The US Supreme Court gave inventors more power to sue competitors for making modified versions of patented products, issuing a decision that extends the reach of hundreds of thousands of patents.
The 9-0 ruling bolsters patents covering everything from genetic codes to children's books. The dispute divided frequent targets of patent suits, including Intel Corp and Ford Motor Co, from companies more concerned about suing to enforce their own rights, such as Pfizer Inc and Sun Microsystems.
A federal appeals court had limited a legal doctrine that lets patent holders sue others who make "equivalent" products.
In partially overturning that decision, the high court said it would "risk destroying the legitimate expectations of inventors in their property." The ruling may prove to be the most significant Supreme Court patent decision in two decades, affecting as many as 90 percent of the 1.2 million patents now in force, lawyers said.
Intel, Ford, International Business Machines Corp, Eastman Kodak Co, DuPont Co and Genentech Inc were among the companies that supported the appeals court ruling, saying it would ward off frivolous patent suits.
Pfizer, Sun Microsystems, Verizon Communications Inc, 3M Co, Dow Chemical Co and such research institutions as the Massachusetts Institute of Technology urged reversal. That group said the lower court decision would slash the value of existing patents and discourage investments in research.
The case before the high court involved a long-running legal fight between Festo Corp and SMC Corp, makers of air cylinders for industrial machinery.
The US Court of Appeals for the Federal Circuit, which handles all patent cases, had put new restrictions on those who amend the description of their invention to ensure approval of a patent application. The vast majority of patent seekers file amendments at some point during proceedings at the US Patent and Trademark Office.
The appeals court said those inventors are restricted to the literal wording in the amended part of the patent and can't take advantage of the so-called doctrine of equivalents.
The appeals court said its new rule would prevent inventors from attempting to recapture subject matter they relinquished during the application process. The Federal Circuit also said its decision would clarify what each patent covered.
The appeals court ruling had roiled the business community.
"Literally hundreds of thousands of patents could have been on that Festo guillotine," said Jesse Jenner, managing partner at Fish & Neave in New York.
The Supreme Court said the lower court had imposed an overly rigid rule that ignored previous Supreme Court support for the doctrine of equivalents. Limiting patents to their literal terms would invite copycats to circumvent a patent with only minor modifications, Justice Anthony M. Kennedy said for the court. "Each time the court has considered the doctrine, it has acknowledged this uncertainty as the price of ensuring the appropriate incentives for innovation," Kennedy wrote.
The court ruled that the doctrine of equivalents is available to patent holders who couldn't have foreseen that changing the description in their application would limit coverage.
In addition, changes to one part of a patent don't affect other aspects that "have only a peripheral relation to the reason the amendment was submitted," Kennedy said.
Patent holders, however, bear the burden of proving that the doctrine of equivalents should apply in their case, Kennedy said.
That conclusion adopted a recommendation offered by the Bush administration.
Under the appeals court ruling, invoking the doctrine of equivalents was "all but impossible," said patent lawyer Jim Carmichael, a partner at Lyon & Lyon in Washington. "The Supreme Court said it shouldn't be impossible, but it should be very hard." Beneficiaries of the ruling will include some members of the patent-heavy biotechnology, pharmaceutical and computer industries.
"Biotech companies and pharmaceutical companies live and die by their patent portfolios," said Q. Todd Dickinson, former head of the Patent and Trademark Office and now a partner with Howrey, Simon, Arnold & White.
"They needed this flexibility because the technology is evolving so rapidly. They need to be able to come back later and make sure they are protected," Dickinson said.
The decision is likely to foster additional litigation over disputed patents, forcing judges to determine in each case whether an amendment amounted to a surrender of subject matter.
"In the end, I'm not sure if this will change the results of a whole lot of cases," said patent lawyer Blaney Harper of Jones, Day Reavis & Pogue. "It is clear that the lawyers will go crazy with this."
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