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The Function/Way/Result Test or Insubstantial Differences Test Is Inapplicable to the Question of Foreseeability of Equivalents

05-1492
July 05, 2007

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Last Month at the Federal Circuit - August 2007

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

[Appealed from: D. Mass., Judge Saris]

In Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., No. 05-1492 (Fed. Cir. July 5, 2007), the Federal Circuit affirmed the district court’s judgment in favor of Shoketsu Kinzoku Kogyo Kabushiki Company, Ltd. and SMC Pneumatics, Inc. (collectively “SMC”) of lack of infringement of U.S. Patent No. 4,354,125 (“the ’125 patent”).

Festo Corporation (“Festo”) sued SMC for infringement of the ’125 patent. The ’125 patent, entitled “Magnetically Coupled Arrangement for a Driving and a Driven Member,” claims a “small gap,” magnetically coupled rodless cylinder. A “magnetically coupled rodless cylinder” contains a piston that is forced through a cylinder and is magnetically coupled to a driven member or driven assembly, which is then attached to a carriage that can move goods. Thus, when the piston moves through the cylinder, the magnetic force moves the driven member, which moves the attached carriage. At the time of the invention, such conveyance machines were known in the art. The invention claimed in the ’125 patent is a “small gap,” magnetically coupled rodless cylinder, meaning that the gap between the piston and the driven member is kept as small as possible so that the magnetic coupling force is particularly strong. Claim 1 of the ’125 patent requires, among other things, “a cylindrical sleeve made of magnetizable material” and “first sealing rings.” Both of these limitations were added during prosecution of the ’125 patent, but Festo never explained why these limitations were added.

SMC’s accused device is also a magnetically coupled rodless cylinder containing a piston, a cylinder, and a driven member. In the SMC device, however, the sleeve on the driven member is made of a nonmagnetizable material, aluminum alloy. In addition, the SMC device uses only one sealing ring. Because of these two features, the parties agreed that the SMC device did not literally infringe the ’125 patent. Festo argued, however, that the SMC device infringed under DOE. In response, SMC argued that its device did not so infringe because it did not satisfy the function/way/result test and because the claim amendments discussed above invoked the doctrine of prosecution history estoppel.

The district court held that prosecution history estoppel did not apply and a jury subsequently found infringement under DOE. On appeal, the Federal Circuit affirmed, but the Supreme Court granted certiorari and remanded for consideration of the prosecution history estoppel question in light of Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997). The Federal Circuit considered this question en banc and held that “the amendments [in this case] were presumed to be related to patentability and therefore created an absolute bar to the invocation of the doctrine of equivalents.” Slip op. at 8. The Supreme Court again vacated and remanded, holding that “an amendment did not raise a complete bar” and that there were three exceptions, namely: “(1) the equivalent was ‘unforeseeable at the time of the application,’ (2) ‘the rationale underlying the amendment [bears] no more than a tangential relation to the equivalent in question,’ or (3) that ‘some other reason suggest[s] that the patentee could not reasonably be expected to have described the insubstantial substitute in question.’” Id. at 8-9 (alterations in original) (citation omitted).

Again, hearing the case en banc, the Federal Circuit held that the “tangential” and “some other reason” exceptions were legal questions to be determined based on the prosecution history and that neither exception applied in this case. With respect to the first exception, the Court concluded that it too was a legal question, but held that district courts may hear expert testimony and consider other evidence relating to the foreseeability analysis. Because no record on the issue of foreseeability had been made in the earlier district court proceeding, the Court remanded for the district court to determine (1)whether an ordinarily skilled artisan would have thought an aluminum sleeve to be an unforeseeable equivalent of a magnetizable sleeve in the context of the invention; and (2) whether a person of ordinary skill in the art would have considered the accused two-way sealing ring to be an unforeseeable equivalent of the recited pair of sealing rings.

On remand, the district court held a bench trial on the foreseeability issue. It found that Festo had failed to rebut the presumption for either the magnetizable sleeve or the sealing rings. Specifically, the district court found that the use of an aluminum alloy sleeve and a single sealing ring was foreseeable. Accordingly, the district court entered judgment of noninfringement in favor of SMC. Festo appealed.

On appeal, the Federal Circuit affirmed, stating that the sole question before it was whether the equivalent was unforeseeable at the time of the amendment. It noted that it had previously determined on remand from the Supreme Court that “unforeseeable at the time of the amendment” meant “whether the alleged equivalent would have been unforeseeable to one of ordinary skill in the art at the time of the amendment.” Id. at 13-14 (citation omitted). It reiterated that “later-developed technology or technology that was not known in the pertinent prior art was ‘usually’ not foreseeable,” but that “old technology, while not always foreseeable, would more likely have been foreseeable.” Id. at 14. The Court observed that it has “consistently held that an equivalent is foreseeable when the equivalent is known in the pertinent prior art at the time of amendment.” Id. In so doing, the Court rejected Festo’s argument that the foreseeability testrequired application of the function/way/result or insubstantial differences test. Specifically, Festo argued that the proper unforeseeability test was to “determine whether the proven equivalent would have been foreseeable to a person of ordinary skill in the art to accomplish the claimed invention, i.e., perform the same function in substantially the same way to achieve the same result, looking only at the information available at the time of the amendment.” Id. at 15-16.

