Center for Advanced Study & Research on Innovation Policy


CASRIP Newsletter - Winter/Spring 1999, Volume 5, Issue 4

The Doctrine of Equivalents after the Supreme Court "Ball Spline" Decision

K.K. Kouken v. K.K. Tatsumi Ryouki1

SS Seiyaku v. Zensei Yakuhin K.K.2

Since the Japanese Supreme Court recognized the doctrine of equivalents as a means of showing infringement of Japanese patents in a decision last spring,3 patent professionals in Japanese legal community have debated how lower courts will clarify the five conditions that the Supreme Court established for applying the doctrine. These five conditions are: (1) the elements that the accused infringer replaced are not an essential portion of the patented invention (non-essential-elements test); (2) the objective of the patented invention can be attained even if the elements are replaced with the structures in the accused product, and thus the accused product results in identical functions and effects as the patented invention (capability-of-replacement test); (3) a person skilled in the art of the patented invention would have readily conceived, at the time of manufacture or other exploitation by the accused infringer, the interchangeability of the claimed portion and the replaced structures in the accused product (obviousness-of-replacement test); (4) the accused product is novel and could not have been conceived from the prior art by a skilled person at the application time of the patented invention (the prior-art limitation); and (5) the accused product was not intentionally removed from the technical scope of the claim by the applicant during the patent prosecution (prosecution-history estoppel).

Two recent district court decisions have answered some of the questions raised by the patent community. In SS Seiyaku, the Osaka District Court, one of two district courts with dedicated intellectual property sections, clarified the first three conditions by giving more detailed definitions for such key concepts as "the essential elements of the invention" and "the obviousness of replacement." In Kouken, the Tokyo District Court adopted similar definitions for the key concepts. Interestingly, the Tokyo District Court included policy discussion justifying the doctrine of equivalents under general legal doctrines that give weight to substance over formality.

These decisions are examples of Japanese courts' reluctance to apply the doctrine of equivalents. As done here, courts tend to define conditions that raise barriers to application of the doctrine. Such limited application of the doctrine of equivalents reflects current case law developments in the United States.4 Not surprisingly, both the Tokyo and Osaka district courts found that some conditions were not met, and thus refused to apply the doctrine. Accordingly, despite the Supreme Court's enthusiastic effort to justify the doctrine through lengthy policy discussions, Japanese case law will not change drastically.

The patent disputed between SS and the accused infringer concerned a long-acting diclofenac sodium preparation comprising a fast-acting diclofenac sodium and a long-acting diclofenac using a sustained-release coat. The claim required the coat be made with an intestinally soluble polymer made of methacrylic acid methyl methacrylate copolymer, methacrilic acid ethylacrylate copolymer, or hydroxypropyl methilcellulose phtharate (HP). The accused product used hydroxypropyl methilcellulose acetate succinate (AS), instead of hydroxypropyl methilcellulose phtharate (HP). Among other issues relating to literal infringement, the patentee argued that AS is equivalent to HP under the five conditions listed by the Supreme Court, and urged the court to find infringement under the doctrine of equivalents.

The court did not agree with the patentee, finding that HP is an element essential for the patented invention and that replacement by the defendant was not obvious to one skilled in the art. The court defined the essential elements as those that produce the function and result unique to the patented invention; in other words, those elements which if replaced would result in a technical idea different from that of the patented invention. According to the court, the unique function and result must be those that were not accomplished by the prior art.

The court found that the following were known as of the filing date: (1) HP and the two types of copolymers recited in the claim could be used as intestinally soluble polymers; and (2) a long-acting formula could be prepared by combining a fast-acting and a long-acting diclofenac. Accordingly, the court noted that the essential elements of the patented invention are: (1) the use of either HP or one of the other two types of copolymers recited in the claim as materials to provide an intestinal coat; and (2) the combination, in a selected ratio, of a.) sustained-release diclofenac prepared with the intestinally soluble polymer, and b.) fast-acting diclofenac without the polymer, thereby providing an improved sustained-release effect in the diclofenac sodium.

The court rejected patentee's argument that the only essential element is the use of a compound included in the hydroxypropyl group, stating that the group includes other compounds that cannot provide an intestinally soluble polymer. The court was also reluctant to select a feature of one of the compounds recited alternatively in the claim. Accordingly, the court concluded that use of one of the three compounds recited in the claim is an essential element and thus cannot be replaced under the doctrine of equivalents.

The court further examined the obviousness of replacement and found that replacement of HP with AS was not obvious because no prior art suggested that an improved sustained-release effect results from the use of HP as a coat for diclofenac sodium. Although the defendant extensively argued for non-infringement based on prosecution history estoppel, the court did not examine the issue. This may be because the courts see the fourth and fifth conditions as defenses that need not be examined if the patentee does not meet its burden of showing the first three conditions are satisfied. As a result, the court find no infringement and dismissed the patentee's claims.

