DISTRICT COURT
In Mayne Pharma Int’l. Pty Ltd. v. Merck & Co., No. 15-00438-LPS (D. Del. Feb. 23, 2017), the court found good cause to modify its protective order to allow Plaintiff, Patent Owner in a parallel IPR, to use in the IPR documents Defendant had designated in the district court as protected discovery material. The “good cause” was the relevance of Defendant’s documents to the secondary considerations inquiry. The court explained that Defendant, upon filing its petition for IPR, knew that the court may amend its protective order upon a finding of good cause. The court also explained that the Board had procedures in place to protect confidential information.
Takeaway: Parties in a district court litigation should be aware that documents produced under a protective order may become discoverable in an IPR. When negotiating your next protective order, consider whether to add any special provisions on dealing with potential IPRs.
FEDERAL CIRCUIT
In Paice LLC v. Ford Motor Co., No. 2016-1647 (Fed. Cir. Mar. 7, 2017), on appeal following a final written decision in an IPR, the Federal Circuit affirmed the unpatentability of six claims, but remanded as to the patentability of one dependent claim. According to the court, the Patent Owner separately argued the patentability of this claim in its Patent Owner Response, but the Board did not separately analyze the claim’s additional limitations.
At the recent inaugural annual meeting of the PTAB Bar Association, Federal Circuit Judge Kimberly Moore commented that the court has recently remanded a number of cases for purposes of obtaining a more developed record. She noted that while the court is often able to easily determine the patentability of the claim at issue, the appeals court cannot decide issues in the first instance. Judge Moore expressed hope that as the Board becomes more experienced, it will issue fewer Final Written Decision decisions that require remand.
Takeaway: On appeal of a final written decision, the Federal Circuit will analyze whether the record shows the evidence on which the Board based its findings, together with the Board’s reasoning in reaching its conclusions. When reviewing your final written decision and contemplating an appeal, consider whether a request for Board rehearing has the potential to obviate the appeal or at least better develop the record to avoid the time and expense of remand.
Updates on Petitioner Estoppel
A number of new cases this month address the scope of petitioner estoppel. In In re Verinata Health, Inc., No. 2017-109 (Fed. Cir. Mar. 9, 2017), the Federal Circuit denied a petition for a writ of mandamus to direct the District Court for the Northern District of California to strike certain portions of defendants’ invalidity contentions.
As we discussed in the February 2017 edition of Keeping Tabs on the PTAB, the district court in Verinata cabined IPR statutory estoppel to grounds raised in the IPR petition and instituted by the Board. Plaintiff had asked the Federal Circuit to review the district court’s narrow application of estoppel. The Federal Circuit declined, finding that the current state of the binding precedent does not compel a finding that the district court clearly abused its discretion or usurped judicial power, and that Plaintiff had failed to satisfy the requirement that it had no other adequate remedy available to obtain the relief sought, as it had not shown why it could not raise its arguments in an appeal from the district court’s final judgment.
Parallel Networks Licensing, LLC v. IBM, No. 12-2072 (D. Del., Feb. 22, 2017), a more recent district court case, interpreted estoppel more broadly. The opinion was written by Judge Kent Jordan of the Third Circuit Court of Appeals, sitting by designation. In this case, the court held that defendant IBM, who had petitioned for IPR concerning the patent at issue in the litigation, was estopped from asserting invalidity over not only the prior art at issue in the IPR, but any prior art reference IBM was aware of when it filed for IPR. IBM argued that broad estoppel should not apply because it had moved for joinder to an earlier-filed IPR, such that it reasonably could have raised only those grounds already present in the earlier IPR. The court rejected this argument, finding that there is no “mirror image” rule for petitions filed with a motion for joinder. Citing Apotex v. Wyeth, IPR2015-00873, Paper 8, at 6 (P.T.A.B. Sep. 16, 2015), which describes the petitioner estoppel provisions as “broad,” the court estopped IBM from relying on all prior art cited in its invalidity contentions, which were served before the IPR petition.
In Resmed Ltd. v. Fisher and Paykel Healthcare Ltd., IPR2016-01716, Paper 12 (P.T.A.B. Mar. 10, 2017), the Board considered parallel district court litigation and potential estoppel in determining the scope of its institution decision. Specifically, the Board instituted IPR as to one challenged claim as obvious over Netzer and Levine, and then exercised its discretion under 37 C.F.R. § 42.108 to have the review proceed on all challenges that likewise raised Netzer as the primary basis of unpatentability. The Board explained its decision as follows:
[W]e recognize the interplay between this proceeding and the related district court action. Thus, by exercising our discretion in this regard, we seek to achieve finality of review at the Board and avoid parallel review at the district court, at least with respect to attacks on the ’072 patent that rely on Netzer as the primary basis of invalidity. . . . We also hope to avoid any “follow-on” petitions that might result from partial institution.
(Id. at 9-10.)
Takeaway: Different cases this month have resulted in different applications of estoppel. In the Resmed case, the Board instituted on all claims that relied on overlapping arguments, in an express effort to avoid parallel review at the district court of invalidity challenges based on the same prior art raised in the petition. This approach may be in response to Judge Newman’s dissent in Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309, 1336-37 (Fed. Cir. 2016) (Newman J., dissenting), where she opined that the PTAB’s practice of instituting IPR on only some challenged claims renders the estoppel provisions irrelevant because it leaves challenged claims available for district court litigation. Estoppel remains a quickly-developing issue, and as we noted last month, parties are well-advised to stay on top of this developing body of law.