Finding Needles In A Haystack And Driving Down One-Way Streets: Recent Developments In The Application Of Estoppel In Patent Proceedings

• Published date: 27 April 2023
• Subject Matter: Intellectual Property, Patent
• Law Firm: Duane Morris LLP
• Author: Mr Thomas J. Kowalski, Patrick McPherson, Paul Belnap and Brandon A. Chan, Ph.D.

Inter partes review (IPR) before the Patent Trial and Appeal Board (PTAB) presents an alternative and more expedient forum for a petitioner to challenge the validity of an issued patent. The PTAB typically issues a Final Written Decision within 12 months following institution of the IPR. One unique aspect of IPR is the statutory estoppel provision that prevents challengers from raising the same invalidity grounds in subsequent civil actions before a district court or the International Trade Commission. The petitioner in an IPR bears the risk of estoppel, precluding it from raising "any ground that the petitioner raised or reasonably could have raised during... inter partes review." 35 U.S.C. ' 315(e)(2).

Recently, there have been multiple developments regarding the application of estoppel. In one case, the Federal Circuit clarified the standard when determining if a potential ground for invalidity "reasonably could have [been] raised" during the IPR and which party bears the burden of proof. In another case, the PTAB held that a party who failed to demonstrate the invalidity of claims in district court is not estopped from subsequently challenging the same patent in an IPR petition.

Ironburg Inventions Ltd. v. Valve Corp

The standard of deciding when a potential ground for invalidity rises to the level of "reasonably could have [been] raised" and which party bears this burden of proof has not been particularly clear. The United States Court of Appeals for the Federal Circuit recently clarified this standard in Ironburg Inventions Ltd. v. Valve Corp., Nos. 2021-2296, 2021-2297, 2022-1070, 2023 WL 2749199 (Fed. Cir. Apr. 3, 2023) when reviewing a decision from the district court.

Ironburg, the owner of U.S. Patent No. 8,641,525 ('525 patent) directed to a video game controller, sued Valve alleging infringement of the '525 patent. Valve petitioned for IPR, which was partially instituted on September 27, 2016.¹ The PTAB issued its Final Written Decision (FWD), cancelling some claims and affirming the patentability of others.

Based on the FWD, Ironburg moved the district court for estoppel under 35 U.S.C. ' 315(e)(2) of two sets of invalidity grounds asserted by Valve.

The first set of invalidity grounds were previously denied institution by the PTAB (pre-SAS), and Valve did not seek a remand following the FWD on the instituted grounds.² The second set of invalidity grounds were based on "newly" discovered references located by Valve in a third party's IPR petition after Valve had already filed its IPR petition. The district court held that...