Estoppel Issues in District Court and the PTAB
In Wasica Finance GmbH v. Schrader Int’l, Inc., C.A. No. 13-1353-LPS (D. Del. Jan. 14, 2020), the district court granted Plaintiff’s motion for summary judgment of estoppel based on defendant’s prior inter partes review. In the IPR, the defendant/petitioner relied on a prior art product manual describing a device for its arguments that the claims were obvious. In the litigation, the defendant relied on the physical device, rather than the manual, arguing that invalidity arguments based on the product could not have been raised at the PTAB. The court held that estoppel applied, explaining that the manual cited in the IPR was “materially identical” to and “entirely cumulative” of the physical product. Id. at 2, 4–7. The court noted the statutory distinction between the grounds of invalidity and the evidence used to support those grounds. Because the only difference in the arguments before the PTAB and in district court was the evidence used to support them—product manual v. physical product—the court held that estoppel should apply. Id. at 7, n.7.
TAKEAWAY: Petitioners looking to monopolize on the decision refusing to apply IPR estoppel in Oil-Dri Corp., discussed in Issue 13, should proceed with caution. District courts have disagreed on whether § 315(e) estoppel applies to arguments that technically could not have been raised in the PTAB, and the Federal Circuit has not yet addressed the issue. Petitioners should be aware that estoppel may apply to arguments that are deemed cumulative of those raised in PTAB proceeding, even if not relying on a printed publication in district court.
In Precision Planting, LLC v. Deere & Co., IPR2019-01052, Paper 19 (Jan. 7, 2020) and Precision Planting, LLC v. Deere & Co., IPR2019-01050, Paper 20 (Jan. 17, 2020), the Board considered the applicability of judicial estoppel. Patent Owner argued that Petitioner should be estopped from arguing that the references on which it relied for its obviousness arguments are in the same field because Petitioners argued differently before the PTO during prosecution of one of Petitioner’s own patents. The Board first questioned the applicability of judicial estoppel to PTAB proceedings, noting that Patent Owner had not cited any authority holding that judicial estoppel was applicable to Board proceedings. Even assuming judicial estoppel applied in IPR proceedings, however, the Board ultimately declined to apply it on the current record because the allegedly inconsistent prior arguments were made under a different legal standard, before the Supreme Court’s decision in KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007).
TAKEAWAY: While the Board has not definitively stated that judicial estoppel applies to PTAB proceedings, it has not outright rejected the argument. Parties should look out for inconsistent prior statements, and consider raising judicial estoppel—bearing in mind, however, that it only binds a party to a position that “it advocated and successfully achieved.”
Printed Publications in a Post-Hulu World
As discussed in Issue 22, while the Precedential Opinion Panel’s (POP) decision in Hulu, LLC v. Sound View Innovations, LLC, IPR2018-01039, provided some guidance on the standards for establishing a reference as a printed publication, it did not specify what kind of evidence would be sufficient to meet those standards. Decisions in a post-Hulu world are beginning to provide clarity on what kind of evidence is sufficient to establish that a reference is a printed publication.
In Cisco Systems, Inc. v. Centripetal Networks, Inc., IPR2018-01436, Paper 40 (Jan. 23, 2020), the Board shed some light on what evidence could be used to show that a printed publication was publicly available, and provided a helpful summary of the applicable law. The dispute centered on whether a user manual given to customers who purchased Sourcefire 3D System products was a “printed publication” under the statute. Petitioner submitted evidence of the distribution of the manual, including a declaration stating that the Sourcefire 3D system was sold 586 times, “each including a copy of the Sourcefire [manual],” and that the manual was posted to the company’s website. The Board agreed with petitioner that 586 sales “far exceeds the number of disclosures recognized under the relevant dissemination law for printed publications.” Id. at 26. The Board also found that the Sourcefire manual was “actively advertised and promoted as being included with the Sourcefire 3D system.” Id. at 27. The Board concluded that the dissemination and availability of the Sourcefire manual to hundreds of customers who were under no obligation of confidentiality was sufficient to establish the reference as a “printed publication.”
In Apple Inc. v. Qualcomm Inc., IPR2018-01251, Paper 44 (Jan. 15, 2020), Patent Owner filed a motion to exclude a printed publication due to (1) lack of authenticity and (2) hearsay as to the copyright date. The Board denied the motion on both issues. First, the Board noted that the “appearance, contents, substance, internal patterns, or other distinctive characteristics” (e.g., table of contents, ISBN, etc.) of the reference supported its authenticity. The Board also noted that Petitioner supported the reference’s authenticity with a librarian declaration, and Patent Owner did not provide any evidence to rebut that testimony. Second, the Board declined to exclude the copyright date on hearsay grounds. The Board’s decision, however, did not explicitly answer the hearsay question. Rather, the Board noted that the Petitioner “does not rely only on the copyright date” of the Exhibit but also submits testimony from a librarian explaining that the Library of Congress records indicate that the publication was available without restriction before the critical date. The Board, therefore, dismissed the motion to exclude as moot because it “need not rely on the copyright date.” Id. at 45. Notably, unlike in Cisco, the Board in Apple did not explicitly note that their holding was consistent with Hulu.
