In a December 19, 2016 decision, Judge Robinson (D. Del.) held that, under current Federal Circuit law, IPR estoppel can only apply to references on which the PTAB institutes trial.
Judge Robinson’s decision was in response to plaintiff Intellectual Ventures’ motion for summary judgment that defendant Toshiba is estopped from raising invalidity grounds that it did not raise in a prior IPR petition. Although Judge Robinson found this argument “perfectly plausible,” she held that the Federal Circuit’s March 2016 decision in Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc. specifically precludes this interpretation.
In Shaw, the Federal Circuit rejected a statutory interpretation of 35 USC 315(e) that applied estoppel to grounds that were raised in an IPR petition, but on which the PTAB did not institute. The Federal Circuit’s reasoning in Shaw hinged on the phrase “during that inter partes review” in 315(e), which is shown marked up below:
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 … that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.
An IPR, the Federal Circuit stated, does not “begin until it is instituted.” Therefore, an IPR petitioner cannot have “raised” (or reasonably raised) any ground in the petition for which the PTAB did not institute trial.
Judge Robinson’s decision takes the Shaw interpretation one step further. Even if an IPR petitioner didn’t raise a reference in the petition, since the unraised reference was never in the IPR proceeding it could not have been raised or reasonably raised during that proceeding. As Judge Robinson noted, this result may be contrary to the original intention of the petitioner estoppel provisions.
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.
After the Shaw decision, it was widely discussed among IPR practitioners that a potential estoppel-avoidance strategy could include providing cumulative grounds of invalidity in one petition. If the PTAB instituted on some grounds and found others redundant, then the non-instituted redundant grounds may be shielded from estoppel under Shaw. If Judge Robinson’s interpretation of Shaw is adopted by the Federal Circuit, estoppel-avoidance strategies may become much simpler.
As more IPR estoppel issues are making their way to the district courts and from the district courts to the Federal Circuit, we should expect more clarity on petitioner estoppel in the not too distant future.
Posted on 12/26/2016 by Deakin T. Lauer
Drink Tanks Corporation sued GrowlerWerks, Inc. last November for patent infringement based on its sale of growlers, including the uKeg 64 product shown below. Earlier this year, the case was transferred from Delaware to Oregon district court. On June 2, 2016, GrowlerWerks took the fight to the U.S. Patent and Trademark Office (PTO) by filing a petition for Inter Partes Review (IPR) seeking to cancel each claim of Drink Tanks’ beer growler patent due to prior art.
GrowlerWerks requested a stay of the litigation based on the IPR filing. On July 15, 2016, Judge Simon denied GrowlerWerks request as premature because the PTO had not yet decided whether to proceed with the IPR.
“GrowlerWerks petition sheds little light on the potential scope of the IPR, and the Court will not base its stay decision on speculation about what the PTO may or may not do. Until the PTO institutes IPR, the Court cannot say that a stay will lead to the simplification of issues in this case. The PTO could grant review of one, several, all or none of the ’670 patent claims. The Court also finds persuasive the reasoning of courts that deny motions to stay without prejudice before the PTO has granted IPR.” – July 15, 2016, Opinion and Order, p. 10.
Such denials are not uncommon before institution, especially when the merits of the IPR petition are not immediately clear from the petition itself or are not specifically addressed in the motion for a stay of the litigation. For now at least, the battle between Drink Tanks and GrowlerWerks will continue on both fronts—at the district court and at the PTO.
Posted on 07/22/2016 by Deakin T. Lauer