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Amendments Making Explicit What Was Implicit Are Not Narrowing

December 20, 2001

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Last Month at the Federal Circuit - January 2002

Judges: Lourie (author), Archer, and Gajarsa

In Interactive Pictures Corp. v. Infinite Pictures, Inc., No. 01-1029 (Fed. Cir. Dec. 20, 2001), the Federal Circuit affirmed a jury's finding of infringement under the DOE and a related damages award.

The patent at issue, U.S. Patent No. 5,185,667 ("the '667 patent"), is directed to an image-viewing system that allows a user to view a portion of a hemispherical field in corrected perspective. The original hemispherical image captured by a fisheye-lens camera has distortion that will cause straight lines to appear to be curved. The image-transform processor takes the distorted image, accepts user input specifying a region of interest in the image, and mathematically transforms the selected region into a perspectively correct output.

The originally filed claim 1 of the '667 patent was rejected by the PTO over the prior art. The applicant amended claim 1 and specifically amended the "image transform processor means" limitation by changing "output signals" to "output transformation calculation signals." The applicant also made arguments distinguishing the invention over the prior art, but did not explicitly provide a reason for the amendment to the "output signals." The claim was allowed thereafter.

The Federal Circuit found that the amendment made to the "image transform processor means" limitation was not a narrowing amendment under Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000), and, therefore, the DOE was not precluded. The amendment made explicit what had been implicit and, therefore, was not done for a substantial reason related to patentability.

Furthermore, the Federal Circuit found that the arguments made over the prior art did not create prosecution history estoppel. The Federal Circuit also rejected the argument that the prior art limited the scope of equivalents, finding that a hypothetical claim that ensnared the accused device would have been patentable over the cited prior art.

Finally, the Court found substantial evidence supporting the jury's finding of equivalence, citing to testimony by the patentee's expert. The expert had testified that portions of the patented device and the accused device were interchangeable in theory, despite the physical inability to interchange those portions. The Court attributed the physical inability to interchange them to differences in software format and stated that interchangeability is judged from the perspective of a skilled artisan making a design choice, not the realities of software compatibility.

The jury's award of $1 million in damages was affirmed as supported by substantial evidence. The patentee's reliance on an outdated business plan, with overly optimistic sales projections that were never met, was upheld as not based on speculation or guesswork. In addition, the inclusion of all of the alleged infringer's products into the royalty base, as well as factoring in bundling and convoyed sales into the royalty rate, was not double recovery. The Court explained that the bundling and convoyed sales were only one of thirteen Georgia-Pacific factors applied to reach the royalty rate and, thus, did not warrant upsetting the jury's award.