependent claims through lower fees because it facilitates examination. This protocol, she noted, has no relevance to whether a claim element is amended or narrowed or argued during prosecution, and should not be deemed to raise the Festo presumption.

Regarding the tangential relation factor, Judge Newman stated that there was no indication in the prosecution history of any relationship between Honeywell’s cancellation of the independent claim and the alleged equivalent of Sundstrand’s apparatus or method. She explained that the tangential criterion related to why an accused amendment was made, and it did not become irrebuttable simply when the accused equivalent concerned the same element that was added by amendment. She stated that the question was “whether the subject matter of the accused equivalent was relinquished by the patentee during prosecution” and felt that it should be answered on its facts, not by converting it into a complete bar. Id. at 11.