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  • The opinions, commentary and characterizations provided to this online forum by the authors and moderators are provided for encouraging discussion, thought and debate on important post grant issues. These postings are in no way representative of the opinions of Oblon Spivak et al., or its clients.

Gaming IPR Estoppel

Posted On: Jun. 5, 2014   By: Scott A. McKeown
ipr-estoppelOutdated Patent Drafting Techniques Present Opportunities.

The Patent Trial & Appeal Board (PTAB) poses a significant threat to patent monetization. Not because the PTAB is anti-patent, far from it, but because the patents challenged today were drafted for the scrutiny of the district court. That is, in a district court invalidity is only found where the presumption of patent validity is overcome by a clear and convincing evidentiary showing. Given the relative low risk of this happening as compared to a non-infringement finding, patents were drafted to obtain the broadest claims possible for ensuring a clean infringement read. Of course, the attractiveness of PTAB challenges is the absence of such pro-patentee standards.

As discussed previously, now that PTAB challenges are becoming the standard, initial hurdle, patents need to be drafted differently, or “post-grant proofed.” This new PTAB centric drafting and prosecution strategy is especially critical in the predictable arts. This is because existing claim drafting strategies might also permit your competitor to game the estoppel flowing from an unsuccessful Inter Partes Review (IPR) challenge.

Under 35 U.S.C. § 315(e)(2) IPR estoppel is applied on a claim-by-claim basis:

(e) Estoppel.—

(2) Civil actions and other proceedings.— The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318 (a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

This claim based estoppel creates interesting opportunities for patent challengers, especially direct competitors in the predictable arts. Take the typical electrical/software patent drafted within the past 10 years as an example. This patent likely has dependent claims directed to well-known options/features, and different classes of repetitive claim sets (system, method, apparatus) that repeat the same language. Now let’s say that a competitor approaches your organization to take license on that patent. You determine that some independent apparatus claims are a concern, but not the trivial, dependent claims (too narrow, or easily designed around). Likewise, the method claims present divided infringement issues. By challenging the method claims in IPR (i.e., ones that you don’t infringe but include similar language) you can demonstrate the strength of your art, without risking estoppel for the claims that are an infringement concern. If you are subsequently sued, you will benefit from the guidance of the PTAB on claim construction/analysis of the submitted art. Thereafter, you can file a fairly straight forward, second IPR filing…or not.

A reversal of this technique can be used on the dependent claims. That is, an IPR is pursued for the base claims only. If the IPR is successful, a sophisticated competitor is unlikely to sue on trivial dependent claims given the outcome at the PTAB. On the other hand, if the IPR is unsuccessful, estoppel would not apply to these claims under the plain language of the statute. Presumably, the same art would not be used again in court, but the “reasonably could have raised component” of 315(e)(2) could be side-stepped, In other words, the invalidity case for the dependent claims would by necessity include the base claims that were subject to the failed IPR. (assuming the judge does not find some type of equitable estoppel in this regard)

I emphasize these strategies for competitors only because NPEs leveraging the cost of litigation to extract settlements are generally not reasonable actors. Likewise, these options may be of limited value in a litigation context if a stay is desired (i.e., you don’t want to leave asserted claims uncovered). As always, your mileage may vary.

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