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. Continue reading “IPR Estoppel Provisions May Not Be That Scary After All”

Estoppel Does Not Attach When Petitioner’s Grounds Are Denied As Redundant

By Reza Mollaaghababa
Under 35 U.S.C. 315(e)(1), a petitioner in an inter partes review of a claim in a patent that has resulted in a final written decision by the Board may not request or maintain a proceeding before the Patent Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review. Nor can such a petitioner raise that ground against that claim in a civil action or in a proceeding before the International Trade Commission. 35 U.S.C. 315(e)(2). In Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., the Court of Appeals for the Federal Circuit (CAFC) recently held that the estoppel provisions of 315(e) do not apply to any ground in an IPR petition that the Board deems as redundant to other ground(s) and thus for which no trial is instituted.

In February 2012, ACS sued Shaw for the infringement of its U.S. Patent No. 7,806,360. Within one year of the service of the complaint, Shaw filed an IPR petition challenging claims 1-20 of the ‘360 patent in which it raised multiple grounds of invalidity. The Board instituted a trial on all challenged claims except for claim 4. With respect to the claims on which a trial was instituted, the Board found certain grounds as redundant relative to others and hence refused to consider those grounds. Subsequently, Shaw filed another IPR petition to challenge claim 4 of the patent based on six new obviousness grounds. The Board instituted a trial based on two of the six grounds and denied the other grounds as redundant. The Board consolidated the two IPRs and issued one final written decision.

In appealing the Board’s decision, Shaw requested that CAFC review the Board’s decision to deny certain grounds as redundant and argued that CAFC had jurisdiction to do so. In particular, Shaw argued that Section 314(d), which indicates that the Board lacks jurisdiction to review the Board’s institution or denial decisions, is not applicable because Shaw was not seeking review of the Board’s institution decision. Rather, it was asking the court “to review the Board’s authority, and correctness in exercising the same, in deeming a subset of asserted grounds redundant of instituted grounds.”

The CAFC disagreed and emphasized that the PTO had the right to exercise its authority in instituting IPR on only some of the grounds. The court explained that there is benefit in the “PTO having the ability to institute IPR on only some of the claims and only some of the proposed grounds, particularly given the Board’s statutory obligation to complete proceedings in a timely and efficient manner.”

The CAFC next addressed Shaw’s request that it issue a writ of mandamus instructing the PTO to reevaluate its redundancy decision and to institute IPR on the redundant grounds. In support of its request for the writ of mandamus, Shaw argued that it may be estopped from raising the redundant grounds in future proceedings.

The CAFC was not persuaded and held that Shaw was not estopped from raising the redundant grounds either in the USPTO or in the courts. The CAFC explained that an “IPR does not begin until it is instituted.” As such, the arguments regarding the redundant claims were not raised during the IPR proceeding and hence are not subject to the estoppel provisions of Section 315 (e).

New Final Rules for Post-Grant Proceedings Published by USPTO on April Fools Day

By Tom Engellenner
The USPTO has gone ahead and finalized new rules for post-grant proceedings under the America Invents Act (AIA) – despite heavy criticism that the rules do little to alter the lopsided nature of these proceedings. The new rules were published at 81 FR 18750 on April 1, 2016 and go into effect on May 2, 2016.

Technically this “final rulemaking” amends various portions of 37 C.F.R. 42, the rules that govern post-grant proceedings under the AIA, including inter partes review (IPR), covered business method review (CBM), and post-grant review (PGR).

Perhaps the most significant change is that under the new rules the patent owner will be able to submit testimonial evidence, such as an expert declaration, as part of a patent owner’s preliminary response to a patent challenge before the Patent Trial and Appeal Board (PTAB) decides to institute an IPR, CBM, or PGR trial. (Under the existing rules, the Patent Owner usually cannot present testimonial evidence until after the institution decision and the PTAB makes its decision to institute trial after hearing only one side of the story, e.g., from the petitioner’s expert.)

However, 37 CFR 42.108(c) has been revised such that if the patent owner presents testimonial evidence as part of a preliminary response, any “genuine issue of material fact created by such testimonial evidence will be viewed in the light most favorable to the petitioner solely for purposes of deciding whether to institute an inter partes review.” An analogous new rule in 37 CFR 42.208(c) for a post grant review has also been finalized. Under the new rules petitioners may also seek leave to file a reply to any preliminary response filed by the patent owner.

These changes beg the questions: what do the patent owners have left to say after institution if their experts’ opinions have already been considered and found unpersuasive, and will the PTAB judges ever change their minds during trials when the petitioner’s evidence is not viewed in its most favorable light? Continue reading “New Final Rules for Post-Grant Proceedings Published by USPTO on April Fools Day”