By Doug Pearson
Among the thorny questions for an IPR petitioner is how estoppel may affect invalidity positions asserted by the petitioner/litigant in a parallel district court proceeding, given the grounds of unpatentability asserted by the petitioner in an IPR petition. The statute provides that a petitioner of an IPR that results in a final decision will be estopped from asserting invalidity in a civil action based on “any ground that the petitioner raised or reasonably could have raised during that inter partes review.” 35 U.S.C. § 315(e)(2). The statute provides a similar estoppel provision that precludes a petitioner of an IPR that results in a final decision from raising or maintaining a proceeding before the PTO (e.g., another IPR) “on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” 35 U.S.C. § 315(e)(1). This question is also a thorny one for district court judges, as reflected by an order dated January 11, 2017 in the United States District Court for the District of Delaware, which held that Toshiba, petitioner of an IPR that came to a final written decision, is not estopped from presenting an invalidity ground at trial against Intellectual Ventures, notwithstanding the fact that the ground could have been presented in Toshiba’s IPR petition but was not. Intellectual Ventures I LLC et al. v. Toshiba Corporation et al., 1-13-cv-00453 (DED January 11, 2017, Order) (Robinson, USDJ) (“Toshiba Order”). Judge Robinson found that the Federal Circuit had never addressed this particular fact pattern and decided that, given existing precedent and competing policy considerations, Toshiba would be permitted to present the ground of invalidity at trial “with the hopes that an appeal may clarify the issue for future judges in future cases.” Id. at 3.
The District Court’s review of existing precedent did not provide a clear path for deciding the estoppel issue. The Court found it undisputed that estoppel does not apply to unpatentability grounds presented in an IPR petition that are rejected by the Board for institution, citing, for example Shaw Indus. Grp., Inc. Automated Creel Sys., Inc., 817 F.3d 1293 (Fed. Cir. 2016). See Toshiba Order at 2. The Federal Circuit in Shaw held that grounds raised by a petitioner in an IPR petition but not instituted by the Board are not subject to estoppel in district courts or other IPR proceedings. Shaw, 817 F.3d at 1300. The reasoning in Shaw relied on the observation that an IPR does not “begin” until instituted, and that grounds raised in an IPR petition but not instituted by the Board therefore could not have been raised “during” that IPR. Id. While the facts in Shaw did not align with those in the Toshiba case, the Court noted that the PTAB considered very similar facts in an IPR in Apotex Inc. v. Wyeth LLC, No. IPR2015-00873 (PTAB 2016). Toshiba Order at 2. In Apotex, the PTAB found that that the petitioner was estopped from asserting a ground of obviousness presented in a later IPR petition in IPR2015-00873 because the petitioner had demonstrated an awareness of all the art for that ground in an earlier IPR petition in IPR2014-00115 (which had come to final decision), and thus reasonably could have, but failed to, assert that ground of unpatentability in the petition for IPR2014-00115. Apotex, IPR2015-00873, Paper No. 8 at 5-8.
Notwithstanding the factual similarity between Toshiba and Apotex, the Court declined to preclude Toshiba from presenting a ground of invalidity at trial that the Court believed Toshiba reasonably could have presented in its IPR. The Court was unsatisfied with competing policy decisions relating to the options. On one hand, requiring a petitioner to bring forth every potentially relevant ground of unpatentability or risk being estopped in litigation appeared inconsistent with the PTAB’s length limits and other limits for petitions. Toshiba Order at 3. On the other hand, permitting a company to assert some references in an IPR and reserve other references for litigation could permit the company to “play games” between the PTAB and the courts, contrary to the purpose of IPR proceedings. Id. Additionally, and perhaps significantly, in a memorandum opinion a month earlier in which the Court considered the estoppel issue, the Court commented that, for the facts at hand, it could not “divine a reasoned way around the Federal Circuit’s interpretation in Shaw,” which exempted from estoppel grounds that could not reasonably have been raised “during” the IPR, notwithstanding the fact that extending Shaw’s logic to prior-art grounds that were not presented to the PTAB at all despite their public nature “confounds the very purpose of this parallel administrative proceeding.” Intellectual Ventures I LLC et al. v. Toshiba Corporation et al., 1-13-cv-00453 (DED December 19, 2016, Opinion) (Robinson, USDJ), 25-27. In other words, the Court seemed perplexed by the notion that grounds never submitted to the PTAB in the first place could not be presented “during” an IPR, as in Shaw, and seemingly could therefore avoid estoppel under Shaw’s language, even though such a result is contrary to the purpose of IPR proceedings. In this instance, the Court plainly felt that more guidance is needed from the Federal Circuit and provided a decision that said so.
In this case Toshiba will be permitted to present invalidity grounds at a district-court trial, even though the Court believed Toshiba reasonably could have, but did not, present those grounds its IPR. But conservative petitioners will likely continue an approach of presenting multiple (perhaps many) solid grounds of unpatentability in one or more IPR petitions so as to minimize estoppel risk in related district-court proceedings or other IPR proceedings. When faced with numerous grounds of unpatentability in one or more IPR petitions, the PTAB has a demonstrated track record of denying some grounds as simply redundant, and estoppel does not apply to such rejected grounds under the Federal Circuit’s present treatment.
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