A Potential Setback For Defendants In The Race To Final Judgment

• Published date: 09 December 2022
• Subject Matter: Intellectual Property, Litigation, Mediation & Arbitration, Patent, Trials & Appeals & Compensation
• Law Firm: Baker Botts
• Author: Spencer Packard

On September 26, 2022, Jump Rope Systems, LLC ("JRS") filed a petition for writ of certiorari to address the question of "[w]hether . . . a determination of unpatentability by the Patent Trial and Appeal Board in an inter partes review proceeding, affirmed by the Federal Circuit, has a collateral estoppel effect on patent validity in a patent infringement lawsuit in federal district court."¹ Courts have routinely applied the collateral estoppel doctrine in similar cases since the Federal Circuit's 2018 decision in XY, LLC v. Trans Ova Genetics, L.C. ("XY, LLC"), which JRS seeks to have overruled.² If the Supreme Court grants certiorari and JRS ultimately prevails, the race to final judgment between parallel district court and Patent Trials and Appeals Board ("PTAB") proceedings could change significantly. Specifically, if JRS's petition is successful, it could allow patentees to advance their infringement claims towards final judgment even after the Federal Circuit's affirmance of a PTAB's unpatentability determination all the way up until the U.S. Patent and Trademark Office ("PTO") issues its certificate of cancellation.

The dispute arose when JRS unsuccessfully sought to license its two patents to Coulter Ventures, LLC, d/b/a Rogue Fitness ("Coulter").³ After JRS presented its offer, Coulter began marketing the patented technology without any license from JRS.⁴ As a result, on July 18, 2018, JRS sued Coulter for patent infringement.⁵ About six months later, Coulter filed two petitions for inter partes review ("IPR") challenging both of JRS's patents.⁶ After the PTAB granted institution, the district court stayed the parallel litigation.⁷ Then, on July 17, 2020, the PTAB issued its final written decisions, wherein it found every challenged claim of both patents to be unpatentable.⁸ JRS appealed the PTAB's final written decisions to the Federal Circuit, which affirmed both on October 6, 2021.⁹

Under XY, LLC, the district court was bound to apply the collateral estoppel doctrine once the Federal Circuit affirmed the PTAB's unpatentability determinations, which precluded JRS from going forward with its court case against Coulter and from asserting its patents in any further proceedings.¹⁰ With this understanding, JRS stipulated to judgment against it, but preserved its right to seek en banc review at the Federal Circuit so it could challenge XY, LLC's collateral estoppel rule.¹¹ The Federal Circuit denied en banc review and granted summary affirmance of...