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Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co.

April 19, 1999

FESTO CORPORATION, PLAINTIFF-APPELLEE,
v.
SHOKETSU KINZOKU KOGYO KABUSHIKI CO., LTD., A/K/A SMC CORPORATION, AND SMC PNEUMATICS, INC., DEFENDANTS-APPELLANTS.



Before Rich, Newman, and Michel, Circuit Judges.

The opinion of the court was delivered by: Newman, Circuit Judge.

On remand from the United States Supreme Court

This case returns to us upon grant of certiorari by the United States Supreme Court, followed by vacatur and remand for further consideration in light of the Court's decision in Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 117 S. Ct. 1040, 41 USPQ2d 1865 (1997). *fn1 We now affirm the district court's judgment with respect to infringement of the Carroll patent, vacate and remand for further proceedings with respect to the Stoll patent, and reinstate our prior decision on the other issues.

BACKGROUND

Festo Corporation sued Shoketsu Kinzoku Kogyo Kabushiki Co. (also known as SMC Corporation) and SMC Pneumatics, Inc. (collectively "SMC") in the United States District Court for the District of Massachusetts, for infringement of two patents relating to magnetically coupled rodless cylinders. Rodless cylinders are used to repeatedly move articles a short distance, for example in assembly lines. By pneumatic or other fluid pressure a piston is moved within a cylinder, and the movement is translated by coupling of the piston to a yoke or other structure outside of the cylinder, which in turn carries the article to be moved.

For magnetic rodless cylinders the piston is not physically attached or yoked to the outer structure, but instead is magnetically coupled to a slidable outer ring or cylinder called the "follower," that carries the article to be moved. When a burst of air or other fluid pressure moves the piston within the cylinder, by magnetic force the follower and its burden are correspondingly moved. The device, separated into its basic components, is pictured as follows:

PICTURE

Trial in the district court was preceded by an eleven-day evidentiary hearing before a special master. The master's report was followed by various motions, of which the district court granted Festo's motion for summary judgment that United States Patent No. 3,779,401 (the Carroll patent) was infringed under the doctrine of equivalents. The court also granted SMC's motion for judgment of noninfringement by certain models of its rodless cylinders. Literal infringement by certain other models was not disputed.

The remaining issues were tried to a jury. The jury found that there was infringement of United States Patent No. 4,354,125 (the Stoll patent) on grounds of equivalency, sustained the validity of both the Carroll and the Stoll patents, and assessed damages. The court entered judgment accordingly, denying duly made post-trial motions. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., No. 88-1814-PBS (D. Mass. Feb. 3, 1994).

On appeal of the issues of infringement of the Carroll and Stoll patents and damages, the Federal Circuit affirmed the judgments. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 72 F.3d 857, 37 USPQ2d 1161 (Fed. Cir. 1995). SMC petitioned for writ of certiorari on two questions, with the following question directed to the doctrine of equivalents (the other question related to procedures involving the special master):

1. In a patent case, can the statutory requirement for patent claims (35 U.S.C. '112, &2) and the statutory restriction for correcting them (35 U.S.C. '251, &4) be nullified by the judicially created doctrine of equivalents?

Following its decision in Warner-Jenkinson the Court granted SMC's petition, vacated the Federal Circuit's decision, and remanded the case for further consideration; such a sequence of events is called a "GVR" (grant, vacate, remand). A GVR occurs when "intervening developments, or recent developments that we have reason to believe the court below did not fully consider, reveal a reasonable probability that the decision below rests upon a premise that the lower court would reject if given the opportunity for further consideration, and where it appears that such a redetermination may determine the ultimate outcome of the litigation, . . ." Lawrence v. Chater, 516 U.S. 163, 167 (1966). The Court espoused the just purpose of avoiding unequal treatment among cases raising similar issues, to "improve the fairness and accuracy of judicial outcomes." Id. at 168. See also Stutson v. United States, 516 U.S. 193, 197 (1996) ("a GVR order both promotes fairness and respects the dignity of the Court of Appeals by enabling it to consider potentially relevant decisions and arguments that were not previously before it").

Upon remand this court invited additional briefing of the issues related to the doctrine of equivalents, Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 117 F.3d 1385 (Fed. Cir. 1997), and heard reargument as to both the Carroll and Stoll patents, including new issues of prosecution history estoppel upon which SMC submitted new evidence.

