IPR tricks of the trade: Federal Circuit clarifies scope of IPR estoppel

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The United States Court of Appeals for the Federal Circuit is seen in Washington, D.C.
The United States Court of Appeals for the Federal Circuit is seen in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly

March 24, 2022 - Patent Trial and Appeal Board post-grant validity challenges — for example, inter partes reviews (IPR) — are frequent components of a patent litigation strategy. However, filing an IPR petition does not come without risk.

If the petitioner is unsuccessful in showing that the challenged claims of a patent are unpatentable, the petitioner may be estopped from challenging the validity of the challenged claims again, at least based on grounds that the petitioner raised or reasonably could have raised. In California Institute of Technology v. Broadcom Ltd., the U.S. Court of Appeals for the Federal Circuit recently clarified that scope of estoppel is broad, overruling its prior precedent. (25 F.4th 976 (Fed. Cir. 2022) ("Caltech")).

This IPR estoppel applies on a claim-by-claim basis and only after the PTAB issues a final written decision addressing the challenge. Estoppel prevents the petitioner from maintaining a validity challenge at the Patent Office, in district court, or before the International Trade Commission based on a ground that the petitioner "raised or reasonably could have raised" during the IPR. (35 U.S.C. § 315(e)).

Over the last few years, there has been uncertainty over the scope of IPR estoppel. In Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., the Federal Circuit limited the scope of estoppel to those claims and grounds for which the PTAB instituted review. (817 F.3d 1293, 1300 (Fed. Cir. 2016)). This interpretation of the estoppel provisions was based on the PTAB's former practice of "partial institution," where the PTAB would exercise its discretion to institute review of some, but not all, claims or grounds raised in an IPR petition.

In Shaw, the Federal Circuit reasoned that the IPR petitioner was not estopped from raising non-instituted grounds because the petitioner could have not raised those grounds "during the IPR," as the PTAB denied review of those grounds while instituting other grounds. (Id.)

After Shaw, a split developed in district courts over the scope of IPR estoppel. Some courts held that estoppel was limited to only those grounds for which the PTAB instituted review, analogous to Shaw. (See, e.g.,Koninklijke Philips N.V. v. Wangs All Corp., 2018 WL 283893, at *4 (D. Mass. Jan. 2, 2018)). Other courts held that estoppel was not so limited, applying estoppel to grounds that a petitioner "reasonably could have raised" in an IPR, but did not do so. (See, e.g., Cobalt Boats, LLC v. Sea Ray Boats, Inc., 2017 WL 2605977, at *3 (E.D. Va. June 5, 2017)).

Then in SAS Institute v. Iancu, the Supreme Court held that the PTAB lacked authority to continue its "partial institution" practice. (138 S.Ct. 1348, 1350 (2018)). In SAS, the Court held that the PTAB must institute review for all claims challenged by the petitioner, or none at all. Thus, while not directly addressing estoppel, the Court eliminated the premise behind Shaw's limitation on the scope of estoppel.

In the Federal Circuit's recent 2022 Caltech decision, the court overruled Shaw, finding that "the reasoning of Shaw rests on the assumption that the [PTAB] need not institute on all grounds, an assumption that SAS rejected." (25 F.4th at 991). In view of SAS, the Federal Circuit "clarif[ied] that estoppel applies not just to claims and grounds asserted in the petition and instituted for consideration by the [PTAB], but to all grounds not stated in the petition but which reasonably could have been asserted against the claims included in the petition." (Id.)

The court explained that "[i]n a regime in which the [PTAB] must institute on all challenged claims and the petition defines the IPR litigation, this interpretation is the only plausible reading of 'reasonably could have raised' and 'in the IPR' that gives any meaning to those words [in § 315(e)]." (Id.)

As it stands today, a petitioner should not withhold grounds that it reasonably could have raised in an IPR petition and expect to rely on them later in district court. An IPR petitioner should therefore pursue its strongest grounds before the PTAB, or otherwise risk being estopped from pursuing those grounds as to the petitioned claims.

The confirmed scope of estoppel may entice petitioners to pursue multiple parallel IPR petitions. The PTAB has discouraged petitioners from this practice and, in fact, requires petitioners to rank parallel petitions in order of preference. In most cases, the PTAB institutes review of the first-ranked petition, if at all. However, if the PTAB denies institution of a parallel petition, the petitioner may be able to argue that it could not have raised the grounds in a non-instituted petition and therefore should not be estopped from pursuing the non-instituted grounds.

This article reflects only the present personal considerations, opinions, and/or views of the authors, which should not be attributed to any of the authors' current or prior law firm(s) or former or present clients.

Eugene Goryunov is a regular contributing columnist on patent law for Reuters Legal News and Westlaw Today.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Westlaw Today is owned by Thomson Reuters and operates independently of Reuters News.

David McCombs is a partner in the Dallas office of Haynes Boone and serves as primary counsel for leading corporations in inter partes review. He can be reached at david.mccombs@haynesboone.com.

Eugene Goryunov is a partner in the intellectual property practice group in the Chicago office of the firm and an experienced trial lawyer who represents clients in complex patent matters involving diverse technologies. He can be reached at eugene.goryunov@haynesboone.com.

Jonathan Bowser is of counsel in the firm's Washington, D.C., office and focuses his practice on patent litigation disputes before the Patent Trial and Appeal Board and federal district courts. He can be reached at jonathan.bowser@haynesboone.com.