The Leahy-Smith America Invents Act (AIA) of 2011 created post-grant review (PGR) and inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office. These new proceedings provide opportunities for non-patent owners to challenge claims on a relatively accelerated timeline, between twelve to eighteen months post-institution, and have become fairly popular, with over 11,000 patents challenged.
After a final decision, these proceedings carry estoppel, including statutory and collateral estoppel among others, for petitioners as well as patent owners.1Each type has unique circumstances (when it arises and where), standards (who has the burden), and applications (who is deciding the questions).
Statutory estoppel. When creating PTAB proceedings, Congress recognized the need to protect patent owners from repeated challenges and specifically included statutory estoppel provisions applicable before the Office, in District Courts, and at the International Trade Commission.
Statutory estoppel is triggered with a final written decision and applies not only to the petitioner but its real parties in interest and those in privity with it.
35 U.S.C. § 315(e)(1) sets forth the estoppel before the USPTO:
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.
35 U.S.C. § 315(e)(2) sets forth the estoppel in civil actions:
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.
Civil actions. The scope of statutory estoppel in civil actions, especially as to what challenges a petitioner "reasonably could have raised during" a PTAB proceeding, has evolved over the past several years. Early on, the PTAB adopted a practice of partial institution where some grounds raised by a petitioner may not have been instituted.
In view of this practice, statutory estoppel did not apply to those grounds that were raised but not instituted. This initial framework came as a result of the Federal Circuit's decision in Shaw, which established a rationale that grounds not instituted cannot be estopped because they could not have been "reasonably raised" before the PTAB.2
After Shaw, district courts differed on the fuller scope of statutory estoppel. Some courts applied Shaw (as an exception to estoppel) broadly, finding estoppel applied only to grounds that were raised and instituted, while other courts applied Shaw (as an exception to estoppel) narrowly, finding estoppel applied only to grounds that were raised but not instituted.3
Those courts applying Shaw narrowly began adopting the "reasonable searcher" standard when making estoppel determinations to assess what grounds a petitioner could have reasonably raised.
As the law developed, patent owners focused on demonstrating what a skilled searcher would have found by (i) identifying "the search string and search source that would identify the allegedly unavailable prior art," and (ii) presenting "evidence, likely expert testimony, why such a criterion would be part of a skilled searcher's diligent search."4
Two years after Shaw, the Supreme Court decided SAS, overruling the PTAB's practice of partial institution.5 While SAS did not interpret the estoppel statutes (§§ 315, 325), it nevertheless eliminated the possibility of petitioned yet non-instituted grounds, the fact pattern specifically at issue in Shaw. Four years after SAS, the Federal Circuit overruled Shaw in California Institute of Technology v. Broadcom Ltd., focusing on the statutory text and explaining that estoppel applies:
not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all grounds not stated in the petition but which reasonably could have been asserted against the claims in the petition.6
Shortly after California Institute of Technology, the Federal Circuit decided Ironburg, providing two more guideposts for statutory estoppel — allocation of burden and reasonableness.7
The court reasoned that, because statutory estoppel is an affirmative defense to invalidity, the patent owner has the burden of proving it applies. And to do so, a patent owner must show by a preponderance of the evidence that a skilled searcher exercising reasonable diligence would have identified the ground; this standard is a level of diligence that is different than what an actual searcher did in fact find, and is not "'what a scorched-earth search around the world would have uncovered....'"8
Office procedures. Petitioners also face estoppel in subsequent proceedings before the Office, including trials before the PTAB and reexaminations before the Central Reexamination Unit. Like estoppel in civil actions, this estoppel also extends to a petitioner's real parties in interest and parties in privity with the petitioner.
Soon after the AIA, the PTAB had an opportunity to address statutory estoppel. In Westlake Services, LLC. v. Credit Acceptance Corp., a patent owner facing multiple CBMs against the same patent sought to terminate one of the proceedings after a final written decision in a separate proceeding.9
Notably, the claims in each proceeding did not overlap, although the grounds (patent eligibility) did. The PTAB held that statutory estoppel is applied on a claim-by-claim basis, reasoning that the statutory text and the Office's comments when promulgating the original AIA regulations reinforce that approach.
While Westlake was a CBM and its holding was under § 326(e) (PGRs), its rationale translates to § 316(e) (IPRs).
Like most district courts, the PTAB applies a reasonable searcher standard to determine what a petitioner could have reasonably raised, noting in one instance that prior art cited during prosecution of the underlying application "reasonably could have been raised" in the petition.10
And statutory estoppel applies even if a petitioner files multiple petitions on the same day (which can result in different final written decision dates) and applies regardless of why the petitioner chose to file separate petitions with overlapping grounds.11
The Office recently clarified the scope of statutory estoppel with respect to subsequent reexaminations. In In re Tyler, the Office of Petitions vacated a granted reexamination request and addressed two main issues on the scope of statutory estoppel before the Office — whether there was a final written decision and the overlap between the reexamination request and the IPR.12
Of particular note was the question of whether the grounds raised in the reexamination request were the same as, or could have been reasonably raised, in the IPR proceeding. The Office noted that the legislative intent of the provision was to include prior art that a diligent searcher would have found.
And it further noted that a diligent searcher is expected to discover printed publications, especially patents and published patent applications, given the number of commercially available databases. The Office went on to note that a skilled searcher conducting a search for a post-grant proceeding like an IPR should reasonably be expected to conduct a more thorough search than an Examiner during examination or an attorney during pre-examination.