I.

THE CARROLL PATENT

The Carroll patent is directed to a magnetic rodless cylinder wherein several cylindrically shaped permanent magnets are disposed on the piston, and the follower is fitted with several annular permanent magnets. The exterior of the device is shown in Figure 1, wherein the cylinder 10 is encircled by the follower bearing permanent magnets of annular shape 28, and having a gripping device 30 which grasps the article to be moved.

[FIGURE 1 FROM CARROLL PATENT]

Relevant to this appeal is the Figure 3 section taken at YCY of Figure 1, showing piston end member 22 bolted to magnet 20. The piston bears annular grooves 24 which accommodate sealing rings 26 adapted to engage the inner wall of cylinder 10 and form a fluid-tight seal.

[FIGURE 3 FROM THE CARROLL PATENT]

Reexamined claim 9, the only claim of the Carroll patent in suit, is as follows, with our paragraphing and emphasis added to the subject matter relevant to infringement by equivalency:

"9. A device for moving articles, which comprises:"

"a hollow cylinder formed of non-ferrous material and having opposite axial ends;"

"a piston mounted in the interior of the hollow cylinder and reciprocatingly slidable therein, the piston including a central mounting member disposed axially in the cylinder,"

"a plurality of cylindrically-shaped permanent magnets mounted on the central mounting member and spaced apart axially from each other, each magnet having a bore formed axially there-through for receiving the central mounting member,"

"at least one pair of end members mounted on the central mounting member and disposed on opposite axial sides of the plurality of magnets,"

"a pair of cushion members formed of resilient material, the cushion members being situated near opposite axial ends of the central mounting member to help prevent damage to the piston when the piston contacts an axial end of the cylinder,"

"and a pair of resilient sealing rings situated near opposite axial ends of the central mounting member and engaging the cylinder to effect a fluid-tight seal therewith;"

"a body mounted on the exterior of the hollow cylinder and reciprocatingly slidable thereon,"

"the body including a plurality of annularly shaped permanent magnets surrounding the cylinder and spaced apart from each other,"

"the permanent magnets of the piston and body being polarized so as to magnetically couple the body to the piston whereby movement of the piston inside the cylinder causes a corresponding movement of the body outside the cylinder,"

"the body further including means provided thereon for holding on the body an article to be moved; and"

"means for controlling the admission of pressure fluid into the cylinder and exhaust fluid from the cylinder for moving the piston in the cylinder,"

"the attractive forces between the permanent magnets of the piston and the body being such that movement of the piston causes corresponding movement of the body below a predetermined load on the body and such that above said predetermined load movement of the piston does not cause corresponding movement of the body."

All of the subject matter of claim 9 was conceded by SMC to be literally present in the accused SMC devices, except for the pair of sealing rings. Instead of a pair of sealing rings situated at opposite ends of the piston, the SMC devices have a single two-way sealing ring at the end of the piston that is in contact with the pressure fluid. The SMC devices also have guide rings situated at each end of the piston.

In Warner-Jenkinson the Court, after concluding that the doctrine of equivalents should be preserved, *fn2 focussed on two aspects thereof: the all-elements rule and prosecution history estoppel. SMC states that the all-elements rule was violated by the district court's decision, and that the Court's new presumption of prosecution history estoppel precludes a holding of infringement, whether or not the all-elements rule also requires a decision in its favor. We reconsider the district court's judgment with respect to both of these aspects.

A.

THE ALL-ELEMENTS RULE

1. The Prior Proceedings

The substitution of a two-way sealing ring for the claimed pair of sealing rings was the basis of the district court's summary judgment of infringement of claim 9 under the doctrine of equivalents. SMC did not dispute that the two-way sealing ring effects a fluid-tight seal with the cylinder, the function stated in the claim clause directed to the sealing rings. SMC did not dispute the interchangeability of the two-way sealing ring and the pair of sealing rings, or that the claimed sealing function is achieved in the same way and with the same result. SMC's only argument to the district court was that the all-elements rule does not permit a finding of equivalence, as a matter of law, because the accused SMC devices do not contain two sealing rings or two equivalent elements.

