By Sue Gerber and Matt Johnson

This blog has previously discussed the effect of several different types of estoppel.  See, e.g., Estoppel Estopped for Remanded Claims, Reminder: Estoppel May Not Preclude Prior-Art Systems, and PGR Estoppel Applies to Unasserted Art.  Recently, the PTAB again took up the issue of estoppel, this time defining the scope of interference estoppel under 37 C.F.R. § 41.127(a).  The Chemours Company FC, LLC v. Mexichem Amanco Holdings SA, DE C.V., IPR2020-01667, Paper No. 10 (PTAB March 25, 2021). There, the PTAB concluded that interference estoppel does not distinguish between priority and patentability issues, but rather precludes a party from subsequently raising all issues that were or could have been raised in an earlier interference proceeding.

Applying the PTAB’s prior decision in Adama Makhteshim Ltd. v. Finchimica S.P.A., IPR 2016-005577, Paper 7 (PTAB May 24, 2016), aff’d, 733 F. App’x 1025 (Fed. Cir. 2018), the PTAB reached this conclusion for three reasons.  First, for more than 35 years, the PTAB has had the authority to decide patentability challenges pertaining to interfering subject matter in an interference proceeding.  (Chemours at 8.)  Because the claims at issue in the IPR petition were exactly the same as those at issue in the prior Interference, the PTAB concluded it was “beyond dispute that questions concerning the patentability of the presently challenged claims could have been raised in the Interference.”  (Id.)  Second, even though the Petitioner could have raised the currently asserted questions of patentability in the Interference, it elected not to do so.  (Id. at 8-9.)  Third, the record showed the Petitioner was well-acquainted with the presently-asserted prior art at the time of the Interference.  (Id.)

Despite this apparently straightforward application of the regulation, the Petitioner urged the PTAB to interpret Section 41.127(a) to impose estoppel as to patentability arguments only when patentability had been asserted in the Interference.  Where, as in this case, priority was the only issue raised and decided, the Petitioner argued the estoppel should not apply to bar later-raised patentability arguments.  The PTAB rejected this alternative interpretation for three reasons.  First, the Petitioner’s argument ran contrary to the text of the regulation, which states that an interference judgment disposes of “all issues that were, or by motion could have properly been, raised and decided.” (Id. at 10 (emphasis in original).)  Second, the PTAB found that Petitioner’s argument “conflates the Board’s discretion to decide patentability issues raised in an interference with a party’s obligation to preserve those issues by properly raising them when given the opportunity and instruction to do so.”  (Id.)  The PTAB explained that while it has the discretion to decline to address an issue, a party cannot elect not to raise issues without also accepting the risk that it will be estopped from raising those issues in subsequent PTO proceedings if it loses the interference.  (Id.Third, Section 41.127(a) does not distinguish between patentability and priority issues; rather, it makes certain that the judgment disposes of “all issues” that were or could have been raised.  (Id. at 13.)  The PTAB denied institution of the requested inter partes review.

In denying the petition, the PTAB offered a parting word to the wise:  “A party that decides not to raise issues it could have raised in the interference, as Petitioner chose to do here, does so at its own peril running the risk it will be estopped from raising those issues in future PTO proceedings in the event it loses the interference.”   (Id.)  Practitioners would be well advised to heed this advice and carefully preserve all available arguments during interference proceedings.

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Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Currently co-chairing the Firm's PTAB subpractice and involved in proceedings at the Board since the first day of their availability in September 2012, Matt regularly represents clients as both petitioners and patent owners at the Board. He further works as an advocate for clients in appeals from Board proceedings at the Federal Circuit.