PAT E N T S

Several years ago, the United StatesSupreme Court released its Festo opin-

ion, a decision that affects the ability of patent owners to successfully sue forinfringement1. District courts grappledwith Festo in patent infringement casesinvolving biotech/pharmaceutical technol-ogy. Then, the US Court of Appeals for theFederal Circuit provided its definitive inter-pretation of the law.

The Supreme Court refashions theflexible barUS law offers two flavors of patent infringe-ment: literal infringement and equivalentinfringement. A plaintiff establishes literalinfringement by showing that every featurerecited in a patent claim is found in thedefendant’s product or process. If there isno literal infringement, the plaintiff may beable to persuade a court that the accusedproduct or process should be deemed equiv-alent to the patented invention. The doc-trine of equivalents allows this expansion ofpatent claim coverage to prevent a personfrom dodging literal infringement withtrivial alterations of the patented invention.

Since the doctrine creates uncertaintyabout claim scope, courts have devisedrules to limit its application, rules such asprosecution history estoppel. Corres-pondence between a patent applicant and apatent examiner are preserved in a publicrecord—the prosecution history. Thisrecord may reveal that the applicant con-vinced the examiner to issue a patent byrevising claims to narrow their scope.

During litigation, the patentee will be for-bidden, or ‘estopped,’ from using the doc-trine of equivalents to recapture claimscope surrendered during patent prosecu-tion to obtain the patent.

Not so long ago, a court had two tech-niques for gauging the extent of a paten-tee’s surrender of claim coverage. Amgen,Inc. v. Hoechst Marion Roussel, Inc., forexample, concerns a patent in which theapplicant had substituted claims to iso-lated human erythropoietin with claims toa specific human erythropoietin2. Prosec-ution history estoppel prevented theclaims from covering all forms of isolatedhuman erythropoietin, but what aboutequivalents lying in the territory betweenall isolated human erythropoietin proteinsand the particular human erythropoietin?Under a ‘flexible bar’ analysis, the patenteemight be able to establish infringementoutside the literal scope of the amendedclaim by showing that certain equivalentswould not have been barred by patentabil-ity requirements. Under the ‘absolute bar’approach, however, the patentee would bedeemed to have surrendered all subjectmatter between the original claim and theamended claim.

In 2000, the Federal Circuit’s FestoCorp. v. Shoketsu opinion abolished theflexible bar approach to prosecution his-tory estoppel in favor of the absolute barrule3. Two years later, a unanimousSupreme Court criticized this decision asunfair to patent owners4. Then the Courtunleashed something new.

According to the Court’s modified flex-ible bar rule, prosecution history estoppelestablishes the presumption of an absolutebar, which the patentee may overcome.How can a patent holder rebut the absolute

bar presumption and expand claim scope?The Court mentioned certain situationswhere an amendment would not be viewedas surrendering a particular equivalent.For example, the equivalent may have beenunforeseeable. But the opinion is rathersketchy about these new rules.

Although the Court’s guidelines forrebutting the presumption lacked clarity,one thing was clear: the modified flexiblebar rule had an immediate retroactiveeffect. It was up to the lower courts to deci-pher this new legal standard, a Rorschachinkblot test that could determine the out-come of cases worth billions of dollars.

District courts tackle the new FestoSoon after publication of the Court’s deci-sion, three district courts applied the newFesto rules. Each court faced almost identi-cal facts. Each reached different conclu-sions.

The three cases concern a patent thatclaims sustained release tablets containingthe antidepressant drug bupropionhydrochloride and hydroxypropyl methyl-cellulose (HPMC) to control the releaserate of the antidepressant. Glaxo Wellcomeowns the rights to the patent and holds anFDA-approved new drug application(NDA) for extended release bupropionhydrochloride, known as Wellbutrin SR.Eon Labs Manufacturing, Excel Phar-maceuticals and Impax Laboratories filedabbreviated new drug applications(ANDA), seeking approval to sell genericversions of Wellbutrin SR. These genericproducts would contain a sustained releaseagent other than HPMC and, therefore,would not literally infringe the patentclaims. Glaxo alleged infringement underthe doctrine of equivalents.

Phill Jones is a freelance writer and editor basedin Spokane, Washington, USA.e-mail: philljones@nasw.org

US courts struggle with new patent infringementstandardsPhill Jones

The lesson from Festo is that during patent prosecution, what you say (or don’t say) and what you do (or don’t do) will be used against you.

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PAT E N T S

The Glaxo patent’s prosecution historyrevealed that the original claims hadincluded a functional description of a tabletcomponent that produced a sustainedrelease effect. The patent examiner hadrejected these broad claims, contendingthat HPMC is critical for sustained releaseof bupropion hydrochloride. To overcomethe rejection, the patent applicant hadrevised the claims to specify HPMC. Sincethe applicant had narrowed the claims forpurposes of patentability, the courts had toconsider whether prosecution historyestoppel barred Glaxo from recapturingequivalents between compositions with anysuitable sustained release component (theoriginal claims) and compositions withHPMC (the amended claims).

