The (unnoticed) demise of the doctrine of equivalents.

• Author: Allison, John R.

INTRODUCTION I. THE DOCTRINE OF EQUIVALENTS II. METHODOLOGY III. RESULTS A. Patentees Rarely Win B. Do the Legal Rules Matter? C. Other Findings 1. Learning effects in the district courts 2. Who uses the doctrine of equivalents? a. Industry differences b. Large versus small entities 3. What arguments prevail? 4. Does case publication matter? IV. WHAT'S GOING ON HERE? CONCLUSION APPENDIX INTRODUCTION

Patent lawyers, courts, and scholars have spent an enormous amount of time and energy over the last twenty-five years trying to determine the rationale and scope of the doctrine of equivalents, an exception to normal patent infringement rules that allows patent owners to extend the scope of patents beyond their literal bounds in certain circumstances. (1) Judges and scholars in the late 1990s suggested that the doctrine of equivalents exception was swallowing the rule, (2) complained that it "lacks a coherent vision" and labeled it the most controversial doctrine in all of patent law. (3) Two of the three most important Supreme Court patent cases decided between 1981 and 2005 concerned the scope of a limitation on the doctrine of equivalents called prosecution history estoppel. (4) The Festo case in particular whipped the patent bar into an unprecedented frenzy, attracting more amicus briefs than any other Supreme Court patent case up to that date. (5)

The Festo case also created a perfect natural test for the importance of patent rules on case outcomes. Before the Federal Circuit's en bane decision in Festo, courts often took a relatively permissive (that is, patent-friendly) stance towards prosecution history estoppel by allowing patent owners to capture ground in court they had unnecessarily given up in patent prosecution. (6) In 2000, the Federal Circuit en banc reversed course, creating an absolute bar against applying the doctrine of equivalents to an element in a patent claim where the patentee had narrowed that element in the course of obtaining the patent. (7) Two years later, the Supreme Court reversed course again, taking a middle ground by creating a presumption that such narrowing of a patent in the PTO creates estoppel, but allowing that presumption to be rebutted in various circumstances. (8) To many patent lawyers, the Supreme Court saved patent law from catastrophe by reversing the absolute bar. (9)

We have conducted an empirical study of every reported doctrine of equivalents decision in both the Federal Circuit and the district courts during three periods--one before the Federal Circuit's 2000 Festo opinion, one after that opinion but before the Supreme Court's 2002 opinion, and a third after the Supreme Court's opinion. We report a number of results that will be of interest to both scholars and patent lawyers. Two broader findings stand out in the data that should be of interest to the legal system more generally. First, the multiple changes in the doctrine of equivalents rules over the last ten years have had surprisingly little effect on the actual outcome of doctrine of equivalents cases, and even less effect on the subset of cases dealing directly with prosecution history estoppel. Indeed, to the extent there is any relationship it is an inverse one--patentees did better under less patent-friendly rules. The attention everyone has paid to Festo as changing the value of patent rights therefore seems to have been largely wasted from a practical perspective. The result is an interesting case study on "law in action" and how it can diverge from law on the books.

The second finding is even more significant: the reason the Festo changes had so little effect seems to be that the doctrine of equivalents was already near death by the late 1990s. Even under the relatively permissive doctrine of equivalents rules in place before 2000, equivalents claims usually failed, most often on summary judgment. That became even more true after 2000, and the Supreme Court's 2002 decision didn't change the trend. In fact, district courts are more likely to reject doctrine of equivalents claims today than ever before.

This left us with a bit of a puzzle: what killed the doctrine of equivalents in the 1990s? We suspected the answer was the growth of claim construction "Markman" hearings after the Supreme Court's 1996 decision in that case. Once courts were construing claims as a matter of law pre-trial, and finding themselves in a position to resolve virtually all infringement issues on summary judgment, they were naturally inclined to decide the doctrine of equivalents issues too. And a court that has just rejected a literal infringement argument--the only kind of court likely to spend much time thinking about equivalents issues pre-trial--is unlikely to undo the work of claim construction by sending the issue of infringement by equivalents to the jury. To test this hypothesis, we constructed a fourth dataset, including cases decided in the 1993 to 1995 timeframe. That dataset bears out our hypothesis. The doctrine of equivalents was alive and well before Markman, but has been in decline ever since.

