Reasonably Could Have Raised & Reasonably Diligent

Prior to last year’s SAS decision, district courts split over whether non-petitioned grounds were embraced by the “reasonably could have raised” aspect of 35 U.S.C. §§ 315(e)(2) and 325(e)(2) estoppel.  However, a growing number of district courts post-SAS have construed this phrase to define grounds that a party could have included in its petition, but did not.  In doing so, the courts are also making clear that the burden of proving that a ground could have reasonably have been raised, lies with the Patent Owner.

In GREE, Inc. v. Supercell Oy, Supercell Oy filed a petition for PGR of a GREE patent. Supercell Oy challenged claims only on § 101 grounds, and the PTAB found some claims ineligible and others eligible.  GREE later asserted the eligible claims in the Eastern District of Texas and Supercell Oy raised an affirmative defense of invalidity. Two weeks back, EDTX issued a memorandum order (here) in response to GREE’s motion to strike Supercell Oy’s affirmative defense pursuant to Federal Rule of Civil Procedure 12(f). The Court found that

Post-SAS . . . [t]he PTAB must now either review on all grounds or not review at all. There is no longer a non-instituted situation, where grounds are raised in the petition, but not instituted. Therefore, for the words ‘reasonably could have raised’ to have any meaning at all, they must refer to the grounds that were not actually raised in the PGR petition, but reasonably could have been included.

The Court stressed that “[a] looser interpretation would allow, if not encourage, petitioners to hold back invalidity grounds from a PTAB review to avoid estoppel, in direct contradiction to the statute and the policy behind it.” But the Court denied GREE’s motion to strike Supercell Oy’s affirmative defense of invalidity. If an affirmative defense raises either a question of fact or a question of law, the court must deny a motion to strike. Here, the Court found that

“[t]he issue of whether a skilled, diligent search reasonably should have uncovered a reference is a question of fact. A motion to strike is not the proper vehicle to challenge the sufficiency of Supercell’s evidence in support of its invalidity defense. . . . [A] motion for partial summary judgment will be needed to accomplish a pretrial determination of the issue.”

On the heels of the EDTX order, the Southern District of California issued a more recent order this past week (here) in Wi-LAN v. LG granting motion for partial summary judgment on § 315(e) estoppel. LG previously asserted during IPR that claims in a Wi-LAN patent are unpatentable as obvious over the combination of two references, but the PTAB found the claims patentable. Wi-LAN accused LG of infringing those claims in SD Cal., and LG responded by asserting five new grounds of obviousness based upon different combinations of various patents and/or printed publications not asserted during IPR.

In granting partial summary judgment, SD Cal. adopted the same reading of § 315(e) estoppel as EDTX. Of note, under the skilled search standard, the Court found that “the fact that LG eventually found the three references at issue through a prior art search is compelling evidence itself that LG reasonably could have discovered these references through a diligent search.” Further, the Court found persuasive evidence that the references at issue could have been found through a reasonable search of a database that LG previously used to discover prior art for the IPR.

These cases build upon the recent trend for a more flexible approach to post-SAS PTAB estoppel.