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SDI Technologies, Inc. filed inter partes review (IPR) of claims 25, 26, 51-53, 55-62, 75, and 76 of U.S. Patent Nos. 8,364,295 (IPR2014-00346).  U.S. Patent No. 8,364,295 (“the ‘295 patent”) is owned by Bose Corp. and relates to an audio system for reproducing sound from computer files and computer network radio stations, such as the Bose Wave® SoundTouchTM music system above.

IPR2013-00346 is one of several IPRs filed by SDI against this family of patents.  In particular, several other claims of the ‘295 patent were held unpatentable in a final written decision in IPR2013-00465, discussed previously.  Patent Owner appealed.

The petition included a single ground of unpatentability, that the claims would have been obvious in view of an article describing a software package for playing MP3 digital audio files on a computer (“WinAmp”), Internet web pages pulled from the Wayback Machine referencing an infrared receiver that connects to a computer, and an Altec Lansing Manual which discloses a speaker system which may be connected to and controlled by a computer via a USB cable connection.  In IPR2013-00465, claims 1–11, 18–21, 24, 27, 29–37, 44–47, 50, 73, and 74 of the ‘295 patent were found unpatentable over this same ground.

At the hearing, Petitioner argued that Patent Owner is estopped from arguing against the ground for rejection under 37 C.F.R. § 42.73(d)(3) in light of the final written decision in IPR2013-00465.

37 C.F.R. § 42.73(d)(3) recites:

A patent applicant or owner is precluded from taking actioninconsistent with the adverse judgment, including obtainingin any patent:

(i) A claim that is not patentably distinct from a finally refusedor canceled claim; . . .

Petitioner argued that “inconsistent with the adverse judgment” should be read to include final written decisions.  Petitioner further asserted that all the requirements of conventional issue preclusion are satisfied.

However, the PTAB held that § 42.73(d)(3) does not yet apply because Patent Owner has not exhausted its appeal rights. In the discussion accompanying the rules, the Patent Office emphasized that estoppel applies when a claim is cancelled, not merely found unpatentable.  Further, in another section of Rule 42.73, “adverse judgment” is used to describe actions that render a judgment unappealable.  See 37 C.F.R. § 42.73(b).  In other words, like traditional estoppel, estoppel under § 42.73(d)(3) only applies when a judgment is truly final.

The PTAB ultimately found claims 25, 26, 51-53, 55-62, 75, and 76 of the ‘295 unpatentable for largely the same reasons as those asserted in the previous IPR.  However, Patent Owner was given the opportunity to present and modify its previous positions, as well as present wholly new positions.

As the above indicates, pursuing an appeal of a final written decision may help prevent estoppel from being asserted against claims of the same patent.  Although the PTAB may not be persuaded that the claims are patentable, at the very least, a Patent Owner may present arguments prepared with the benefit of hindsight.