Eon and Impax proposed to manufac-ture products containing hydroxypropylcellulose (HPC), rather than HPMC. In aNew York district court, Glaxo attemptedto rebut the presumption of an absolutebar by arguing that HPC could not havebeen foreseen as a sustained release agent5.Viewing foreseeability as an issue of fact tobe determined at trial, the judge deniedEon’s motion for summary judgment. ACalifornia district court ruled in favor ofdefendant Impax6. Here, the judge decidedthat a person of skill in the art would haveknown that HPC and HPMC were sub-stantially equivalent, and that the patentapplicant should have amended the claimsto include HPC. That is, Glaxo had notovercome the absolute bar presumption,because HPC had been a foreseeableequivalent to HPMC.

Excel planned to market a product con-taining polyvinyl alcohol (PVA) as the sus-tained release agent, and Glaxo assertedthat the proposed product should be con-sidered an equivalent to the claimed sus-tained release tablets7. To rebut theabsolute bar presumption, Glaxo againargued unforeseeability.

A Virginia district court, however, tookthe position that even if PVA’s use in com-bination with bupropion hydrochloridehad been unforeseeable, Glaxo had notmet its burden under Festo. The courtexplained that the patent applicant couldhave amended the claims to specify a cate-gory of polymers used to achieve sustainedrelease, instead of narrowing the claims byspecifying HPMC. Admitting that it isunlikely that the patent examiner wouldhave accepted such a broad claim, thejudge interpreted Festo to require a deter-mination of “whether the patentee had thescientific ability to redraft the claims more

broadly, not whether the examiner wouldhave accepted the hypothetical amend-ments.” The court granted Excel’s motionfor summary judgment of noninfringe-ment.

A year after the release of these deci-sions, the Federal Circuit explained thenew rules. Only the California court got itright.

Fortunate timing benefited theMassachusetts district court when itneeded to apply Festo in Amgen v. Hoechst.In September 2003, Judge Young held thatAmgen had rebutted the presumption ofprosecution history estoppel. But hedelayed the release of his opinion, becausethe Federal Circuit would soon publish its

new Festo decision. When Judge Youngpublished his 73-page Amgen opinion, thedocument included his original analysis ofthe Supreme Court’s Festo rules and hisrevised analysis required by the FederalCircuit’s interpretation.

The Federal Circuit elucidates the new Festo ruleThe Federal Circuit’s 2003 Festo decisionprovides the authoritative interpretation ofthe Supreme Court’s rules. At the outset,the court established that rebuttal of theabsolute bar presumption is “a question oflaw to be determined by the court, not ajury.”8 The Federal Circuit explained thatthe Supreme Court furnished three tech-niques to overcome the presumption of anabsolute bar: show that the alleged equiva-lent would have been unforeseeable at thetime of the narrowing amendment; showthat the narrowing amendment bore nomore than a tangential relation to theequivalent in question; or show that therewas “some other reason” suggesting that thepatent applicant could not have reasonablybeen expected to have described the allegedequivalent.

So far, courts have applied the unfore-seeability inquiry in three biotech/phar-

maceutical patent infringement cases. Inall three cases, the inquiry benefited defen-dants.

In the Massachusetts district court,Amgen asserted that the defendant’s prod-uct, which contained the mature 165–amino acid version of human erythropoi-etin, equivalently infringed Amgen’s claimsto erythropoietin with the same 165 aminoacids plus a terminal arginine residue.During prosecution, Amgen had narrowedclaims from isolated human erythropoietinto the 166–amino acid form, triggering theabsolute bar presumption. The court foundevidence in the prosecution history that, atthe time that Amgen had introduced itsnarrow claims, the company had knownthat the 166th arginine is cleaved fromhuman erythropoietin. The court thereforeconcluded that the alleged equivalent hadbeen foreseeable and could have beenencompassed in an amended claim.

The Federal Circuit considered unfore-seeability in a case about patent claims to aprocess for preparing the antibioticcefuroxime axetil9. While prosecuting thepatent, the plaintiff had overcome a claimrejection by limiting the term “highlypolar organic solvent” to a sulfoxide, anamide and a formic acid. During litigation,the plaintiff alleged that the defendant’sprocess, which used acetic acid as the sol-vent, infringed the claims under the doc-trine of equivalents. Apparently, theplaintiff attempted to rebut the absolutebar presumption by arguing that it had notbeen foreseeable that narrowing the claimswould have resulted in the surrender ofacetic acid, which is an obvious homologof formic acid. The court advised thatforeseeability relates to the equivalent, notto whether an amendment might result inprosecution history estoppel. And sinceformic acid and acetic acid are well-knownhomologs, acetic acid was a foreseeableequivalent to formic acid.

