Judge Sue L. Robinson of the U.S. District Court for the District of Delaware recently identified a logical fallacy in the “statutory estoppel” jurisprudence with respect to 35 U.S.C. § 315(e)(1).
According to the statute, a petitioner of an IPR that results in a final decision will be estopped from asserting invalidity in a civil action based on “any ground that the petitioner raised or reasonably could have raised during that inter partes review.” 35 U.S.C. § 315(e)(2).
In the recent case of Intellectual Ventures v. Toshiba, Judge Robinson noted that “the Federal Circuit has construed the language quite literally” in the use of the word “during.” The term is spelled out as “any ground that the petitioner raised or reasonable could have raised during that inter partes review” in § 315(e)(1). The judge noted that while extending the logic of non-instituted grounds as not being able to be raised “during” an IPR proceeding to prior art references that were never presented to the Patent Trial and Appeal Board at all “confounds the very nature of this parallel administrative proceeding, the court cannot divine a way around the Federal Circuit’s interpretation in Shaw.” Thus, she did not estop Toshiba from presenting the grounds never presented to the PTAB in a pair of orders in December and January, and heavily implied that the Federal Circuit should weigh in to clarify the issue.
The rationale for excluding non-instituted grounds from estoppel in litigation is that the non-instituted grounds were present only in the “preliminary proceeding” (the IPR petition), but did not become part of the “proceeding” (the instituted IPR) — to borrow the terms from Apotex — and “[a]ny claim or issue not included in the authorization for review is not part of the review” (77 Fed. Reg. 48,680, 48,689 (Aug. 14, 2012)). Apotex held that non-instituted grounds were not those that “reasonably could have been raised” because once denied they were prevented from being raised during the trial.
If grounds not included in the authorization for review are not part of the review, one must ask how prior art references never presented to the PTAB at all could qualify as those that a petitioner “reasonably could have raised during [the] inter partes review” under § 315(e)(1)?
One rationale inconsistently interprets “during” as post-institution for application to non-instituted grounds (excluded because not “during” the IPR), but as pre-institution for grounds that were not asserted but “could have been” included in the petition (a pre-institution “preliminary proceeding”). Alternatively, one could follow a different rationale, that the ground “could have been raised” in a hypothetical petition (1) in which the petitioner asserted a ground including the prior art reference(s) never presented to the PTAB, and (2) based on which references the PTAB hypothetically instituted an IPR. Both of these rationales are illogical.
This issue is one to watch for petitioners and patent owners alike. If petitioners are only estopped from raising those grounds that were actually raised, the scope of estoppel is very narrow and more accused infringers will want to file IPRs. However, if “reasonably could have raised” means some broader pool of art, the estoppel could be much broader and IPRs less favorable to petitioners as a result.