The district court did not adopt SMC's view of the all-elements rule. Citing precedent wherein the all-elements rule was found to be satisfied when the function of the claimed element was performed but not by a direct correspondence of components, the district court held that the substitution of a two-way sealing ring, which performs the same function as the pair of sealing rings, is in compliance with the all-elements rule. The district court explained:

"To constitute an infringement, the accused device must contain each and every limitation of the claim or its substantial equivalent. Vaupel [Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 20 USPQ2d 1045 (Fed. Cir. 1991)], 944 F.2d at 879. "An equivalent must be found for every limitation of the claim somewhere in an accused device, but not necessarily in a corresponding component, although that is generally the case." Corning Glass Works v. Sumitomo Elec. U.S.A., Inc., 868 F.2d 1251, 1259 (Fed. Cir. 1989) (adding negative dopant to the cladding is equivalent to adding positive dopant to the core in the context of the claimed invention)."

Since equivalency was not disputed, and we agree that the claimed test is met of substantially the same function, way, and result, the district court granted Festo's motion for summary judgment of infringement.

On this rehearing of its appeal to the Federal Circuit SMC again does not dispute the fact of equivalency, but again argues that the all-elements rule bars a finding of infringement. Citing Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 4 USPQ2d 1737 (Fed. Cir. 1987) (en banc) and ensuing Federal Circuit decisions, as now reinforced in Warner-Jenkinson, SMC argues that the all-elements rule precludes any liability under the doctrine of equivalents because the accused SMC devices do not contain a pair of sealing rings or two distinct elements that are the same as or equivalent to the pair of sealing rings.

In reviewing a grant of summary judgment the appellate court must decide, on the record presented to the trial court, whether the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). Thus the evidence is viewed in the light most favorable to the non-movant, drawing factual inferences and resolving factual doubts in favor of the non-movant. See, e.g., EMI Group North America, Inc. v. Intel Corp., 157 F.3d 887, 891, 48 USPQ2d 1181, 1184 (Fed. Cir. 1998) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986)). Infringement in terms of the doctrine of equivalents is amenable to summary judgment when on the correct law, and undisputed facts or the non-movant's supportable version of the facts, the movant's position must prevail. See Warner-Jenkinson, 117 S. Ct. at 1053 n.8, 41 USPQ2d at 18875 n.8 (summary judgment is proper when no reasonable jury could find the elements to be equivalent).

In affirming the district court's judgment we cited Dolly, Inc. v. Spalding & Evenflo Cos., 16 F.3d 394, 398, 29 USPQ2d 1767, 1769 (Fed. Cir. 1994) and Intel Corp. v. United States Int'l Trade Comm'n, 946 F.2d 821, 832, 20 USPQ2d 1161, 1171 (Fed. Cir. 1991) for the principle that the all-elements rule may be satisfied although there is not one-to-one correspondence between each element of the claimed invention and each component of an accused device depending on the facts of the particular substitution. We first consider whether this principle continues to be viable in the wake of Warner-Jenkinson.

2. Precedent

In Warner-Jenkinson the Court reaffirmed the precept of the doctrine of equivalents that "a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is `equivalence' between the elements of the accused product or process and the claimed elements of the patented invention." 117 S. Ct. at 1045, 41 USPQ2d at 1865. Thus the Court responded to the concerns expressed by the amici that the law continue to limit this opportunity for "fraud on the patent," the words of Graver Tank, while guarding against undue breadth of the doctrine by confirming that it is the separate claim elements for which equivalency is determined, and not the invention as a whole:

"Each element contained in a patent claim is deemed material to defining the scope of the patented invention, and thus the doctrine of equivalents must be applied to individual elements of the claim, not to the invention as a whole." 117 S. Ct. at 1049, 41 USPQ2d at 1871.

The invention-as-a-whole criterion was discarded by the Federal Circuit en banc in its decision in Pennwalt, wherein the court adopted the all-elements rule. In the decade since Pennwalt the Federal Circuit has applied the rule in diverse factual situations and has refined its application accordingly. Thus in Corning Glass Works v. Sumitomo Electric U.S.A., Inc., 868 F.2d 1251, 9 USPQ2d 1962 (Fed. Cir. 1989) the court elaborated that the accused device must contain every claim element, but "not necessarily in a corresponding component, although that ...


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