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Jennifer Bush focuses her practice on prosecuting patent applications in a wide range of technical fields, including computer software, Internet technologies, RFID, and business methods. Jennifer also has patent prosecution experience with life sciences and medical devices. Her practice also involves intellectual property strategy and counseling, as well as inter partes reviews, patent appeals and reexaminations. Jennifer has analyzed intellectual property issues for numerous due diligence and litigation matters.

In addition to providing legal services for her clients, Jennifer is a Lecturer-in-Law at the University of California, Davis School of Law, where she teaches patent prosecution and practice. She is also a member of the faculty at the Practicing Law Institute, and co-chair of the annual Fundamentals of Patent Prosecution boot camp.  She has lectured on topics related to patent law at the University of California, Hastings College of the Law and Santa Clara University School of Law.

View Jennifer's bio on Fenwick.com

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.

In the most recent action in Depomed, Inc. v. Purdue Pharma LP, a patent infringement case involving pain reliever OxyContin, Purdue Pharma asked the U.S. District Court for the District of New Jersey to confirm that certain of the defenses it raised under 35 U.S.C. §§ 102 and 103 remained after a decision in the inter partes review (IPR) proceedings pertaining to the same patent. Depomed offered several theories to prevent Purdue from pursuing the various infringement defenses it had raised.

First, the court denied Depomed’s theory of statutory estoppel. Depomed had argued that Purdue could have raised these defenses in the IPR, arguing that the current on-sale bar issue related to the MS Contin® product could have been argued in the IPR based on documentation about the MS Contin® product.

The court noted that “Inter partes review cannot replace the district court in all instances, for example, when claims are challenged in district court as invalid based on the on-sale bar…” Quoting Synopsys, Inc. v. Mentor Graphics Corp. Purdue argued that its on-sale bar and § 102(g) defenses were not based solely on patents or printed publications. Rather, the publications were used to support its contentions that “the claimed invention was on sale prior to the filing of the patents-at-issue, or invented by another before that time.” The court agreed that using the publications for support did not transform these defenses “into a statutory ground for relief in an IPR.”

The court also declined Depomed’s argument that Purdue adopted its position in bad faith.  The court noted that throughout the case Purdue had argued that a stay pending the IPR matter would streamline the invalidity issues in the litigation matter.

Finally the court denied Depomed’s theory of judicial estoppel due to statements Purdue made in an effort to obtain the stay pending the IPR. While noting that the court appreciated Depomed’s frustration at having to litigate issues already presented to the Patent Trial and Appeal Board (PTAB), it could not “ignore the fact that the Federal Circuit has determined that it is appropriate to do so.” The court noted that the IPR proceedings reduced the number of defenses and references that remained available to Purdue in the litigation matter.

The “hybrid” procedure of inter partes review has been considered since its inception by some to be litigation at occurs at the patent office, rather than in district court.  The designation of IPRs and other procedures as “patent office trials” by the America Invents Act (AIA), as well as adherence to the Federal Rules of Evidence (FRE) in many instances helped contribute to this sentiment.  However, in Cuozzo Speed Technologies, LLC v. Lee, No. 15-446 (June 20, 2016), the Supreme Court put this notion to rest, concluding that, “in [] significant respects, inter parties review is less like a judicial proceeding and more like a specialized agency proceeding.”  

In Cuozzo, the Court upheld the prior Federal Circuit decision, in which Cuozzo had challenged – and lost – on two procedural aspects of inter partes review: (1) the reviewability of the Board’s institution decisions and (2) the use of a “broadest reasonable construction” (BRC) standard in claim construction. Continue Reading Cuozzo Court Concludes “Hybrid” Inter Partes Review a Specialized Procedure within Patent Office Agency Proceedings

For the issues raised for petitioner and patent owner like by non-instituted grounds, a possible model emerges based on the Board’s actions in Liberty Mutual, and in consideration of a near analogue in patent prosecution practice.

In Liberty Mutual (although very infrequently thereafter), the Board identified from within the “redundant” grounds raised, various groupings of grounds, and issued a pre-institution decision order that gave the petitioner in that case seven days to select which sets of grounds it wanted to maintain.

This process has a near-analogue in patent prosecution practice at the Patent Office: the restriction requirement. Continue Reading The Problem of Non-instituted Grounds, Part II – Lessons from Liberty Mutual

Grounds asserted by a petitioner in an IPR, but not instituted (“non-instituted grounds”) can be a source of frustration for the petitioner and the patent owner alike.  Frequently, not all grounds asserted in an IPR will be instituted by the Patent Trial and Appeal Board (“the Board”).  For the petitioner, non-instituted grounds may be a source of concern, especially if future petitions are time-barred, and/or if the instituted grounds represent only a single invalidity position (e.g., anticipation under 102, but not obviousness under 103). For the patent owner, non-instituted grounds leave unanswered questions about whether and future IPRs might be filed.   Continue Reading The Problem of Non-instituted Grounds, Part I – “Could Have,” Would Have, Should Have