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Federal Circuit Clarifies Statutory Estoppel in Litigations with Co-Pending IPRs

3 min read

Section 315(e)(2) states that once a final decision issues in an IPR challenging a claim, the Petitioner “may not assert either in [court or the ITC] that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” In California Institute of Technology v. Broadcom Ltd., Nos. 2020-2222, 2021-1527, the Federal Circuit clarified the scope of statutory estoppel, making it harder for some patent challengers to preserve invalidity arguments for litigation.

Patent Owner filed a patent infringement suit against Defendant, who challenged the asserted patents in a series of IPRs. The PTAB instituted IPR but concluded that most of the challenged claims were not unpatentable. After the IPRs, Defendant challenged the patents in the litigation on grounds that were not in its Petition but could have been. The District Court concluded that Section 315(e)(2) barred Defendant from challenging the patents on those grounds.

The District Court adopted a broad interpretation of Section 315(e)(2) estoppel, but other courts had interpreted it more narrowly. The District Court’s broad interpretation meant that Defendant could not pursue any invalidity grounds it could have raised in the Petition, but elected not to articulate in the IPRs. Other courts, applying the reasoning of the earlier Federal Circuit decision Shaw Industries Group v. Automated Creel Systems, Nos. 2015-1116, 2015-1119, limited the scope of estoppel to those grounds actually raised in the Petition.

On appeal, the Federal Circuit affirmed the District Court and resolved the split in favor of the broad interpretation of Section 315(e)(2) estoppel. The Federal Circuit relied on the Supreme Court’s post-Shaw decision in SAS Institute, Inc. v. Iancu, No. 16-969, which held that there could be no partial institutions because the petition governs the scope of inter partes review, not the institution decision. The Federal Circuit applied the same reasoning, holding that any ground that could have been raised in a petition (rather than the institution decision) is a ground that reasonably could have been raised during inter partes review. Therefore, Defendant was barred from asserting in court any invalidity ground it could have but did not include in its Petition.

Takeaways:

  • Section 315(e)(2) estoppel applies to all grounds that the petitioner could have raised in its petition. Petitioners should carefully consider which grounds to include in the petition since they may not get another chance to rely on other grounds that they could have been included.
  • Petitioners facing litigation should consider invalidity theories that are preserved in the District Court regardless of whether Section 315(e)(2) estoppel applies, including Section 101 and 112 challenges. Petitioners should also consider making anticipation and obviousness challenges with product prior art, which cannot form the basis of an IPR challenge and therefore would not be estopped under this ruling.
  • Patent Owners should be aware that patent challengers may have few invalidity options based on patents and printed publications after an IPR that is not completely successful.
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