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Plaintiff Rebuts Festo Presumption Against DOE

October 04, 2004

Decision icon Decision

Last Month at the Federal Circuit - November/December 2004

Judges: Schall (author), Mayer, and Michel

In Insituform Technologies, Inc. v. Cat Contracting, Inc., No. 99-1584 (Fed. Cir. Oct. 4, 2004), the Federal Circuit affirmed a judgment of infringement with respect to the Defendants, vacated a finding of willful infringement and remanded for further proceedings on that issue with respect to certain Defendants, and vacated the district court’s damages award and remanded for further proceedings on that issue.

This case has a lengthy procedural history concerning a complex series of trials and appeals spanning nearly fourteen years. Insituform Technologies, Inc. and other related parties (collectively “Insituform”) sued Cat Contracting, Inc. and others (collectively “Cat”) for infringement of U.S. Patent No. 4,366,012 (“the ‘012 patent”), which is directed to a process for rehabilitating underground pipe without digging it up. Specifically, the claim at issue of the ‘012 patent claims a process for impregnating a flexible tube liner with resin prior to insertion of the liner into a damaged pipe.

The infringement question was one of equivalency and required a determination of whether the Plaintiffs were barred by prosecution history estoppel from asserting the DOE. The Federal Circuit ruled that the rationale underlying amendments made during the prosecution history bore no more than a tangential relation to the equivalent in question and, therefore, rebutted the Festo presumption that a narrowing amendment made for a reason of patentability surrenders the entire territory between the original claim limitation and the amended limitation. Specifically, the Court ruled that an amendment limiting the literal scope of claim 1 to a “single cup process” bore only a tangential relation to the equivalent in question, i.e., a process using “multiple cups.” The patentee had merely argued that the amended claim did not have the disadvantage of a large compressor at the end of the liner as in that prior art. There simply was no relationship between the narrowing amendment and a multiple-cup process, according to the Federal Circuit.

The damages trial had been bifurcated from the infringement issues and was conducted under the assumption that two different processes infringe the ‘012 patent. The Federal Circuit had previously determined, however, that only one of those processes infringed. Based on testimony from two previous trials and new evidence, on this appeal, the Court amended its damages ruling. Cat argued that the district court had erroneously ruled on damages based on deposition and affidavit testimony without the opportunity to observe and assess the credibility of the new witnesses. The Federal Circuit agreed that the procedure chosen by the district court was tantamount to a trial by affidavit. The deposition testimony of the two additional witnesses combined with inconsistent testimony from witnesses at two different trials created a disputed issue of material fact upon which the quantum of damages turned. Accordingly, the Federal Circuit vacated and remanded the damages issue.

Concerning willfulness, Cat had failed to obtain an opinion of counsel, and the district court found willful infringement. The Federal Circuit vacated this decision, concluding that its elimination of the adverse inference arising from failure to obtain an opinion of counsel is a material change requiring a fresh weighing of the evidence in this case.

The district court had also found that Cat and another Defendant were liable for induced infringement because they had taught their licensees to use an infringing process. Concerning intent, Cat’s and the other Defendant’s licensing activities had occurred after the first trial with full knowledge that the process had been accused of infringing. Thus, the Federal Circuit concluded that the evidence of record supported the finding of induced infringement.