Burden on Proponent of Affirmative Defense

Back in 2016 district courts started encountering infringement suits where the subject patents had survived PTAB challenge. In such scenarios, estoppel applied to failed petitioners under 35 U.S.C. § 315(e)(2). To asses whether invalidity defenses asserted in the later court case should be estopped as arguments that “reasonably could have been raised” in the failed IPRs, the courts needed to determine whether the newly asserted art could have been located by a reasonably skilled searcher at IPR filing. But, 325(e)(2) is silent as to which party bears the burden of proof on this issue of estoppel.

That is, does the Patent Challenger have to show that it could not have found the art with reasonable diligence, or, does the Patent Owner have to show that art could have been found with reasonable diligence?

Most courts held that since estoppel was an affirmative defense, the burden fell on the proponent patent owner. Today, in a precedential decision, the Federal Circuit agreed.

In Ironburg Inventions Ltd., v. Valve Corp., (here) the Federal Circuit held that:

[Valve cites] district courts that have placed the estoppel burden of proof solely on the patent owner, as the party seeking to benefit from an assertion of estoppel. See Clearlamp, 2016 WL 4734389, at *9 (“It is the proponent of an estoppel argument that bears the burden.”); Pavo Sols. LLC v. Kingston Tech. Co., 2020 WL 1049911, at *4 (C.D. Cal. 2020) (same); Innovative Memory Sys., Inc. v. Micron Tech., Inc., 2022 WL 4548644, at *3 (D. Del. 2022) (parties agreeing that burden is on patentee asserting estoppel). We agree with Valve and now hold that the burden of proving, by a preponderance of the evidence, that a skilled searcher exercising reasonable diligence would have identified an invalidity ground rests on the patent holder, as the party asserting and seeking to benefit from the affirmative defense of IPR estoppel. Our holding is consistent with the general practice that a party asserting an affirmative defense bears the burden to prove it.

So, perhaps not exactly a surprising outcome given near consensus of the lower courts.

But, while the initial burden may rest with the Patent Owner, inevitably the Patent Owner will present a search in which the prior art evidence was found by a professional searcher. Here, it is especially critical for the patent challenger to have search records of its own from a professional searcher. For this reason, I always recommend us of a professional search firm, even when there is adequate prior art in hand to proceed with an IPR (perhaps coming in through experts or other industry sources). After-the-fact justification of what could not have been found is not near as strong as contemporaneous records from the time of petition filing. Likewise, as AI tools improve, the argument that art could not have been reasonably located may be increasingly difficult to make years down the line. Clearly, having no search data at the time of petition filing, or informal process records is not a winning strategy – despite the burden.