PTAB / District Court / Estoppel

Is IPR estoppel losing even more teeth? District Court finds it applies only to instituted grounds

Published December 26, 2016

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