Post-Trial Decision on Ensnarement Defense to Doctrine of Equivalents Upheld in $200 Million Patent Dispute

There are two types of direct infringement: (1) literal infringement; and (2) infringement under the doctrine of equivalents. The former asks whether a product or process meets all of the requirements of a claim, exactly. The latter is a long-standing judicial doctrine that focuses on whether a given requirement of the claim, though not literally met, is nevertheless equivalent to that requirement. Recognizing the potential for the doctrine of equivalents to subvert the public notice function of a patent’s claims, the federal courts have developed a number of legal defenses that constrain its application. Prosecution history estoppel, which generally prevents a patentee from recapturing through the doctrine of equivalents claim scope that it surrendered during prosecution for purposes of patentability (subject to certain exceptions), tends to be the most common. But there are others, and they can be equally important when addressing a doctrine-of-equivalents theory of direct infringement. The ensnarement defense is one of those other defenses, and it holds that a doctrine of equivalents theory cannot be asserted if it will encompass or “ensnare” the prior art.

On September 29, 2017, in Jang v. Boston Scientific Corp., the Federal Circuit issued a relatively rare precedential decision addressing the application of the ensnarement defense. Nos. 2016-1275, 2016-1575, slip op. at 14-23 (Fed. Cir. Sept. 29, 2017). The case involved a cardiologist’s claim for more than $200 million in royalties, which he argued were owed to him under a prior assignment agreement involving the patent-in-suit, and it proceeded to a jury trial on issues of infringement. After the trial, a jury returned a verdict of no literal infringement but found infringement under the doctrine of equivalents. Although the defendant did not raise an ensnarement defense in a summary judgment or JMOL motion, it did invoke the defense in connection with one of its motions in limine. The district court, in ruling on that motion, decided that it would conduct a post-trial ensnarement hearing, if the jury returned a verdict of infringement under the doctrine of equivalents. Staying true to that decision, the district court conducted an evidentiary hearing on ensnarement following the jury verdict on doctrine of equivalents.

For the hearing, and as approved by Federal Circuit precedent, the cardiologist elected to use a hypothetical claim analysis to establish a range of equivalents to which he believed he was entitled, above and beyond the actual scope of his asserted claims. “In other words, he attempted to construct a hypothetical claim . . . that would be broad enough to literally cover [the accused product], yet not so broad that it would be unpatentable over the prior art.” Jang, slip op. at 8. The district court concluded, however, that the cardiologist failed to draft a proper hypothetical claim for the ensnarement analysis, finding that one proposed hypothetical claim impermissibly narrowed the issued asserted claim and that the other did not broaden the issued asserted claim at all. As a result, the district court vacated the jury verdict of infringement under the doctrine of equivalents and entered judgment of non-infringement in favor of the defendant.

On appeal, the Federal Circuit agreed with the district court’s analysis and application of the ensnarement defense. Jang, slip op. at 14-19. Emphasizing that “[a] patentee . . . bears the burden of proving that it is entitled to the range of equivalents which it seeks,” the Federal Circuit explained that “when utilizing the hypothetical claim tool, that burden starts with proposing a proper hypothetical claim that only broadens the issued asserted claims.” Id. at 18-19. A patentee “cannot effectively transfer the responsibility of defining the range of equivalents to which he is entitled to the district court,” the Federal Circuit elaborated. Id. at 19. Thus, having found “as a threshold matter, [that the cardiologist] failed to submit a proper hypothetical claim for consideration,” the Federal Circuit concluded he had failed “to meet his burden of proving that his doctrine of equivalents theory did not ensnare the prior art.” Id. at 19.

The Federal Circuit then went on to reject the cardiologist’s remaining arguments, including an argument that the defendant had waived the ensnarement defense by failing to raise it in a motion for summary judgment or JMOL. Jang, slip op. at 20-23. The Federal Circuit found “nothing legally unsound in [the defendant] raising ensnarement through its pretrial motion in limine, and the district court conducting a post-trial hearing on the defense contingent on an infringement verdict under the doctrine of equivalents.” Id. at 21. The Federal Circuit also rejected an argument that the defendant was attempting “to repackage previously-excluded invalidity defenses in the guise of an ensnarement defense,” explaining that “the ensnarement inquiry has no bearing on the validity of the actual claims asserted in a case . . . because ensnarement concerns patentability with respect to a hypothetical patent claim as opposed to the validity of an actual patent claim.” Id. Accordingly, the Federal Circuit upheld the district court’s vacatur of the jury’s doctrine-of-equivalents infringement findings and affirmed its entry of judgment of non-infringement. Id. at 24-25.

Jang serves as an excellent reminder that when dealing with doctrine-of-equivalents theories of infringement, attention should not just be paid to how the patentee argued or amended over the prior art during prosecution but to the disclosures and teachings of the prior art at large. And for patent owners, it highlights the need to carefully scrutinize hypothetical claims to ensure that, as a threshold matter, they comply with the Federal Circuit’s requirements.

Other Notable Decisions – Week Ending September 29, 2017

In re Smith Int’l, Inc., No. 2016-2303 (Fed. Cir. Sept. 26 2017) (precedential): In Smith, the Federal Circuit overturned a Patent Trial and Appeal Board claim construction under the broadest reasonable interpretation standard. The Federal Circuit concluded that the Board’s construction was unreasonably broad, emphasizing that “[t]he correct inquiry in giving a claim term its broadest reasonable interpretation in light of the specification is not whether the specification proscribes or precludes a broad reading of the claim term adopted by the examiner. And it is not simply an interpretation that is not inconsistent with the specification. It is an interpretation that corresponds with what and how the inventor describes his invention in the specification, i.e., an interpretation that is consistent with the specification.” Otherwise, the Federal Circuit elaborated, “any description short of an express definition or disclaimer in the specification would result in an adoption of a broadest possible interpretation of a claim term, irrespective of repeated and consistent descriptions in the specification” to the contrary.

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