Design-Around Strategy

A design-around modifies a product or process to avoid infringing a patent's claims: DEFINITION: engineering or designing a product or process that achieves the same functional goal as the patented invention without satisfying every element of any claim of the patent; LEGAL BASIS FOR DESIGN-AROUNDS: the all-elements rule: a patent is infringed only if the accused product or process satisfies EVERY element of at least one claim of the patent; if any element is missing, there is no literal infringement; therefore: remove or change a single element of the claim → no literal infringement; BUT — the doctrine of equivalents must also be analyzed; DOCTRINE OF EQUIVALENTS RISK: even without literal infringement, a design-around can still infringe if the changed element performs substantially the same function, in substantially the same way, to achieve substantially the same result (function-way-result test; Graver Tank v. Linde Air Products, S.Ct. 1950); PROSECUTION HISTORY ESTOPPEL LIMITS DOE: if the patentee narrowed a claim element during prosecution to overcome a rejection (amended or argued to distinguish prior art), the doctrine of equivalents cannot recapture the surrendered territory; Festo Corp. v. Shoketsu Kinzoku Kogyo (S.Ct. 2002): narrowing amendments for reasons substantially related to patentability create a presumptive bar to DOE for the narrowed element; DESIGN-AROUND FRAMEWORK: STEP 1: obtain the patent and read all claims carefully; STEP 2: map your product or process to each claim element; STEP 3: identify which elements you can change or eliminate; STEP 4: assess DOE risk for each changed element; STEP 5: check prosecution history to see if DOE is barred by estoppel; STEP 6: implement the design-around; STEP 7: document the analysis (supports good-faith belief / willfulness defense).

Prosecution history estoppel is the design-arounders' most valuable tool: WHAT PROSECUTION HISTORY ESTOPPEL DOES FOR DESIGN-AROUNDS: it limits the patent owner's ability to use the doctrine of equivalents to capture your design-around; when a claim element was narrowed during prosecution, the patent owner cannot recapture equivalents of the surrendered scope; HOW TO USE IT: search the patent's prosecution history (file wrapper) on the USPTO Patent Center; look for: amendments that narrowed the claim element you changed; arguments by the patentee distinguishing prior art on the basis of the specific element; cancellation of broader claims and substitution with narrower claims; IF THE ELEMENT WAS NARROWED: identify what broader scope was surrendered; design your product to fall in the surrendered scope; the patent owner cannot use DOE to cover your design-around because they surrendered that equivalents range during prosecution; FESTO PRESUMPTION: when a patentee narrows a claim for a reason related to patentability, there is a presumptive bar to DOE for that element; the patentee can rebut the Festo presumption only by showing: (a) the equivalent was unforeseeable at the time of the amendment; (b) the rationale for the amendment bears no more than a tangential relation to the equivalent; (c) there is some other reason suggesting the patentee could not reasonably be expected to have described the equivalent; SPECIFIC EXCLUSION PRINCIPLE: if a patent's prosecution history or claims specifically exclude a particular embodiment (explicitly or by necessary implication), that embodiment is not infringed even if it might otherwise be an equivalent; CLAIM DIFFERENTIATION: if the patent has dependent claims that add an element absent from the independent claim, the independent claim presumably does not require that element — the design-around can include that element without being limited to the dependent claim's version.

