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Uncertainty is the only certainty when it comes to IPR estoppel

Someday, maybe soon, the Federal Circuit will weigh in on the scope of IPR estoppel for references that were known by a party but not presented in an IPR petition filed by that party. Until that happens, it appears that the manner in which IPR estoppel is applied will continue to vary. Even in the same jurisdiction.

Under 35 U.S.C. 315(e), a petitioner is estopped from asserting that a “claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” In Shaw Indus. v. Automated Creel, the Federal Circuit rejected a statutory interpretation of 35 USC 315(e)(2) that applied estoppel to grounds that were raised in an IPR petition, but on which the PTAB did not institute. However, the Federal Circuit has not yet addressed whether IPR estoppel applies to references that a petitioner knew about but did not raise as a ground for unpatentability in a concluded IPR proceeding. Two recent conflicting decisions out of the District of Delaware highlight the uncertain application of IPR estoppel as to this category of prior art.

In December 2016, Judge Robinson held in Intellectual Ventures v. Toshiba that IPR estoppel applies only to references on which the PTAB institutes trial. With this narrow view of IPR estoppel, Judge Robinson permitted Toshiba, the petitioner in a concluded IPR proceeding, to challenge validity based on prior art that Toshiba was aware of but did not include in the IPR petition. Judge Robinson confirmed that holding in January 2017—albeit somewhat reluctantly:

On the whole, since it is not my place to make policy decisions, I am not inclined to change my original decision, with the hopes that an appeal may clarify the issue for future judges in future cases. Therefore, Toshiba is not estopped from presenting the Fuse combination at trial.

More recently, Circuit Judge Jordan (sitting by designation) came to the opposite conclusion. In Parallel Networks v. IBM, Judge Jordan rejected IBM’s validity challenges based on prior art combinations not raised in the IPR proceedings:

Allowing IBM to raise arguments here that it elected not to raise during the IPR would give it a second bite at the apple and allow it to reap the benefits of the IPR without the downside of meaningful estoppel. To prevent that unfair result, I conclude that IBM is estopped from asserting prior art references and combinations that it reasonably could have raised before the PTAB.

Judge Robinson’s decision relied heavily on Shaw, which Judge Robinson indicated compelled a narrow interpretation of IPR estoppel:

Although extending [this logic] to prior art references that were never presented to the PTAB at all (despite their public nature) confounds the very purpose of this parallel administrative proceeding, the court cannot divine a reasoned way around the Federal Circuit’s interpretation in Shaw.

Judge Jordan’s decision, however, did not mention or cite Shaw. Instead, Judge Jordan’s decision focused on the language of Section 315(e)(2) and a PTAB decision that applied IPR estoppel before the PTO, under Section 315(e)(2), to include references known but not raised in a petition.

Another interesting aspect of the Parallel Networks decision is that IBM’s participation in the IPR proceeding was through the joinder provision of Section 315(c). Requests for joinder are frequently filed with “copycat” petitions to increase the likelihood that joinder will be granted. IBM argued that because of this, it was practically limited to the grounds raised by the prior petitioner. Judge Jordan found this argument unconvincing, noting that requests for joinder “can involve petitions that assert different grounds of invalidity.”

Posted on 3/9/2017 by Deakin T. Lauer