Use of trademarks on Internet can be a problem

Abstract

The article that follows examines the competition policy reflected in the decisions of the Court of Appeals for the Federal Circuit in its patent cases.1 The court's views on this subject have been manifested most plainly in decisions that have transformed the law concerning infringement under the doctrine of equivalents and claim construction. In both categories, the court narrowed patent scope by reason of its desire to protect competitors. The article argues that the court's premise in prescribing narrower claim scope reflected an incomplete view of competition policy. The court's analysis overlooked the benefits to competition provided by patents, which stimulate inventions and their development. The article traces the development of antitrust jurisprudence and demonstrates how respect for the contribution of patents to competition and skepticism of free-riding has evolved, particularly beginning in the 1970s. The article draws a parallel between the Court's reasoning about competition policy, on the one hand, and the rejected views of Justices Hugo Black and William O. Douglas and abandoned patent-antitrust jurisprudence, on the other.The Federal Circuit's decision in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 234 F.3d 558 (Fed. Cir. 2000), on the subject of equivalents is considered in the paper. In that decision, the majority adopted a new rule that completely barred infringement under the doctrine of equivalents of any claim limitation where, in prosecution, there had been a narrowing amendment relating to patentability. In the past, prosecution estoppel foreclosing equivalents had been subject to a “flexible bar,” which, in some circumstances, allowed for equivalence notwithstanding such an amendment. The article points out that because almost all patents are amended during prosecution, the effect would be to allow widespread copying of patented inventions by trivial modifications of any narrowed claim limitation. The incentive to innovate in the future would be correspondingly diminished and the expectations of past patentees would be correspondingly altered.Following the writing of the article, the Supreme Court decided Festo on certiorari, 122 S. Ct. 2519 (2002), and rejected the Federal Circuit's complete bar approach. The Court continued the flexible bar approach to equivalents, allowing for infringement despite a narrowing amendment. The doctrine of equivalents was explained in terms of “the nature of language,” which “makes it impossible to capture the essence of a thing in a patent application.” Id. at 1837. The Court announced a new rule, starting with a presumption that “the territory between the original claim and the amended claim” was disclaimed as to “readily known equivalents,” Id. at 1842. The presumption could be overcome where:[1] “The equivalent may have been unforeseeable at the time of the application;” [2] “the rationale underlying the amendment may bear no more than a tangential relation to the equivalent in question;” or [3] “there may be some other reason suggesting that the patentee could not reasonably be expected to have described the insubstantial substitute in question.” Id.The Court recognized the effect of uncertainty from the doctrine of equivalents on competitors as a result of the flexible bar, but rejected that as a reason for a complete bar. Id. For example, “if competitors cannot be certain about a patent's extent, they may be deterred from engaging in legitimate manufactures outside its limits, or they may invest by mistake in competing products that the patent secures.” Id. at 1837. The Court also quoted Justice Black's concern for competitors in his dissent objecting to the doctrine of equivalents in Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605 (1950). Festo, 122 S. Ct. at 1838. Despite a “delicate balance” between the interest of the patentees and those of the public, the Court squarely disagreed with the preference of the Federal Circuit, Justice Black, and competitors of the patentee. Each time the Court had addressed the subject over a 100-year period, it “affirmed the doctrine over dissents that urged a more certain rule.” Id.The Court's holding preserved placement of the burden of the uncertainty implicit in the doctrine of equivalents on competitors in favor of protecting patentees and the patent incentive to innovation. Id. At the same time, the effect of the Court's new rule was to impinge on the scope available to patentees. Requiring the inventor to write all knowable variations of his invention into the claims is a way of reducing the scope of equivalency. It is out of keeping with Graver Tank, which applied equivalents to an unclaimed variation described in the specification, as well as the thoughtful analyses of the Antitrust Division about the importance of a full patent reward. By the same token, applying equivalents to later-developed technology extends the patent to apply to the more creative competitor but inconsistently leaves the straightforward free-rider with a minor knowable variant outside the patent.