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”

Affirmative Defense of Invalidity As Part of a Motion to Intervene Does Not Bar Filing of a Subsequent IPR Petition

By Reza Mollaaghababa
According to 35 U.S.C. §315(a), an inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.  In a recent decision, the Patent Trial and Appeal Board dealt with the issue of whether a petition would be barred under Section 315(a) when the petitioner previously had raised an affirmative invalidity defense as part of a motion to intervene as a defendant in a federal patent infringement suit.  The Board decided that the petition was not barred by Section 315(a) and instituted a trial on the merits.  (IPR2015-01872, Paper 10, March 14, 2016.)

Ericsson Inc. (the Petitioner) filed a petition to institute an inter partes review of claims 1-25 of U.S. Patent No. 7,385,994 of Intellectual Ventures II LLC (the Patent Owner).  In a preliminary response, the Patent Owner argued that the Petition was time barred under Section 315(a) because prior to the IPR Petition Ericsson had filed a motion to intervene as a defendant in a patent infringement litigation, initiated by the Patent Owner against AT&T and Cingular Wireless, along with an Answer in Intervention, in which the Petitioner had raised an affirmative defense of invalidity of the ‘994 patent.  The Patent Owner characterized the intervention initiated by the Petitioner as “initiating a new dispute,” when none existed beforehand.

The Board disagreed with the Patent Owner and relied on the reasoning put forth in Ariosa Diagnostics v. Isis Innovation Limited (IPR2012-00022) to hold that Ericsson’s answer did not constitute a civil action challenging the validity of a claim of a patent. Continue reading “Affirmative Defense of Invalidity As Part of a Motion to Intervene Does Not Bar Filing of a Subsequent IPR Petition”

A Decision Not to Institute a Trial at the PTAB Does Not Carry Much Weight in Federal Court

By Tom Engellenner
Two recent cases show that simply avoiding a post-grant review proceeding at the U.S. Patent Office’s Patent Trial and Appeal Board (PTAB) not only does not preclude a defendant in underlying patent infringement litigation in a federal district court from raising the same invalidity arguments again, it also may not even influence the court’s claim construction. Moreover, the patent owner may not be allowed to make reference to its prior success in avoiding an administrative trial at the Patent Office as well.

Although 35 U.S.C. § 315(e)(2) provides an estoppel binding on a petitioner (or any party in privity with the petitioner) from raising the same issue in federal court patent infringement litigation if they lose in a PTAB final written decision, it is increasingly clear that a PTAB decision not to institute a trial is not likely to carry much weigh in federal court.

In Adidas AG v. Under Armour Inc. et al, C.A. No. 14-130, slip op. (D. Del. Dec. 15, 2015), the District Court of Delaware denied a defendants’ motion to modify the court’s claim construction order based on a PTAB decision denying institution of an inter partes review (IPR). The patent at issue covers “location aware” fitness trackers, which Addidas has alleged are infringed by Under Armour’s fitness and exercise monitoring systems. Even though Under Armour didn’t get a trial initiated on the Addidas patent at the PTAB, it did like the way the board construed the claims and urged Judge Sleet of the Delaware federal district court to adopt the same construction.

The Delaware District Court declined to change its construction of the term “with respect to a route path.”  Judge Sleet noted in a footnote that the “PTAB’s choice not to institute an IPR is not the type of adjudication that leads to issue preclusion.” The order further noted that the PTAB had not reached a final decision on the claim construction and consequently, the Court “is not bound by a preliminary claim construction used by the PTAB for the limited purpose of denying an IPR request.” Continue reading “A Decision Not to Institute a Trial at the PTAB Does Not Carry Much Weight in Federal Court”