U.S. Supreme Court Reverses "Festo"

June 05, 2002

In the Fall of 2000, the U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit”) issued a decision known to patent attorneys as “Festo.”  Critics argued that Festo retroactively and severely restricted a patent holder’s rights, while proponents argued that the decision created more certainty when trying to decide whether a patent was infringed, thus significantly reducing the cost of patent litigation.  On Tuesday, May 28, 2002, a unanimous U.S. Supreme Court reversed Festo.

At issue was the "doctrine of equivalents," under which an invention that is not an exact copy can still be found to infringe a patent if it varies from the patented device by containing “equivalent” features.  The Federal Circuit nearly abolished the doctrine by holding that infringement through equivalents was not available for patent owners who had in some way limited the scope of the patent during the process of obtaining the patent.  Before Festo, patents were almost always limited during the back and forth negotiation process with the Patent Office.  Thus, the Federal Circuit’s ruling negatively affected thousands, if not, hundreds of thousands of existing patent holders.

The Supreme Court said the Federal Circuit was wrong in that it improperly limited the doctrine of equivalents.  Festo would ``risk destroying the legitimate expectations of inventors in their property,'' Justice Kennedy wrote.  Justice Kennedy also said the Federal Circuit ignored the Supreme Court's guidance in a 1997 ruling that courts must be cautious before adopting changes that disrupt the settled expectations of the inventing community.

The Supreme Court’s decision is one of its most important patent decisions of the last three decades in that it restores the doctrine of equivalents for patent holders.

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