The Many Flavors Of Inter Partes Review Estoppel: A Review And Update

• Jurisdiction: United States,Federal
• Law Firm: Haug Partners
• Subject Matter: Intellectual Property, Patent
• Author: Mr Brian Murphy
• Published date: 03 October 2023

I. Introduction

The Leahy-Smith America Invents Act ("AIA") was years in the making. From the first patent reform bill introduced by Representative Lamar Smith in June 2005² until the final House and Senate debates in September 2011, Congress debated every provision of the AIA, revised the language, debated some more, and finally codified the new law with overwhelming bipartisan support. Congress designed the statutory inter partes review ("IPR") estoppel provisions in 35 U.S.C. Section 315(e) to limit serial post-grant challenges to the patentability of patent claims whether in the Patent Office, district court, or the International Trade Commission (ITC). The estoppel language was carefully crafted and closely debated.³ This article addresses the legislative history, statutory language, and leading cases interpreting the many flavors of IPR estoppel that attach under a variety of circumstances.

II. AIA Legislative Review - Policy Pronouncements and Estoppel Rationale

The AIA was "designed to establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs," and it included the creation of "a relatively efficient and inexpensive administrative system for resolution of patent validity issues before the USPTO."⁴ Congress drafted the IPR provisions to replace an underutilized inter partes reexamination process with a "quick, inexpensive, and reliable alternative to district court litigation to resolve questions of patent validity" at the USPTO.⁵ IPRs "only make sense if ... not unduly expensive, and if such proceedings substitute for a phase of district court litigation."⁶ Congress, therefore, included statutory IPR estoppel as a crucial tool to effect its oft-stated policy goals of avoiding duplicative litigation and serial patent validity challenges to the same patent by the same challenger and any real parties in interest and privies.

Statutory IPR estoppel was an essential component of the AIA architecture, designed to "improve patent quality and limit litigation abuses, thereby ensuring that patents remain positive forces in the marketplace."⁷ The intent was to "prohibit[] multiple bites at the apple by restricting the cancellation petitioner to opt for only one window one time."⁸ The statutory one-bite-at-the-apple estoppel restriction in the AIA is a crucial "procedural limit[] on post-grant administrative proceedings that will prevent abuse of these proceedings for purposes of harassment or delay."⁹ The twin themes of providing patent challengers with a one-shot, streamlined administrative proceeding to challenge the validity of issued patent claims at the Patent Office rather than district court, and preventing patent owner harassment and abuse, were constantly reinforced throughout the legislative debate over the AIA. Additional examples to those quoted above abound:

This 'one bite at the apple' provision was included ... to quell concerns that a party bent on harassing a patent holder might file serial [post grant review] petitions.¹⁰

***

The goal is to encourage [post grant review] challenges when warranted, not discourage them in view of complicated, expensive, and arcane procedures. The Director is admonished ... to ensure that regulations forbidding and penalizing harassment are enacted and enforced."¹¹

***

[T]his bill represents a fair, balanced, and necessary effort to improve patent quality, ... and offer productive alternatives to costly and complex litigation.¹²

***

The bill's enhanced administrative estoppel will effectively bar a third party or related parties from invoking ex parte reexamination against a patent if that third party has already employed post-grant or inter partes review against that patent.¹³

***

This bill will establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs, while making sure no party's access to court is denied.¹⁴

***

Ideally, extending could-have-raised estoppel to privies will help ensure that ... an inter partes review ... will completely substitute for at least the patents-and-printed-publications portion of the civil litigation.¹⁵

***

These [post grant review] proceedings will serve to minimize costs and increase certainty by offering efficient and timely alternatives to litigation as a means of reviewing questions of patent validity. ... It is important that post-grant review proceedings be designed to prevent delay and abusive challenges, but still enable valid challenges based on meritorious grounds.¹⁶

The House and Senate versions of the Patent Reform Act of 2007 included very similar statutory estoppel language to effect an enhanced administrative estoppel that would prohibit unsuccessful petitioners from later challenging the same patent claims (or any newly added claims) in subsequent reexamination, derivation, post grant review, district court, or International Trade Commission (ITC) proceedings "based on any ground that the cancellation petitioner raised during the post-grant review proceeding."¹⁷ Although the estoppel provisions in the 2007 proposed bills were limited to grounds actually raised during the post grant challenge proceeding, the Senate bill added a separate provision that would bar unsuccessful petitioners and real parties in interest from filing a subsequent IPR "on the same patent, regardless of the issues raised in the first [post grant review].¹⁸ The 2007 Senate bill and accompanying report planted the seeds for the later-adopted AIA estoppel provisions that bar petitioners, their real parties in interest, and privies from challenging the same patent claims in any subsequent Patent Office, district court, or ITC proceeding based on "any ground that the petitioner raised or reasonably could have raised" during the earlier IPR (or PGR) proceeding.¹⁹

Congress tried hard to make their intent clear as to the scope of the enhanced "reasonably could have raised" IPR estoppel provision:

[I]t is only reasonable to apply estoppel to claims the challenger was, or should have been, in a position to raise, whether or not it did so.²⁰

***

[A petitioner] might be required to raise all prior art identified to him as a result of a reasonable search request submitted to a commercial search firm.²¹

***

The bill ... preserves estoppel against relitigating in court those issues that an inter partes challenger reasonably could have raised in his administrative challenge.²²

***

Adding the modifier "reasonably" ensures that could-have-raised estoppel extends only to that prior art which a skilled searcher conducting a diligent search reasonably could have been expected to discover.²³

***

The estoppels in subsection (e) will prevent ... petitioners from seeking ex parte reexamination of issues that were raised or could have been raised in the inter partes or post-grant review.²⁴

Try as Congress might to craft clear and unambiguous statutory estoppel language, the scope and applicability of the IPR statutory estoppel provisions have been, and continue to be, heavily litigated. An analysis of inter partes reexamination estoppel and the legislative evolution of statutory IPR estoppel language follows in the next section.

III. Statutory Inter Partes Reexamination Estoppel - Former 35 U.S.C. ' 315(c), 317(b)

We begin with the now-replaced inter partes reexamination statute, which contained substantial administrative estoppel provisions. One provision precluded an unsuccessful inter partes reexamination requester from requesting or maintaining a later inter partes reexamination following a final decision "favorable to patentability:"

[N]either [the requester] nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such ... inter partes reexamination proceeding and an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office .... This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.²⁵

The unsuccessful requester also was:

"estopped from asserting at a later time, in any civil action [for patent infringement], the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings."²⁶

The estoppel provision in former 35 U.S.C. Section 315(c) also included the safe harbor provision recited in former Section 317(b) for newly discovered prior art unavailable to the third-party requester and Patent Office.

The inter partes reexamination estoppel provisions quoted above defined a statutory form of claim preclusion ("any ground ... raised or could have raised"²⁷) that Congress carried forward, in modified form, into the IPR statutory estoppel provisions. For example, the unsuccessful inter partes reexamination requester was estopped at both the Patent Office and in district court from later pursuing grounds that it raised or could have raised against the challenged claims during the inter partes reexamination proceeding. As with statutory IPR estoppel, the inter partes reexamination estoppel provisions were put in place "to guard against harassment of a patent holder."²⁸ And Congress further recognized during the AIA debate that for inter partes reexamination it had "imposed severe estoppel provisions that preclude a later court challenge based on issues not even raised during an inter partes reexamination proceeding."²⁹ Congress was well aware of how to craft a form of statutory claim preclusion based on its experience drafting the inter partes reexamination estoppel provisions. Congress...