In Part I, we explain the doctrine of equivalents, prosecution history estoppel, and the changes in the law that have occurred during the last ten years. Part II sets out the details of our study. In Part III, we report our findings. Finally, Part IV draws some broader conclusions and investigates what caused the unexpectedly early--and largely unnoticed--demise of the doctrine of equivalents.

1. THE DOCTRINE OF EQUIVALENTS

   The goal of the patent system is to encourage innovation. Patents do this by giving the first inventor of a new and nonobvious technology the exclusive right to make, use, and sell the patented invention. (10) A patent owner's rights are defined not by what the patentee built--they may not have built anything--but by the patent claims, which courts liken to the "metes and bounds" of a real property deed. (11) A user literally infringes a patent if, but only if, she includes each and every element of the patent claims in her product. (12) Courts recognized quite early in patent history, however, that a too-strict application of this rule would make it trivial to evade many patents by making insubstantial changes to one piece of the invention. This may be true either because the patent owner did not do a perfect job of anticipating and including changes that might be made to the invention by others (13) or because changed circumstances or later-developed technologies make possible variations the patentee could not have foreseen. (14) Courts can address these imperfections with the doctrine of equivalents, which effectively expands patent claims beyond their literal scope to devices that are not very different from the patented invention. (15)

   Such an expansion requires courts to define what differences are insubstantial enough that they should be considered infringing, lest the doctrine of equivalents swallow the rule that patent claims define the scope of the invention. Courts have developed a number of tests for applying the doctrine of equivalents. The most commonly applied test, which fits mechanical inventions particularly well but which is also applied to other kinds of subject matter, is the "function-way-result" test. This tripartite test finds equivalence only if the defendant's product performs substantially the same function in substantially the same way to achieve the same result. (16) Other cases have applied a more general "insubstantial differences" approach, asking how different the defendant's product is from the patent claims. (17) Courts also ask--or at least they used to ask--whether the patent covers a pioneering invention that should be entitled to a greater scope of protection. (18) Courts also emphasize that each and every element of the patent claim must be present in the accused device either literally or by equivalence. (19) This "all elements" test prevents a finding of infringement if even one element is entirely missing. It also prevents the patentee from using the doctrine of equivalents to so broaden a claim element that it would vitiate it entirely. (20)

   In addition to defining the scope of the doctrine of equivalents, courts have also created a number of limitations on the doctrine. (21) First, they will not use the doctrine of equivalents to expand the claims to such an extent that they read on the "prior art"--the universe of things others had done before the invention. (22) Since a patent applicant could not write a valid patent claim that would literally cover the prior art, (23) courts quite logically have concluded that patent owners cannot achieve the same result by applying the doctrine of equivalents. Second, the Federal Circuit adopted in 2002 a doctrine called "dedication to the public domain," under which a patent owner cannot capture under the doctrine of equivalents any technological equivalent that was disclosed in the patent but not claimed. (24) The court reasoned that since the doctrine of equivalents was designed to protect patent owners against unanticipated uses, it should not apply where the patent owner did (or at least reasonably could have) anticipated the use. (25)

   The final limitation on the doctrine of equivalents, and the one that has created the most controversy, is the doctrine of prosecution history estoppel. Prosecution history estoppel arises when the patentee obtains her patent by making certain representations to the PTO about the limited scope of the patent and then seeks to use the doctrine of equivalents to expand the scope of those rights. Sometimes those representations occur by argument: the patentee persuades the PTO to grant a patent over a piece of prior art by explaining to the Examiner how the patent differs from the prior art. Even if the patentee did not need to make such an argument to distinguish her invention from the prior art, prosecution history estoppel stems from the belief that the Examiner should...