In Victaulic Company v. ASC Engineered Sols., LLC, the District of Delaware ruled on summary judgment that ASC is estopped from asserting two obviousness grounds against a patent claim because it raised the same grounds in inter partes reexamination proceedings. At issue was whether pre-America Invents Act (AIA) reexamination estoppel under 35 U.S.C. § 315(c) applies even if the patent owner raises a different claim construction in district court than the USPTO applied during reexamination. The District Court answered "yes," reasoning that a "party's proposed construction of a term does not change . . . whether a party previously asserted that a claim ... was obvious in an inter partes reexamination."
Victaulic owns U.S. Patent No. 7,712,796 ("the '796 Patent"), which relates to a "deformable mechanical pipe coupling." Independent claims 1, 21, 41 and 44 of the '796 Patent each includes a "being deformable" limitation, which recites "said segments being deformable upon adjustable tightening of said connection members so as to substantially conform the curvature of said arcuate surfaces to the outer surfaces of said pipe elements within said circumferential grooves."
In 2012, ASC requested inter partes reexamination of certain claims of the '796 Patent, including claims 1, 21, 41 and 44. ASC's request asserted obviousness grounds against those claims based on "Reynolds" and "Reynolds in view of Webb." The USPTO instituted reexamination on both of those grounds but determined that the claims were "valid and patentable" in a final decision.
Notably, during reexamination, the USPTO agreed to add language to the "being deformable" limitation in claims 21, 41 and 44—but not in claim 1. However, the USPTO "mistakenly omitted" the added language from its decision, and the claims were not formally amended to add that language.
In 2020, Victaulic asserted claim 1 of the '796 Patent against ASC in the District of Delaware, among other claims. In its invalidity contentions for claim 1, ASC again asserted "Reynolds" and "Reynolds in view of Webb."
In a motion for summary judgment, Victaulic argued that ASC was estopped from asserting "Reynolds" or "Reynolds in view of Webb" against claim 1 under 35 U.S.C. § 315(c) because ASC raised those grounds in the reexamination proceedings. Section 315(c) states that a "third-party requester" like ASC is "estopped from asserting at a later time, in any civil action . . . the invalidity of any claim finally determined to be valid and patentable on any ground which the  requester raised or could have raised during the inter partes reexamination proceedings."
In response, ASC argued that its Reynolds and Webb-based obviousness grounds were not "raised" and "could not have been raised" in the reexamination proceedings because the two proceedings involve different claim interpretations of the "being deformable" limitation in claim 1. Specifically, ASC argued that, during reexamination, the USPTO applied a narrow interpretation of "being deformable" in claim 1 that necessarily included the additional language that was supposed to be added to claims 21, 41 and 41. Thus, according to ASC, estoppel should not apply because "Victaulic now asserts an interpretation of the ['being deformable'] claim limitation . . . in claim 1 that is broader than the Board's interpretation of the claim," which presents new "issues" when asserting Reynolds and Webb in district court.
The District Court rejected ASC's argument, ruled that estoppel applied, and granted summary judgment in favor of Victaulic. In coming to its conclusion, the District Court determined that "raised or could have raised" in § 315(c) refers to whether the same claims are at issue, not the same interpretations, citing In re Affinity Labs of Texas, LLC, 856 F.3d 883, 891-92 (Fed. Cir. 2017). When ASC requested reexamination, claim 1 "had the same language as it has now," which "has only 'one correct construction.'" Accordingly, even if Victaulic is applying a different construction than the USPTO, that "does not change either how the Court must construe that term or whether a party previously asserted that a claim which includes that term was obvious in an inter partes reexamination." Accordingly, ASC was "estopped from asserting in this action that Claim 1 of the '796 Patent is invalid as obvious in view of Webb and Reynolds because ASC raised or could have raised those invalidity grounds in the [reexamination]."
The District Court further noted in a footnote that "ASC could have raised its real argument—i.e., that the IPR added limitations to Claim 1" had it not "forfeited the chance to bring such a motion" (citing a sealed document).
Practice Tip: In light of estoppel provisions under pre- and post-AIA patent statutes, practitioners should proceed with caution when asserting the same prior art in district court that they asserted in prior proceedings, including reexaminations, before the USPTO. As shown in Victaulic, the Patent Act's estoppel provisions are "severe" and may apply even if claims are interpreted or construed differently between the proceedings.
Victaulic Company v. ASC Engineered Sols., LLC., Civil Action No. 20-887-GBW (D. Del. Nov. 30, 2022).
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