## Facts

- Atlantic owned U.S. Patent No. 4,674,204 covering a shock-absorbing shoe innersole, including process claims and product-by-process claims.
- Claim 1 (key process claim) described molding an innersole by introducing expandable polyurethane into a mold and recovering an innersole with open-celled polyurethane foam and a heel insert.
- A product-by-process claim covered “[t]he molded innersole produced by the method of claim 1.”
- Faytex distributed innersoles manufactured by two suppliers:
  - Surge used a method the parties agreed literally practiced the patented process.
  - Sorbothane used a different method, injecting liquid material into a mold and using a dam to hold material in place rather than placing a solid insert with “tack” to maintain position during molding.
- Atlantic alleged Faytex infringed by selling Sorbothane-made innersoles under both (i) the process claims and (ii) the product-by-process claims, asserting the resulting innersoles were identical to those claimed.

## Issues

1. Whether Sorbothane’s manufacturing method infringed the patented process claim, literally or under the doctrine of equivalents.
2. Whether a product-by-process claim is infringed by an identical product made by a different process, or only by products made using the claimed process.
3. Whether the patent was invalid under the on-sale bar, 35 U.S.C. § 102(b), under the correct legal standard.
4. Whether the district court’s damages analysis was legally proper.

## Decision

- Affirmed the finding that Sorbothane’s process did not infringe the process claim, either literally or under the doctrine of equivalents.
- Affirmed the finding that Faytex did not infringe the product-by-process claim by selling Sorbothane-made innersoles because they were not made by the claimed process.
- Vacated the judgment that the patent was not invalid under § 102(b) and remanded for further findings on the on-sale bar issue.
- Remanded for recalculation of lost profits damages if liability was again established.
- Denied Faytex’s requests for sanctions.

## Legal Principles

- Process claims are infringed only when the accused method performs the claimed steps; materially different steps defeat literal infringement.
- Under the doctrine of equivalents, a method does not infringe where it performs the relevant function in a substantially different way, even if it produces a similar result.
- For product-by-process claims, the process terms limit infringement scope: such a claim is infringed only if the accused product is made by the recited process, not merely because the product is identical or indistinguishable.
- A district court’s § 102(b) on-sale bar ruling may be vacated and remanded when the appellate court cannot determine whether the correct legal standards were applied or whether necessary findings were made.
- Lost-profits damages must be based on a legally sound methodology tied to established liability; errors require remand.

## Conclusion

The Federal Circuit held that product-by-process claims do not reach identical products made by different methods, affirmed noninfringement for Sorbothane-made innersoles under both process and product-by-process theories, and remanded for further proceedings on the on-sale bar and damages.


Atlantic Thermoplastics Co. v. Faytex Corp., 970 F.2d 834 (Fed. Cir. 1992)