The Board Declines To Apply Interference Estoppel

By Ryan Camp,* Sachin Patel, and Josh Nightingale –

On June 14, 2022, the Board instituted Zynga Inc.’s (“Zynga”) petition for IPR against U.S. Patent No. 7,168,089 (the “’089 patent”), rejecting Patent Owner IGT’s argument that interference estoppel should preclude institution.  Zynga, Inc. v. IGT, IPR2022-00199, Paper 11 (Institution Decision).  Zynga (and its predecessor-in-interest) have been involved in multiple proceedings against IGT and the ’089 patent, including an interference proceeding initiated in 2010 (see Int. No. 105,747) and a patent infringement suit in the Western District of Texas. See IGT et al. v. Zynga Inc., 6:21-cv-00331 (W.D. Tex. 2021).  The ’089 patent relates generally to gaming machines and secure communications for transferring gaming software and information between gaming machines and a gaming server.

In 2010, the predecessor-in-interest to Zynga provoked the interference proceedings involving IGT’s ’089 patent.  During the interference, Zynga filed a motion for unpatentability, including claims of obviousness based on three prior-art references. The Board, however, found Zynga’s specification did not provide sufficient written description support for its claims and terminated the interference in February 2014, dismissing Zynga’s motion for unpatentability as moot.

In November 2021, Zynga filed its petition for IPR and asserted that the ’089 patent was obvious over three prior-art references different from those raised during the interference. In response, IGT argued that interference estoppel under 37 C.F.R. § 41.127(a)(1) applied, and that Zynga was prohibited from raising arguments that could have, but were not, made during the interference. As such, according to IGT, Zynga could not raise an argument based on the new prior-art references during the inter partes review. The Board disagreed, finding that interference estoppel did not apply and allowing Zynga to present the new prior-art references.

In analyzing the issue, the Board explained that the initial focus during an interference under 37 C.F.R. § 41.201 is whether threshold issues would deprive the opponent of standing, such as lack of written description of an involved application.  See 37 C.F.R. § 41.201(2)(ii). The Board reasoned that when it terminated the interference and dismissed Zynga’s motions as moot, the Board did not “analyze or decide any issues of unpatentability based on prior art.” Institution Decision, Paper 11 at 9.  Therefore, because the Board did not reach the issue of obviousness in the interference, interference estoppel did not apply, and Zynga was permitted to make additional obviousness arguments in the IPR. The Board further remarked that Zynga had provoked the interference two years prior to the promulgation of interference estoppel under the AIA. The Board concluded that it would be “unfair” to impose interference estoppel against Zynga, and to the extent interference estoppel applied, the Board exercised its discretion under 37 C.F.R. § 42.5(b) to waive its application.

After considering the merits of the petition, the Board determined that Zynga had demonstrated a reasonable likelihood of prevailing with respect to at least one of the challenged claims and instituted IPR.

* Ryan Camp is a summer associate in Jones Day’s Chicago Office.