Overview
The AIA includes estoppel provisions to limit a party’s ability to reassert invalidity arguments in a subsequent proceeding. Because an entire inter partes review (IPR) proceeding before the Patent Trial and Appeal Board (the Board) lasts no longer than approximately 18 months,1 the AIA estoppel provision is likely to become relevant in many parallel district court actions, which are typically of longer pendency.
District court estoppel arising from an IPR proceeding is governed by 35 U.S.C. § 315(e)(2):
The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party-in-interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.
Although there are several limitations discernable from a plain reading of the statute, the legislative history and a lack of district court guidance renders reliance on some of these “limitations” questionable for petitioners attempting to evaluate the nature of available invalidity arguments in another action.
Estoppel Arising From Grounds Petitioner Raised or Reasonably Could Have Raised
Estoppel is limited to grounds the petitioner “raised or reasonably could have raised” during the IPR. This is perhaps the most determinative aspect of the statute as to estoppel scope, yet district court interpretation so far has been minimal. The safest course for the challenger is to rely on invalidity grounds not available to IPR petitioners—namely, invalidity based on 35 U.S.C. § 101, § 112, or prior use/sale of physical products or systems.2 In Star Envirotech, Inc. v. Redline Detection, LLC, the Central District of California declined to apply estoppel to invalidity arguments based on a physical machine and an owner’s manual directed to the machine, despite the Defendants having had the owner’s manual in their possession at the time of the IPR.3 The court found that regardless of the Defendants not asserting the owner’s manual in the IPR, the physical machine was “a superior and separate reference.”4 The court also allowed Defendants to assert invalidity based on prior art combinations including the physical machine and prior art publications that were a part of the IPR.5 Thus, evaluating the existence and strength of physical or non-publication prior art before filing an IPR is an important consideration for potential petitioners that can minimize the impact of any later-arising estoppel.
Outside of those grounds that could not have been a part of the IPR, other invalidity arguments are not yet strictly forbidden. Pre-AIA estoppel arising from inter partes reexamination was limited to invalidity grounds that the requester “raised or could have raised.”6 A review of the legislative history evidences a narrowing of estoppel arising from an IPR compared to that arising from an inter partes reexamination.7 During Senate debate on the AIA, Senator Kyl explained that pre-AIA reexamination estoppel applies to “any issue that it would have been physically possible to raise in the inter partes reexamination, even if only a scorched-earth search around the world would have uncovered the prior art in question,” whereas post-AIA IPR estoppel applies only to “that prior art which a skilled searcher conducting a diligent search reasonably could have been expected to discover.”8 This suggests that patents and printed publications may be asserted in subsequent proceedings under limited circumstances. Additional comments relating to affected parties seem to contradict that suggestion. In the context of discussing estoppel of real parties-in-interest and the petitioner’s privy, Senator Kyl stated that “extending could-have-raised estoppel to privies will help ensure that that if a review is instituted while litigation is pending, that review will completely substitute for at least the patents-and-printed-publications portion of the civil litigation.”9 Absent court guidance interpreting this “reasonably” standard, petitioners should proceed with caution in asserting or expecting to be able to assert prior art patents and printed publications in subsequent actions.
Estoppel Arising From Claims Resulting In a Final Written Decision
Estoppel applies only on a claim-by-claim basis.10 It also only applies to proceedings that result in “a final written decision.”11 Because the statute reads “a claim . . . that results in a final written decision,” a reasonable interpretation is that claims challenged by the petitioner but not instituted by the Board as well as claims not challenged by the petitioner at all would not give rise to estoppel. But, available case law on the topic supports a somewhat broader interpretation.
Estoppel as applied to claims challenged in an IPR petition but denied for institution of review was addressed in Invensys Sys., Inc. v. Emerson Elec. Co. in which the court found the Defendants were estopped from asserting in the litigation prior art references raised in the IPR petition, even as to the claims for which the IPR was not instituted.12 Notably, the court stated that the Defendants “will be estopped” before a final written decision was even reached in the IPR.13 By contrast, in Nat’l Oilwell Varco, L.P. v. Omron Oilfield & Marine, Inc., the IPR petition was denied as to all claims asserted and in the court explained that “the statutory doctrine of estoppel DOES NOT APPLY to this case.”14
Thus, the tensions between the plain reading of the statute and these decisions is driven, in large part, by the Board’s practice of instituting review and, correspondingly, a final written decision, as to some but not all of the claims asserted in the petition. The propriety of this practice has been appealed to the Federal Circuit in Synopsys, Inc. v. Mentor Graphics Corp.15 The Federal Circuit’s decision will likely bear heavily on the proper scope of estoppel.16 In the meantime, Petitioners should continue to rigorously consider potential estoppel issues prior to filing an IPR petition.
1 See 77 Fed. Reg. at 48757.
2 See 35 U.S.C. § 311(b) (limiting IPR to invalidity based on prior art patents and printed publications under sections 102 and 103).
3 No. 12-CV-01861, slip op. at 5 (C.D. Cal. Jan. 29, 2015) (Dkt. no. 99).
4 Id.
5 Id.
6 See 35 U.S.C. § 315(c) (pre-AIA statute).
7 157 Cong. Rec. S1375 (Mar. 8, 2011).
8 Id.
9 Id. at S1376.
10 35 U.S.C. § 315(e)(2).
11 Id.
12 No. 6:12-CV-00799, 2014 WL 4477393, at *3 (E.D. Tex. July 25, 2014).
13 Id.
14 No. 1:12-CV-773, slip op. at 1 (W.D. Tex. Dec. 2, 2013) (Dkt. no. 62; emphasis in original).
15 Brief for Appellant at 4 (Fed. Cir.) (No. 14-1516) (Dkt. no. 34).
16 See, e.g., Brief for Intervenor – Director of USPTO at 49-50 (Fed. Cir.) (No. 14-1516) (Dkt. no. 62; “There is nothing in the statutory scheme to suggest that petitioners should be effectively penalized for simply presenting claims for review, when they are not even granted a full administrative proceeding on them.”).