TAKEAWAY: The standard for the evidence required to establish a reference as a “printed publication” continues to evolve. Given the uncertainty of what evidence any particular panel will find sufficient, cautious Petitioners should consider gathering any available evidence to support the public availability of key prior art references, including declarations of recordkeeping witnesses, where available.
Developments Regarding the Board’s Discretion to Institute
In 3Shape A/S v. Align Tech., Inc., IPR2019-00151, Paper 23 (Dec. 30, 2019), the Board denied Patent Owner’s request for rehearing of the decision to institute trial, rejecting the argument that it should have exercised its discretion and declined to institute where only four of the twenty challenged claims were found to be likely unpatentable. The Board held there is no specific percentage of how many challenged claims must be found likely unpatentable in order to institute trial. The Board also noted that seventeen out of forty-five challenged claims had been instituted over three IPR proceedings, which all raised the same prior art references to challenge related patents, and that this number was “a significant portion” and favored institution.
TAKEAWAY: While the POP designated Chevron and Deeper as informative (discussed in Issue Fourteen), this panel looked beyond the current petition, to related petitions, to determine the most efficient use of the Board’s resources.
In C.R. Bard, Inc. v. Hoyt August Fleming, IPR2019-01566, Paper 16 (Jan. 8, 2020), the Board instituted trial and rejected Patent Owner’s argument that it should use its discretion to deny institution under 35 U.S.C. §§ 314(a) and 325(d). Petitioner filed a patent on similar subject matter as the challenged patent, but had not disclosed the prior art it submitted to the PTO during prosecution of its own patent. Patent Owner argued that this evidenced bad faith and cut against Petitioner’s argument that the reference was relevant to the subject matter at issue. The Board explained that no statute or regulation spoke to this scenario and that none of the General Plastic factors appeared applicable to these circumstances. As a result, the Board held that discretionary denial of institution was not appropriate.
TAKEAWAY: While the Board is often open to arguments supporting fairness and inefficient use of PTAB resources, panels of the Board seem hesitant to venture too far outside the statutes, regulations, and previous opinions. Parties seeking broad rulings based on equity or alleged gamesmanship should try to anchor their arguments to explicit statutory or regulatory language or prior opinions.
Board Reverses Institution Decision in Light of GoPro
As reported in Issue Twelve, the Board instituted trial in Sling TV LLC et al. v. Realtime Adaptive Streaming LLC, IPR2018-01331, despite service of a Complaint on the Petitioner asserting the challenged patent more than one year before the petition was filed, because the patent owner was not the party who filed the complaint. After the Precedential Opinion Panel’s (POP) decision in GoPro, Inc. v. 360Heros, Inc., IPR2018-01754, Paper 38 (Aug. 23, 2019), however, the Patent Owner filed a motion to terminate the IPR proceeding. In granting the motion to terminate, the Board dismissed Petitioner’s argument that GoPro should not apply because precedential Board decisions only bind “subsequent matters” involving similar facts or issues. The Board explained that Patent Owner’s post-GoPro motion to terminate was “just such a ‘subsequent matter,’ even if the original Petition is not.” Id., Paper 39 at 5 (Jan. 17, 2020). The Board further noted that even if the motion to terminate was not a “subsequent matter,” the Board has “inherent authority to reconsider [its] decisions.” Id. The Board therefore granted Patent Owner’s motion to terminate because the original petition was untimely under GoPro.
TAKEAWAY: Even if a POP decision is binding only on “subsequent matters,” the Board may apply the decision to a pending IPR proceeding if given the opportunity.
The Federal Circuit and the Board are still dealing with the aftermath of Arthrex, Inc. v. Smith & Nephew, Inc, et al., No. 2018-2140 (Fed. Cir. Oct. 31, 2019), rendering PTAB judges “inferior officers” under the U.S. Appointments Clause. While a number of Board decisions have since been vacated and remanded based on Arthrex, the Federal Circuit denied rehearing in Sanofi-Aventis Deutschland GMBH v. Mylan Pharmaceuticals Inc., 2019-1368, -1369 (Fed. Cir. Jan. 28, 2020), where the request for remand in light of Arthrex was deemed waived, as it was not raised in the appeal briefs, but asserted only in a petition for rehearing en banc.
The Federal Circuit also clarified that only patent owners may seek remand to a new panel under Arthrex. According to the Federal Circuit, a petitioner—unlike a Patent Owner—"sought out the Board’s adjudication, knew or at least should have known of this structural defect, and was content to have the assigned Board judges adjudicate its invalidity challenges until the Board ruled against it.” Ciena Corp. v. Oyster Optics, LLC, No. 2019-2117 (Fed. Cir. Jan. 28, 2020). Thus, the court found that the petitioner forfeited its Appointments Clause challenge when it filed the petition. Id.
Meanwhile, the U.S. Government, Appellant Arthrex, and Appellee Smith & Nephew, each submitted petitions for rehearing and/or rehearing en banc asking for reconsideration of the October 31 Arthrex decision. On January 17, all parties filed responses to the petition for rehearing agreeing that the decision warrants en banc review.