Must a patentee establish by greater than a preponderance of the evidence infringement under the doctrine of equivalents where the alleged equivalent is separately patented? No, according to the Federal Circuit in Siemens Medical Solutions USA, Inc. v. Saint-Gobain Ceramics & Plastics, Inc., __ F.3d __, No. 2010-1145, -1177 (Fed. Cir. February 24, 2011) (http://www.cafc.uscourts.gov/images/stories/opinions-orders/10-1145-1177.pdf).
Siemens owns a patent directed to a scintillator detector using cerium-doped lutetium oxyorthosilicate (LSO) scintillator crystals for use in, e.g., positron emission tomography (PET) scanners (the LSO Patent). Saint-Gobain used cerium-doped lutetium-yttrium orthosilicate (LYSO) crystals, which were claimed in a later-issued patent that Saint-Gobain had licensed from a third party (the LYSO Patent). In 2007, Siemens sued Saint-Gobain in the District of Delaware for willful infringement of the LSO Patent, arguing that Saint-Gobain’s LYSO crystals infringed Siemens’ patented LSO crystals under the doctrine of equivalents. Saint-Gobain argued that its LYSO crystals were not equivalent to the LSO crystals because the LYSO crystals were claimed in the later-filed LYSO Patent, and asserted its license of that later-filed patent as a defense to willful infringement. In 2008, a jury agreed with Siemens that the LYSO crystals were equivalent to the LSO crystals and awarded Siemens more than $52 million in damages (reduced to approximately $45 million by the district court). The jury found that Saint-Gobain’s infringement was not willful.
In a post-trial motion for JMOL or a new trial, Saint-Gobain challenged, inter alia, the district court’s refusal to instruct the jury that Siemens needed to prove infringement under the doctrine of equivalents by “clear and convincing” evidence, a higher burden than the typical “preponderance of the evidence” standard. According to Saint-Gobain, the heightened burden was necessary because Saint-Gobain’s LYSO crystals were covered by the later-issued LYSO Patent. Saint-Gobain argued that, since the U.S. Patent and Trademark Office (PTO) “considered” Siemens’ patent before issuing the LYSO patent (Siemens’ patent was listed among the “References Cited” on the face of the later-issued patent), then the PTO considered LYSO crystals to be nonobvious in view of the LSO Patent. And, since the LYSO Patent is presumed valid (and carries with it a heightened burden to prove invalidity), a heightened burden should apply to the doctrine of equivalents analysis since a finding of equivalence between the two would “constructively invalidate” the LYSO Patent. Specifically, Saint-Gobain argued that “[t]he jury’s finding of equivalence ‘constructively invalidated’ the [LYSO] patent because ‘a legal conclusion of invalidity for obviousness was . . . the clearly implied result of the jury’s verdict.” The district court denied Saint-Gobain’s post-trial motion, and Saint-Gobain appealed.
Despite acknowledging Saint-Gobain’s argument as “interesting,” “not illogical,” and “ably articulated by the dissent,” the Federal Circuit agreed with the district court in a 2-1 decision. The court rejected Saint-Gobain’s argument that Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 493 F.3d 1368 (Fed. Cir. 2007) mandates an increased burden of proof in cases of separate patentability—in such cases, equivalency may be “considerably more difficult to make out” by a preponderance of the evidence, but the burden of proof itself is not heightened. The court also noted that equivalence and obviousness require different analytical frameworks—the doctrine of equivalents generally involves application of the “insubstantial differences” test, typically via the “function-way-result” test, while obviousness requires analysis under the four Graham factors. In addition, unlike equivalence, an obviousness inquiry can consider objective evidence of commercial success. Moreover, the time frames of the two inquiries differ—equivalence is evaluated at the time of infringement, while obviousness is evaluated at the time the invention was made. In summary, in keeping with “longstanding equivalence jurisprudence,” the court confirmed that even though the alleged equivalent was separately patented, “infringement under the doctrine of equivalents may be proved by a preponderance of the evidence.” The court thus affirmed the district court’s judgment in favor of Siemens, though the court vacated the damages award for additional consideration.
Judge Prost, in dissent, identified what she characterized as a “tension” between the nonobviousness and equivalence inquiries. “Where equivalence is used against a feature that is separately patented,” she argued, “the patentee’s attempts to show that the feature is insubstantially different from the asserted patent crash into the well-settled presumption that patents are nonobvious over the prior art.” While conceding that the obviousness and equivalence tests are separate from one another, Judge Prost reasoned that there is some inevitable overlap. In essence, she argued, the tests differ only in that an “insubstantial difference” under the doctrine of equivalents requires the skilled artisan to have only “some reason to make the substitution to find the limitation obvious under Graham and KSR.” The bar for this test is not high, which suggests that a reason to combine will be easy to prove. In order to prevent undermining the presumption of obviousness accorded to issued patents, a jury should be instructed that “a separately-patented (and presumptively nonobvious) substitution cannot be ‘insubstantial’ unless some fact distinguishes the equivalence finding from the PTO’s earlier nonobviousness determination.” In the present case, such a fact could be the passage of time—Judge Prost would have required the district court to inform the jury that equivalence could be found only if it also found that the state of the art of LSO crystals had advanced from the time of the invention of the patented LYSO crystals to the alleged infringement so that the LYSO Patent, though previously nonobvious in view of the LSO Patent, had become obvious and insubstantial (and thus equivalent).