In Kroy IP Holdings, LLC v. Groupon, Inc., No. 17-cv-01405, 2022 WL 17403538 (D. Del. Dec. 2, 2022), the Court granted Groupon's motion to dismiss Kroy IP's amended complaint based on collateral estoppel.
On October 16, 2017, Kroy IP filed suit against Groupon in the District of Delaware, alleging that Groupon infringed U.S. Patent No. 6,061,660 ("the '660 patent"), which claims a method and system for providing incentive programs over a computer network. Id. at *2. In its original complaint, Kroy IP asserted 13 "exemplary" claims of the '660 patent. Id.
In October 2018, Groupon timely filed two inter partes reviews ("IPRs") challenging 21 total claims of the '660 patent, the 13 "exemplary" claims and eight additional claims. Id. at *2–*3. A few months after Groupon filed its IPR petitions, Kroy IP filed an amended complaint. Id. at *3. The amended complaint added 22 newly-asserted claims. d. at *3–*4. Few of these 22 newly-asserted claims were included in Groupon's IPR petitions because the claims were first raised after the IPR filing deadline. Id. at *4. The PTAB invalidated all asserted claims, and the Federal Circuit affirmed the PTAB's decision on appeal. Id.
Groupon moved to dismiss Kroy IP's amended complaint primarily on the grounds that Kroy IP was collaterally estopped from alleging infringement of the 22 newly-asserted claims. Id. at *5, *7.
The Court explained that collateral estoppel resulting from a PTAB Final Written Decision is a form of issue preclusion, which requires that the same issue was previously adjudicated. Id. at *8. However, the claims need not be identical, in fact, "precedent does not limit collateral estoppel to patent claims that are identical." Id. at *9 (quoting Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013)). Rather, if the "differences between the unadjudicated patent claims and adjudicated patent claims do not materially alter the question of invalidity," then collateral estoppel applies. Id.
The Court found that the newly asserted claims contained "superficial differences" from the claims invalidated by the PTAB, and in some instances, were broader than those before the PTAB. Id. at *15–*16. For some claims, Plaintiff's newly asserted claim was directed to a method, whereas the invalidated claim was directed to a system. Id. at *16. The Court reasoned that the newly asserted method claim was "(1) worded nearly identically to [the invalidated system claim] and (2) makes use of all material elements of [the invalidated claim's] system in the claimed method." Id. at *17. The fact that the system claim required a server did not convince the Court that the claim was valid. Id. at *16. Ultimately, in light of the PTAB's decision invalidating "other (slightly-differently-worded) claims of the same patent," which did not materially alter the question of invalidity, the Court concluded that the Groupon had demonstrated that Kroy IP was collaterally estopped from asserting infringement of the newly-asserted claims. Id. at *34.
A consideration for future litigants to keep in mind is that "(1) if the PTAB issues a final judgment invalidating a patent claim; and (2) if another claim in that same patent is at issue in a district court litigation; and (3) if any differences between the two claims do not materially alter the question of invalidity regarding the district court claim; then (4) the patentee will be collaterally estopped from litigating the district court claim (assuming the other requirements of the collateral estoppel doctrine are met)." Id. at *9.
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