Joinder Estoppel Narrower Than Original Petition Estoppel

Court’s have struggled with the meaning of the “reasonably could have raised” aspect of 315(e)(2) IPR estoppel. The CAFC has not had much opportunity to weigh in on this issue…. yet. But, last week the Court provided guidance on what is “reasonably raised” when a party joins an IPR petition under § 315(c).  Based on the Court’s decision, joinder may become a more attractive option for co-defendants in multi party litigations.

In Network-1 Technologies, Inc. v. Hewlett-Packard Co. (here), the CAFC had to determine whether HP was estopped from raising certain validity challenges under 35 U.S.C. § 315(e)(2) based on HP’s joinder to an IPR.

In 2011, Network-1 sued a number of defendants, including HP and Avaya, for infringement in the Eastern District of Texas.  Avaya filed an IPR petition against an asserted patent that the Board partially instituted.  Following institution, HP filed a first IPR petition and motion to join the Avaya IPR.  HP’s petition included grounds different than those that had already been instituted, and the Board denied HP’s request.  HP thereafter filed a second IPR petition and motion to join the Avaya IPR, this time including only the grounds already instituted.  The Board granted HP’s request, and HP was joined as a party to the Avaya IPR.  In the Board’s final written decision, it found none of the challenged claims unpatentable, and the CAFC ultimately affirmed this decision.

Back at the district court years later, following a jury verdict finding the patent invalid, Network-1 filed a motion for JMOL related to validity.  The district court granted Network-1’s motion, concluding that because of HP’s joinder to the Avaya IPR, HP should have been estopped under 35 U.S.C. § 315(e) from raising obviousness challenges, which the court determined “reasonably could have been raised” in the Avaya IPR.  HP appealed this decision.

On appeal, HP argued that the district court misapplied the estoppel provision under § 315(e).  Specifically, HP argued that no validity ground that it raised at trial “reasonably could have [been] raised” through its joinder to the Avaya IPR.

The CAFC agreed.  In so doing, the Court interpreted § 315(e) and, for the first time, its modified holding in Facebook, Inc. v. Windy City Innovations:

[A]s we held in Facebook, Inc. v. Windy City Innovations, LLC, the joinder provision does not permit a joining party to bring into the proceeding new grounds that were not already instituted. Rather, it may only join the already-instituted proceeding as a party.

. . .

[A]ccording to [§ 315(e)], a party is only estopped from challenging claims in the final written decision based on grounds that it “raised or reasonably could have raised” during the IPR. Because a joining party cannot bring with it grounds other than those already instituted, that party is not statutorily estopped from raising other invalidity grounds.

Therefore, since HP relied on the joinder exception to the time bar under § 315(b) to join Avaya’s IPR with identical grounds to those already present in Avaya’s petition and was unable to raise new grounds of its own, HP was only estopped from raising those grounds present within the joined petition.  Accordingly, the CAFC held that “permitting HP to challenge the asserted claims . . . as obvious over the [non-petitioned art] does not give HP a ‘second bite at the apple’ to challenge the [ ] patent because HP could not have raised such a challenge in the Avaya IPR.”

The CAFC’s Network-1 Technologies decision may help guide district courts grappling with other various § 315(e)(2) estoppel issues.  For example, districts have split over whether or not physical products described by prior art publications of an earlier PTAB trial are subject to § 315(e)(2) estoppel.  Since petitioners may only raise grounds on prior art consisting of patents and printed publications, challenges based upon physical products or systems cannot be raised at the PTAB.  Network-1 Technologies indicates that the CAFC may take a narrow view of estoppel on this issue as well.  This disputes will be making their way to the Federal Circuit within the next year.