United States: District Courts Split On Scope Of IPR Estoppel

While the inter partes review procedure is nearly five years old, in many respects, the law remains unsettled and continues to evolve. This can be seen from recent district court decisions differing in their interpretation of the scope of IPR estoppel.

The Federal Circuit's Shaw Decision Sets the Stage for IPR Estoppel

In March 2016, the Federal Circuit in Shaw1 considered the scope of IPR estoppel under Section 315(e), holding that it does not extend to grounds rejected by the PTAB in a decision instituting IPR petitions.

Shaw filed an IPR challenging certain patent claims on three grounds—two asserting obviousness and one asserting anticipation by a different prior-art reference. The PTAB instituted IPR based on the two obviousness grounds, but denied institution based on the anticipation ground, which—without further explanation—it deemed "redundant" to the obviousness grounds. After a trial on the merits, the PTAB determined that Shaw had not proven these claims to be unpatentable.

Shaw appealed the final written decision, and also petitioned for a writ of mandamus directing the PTAB to reconsider its institution decision. The stringent requirements for a writ of mandamus were satisfied, Shaw argued, because the final decision in the IPR created an estoppel under Section 315(e) preventing Shaw from raising the anticipation ground (or other grounds) in the future, even though neither the PTAB nor the court had evaluated its merits.

Section 315(e) recites:

(1) Proceedings before the office.— 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 request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

(2) Civil actions and other proceedings.— 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 arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.2

The Federal Circuit denied mandamus, disagreeing with Shaw, and accepting the argument of the USPTO (as intervenor) that estoppel does not apply in these circumstances.3 IPR proceeds in two phases: first, the PTAB evaluates the petition to determine whether to institute IPR; second, the PTAB conducts the IPR itself and makes a final decision based on the evidence.4 Therefore, the court reasoned, if the PTAB rejects a ground in its institution decision, it never becomes part of the IPR itself, and so is not a "ground that the petitioner raised or reasonably could have raised during that inter partes review."5 Since the PTAB's redundancy decision did not give rise to estoppel with respect to the anticipation ground, as it specifically prevented Shaw from raising that ground in the IPR, Shaw may argue that ground in the future court proceedings, and mandamus was not warranted.

District Courts' Conflicting Interpretation of IPR Estoppel

Intellectual Ventures I LLC v. Toshiba Corp. (D. Del.): Narrow Estoppel

Judge Robinson of the District Court of Delaware recently weighed in on post-Shaw IPR estoppel, taking it one, very significant step further. In Intellectual Ventures I LLC v. Toshiba Corp.,6 Judge Robinson held that Section 315(e) estoppel applies only to grounds actually instituted. In other words, estoppel does not apply even to grounds never raised in the petition.

Toshiba filed a petition for IPR, asserting four grounds of invalidity: two based on anticipation and two based on obviousness. The PTAB instituted on one of the obviousness grounds and denied the remaining grounds. The PTAB ultimately issued its final written decision, finding unpatentable the challenged claims on the sole instituted ground. While IV's Federal Circuit appeal was pending, IV moved for partial summary judgment in the district court based on IPR estoppel, arguing that Toshiba should be estopped from asserting invalidity of the challenged claims based on either (1) the instituted obviousness ground itself; or (2) an obviousness combination involving references not presented to the PTAB—because it "could have been raised" in the IPR.7 Toshiba responded that IV's motion was "fundamentally unfair," and that a stay "makes most sense, as the Federal Circuit appeal likely will result in the patent claims being confirmed as invalid."8