In another Federal Circuit case, a patentapplicant had narrowed claims to a partic-ular synthetic Bacillus thuringiensis toxingene; an original claim had encompassedsynthetic genes expressing a protein func-tionally comparable to native Bt toxin10.Now, the patent holder argued that theaccused equivalent—a synthetic Bt toxingene with a nucleotide sequence that dif-fers from the claimed gene’s sequence byabout 19 percent—was unforeseeable. Thecourt disagreed. Since the patent applicanthad tried to claim all functionally equiva-lent Bt toxin genes, the accused equivalenthad been foreseeable.

462 VOLUME 22 NUMBER 4 APRIL 2004 NATURE BIOTECHNOLOGY

So far, courts have applied the Supreme Court’sunforeseeability inquiry inthree biotech/pharmaceuticalpatent infringement cases. In all three cases, the inquirybenefited defendants.

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PAT E N T S

The Amgen court had the opportunityto consider the new “tangential” inquiry,which focuses on whether the reason forthe narrowing amendment was directlyrelevant to the alleged equivalent. Here,the claims had been amended to avoid adouble patenting rejection, and not to dis-tinguish the claimed erythropoietin from a165–amino acid human erythropoietin.The court decided that the patent appli-cant had introduced the narrowingamendment for a reason only tangentiallyrelated to the equivalent in question. Thus,Amgen rebutted the absolute bar pre-sumption.

What about the third—“some otherreason”—argument for rebutting the pre-sumption? In the Federal Circuit’s view,this inquiry is vague, but narrow. The inge-nuity of litigators will determine whetherthe third inquiry can be fashioned into auseful rebutting argument.

Cost of avoiding estoppel: neitherunforeseeable nor tangentialFollowing the Federal Circuit’s 2000 Festo

decision, US patent office attorneys pre-dicted how patent applicants might alterpatent prosecution practice: file moredetailed disclosures following more thor-ough prior art searches, present more pre-cise claims, file many applications withvarying scope and abandon applicationsthat run into amendment problems, andfight narrowing amendments through anincreased number of examiner interviewsand by appealing claim rejections to the patent office Board and the courts11.The Supreme Court’s modified flexible bar rule should inspire the same practices.The attorneys also suggested that theincreased emphasis on averting prosecutionhistory estoppel would bring increased rev-enues to the patent office. Avoiding thetaint of estoppel does boost the price tag ofpatent procurement. But these expensespale in comparison with the cost ofattempting to overcome the estoppel duringlitigation.

In his concurring opinion to the 2003Festo decision, Judge Rader characterizedthe prosecution history estoppel issues as

“some exceptions to an exception to anexception to the standard rule of infringe-ment.” This may be true, but then the devilis in the details.

1. Gogoris, A.C. & Lee, S.S. Festo and the US SupremeCourt: be careful what you wish for. Nat. Biotechnol.20, 845–846 (2002).

2. Amgen, Inc. v. Hoechst Marion Roussel, Inc., 287F.Supp.2d 126 (D. Mass. 2003).

3. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,234 F.3d 558 (Fed. Cir. 2000).

4. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,535 U.S. 722 (2002).

5. Glaxo Wellcome, Inc. v. Eon Labs Mfg., 2002 U.S.Dist. LEXIS 14923 (S.D.N.Y. Aug. 13, 2002).

6. Glaxo Wellcome, Inc. v. Impax Labs., Inc., 220F.Supp.2d 1089 (N.D. Cal. 2002); affirmed by Glaxov. Impax, 2004 U.S. App. LEXIS 1324 (Fed. Cir. Jan.29, 2004).

7. SmithKline Beecham Corp. v. Excel Pharm., Inc., 214F.Supp.2d 581 (E.D. Va. 2002); vacated andremanded by SmithKline v. Excel, 2004 U.S. App.LEXIS 1323 (Fed. Cir. Jan. 29, 2004).

8. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.,344 F.3d 1359 (Fed. Cir. 2003).

9. Ranbaxy Pharmaceuticals, Inc. v. Apotex, Inc., 350F.3d 1235 (Fed. Cir. 2003).

10. Mycogen Plant Sci. v. Monsanto Co., 2004 U.S. App.LEXIS 3001 (Fed. Cir. Feb 20, 2004).

11. Toupin, J. & Whealan, J. Effects of Festo decision onUSPTO Operations. http://www.uspto.gov/web/offices/com/advisory/acrobat/ppacpres2-01.pdf (February,28, 2001).

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