In Kouken, the Tokyo District Court found literal infringement by one of two accused machines of the defendant, but found no infringement, either literal or equivalent, by the second machine. Kouken's two patents related to a water-resistant load system comprising a cylindrical main electrode and a hollow cylindrical base electrode with a closed, insulated bottom designed so that water safely collected in the bottom. Claims in the first patent required the main electrode to pass through the bottom of the base electrode. In the second accused machine, the defendant modified the main electrode so that it did not extend through but rather was spaced apart from the bottom of the base electrode.

Before examining whether the doctrine of equivalents should apply, the court explained why courts can find infringement under the doctrine of equivalents even though the accused device does not literally meet the claim language. The court listed examples where courts examine the substance of facts involved in a particular case and apply rights and obligations according to the substance, even if the facts in the case fail to meet conditions required by the applicable law. One of the examples given by the court was a couple who have not registered their marriage but who meet other conditions showing that they are in substance a married couple. The law recognizes the substance of their relationship and applies to them rights and obligations that are normally applicable only to a husband and wife that have met the formal requirement under the civil code, registration of marriage. The court reasoned that the law sometimes gives more weight to substance than to formality in order to avoid unfair results resulting from strict enforcement of formality requirements. The doctrine of equivalents functions in the same way because the accused device and the patented invention are substantially the same -- a skilled person would have readily understood that the accused embodiment has the same function and result as the patented invention. Based on this policy discussion, the court allocated the burden of proof for the first three conditions to the patentee, and for the last two conditions to the accused infringer.

In examining the five conditions set forth by the Supreme Court, the court suggested that the first and second conditions are substantially the same, noting that non-essential elements are those that can be replaced without affecting the function and result of the patented invention, and that an accused device can never constitute an embodiment of the patented invention if it does not function in the same way to produce the same result as the patented invention. The court found that the function and result of the defendant's second machine are the same as those discussed in the specification of the first patent. Thus, the second condition was met by showing that the accused machine functions in the same way to produce the same result as the patented machine.

With respect to the third condition, the court noted that the technical features adopted by the accused infringer must be readily understood by everyone in the field of the invention (which is broader than by "one skilled" in that field) to be replacements for the recited features that obtain the same function and result as the patented invention. In other words, the obviousness of replacing the recited features with the new features is greater than the degree of obviousness required for rejecting patentability for lack of inventive step. In the second accused machine, a water supply pipe was modified to support the main electrode and to receive current from a power source, which results in a risk of electrical circuit throughout the entire machine via water. The court therefore found enough evidence that a skilled person would not choose the features adopted by the defendant. Thus, the replacement by the defendant was not readily conceived by one skilled in the art and thus did not meet the third condition. Accordingly, there was no infringement under the doctrine of equivalents.

The court did a similar analysis on the claims of the second patent, which also required the main electrode to extend through the bottom of the base electrode. As with respect to the first patent, the court concluded there was no infringement under the doctrine of equivalents because the third condition was not met, although the first and second conditions were met. Accordingly, the patentee's claims for injunction and recovery of damages were granted with respect to the first machine only.

As a comparative note, the allocation to defendant of the burden of proof with respect to the fourth and fifth conditions, inventive step of the accused embodiment and prosecution history estoppel, contrasts with the U.S. courts' placing such burdens on the patentee.5 The above two cases indicate the increased significance of the third condition, the obviousness-of-replacement test. As suggested by Kouken, the first two tests are substantially the same. These tests cannot reasonably distinguish replacements that qualify as equivalents from replacements that do not qualify because the result of the tests changes depending on the definition of the function and result unique to the invention. In S.S. Seiyaku, the Osaka District Court redefined, based on the prior art, the function and result of the patented invention to make them narrower than those discussed in the specification. This resulted in a finding that the first condition was not met by the accused product. In Kouken, the Tokyo District Court simply adopted the function and result discussed in the specification. This resulted in a relatively broad definition of the result, which is readily met by the accused machine. Both courts, however, refused to find equivalency for not meeting the third condition.