Judge Robinson denied the stay, and, with respect to the instituted obviousness ground, agreed with IV, holding it consistent with the plain language of Section 315(e) and Shaw. However, with respect to the additional obviousness combination not before the PTAB, Judge Robinson disagreed. Relying on Shaw, Judge Robinson found that "[a]lthough IV's argument in this regard is perfectly plausible, in the sense that Toshiba certainly could have raised these additional obviousness grounds based on public documents at the outset of their IPR petition, the Federal Circuit has construed the [language of Section 315(e)(2)] quite literally."9 She continued, "the Court determined in Shaw that, because the PTAB rejected a certain invalidity ground proposed by the IPR petitioner, no IPR was instituted on that ground, and, therefore, petitioner 'did not raise—nor could it have reasonably raised—the [rejected] ground during the IPR.'"10 While expressing concerns that "extending [this] logic to prior art references never presented to the PTAB at all (despite their public nature) confounds the very purpose of this parallel administrative proceeding," Judge Robinson felt she was nonetheless bound and unable to "divine a reasoned way around the Federal Circuit's interpretation in Shaw."11

Verinata Health, Inc. v. Ariosa Diagnostics, Inc. (N.D. Cal.): Narrow Estoppel

Judge Illston of the Northern District of California grappled with a similar issue in Verinata Health, Inc. v. Ariosa Diagnostics, Inc.12

Verinata argued that Shaw applies only to grounds actually presented in an IPR petition, and denied institution because they are found "redundant."13 Judge Illston determined otherwise. According to Judge Illston, Shaw has a much broader application, namely, it applies to any "noninstituted ground," regardless of whether the ground was included in the IPR petition.14 Like Judge Robinson, Judge Illston found that the Shaw court "interpret[ed] the IPR estoppel language literally, plainly stating that only arguments raised or that reasonably could have been raised during IPR are subject to estoppel."15 That is, under Shaw's literal reading, any ground not actually instituted was not raised, nor could it have been raised, during the IPR, and, thus, no estoppel attaches.16 She also noted that "[s]ince Shaw, courts have read the decision accordingly," citing to, among other decisions, Judge Robinson in Intellectual Ventures I.17

However, Judge Illston—unlike Judge Robinson—appeared to agree with the underlying rationale to read Section 315(e) quite literally: "limiting IPR estoppel to grounds actually instituted ensures that estoppel applies only to those arguments, or potential arguments, that received (or reasonably could have received) proper judicial attention."18

Parallel Networks Licensing, LLC v. Int'l Business Machines Corp. (D. Del.): Broad Estoppel

Third Circuit Judge Jordan (sitting by designation in the District of Delaware) found in Parallel Networks Licensing, LLC v. Int'l Business Machines Corp.19 that "[a] broad estoppel provision [35 U.S.C. § 315(e)(2)] prevents inter partes review petitioners from raising arguments in federal court that could have been raised during their IPRs."20

IBM had joined four already-instituted IPR petitions, filing essentially identical petitions. Although the PTAB instituted on all grounds, it found in its Final Written Decisions that IBM failed to show that any of the challenged claims were unpatentable.21 IBM then sought in district court to invalidate the same challenged claims "based on prior art combinations of which it was aware before it filed its IPR Petitions" and included in its invalidity contentions a year before it filed the IPR petitions.22

Parallel Networks argued that these prior art combinations "reasonably could have been raised," and thus, IBM "should not be able to raise them here."23

IBM countered that it could not have raised the combinations due to the procedural posture of its petitions: because it joined already-instituted IPRs (as opposed to filing its own independent IPRs), it was limited to the arguments and grounds presented in the already-instituted IPRs.24

Judge Jordan disagreed with IBM, finding that, "[d]espite IBM's claims to the contrary, there is 'no mirror image rule' for joinder."25 According to Judge Jordan, "[a]llowing IBM to raise arguments here that it elected not to raise during the IPR would give it a second bite at the apple and allow it to reap the benefits of the IPR without the downside of meaningful estoppel."26 Thus, "to prevent that unfair result," Judge Jordan "conclude[d] that IBM is estopped from asserting prior art references that it could have reasonably raised before the PTAB."27 Interestingly, in doing so, Judge Jordan did not cite to Shaw.


Under the broader interpretation that is implicit in Judge Jordan's reasoning, patent challengers in most cases would be estopped from using any patent- or publication-based prior-art arguments in a district court litigation that follows an IPR. Under the narrower interpretation applied by Judges Robinson and Illston, a patent challenger would be estopped only on grounds that were actually litigated in the PTAB. In between is the interpretation that would result if the Shaw holding is limited to its facts, under which the estoppel would apply to every ground except those that the challenger raised in its IPR request, but failed to convince the PTAB to accept for institution.

