By Scott A. McKeown
| March 6, 2017

Practical Impact of Joinder Practice, Stricter Estoppel


IPR estoppel is established under 35 U.S.C. § 315(e)(2), which provides that “the petitioner in an inter partes review of a claim in a patent . . . that results in a final written decision . . . may not assert . . . in a civil action . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” (emphasis added).  Once upon a time, the reasonably could have raised component was thought to refer to art that could have been raised in the initial petition — at least, that was what Congress seemed to intend. Since that time, the Federal Circuit has made clear that this statutory estoppel is linked to the grounds presented at trial, and not those included in the petition and rejected by the Board as redundant. 

In Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016), the Court held that statutory estoppel does not apply to grounds denied by the Board as redundant.  The Court reasoned that estoppel cannot flow from grounds that are not part of the trial or any resulting decision from which estoppel can attach.

Rightly or wrongly, district courts have construed Shaw to extend to any potential trial ground not presented in the petition, not just those denied on redundancy grounds. This development has been a boon for original petitioners. But, a recent decision has made clear that petitioners seeking joinder may forfeit the Shaw estoppel benefits.


The present Shaw estoppel benefits are explained in Intellectual Ventures I LLC v. Toshiba Corp., Civ. No. 13-453. In Intellectual Ventures the plaintiff patent owner argued in part that the defendant was estopped from introducing a new invalidity argument.  Slip Op. (DN 559) (D. Del. Dec. 19, 2016).  As discussed previously, plaintiff argued that one of the combinations of publicly available patents and printed publications “could have been raised” in the prior IPR because it was known to the defendant.  The Court's initial reaction to this contention was favorable: “IV's argument in this regard is perfectly plausible, in the sense that defendant certainly could have raised these additional obviousness grounds based on public documents at the outset of their IPR petition.”  Slip Op. (DN 559) at 26 (emphasis added).  However, in light of Shaw, the Court expressed that its hands were tied.  “[T]he Federal Circuit has construed the [Section 315(e)(2)] language quite literally.”  Id.  And “[a]lthough extending the above logic to prior art references that were never presented to the PTAB at all (despite their public nature) confounds the very purpose of this parallel administrative proceeding, the court cannot divine a reasoned way around the Federal Circuit's interpretation in Shaw.”  Id. at 26-27.   Thus, despite the fact that this art reasonably could have been raised (presumably) in a prior related IPR, defendant was permitted to introduce this art for invalidity purposes.  Id. at 27. 

More recently, the Shaw estoppel benefits were argued in relation to a petitioner that joined an IPR trial already in progress via a motion for joinder. In Parallel Networks Licensing, LLC v. International Business Machines Corp., (here) Civ. No. 13-2072, Parallel Networks argued that IBM was estopped from introducing obviousness combinations that were known to IBM and thus could have been raised in the previous IPRs.  Slip Op. at 24.  IBM argued that these grounds could not have  been raised because it was copying petitions filed by Microsoft Corp. in order to support its request for joinder with Microsofts’ petitions (necessary in view of IBM being past the one year bar date).  Id. At 25.

In Parallel Networks it was held that, despite IBM’s arguments “there is no ‘mirror image’ rule for joinder,” and noted that the cases cited by IBM explicitly contemplate that requests for joinder can involve petitions that assert different grounds of invalidity.  (Of course, while true in theory — this is not how the system works in practice). Accordingly, Parallel Networks held that allowing IBM to raise arguments that it elected not to raise during the IPR “would give it a second bite at the apple and allow it to reap the benefits of the IPR without the downside of meaningful estoppel,” concluding that IBM is estopped from asserting prior art references and combinations that it reasonably could have raised before the PTAB.

Significantly, Parallel Networks did not cite or otherwise reference the Shaw decision urging the opposite result.

It may be that the Court in Parallel Networks viewed joinder practice as a unique opportunity to join an IPR trial already in progress.  And that, it would seem to an outsider that raising additional grounds would be a common sense exercise; especially if different, stronger art was known. Nevertheless, what was designed to be a straightforward estoppel framework to protect patentees from harassment has become quite unpredictable.

As I have pointed out previously, the PTAB should switch to an "all or nothing" trial institution. That is, if one ground is deemed to meet the threshold standard for institution for a challenged claim, all grounds should be accepted for trial. While Patentees may not appreciate this change in the short term, it will benefit them in the long run.

This case was brought to my attention by the great Docket Navigator.

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