The Court reasoned that Festo’s argument seemed inconsistent with the basic concept of the doctrine of equivalents. Festo was essentially arguing that “a patentee should be able to capture through equivalents a device that was novel, i.e., separately patentable, because of the novelty of the equivalent features.” Id. at 17. The Court noted that the theory of DOE, however, is that “an applicant through the doctrine of equivalents should only be able to protect the scope of his invention, . . . not to expand the protectable scope of the claimed invention to cover a new and unclaimed invention.” Id. (citation omitted). Thus, explained the Court, “there is a strong argument that an equivalent cannot be both non-obvious and insubstantial.” Id.

The Court added that neither the Supreme Court’s earlier decision nor its own en banc decision supported Festo’s argument. To the contrary, noted the Court, those decisions “make clear that an equivalent is foreseeable if the equivalent was generally known to those skilled in the art at the time of amendment as available in the field of the invention as defined by the pre-amendment claim scope.” Id. at 18.

The Court stated that Festo had offered no persuasive theory as to why the function/way/result test should be used to determine foreseeability. It observed that the function/way/result and insubstantial differences tests are “not designed to determine whether prosecution history estoppel applies as a result of a limiting amendment.” Id. at 19. The Court reasoned that “accepting Festo’s view of foreseeability would likely eliminate prosecution history estoppel as a restriction on the doctrine of equivalents in most cases.” Id. “Prosecution history estoppel would apply only if the applicant in adopting the narrowing amendment was aware or should have been aware that the equivalent would be an equivalent to the claimed feature for purposes of the invention as defined by the amended claim.” Id. Beyond this being rare in itself, added the Court, “it would be rarer still that the applicant, aware of such an alternative, would have failed to claim it in the first instance.” Id. The Court also stated that applying the test at the time of infringement to determine equivalency and then at the time of amendment to determine foreseeability would lead to “endless bickering” and that adding to the confusion, the parties’ roles would be reversed for each application of the test. Id. at 19-20.

The Court observed that “[t]he question is not whether after the narrowing amendment the alternative was a known equivalent, but rather whether it was a known equivalent before the narrowing amendment.” Id. at 20. It explained that “[i]f at the time of the amendment, the equivalent was known in the pertinent prior art, the applicant should not be able to recapture it simply by establishing that a property of the equivalent—irrelevant to the broader claim before amendment—was relevant but unknown with respect to the objectives of the narrower amended claim.” Id.

Accordingly, the Federal Circuit concluded that “the function/way/result test or insubstantial differences test is inapplicable to the question of foreseeability” and that “[a]n equivalent is foreseeable if one skilled in the art would have known that the alternative existed in the field of art as defined by the original claim scope, even if the suitability of the alternative for the particular purposes defined by the amended claim scope were unknown.” Id. at 21.

Applying the above principles to the SMC’s aluminum alloy sleeves, the Court found that “[n]ot only was the use of a non-magnetic sleeve disclosed in the prior art, the ’125 patent application itself clearly recognized the possibility of using a non-magnetic material for the sleeve.” Id. at 23. Thus, the Court held that the use of an aluminum alloy sleeve was foreseeable at the time of the amendment, and the equivalent was surrendered by amendment. Given its conclusion with respect to the sleeve, the Federal Circuit noted that it need not determine whether the use of a single sealing ring was foreseeable.

Judge Newman dissented. She noted that the majority’s “new rule further erodes the residue of the doctrine of equivalents, for its foreseeable result is to deprive amended claims of access to the doctrine of equivalents.” Newman Dissent at 1-2. She opined that under the majority’s opinion, “even if unforeseeable as a matter of fact, even if technologically unexpected or unlikely, the equivalent must be ruled to be foreseeable if the structure is later found to be a usable equivalent.” Id. at 2. She observed that “the panel majority rules that the aluminum alloy shield was retrospectively foreseeable at the time of the amendment because it later was used as an equivalent, although it was not known to be equivalent and would not have been deemed equivalent at the time of the amendment.” Id. at 4. She added that “[h]indsight is not foreseeability.” Id. According to her, no error had been shown in the district court’s finding that persons of skill in the field of the invention would not have deemed magnetizable and nonmagnetizable sleeves to be equivalent at the time the ’125 patent application was filed and prosecuted. She stated that “[i]t cannot be irrelevant that the then-existing knowledge in the field of the invention would not have deemed an aluminum alloy sleeve equivalent to a magnetizable metal sleeve . . . .” Id. at 4-5. She noted that “[e]vidence of foreseeability must be limited to prior art, not future art,” id. at 5, and that the majority was incorrect in ruling that “the foreseeability requirement does not require the knowledge that the equivalent would satisfy the function/way/result test or the insubstantial differences test.” Id. at 6. She concluded that the majority’s holding “strays from controlling precedent as well as from logic.” Id. at 7.