IPR Estoppel Provisions May Not Be That Scary After All

By Yue (Joy) Wang
IPR petitioners wary of the statutory estoppel under 35 U.S.C. § 315(e)(2) may have reason to be cautiously optimistic.   Judge Sue Robinson of the Federal District Court of Delaware recently held that Toshiba is not estopped from presenting invalidity grounds at trial that it did not raise in an earlier IPR.  Intellectual Ventures I LLC v. Toshiba Corp. No. 1:13-cv-00453, D.I. 559 & 574 (D. Del. December 19, 2016 & January 11, 2017).

35 U.S.C. § 315(e)(2) reads in relevant part:

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) . . . may not assert . . . in a civil action arising in whole or in part under section 1338 of title 28 . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

In her opinion, Judge Robison noted that the Federal Circuit has interpreted Section 315(e)(2) very literally. “[E]stoppel applies to grounds for invalidity upon which the Board instated review in the IPR proceeding, whether or not the Board addresses those grounds in its final decision (‘instituted grounds’). . . . [T]here likewise can be no dispute that estoppel does not apply to invalidity grounds that were raised by a petitioner in an IPR, but rejected by the Board as instituted grounds (i.e., ‘noninstituted grounds’).” Intellectual Ventures I LLC v. Toshiba Corp. No. 1:13-cv-00453, D.I. 574 (D. Del. January 11, 2017).

As background, Intellectual Ventures sued Toshiba for infringement of claims 17 and 19 of the ’819 Patent in Delaware in 2013. Toshiba petitioned for IPR of the ’819 Patent in 2014. Toshiba prevailed in the IPR, with the PTAB invalidating claims 17 and 19 in a final written decision. Toshiba Corp. v. Intellectual Ventures II LLC, No. IPR2014-00418, Paper No. 28 (P.T.A.B. Aug. 7, 2015).

Before the Delaware court, Intellectual Ventures moved for summary judgment that Toshiba is estopped from raising one of its invalidity grounds at trial because the ground was based on publicly available prior art that could have been raised in Toshiba’s IPR petition. Intellectual Ventures I LLC v. Toshiba Corp., No. 1:13-cv-00453, D.I. 559 at p.26 (D. Del. December 19, 2016). Judge Robinson disagreed, citing Shaw Indus. Group, Inc. v. Automated Creel Systems. Id. In Shaw, the Federal Circuit held that Section 315(e)(2) does not estop a ground rejected by the PTAB at the institution stage because, since “[t]he IPR does not begin until it is instituted,” the petitioner “could [not] have reasonably raised – the [rejected] ground during the IPR.” 817 F.3d 1293, 1300 (Fed. Cir. 2016) (emphasis in original). Extending the Shaw logic, Judge Robinson found that Toshiba is not estopped from raising its invalidity ground that was not raised at all in IPR. No. 1:13-cv-00453, D.I. 559 at 27 (D. Del. December 19, 2016). But Judge Robinson expressed misgivings at this result, noting that “[a]lthough extending the [Shaw] 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.” Id.

After reviewing the parties’ supplemental briefing on the estoppel issue, Judge Robinson stood by her decision, “with the hopes that an appeal may clarify the issue for future judges in future cases.”  Intellectual Ventures I LLC v. Toshiba Corp., No. 1:13-cv-00453, D.I. 574 (D. Del. Jan. 11, 2017). Judge Robinson acknowledged that the PTAB in Apotex Inc. v. Wyeth LLC had come to the opposite conclusion when faced with similar facts, but declined to follow the PTAB’s example in the absence of specific authority from the Federal Circuit. Id.

In Apotex, the petitioner was estopped from raising an invalidity ground under Section 315(e)(1) because the ground was based on prior art that the petitioner had cited in an earlier IPR petition against the same patent. No. IPR2015-00873, Paper No. 8, 2015 Pat. App. LEXIS 12730, 2015 WL 5523393 (Sept. 16, 2015). Section 315(e)(1) parallels Section 315(e)(2), but applies to later IPR petitions. As a result, the PTAB found that the petitioner knew about the teachings of the prior art and reasonably could have raised the new ground in the earlier IPR.  The PTAB also pointed to the statement of Senator Grassley in the legislative history of the AIA, which stated that the phrase “could have raised” broadly included “prior art which a skilled searcher conducting a diligent search reasonably could have been expected to discover.”

Interestingly, Intellectual Ventures’ position may not pass muster even under Apotex. In Apotex, the PTAB emphasized that the petitioner was actually aware of the prior art in the new ground because the petitioner had used the same prior art in its earlier IPR petition against the same patent. In contrast, Intellectual Ventures merely alleged that Toshiba’s invalidity ground was based on prior art that was “publicly available” at the time Toshiba filed its petition, without any allegation that Toshiba was actually aware of the prior art at the time of the earlier IPR petition.

But, those hoping for resolution of this statutory estoppel issue may have to wait for another case. After an eight-day trial, a jury found on January 30, 2017 that Toshiba did not infringe the ’819 patent, perhaps rendering moot the issue of invalidity. See Intellectual Ventures I LLC v. Toshiba Corp., No. 1:13-cv-00453, D.I. 607 (D. Del. Jan. 30, 2017).

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