The Tokyo District Court emphasized that a finding of equivalence requires a high degree of obviousness in replacement of the features in the claim with those in the accused device, as compared to the obviousness required for rejecting patentability for lack of inventive step. The Japanese Patent Act and Utility Model Act provide for different degrees of obviousness: (1) inventive step under the Patent Act, defined as "would not readily have been conceived by one skilled in the art;"6 and (2) inventive step under the Utility Model Act, defined as "would not very readily have been conceived by one skilled in the art."7 Further, Japanese courts developed a doctrine that is analogous to the U.S. inherency doctrine and has been incorporated in the JPO guidelines.8 This doctrine enables courts and the JPO to find different elements substantially the same when the difference is a minor variation in the means of accomplishing the object of the invention. These "substantially identical elements" are applicable both to patent and utility model law. Accordingly, the Japanese patent and utility model system has four standards to evaluate the obviousness of different elements. The Kouken court nevertheless only compared the standard for equivalency to the standard for inventive step under the Patent Act.

Further, it has recently become very difficult to draw line between inventive step and novelty because JPO, influenced by U.S. case law doctrines, does not reject claims for lack of inventive step unless there is an express motivation or at least a basis for implied motivation with respect to the replacement made by the applicant.9 In theory, the Kouken court's distinction between tests for equivalents and inventive step is possible. However, in practice, the distinction is impossible and thus the Japanese Patent Office applies the same inventive step standard for examining both patent and utility model applications. Because the theoretical distinction only introduces confusion, it would be better to examine equivalency using the most frequently used standard, the inventive step standard under the Patent Law. In fact, the analysis done by the court in Kouken is exactly the same as the analysis that would have been done for examining the inventive step.

Another interesting contrast with the United States is that Japanese courts focus their analyses on the equivalency question. In the United States, after Markman and Warner-Jenkinson, courts focus their analyses on issues that limit the doctrine of equivalents, which are comparable to Japanese courts' conditions (4) and (5). U.S. courts examine these conditions before getting to the equivalency questions. Reflecting the Supreme Court's concern for public interests as expressed in Warner-Jenkinson, fewer and fewer cases get to the question of equivalency in U.S. courts. In contrast, according to Kouken, Japanese courts must examine the first three conditions for showing equivalency before getting to the last two conditions that limit the doctrine of equivalents. Thus, as clearly indicated in these two recent cases, a strict standard for the first three tests is necessary for Japanese courts if they follow the example of U.S. case law and maintain the traditional Japanese case law limiting the application of the doctrine of equivalents.

Overall, Japanese courts were wise to avoid complicated issues relating to prosecution history estoppel. As shown by the recent Federal Circuit cases reported above, U.S. courts are struggling to define the effect of the estoppel that results from amendments and arguments during prosecution. By focusing on development of case law on the obviousness-of-replacement test, Japanese courts can take advantage of the existing case law on inventive step to develop a clear and objective standard for equivalency.

Toshiko Takenaka

1. Judgment of Tokyo District Court, Oct. 7, 1998, 52 Minshu (No. 1) 113, Hanrei Jiho No. 1657, 122 (1999).

2. Judgment of Osaka District Court, Sept. 17, 1998 (Unreported as of 3/16/1999).

3. Judgment of Supreme Court of Japan, Judgment of Supreme Court of Japan, February 24, 1998. An English translation of the decision by this author is published in 5-1 Casrip Newsletter 12 (Center for Advanced Study and Research in Intellectual Property, University of Washington School of Law, Seattle, Winter 1998), available on-line at newsletter/ newsv5i1jp1.html.

4. Toshiko Takenaka, Harmonizing the Japanese Patent System with Its U.S. Counterpart Through Judge-Made Law: Interaction Between Japanese and U.S. Case Law Developments, 7 Pacific Rim Law & Policy Journal 250 (1998).

5. With respect to prosecution history estoppel, the Supreme Court made clear that the burden is on the patentee by introducing a new presumption when a patentee made an amendment relating to elements on dispute during the prosecution. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 137 L.Ed. 2d 146, 117 S. Ct. 1040, 41 U.S.P.Q.2d 1865 (1997). With respect to the inventive step of the accused embodiment, the Federal Circuit introduced an analogous doctrine to require a hypothetical claim literally covering the accused embodiment be patentable over the prior art to uphold infringement under the doctrine of equivalents. The court indicated that the burden to show the patentability is on the patentee. Wilson Sporting Goods Co. v. David Geoffrey & Associates, 904 F.2d 677, 14 U.S.P.Q.2d 1942 (Fed. Cir. 1990), cert. denied, 111 S. Ct. 537 (1990).

6. Japanese Patent Act, Article 29, Paragraph 2.

7. Japanese Patent Act, Article 3, Paragraph 2.

8. Japanese Patent Office, Examination Guidelines for Patent and Utility Model in Japan, Chapter 3, Section 2.4. (1993).

9. Id. At Chapter 2, Section 2.5.2. (1993).

10. Markman v. Westview Instruments, 517 U.S. 370, 134 L. Ed. 2d 577, 116 S. Ct. 1384, (1996)

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