Collateral estoppel. Issue preclusion, or collateral estoppel, is a doctrine that prevents a party from relitigating an issue in another proceeding where that issue was actually litigated and necessary to the judgment in an earlier proceeding.
Collateral estoppel in civil actions has long been a part of the case law applicable to all issues, not just patent issues or issues relevant to PTAB proceedings. And collateral estoppel can also apply in subsequent Office proceedings.
Office procedures. In general, collateral estoppel applies to patent claims if the issues of patentability are identical. The question is whether the differences between the adjudicated claims and the unadjudicated claims do not materially change the question of patentability.
Thus, collateral estoppel is not limited to only identical claims but looks at the issues that were litigated and decided. Nor is collateral estoppel limited to issues overlapping between the same type of procedure before the Office.
An IPR decision has collateral effect once that decision becomes final, i.e., after all appeals.13 And the Federal Circuit recently addressed the scope of collateral estoppel as it applies to substitute claims during the same IPR.
In ZyXEL, the court addressed two questions related to collateral estoppel — how it applies to substitute claims when original claims are found unpatentable and when a party must raise collateral estoppel.14
These issues came to the court on a cross-appeal after the Board found some original claims unpatentable, some original claims patentable, and separately found a set of substitute claims patentable. Notably, the court reversed the Board's patentability determination on the claims the Board upheld and remanded for reconsideration of the substitute claims in view of potential collateral estoppel effects.
The court noted that the substitute claims were each a combination of elements that were found in the original claims, which were now all held to be unpatentable. And it reasoned that collateral estoppel can apply to substitute claims (based on original claims) because collateral estoppel can apply even if claims are not identical. The court also noted that collateral estoppel can be raised for the first time on appeal, which the appellant (IPR petitioner below) did.
ZyXEL follows MaxLinear, where the Federal Circuit held collateral estoppel was applicable in an IPR proceeding addressing dependent claims after independent claims in the same patent were previously held unpatentable.15 The Board and court both found independent claims unpatentable in view of a first combination of references.
The Board, assessing a different combination of references in a subsequent IPR, found the dependent claims patentable but only because the combination failed to show all elements of the independent claims. When remanding back to the Board, the court explained that the finding of unpatentability of the independent claims abrogates the basis for the Board's decision finding the dependent claims patentable.
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PTAB practice and jurisprudence has evolved throughout the decade since these new proceedings came online as these cases, their appeals, and (for many) their parallel litigations work through the courts.
Footnotes
1. 35 U.S.C. § 315(e)(1); 325(e)(1) (statutory estoppel before the USPTO); 35 U.S.C. § 315(e)(2), 325(e)(2) (statutory estoppel in civil actions); 37 C.F.R. § 42.73(d)(3) (regulatory estoppel); B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 141 (2015) (collateral estoppel applied to agency proceedings); see also MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1376 (Fed. Cir. 2018) (application of collateral estoppel extended to PTAB proceedings).
2. Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293, 1300 (Fed. Cir. 2016).
3. See, e.g., Verinata Health, Inc. v. Ariosa Diagnostics, Inc., , at *3 (N.D. Cal. Jan. 19, 2017); contra Oil-Dri Corp. of Am. v. Nestle Purina Petcare Co., , at *9 (N.D. Ill. Aug. 2, 2017).
4. Clearlamp, LLC v. LKQ Corp., No. 12 C 2533, , at *8-9 (N.D. Ill. Mar. 18, 2016), judgment entered, No. 12 C 2533, (N.D. Ill. Nov. 30, 2016).
5. SAS Inst., Inc. v. Iancu, 584 U.S. 357, 367 (2018)).
6. Cal. Inst. of Tech. v. Broadcom Ltd., 25 F.4th 976, 991 (Fed. Cir. 2022).
7. Ironburg Inventions Ltd. v. Valve Corp., 64 F.4th 1274, 1299 (Fed. Cir. 2023).
8. Ironburg, 64 F.4th at 1298 (noting that the court in Clearlamp rejected the proposition that a litigant is estopped from raising an issue where only a scorched-earth, worldwide search would have uncovered the prior art in question).
9. See Westlake Servs., LLC v. Credit Acceptance Corp., CBM2014-00176 (May 14, 2015) (precedential), aff'd Credit Acceptance Corp. v. Westlake Servs., 859 F.3d 1044 (Fed. Cir. 2017).
10. E.g.,Ford Motor Co. v. Paice LLC, IPR2014-00884, at 14-15 (Dec. 10, 2015); see also Palomar Techs., Inc. v. MRSI Sys., LLC, 373 F. Supp. 3d 322, 331 (D. Mass. 2019); Clearlamp, , at *7-8.
11. Intuitive Surgical, Inc. v. Ethicon LLC, 25 F.4th 1035, 1041 (Fed. Cir. 2022).
12. Ex Parte Reexamination Control No. 90/014,950.
13. United Therapeutics Corp. v. Liquidia Techs., Inc., 74 F.4th 1360, 1372 (Fed. Cir. 2023), cert. denied, 144 S. Ct. 873 (2024).
14. ZyXEL Commc'ns Corp. v. UNM Rainforest Innovations, 107 F.4th 1368 (Fed. Cir. 2024).
Originally published by Westlaw Today
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