The doctrine of equivalents is the patentee's primary tool to capture design-arounds: DOE BASICS: even when a product does not literally infringe (it lacks one claim element), the patent may still be infringed if the product performs substantially the same function in substantially the same way to achieve substantially the same result as the claimed element; GRAVER TANK v. LINDE AIR PRODUCTS (S.Ct. 1950): established the function-way-result test; the DOE applies element-by-element (not claim-by-claim); must show each changed element is equivalent to the corresponding claim element; WARNER-JENKINSON CO. v. HILTON DAVIS CHEMICAL CO. (S.Ct. 1997): reaffirmed DOE; the function-way-result test applies element-by-element; prosecution history estoppel must be applied on an element-by-element basis; FESTO CORP. v. SHOKETSU KINZOKU (S.Ct. 2002): narrowing amendment for reasons substantially related to patentability = presumptive bar to DOE for that element; largely gutted DOE for claims that were amended during prosecution; DESIGN-AROUND STRATEGIES TO AVOID DOE: CHANGE THE FUNCTION: design the altered element to perform a substantially DIFFERENT function — not just a different way to do the same thing; CHANGE THE WAY: even if the function and result are the same, perform the function in a substantially different way; LEVERAGE PROSECUTION ESTOPPEL: design-around to fall in the surrendered scope — DOE is barred; USE PRIOR ART AS SHIELD: the Wilson Sporting Goods rule: DOE cannot be used to cover subject matter in the prior art; if your design-around was in the prior art at the time the patent issued, DOE cannot reach it; SPECIFIC EXCLUSION: if the prosecution history explicitly excludes your design-around, DOE is blocked.

The patentee can sometimes use continuation applications to capture a design-around: CONTINUATION RISK: when a design-around becomes public (the product launches), the patentee may file a continuation application with new claims specifically drafted to cover the design-around; LEGAL BASIS: if the patentee has a pending patent application (or a parent application is still open for continuation), the patentee can draft new claims supported by the original disclosure that read on the design-around; HOW THIS IS POSSIBLE: a continuation shares the priority date of the original application; if the design-around uses technology that was described (if not claimed) in the original application, the patentee can now claim it; LIMITATIONS: the original disclosure must support the new claims (§ 112 written description); new matter cannot be added; the claims cannot be broader than the original disclosure; SUBMARINE PATENTS (HISTORICAL): pre-AIA, continuation applications could remain pending for decades with undisclosed claims; the patent would 'surface' when a competitor's product matched the eventually-issued claims; AIA 2011: limited submarine patent risk; applications publish at 18 months; term measured from filing date (not issue date); 20-year patent term from earliest effective filing date; POST-AIA CONTINUATION RISK: continuation risk still exists while any related application is pending; at product launch, check: are there any pending continuation, CIP, or divisional applications from the same family?; DESIGN-AROUND TIMING: implement design-arounds before the continuation patent issues, not after; once the continuation patent issues with claims covering the design-around, you face a new infringement suit; MONITORING PENDING APPLICATIONS: subscribe to family monitoring (Google Patents Family; Derwent Innovation) to receive alerts when continuation applications file or publish.

The design-around vs. license decision is a core IP strategy choice: COST-BENEFIT FRAMEWORK: COST OF LICENSING: royalty rate × sales volume over the license term; upfront license fee; time to negotiate; ongoing compliance burden; reputational impact (paying a competitor for technology); COST OF DESIGN-AROUND: engineering time and cost; time-to-market delay; risk of unsuccessful design-around (DOE liability remains); risk of continuation patent; ongoing monitoring; WHEN DESIGN-AROUND IS PREFERRED: the royalty demand is unreasonable or the patent is of questionable validity; the product can be redesigned without significant performance degradation; the patent is held by a competitor who would not grant a license or would impose restrictive terms; the design-around creates an opportunity to develop a superior product (leapfrog innovation); WHEN LICENSING IS PREFERRED: the patent is clearly valid and clearly infringed; the royalty rate is commercially reasonable; time-to-market is critical and design-around would cause significant delay; the patent holder has demonstrated willingness to license at acceptable rates; the patent is fundamental to the technology and multiple other licensees have already accepted it; HYBRID APPROACH: implement the design-around AND negotiate a license; the design-around demonstrates alternatives and weakens the licensor's leverage; simultaneously negotiating limits the risk if the design-around is ultimately found to infringe; COMPETITIVE INTELLIGENCE VALUE OF DESIGN-AROUND: the design-around process reveals: which claim elements are critical to the invention; where the prior art limits the patent scope; which design choices are not covered by the patent; this intelligence improves both product design and potential invalidity challenges; IPR AS A COMPLEMENT TO DESIGN-AROUND: if a strong design-around exists, combine it with an IPR petition to invalidate the patent; a successful IPR eliminates the risk of the continuation capturing the design-around.