Given the conflicting interpretations of the estoppel statute and the Shaw decision so far,28 we expect the Federal Circuit to soon provide further guidance on the intended scope of Shaw, and in particular, whether grounds that were never raised in an IPR proceeding fall within the scope of Section 315(e)'s "reasonably could have raised during that inter partes review" language. It seems logical that broader estoppel would mean fewer IPR requests, and narrower estoppel would mean more IPR requests. However, as a practical matter it may well be that there are very few cases in which the breadth of the estoppel would affect the challenger's decision to request IPR. In that case, narrowing the estoppel would not encourage additional IPR filings, and would only result in more follow-on district court validity litigation—which was certainly not Congress's intent in enacting the AIA.


1 Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293 (Fed. Cir. 2016).

2 35 U.S.C § 315(e).

3 Shaw, 817 F.3d at 1300.

4 Id.

5 Id. (emphasis in original).

6 Intellectual Ventures I LLC v. Toshiba Corp., No. 13-453-SLR, 2016 WL 7341713 (D. Del. Dec. 19, 2016), reconsideration denied, 2017 WL 107980 (D. Del. Jan. 11, 2017).

7 Id. at *12.

8 Id.

9 Id. at *13 (emphasis added).

10 Id. (quoting Shaw, 817 F.3d at 1300) (alteration and emphasis in original).

11 Id. On reconsideration, Judge Robinson reiterated her view that the "outcome does not strike [her] as necessarily consistent with the notion of having a parallel administrative proceeding that is supposed to supplant litigation and provide a faster, cheaper, better resolution to patent disputes" and, while she maintained her original decision, she did so "with the hopes that an appeal may clarify the issue for future judges in future cases." Intellectual Ventures I, 2017 WL 107980 at *1–2.

12 Verinata Health, Inc. v. Ariosa Diagnostics, Inc., No. 12-cv-05501-SI, 2017 WL 235048 (N.D. Cal. Jan. 19, 2017).

13 Id. at *3.

14 Id.

15 Id. (citing Shaw, 817 F.3d at 1300) (emphasis in original).

16 See id.

17 Id. (citing HP Inc. v. MPHJ Tech. Invs., LLC, 817 F.3d 1339, 1347 (Fed. Cir. 2016) ("[T]he noninstituted grounds do not become a part of the IPR. . . . [T]he noninstituted grounds were not raised and, as review was denied, could not be raised in the IPR." (alteration in original)); Illumina, Inc. v. Qiagen, N.V., No. 16-2788-WHA, 2016 WL 4719269, at *6 (N.D. Cal. Sept. 9, 2016) ("The Federal Circuit recently held that statutory estoppel does not apply to grounds raised in a petition but not instituted. . . . Thus, the arguments that Qiagen raises herein, which were not instituted by the IPR, are not barred by Section 315(e)(2)."); Intellectual Ventures I, 2016 WL 7341713, at *13 ("[I]n Shaw[,] . . . because the PTAB rejected a certain invalidity ground proposed by the IPR petitioner, no IPR was instituted on that ground and, therefore, petitioner 'did not raise—nor could it have reasonably raised—the [rejected] ground during the IPR.'" (alterations in original))).

18 Id. at *3.

19 No. 13-cv-2072 (KAJ) (Feb. 22, 2017) (slip op.).

20 Id. at 24.

21 Id.

22 Id.

23 Id. at 25.

24 Id.

25 Id. at 26.

26 Id.

27 Id.

28 See also, e.g., Great West Casualty Co. v. Intellectual Ventures II LLC, IPR2016-01534, Paper 13 at 1 (PTAB Feb. 15, 2017) (disagreeing with Intellectual Ventures I and Verinata and holding that, under Shaw, estoppel applies to grounds that a petitioner could have but "elected not to raise" in a petition).

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