Reasonably Could Have Investigated in PGR?
Last month the Federal Circuit recalibrated the scope of IPR estoppel by overruling Shaw Industries. That is, after the SCOTUS decision in SAS Institute, the Court concluded that IPR “raised or reasonably could have raised” estoppel applies not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all claims and grounds not in the IPR but which reasonably could have been included in the petition.
As to “reasonably could have been raised,” this assessment considers what information was known to the filer, and when, or, what might have been uncovered via a reasonably diligent search. In the case of a PGR proceeding — allowing a broader range of validity challenge types relative to IPR — this “reasonably could have raised” estoppel footprint poses a significant risk to patent challengers.
As recently analyzed by the International Trade Commission (ITC) in Certain Cloud-Connected Wood-Pellet Grills & Components Thereof, PGR estoppel reaches physical products even where their operation is not publicly discernible, and may require investigation – such as reverse engineering. The agency explains, (here) (pgs., 87-92):
[Challenger] argues that it could not have identified the MAK System in its post-grant review petitions because the details of the operation of the MAK System are not discernible by inspection of a grill or through public documentation-in particular whether the MAK System uses a “cloud computing platform” or “cloud service,” and whether certain signals are sent. [Challenger] cites regulations regarding post-grant proceedings requiring that a petition specify “where each element of the claim is found in the prior art.” 37 C.F.R. § 42.204(b)(4). In addition, the PTAB will not institute a post-grant review proceeding unless it is “more likely than not” that at least one of the claims is unpatentable. 35 U.S.C. § 324(a). . . .
[Patent Owner] submits that [challenger] knew about the MAK System for years before filing for post-grant review and did not even obtain a sample of a MAK Grills product. [Patent Owner] further submits that “packet sniffing” technology and other investigative techniques could have been used to observe communications between the components of the MAK System, pointing to similar analysis conducted [its expert]. [Patent Owner] submits that the PTAB has subpoena power that would have allowed [challenger] to obtain confidential information regarding the MAK System, if necessary. . . . [Patent Owner] contends that if [challenger] had identified the MAK System as part of its petition, even without explicit evidence that each limitation was present, the PTAB would still have been required to institute the petition under the Supreme Court’s precedent in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018). CIB at 67. . . .
[Challenger] contends that it needed more information to include the MAK System in its petition, but the record shows that [challenger] was not diligent in pursuing that information and did not even purchase and inspect a MAK Grill product. Moreover, the evidence does not support [challenger’s] contention that confidential information from MAK Grills would have been necessary to file a petition. Several of the references identified in [challenger’s] post-grant review petitions disclose less than all of the limitations of the asserted claims. . . . . Based on this record, the undersigned finds that [challenger] could have identified the MAK System in one of its post-grant review petitions. Because it chose not to include the MAK System in the post-grant reviews that resulted in final written decisions, [challenger]is now precluded from asserting invalidity based on the MAK System.
While the ALJ is correct that SAS may dictate inclusion of an incomplete ground for trial, that ground will remain incomplete. Petitions cannot be supplemented as to missing content — via subpoena or otherwise. Further, while an incomplete understanding may allow the reference to form part of a 103 combination. It seems that the MAK Grill was most relevant for features only discernible upon testing and reverse engineering.
So, the moral of the story here is: File an IPR to potentially preserve your product art for a rainy day. And if pressed for time and forced to file a PGR, do the necessary investigation for known product art. Use it or lose it.