Amendment of Claims in Reexamination Precludes Award of Royalties for Pre-Issuance Infringement

Scott Daniels | October 30, 2012

In certain circumstances, a patentee may recover for acts of infringement that occur before issuance of its patent.  Section 154(d) states that a patentee may obtain a reasonable royalty for acts of infringement occurring between the patent’s publication date and its issuance date.  The statute adds that a patentee may “obtain reasonable royalties for activities amounting to infringement of the [patent application’s claims] if: (1) the issued patent claims are substantially identical to the claims in the published application; and (2) [defendant] had actual notice of the published patent application.” 


The possible applicability of § 154(d) arose last week in the infringement action Sloan Valve v. Zurn Industries.  The patentee Sloan asserted that it was entitled to a reasonable royalty for Zurn’s acts of infringement that took place after the publication Sloan’s application but before the issuance of that patent.  There does not appear to have been any dispute that Zurn had actual notice of the published patent publication as required by § 154(d)(2) – the issue was whether issued patent claims were substantially identical to the claims in the published application, as required by § 154(d)(1).


Judge Amy St. Eve began her analysis by correctly noting that this issue of “substantial identity” under 35 U.S.C. § 154(d)(2), is governed by the case law involving reissue claims, specifically, those cases addressing the question of whether amended claims are “substantially identical” to original claims for purposes of intervening rights under 35 U.S.C. § 252.  “In determining whether substantive changes have been made, [a court] must discern whether the scope of the claims are identical, not merely whether different words are used.”


Sloan’s patent claimed a toilet including a water flush valve in a plurality of flush modes.  Significantly, the patent had survived reexamination, but only after Sloan had amended the claims.  Without going too far into the gory mechanical details, suffice it to say that, Sloan amended the claim in reexamination by changing the preamble and two “thereby” clauses:


[a] system for operating a water flush valve in a plurality of user selectable flush volume modes, including a liquid waste removal mode and a solid waste removal mode, comprising … thereby releasing a first flush volume of water for solid waste flushing purposes in the solid waste removal mode and … thereby releasing a second flush volume of water adequate for liquid waste for flushing purposes in the liquid waste removal mode.


Zurn argued that Sloan’s amendment substantially changed the scope of the claim.  Sloan replied that the amendment was a mere clarification of the claim, but Judge St. Eve agreed Zurn, not Sloan.  She found that the “amendment … did more than simply provide clarification of an already existing term.”


First, the Judge noted that Sloan’s amendment had limited the scope of its claim. to overcome a prior art rejection.  “A plain reading of the claim reveals that the amendments made during reexamination added limitations that were previously not in the claim and therefore narrowed the scope. Accordingly, the amended [claim] post-reexamination, is not substantially identical to its published version.”


Second, Judge St. Eve found that the amendment of the “thereby” clauses “make an otherwise non-limiting term in the preamble, limiting.” The Judge stated that the “addition of these amendments during reexamination gave the ‘dual mode’ claim term its patentable weight and differentiated it from the prior art …”


Sloan cited three Federal Circuit decisions – Tennant Co. v. Hako Minuteman, Inc., Kaufman Co. v. Lantech Inc., and Predicate Logic, Inc. v. Distributive Software – for the proposition that the addition of terms to a claim need not result in a change in the claim’s substantive scope, that the additional terms may be mere clarification.  Judge St. Eve was not buying.  She found that the terms added to the claims in each of the CAFC decisions merely recited features already present in the original claims.  In this case, she concluded, Sloan’s amendments actually added new features to the claims.


Since Sloan’s amendments changed the scope its claims, Judge St. Eve concluded, Sloan had not satisfied § 154(d)(1) and it was therefore not entitled to royalties for any acts of infringement occurring prior to the issuance date of its patent..


For accused infringers, there is one more reason to consider reexamination.

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