Inter Partes Reviews (“IPRs”) are a powerful tool to challenge the validity of issued patent claims before the United States Patent Trials and Appeals Board (“PTAB”). One of the risks to a petitioner in filing an IPR is that if an IPR reaches a final written decision and at least one of the challenged claims is upheld as patentable, the petitioner is estopped from presenting invalidity arguments in district court or later PTAB proceedings “with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”1 Recent PTAB and Federal Circuit decisions interpreting the AIA have, however, narrowed the scope of such estoppel. Specifically, certain “redundant” grounds—grounds in an IPR petition that the PTAB, in its discretion, finds redundant of other presented grounds—are not estopped in later proceedings because they could not have been raised during that IPR. The interplay between the PTAB’s discretion to find certain grounds redundant and the associated risk of estoppel under the AIA creates several considerations that a petitioner should weigh when determining a petition strategy.
The PTAB’s Discretion to Institute or Deny Petitions
When a petitioner files a petition with the PTAB, the PTAB has discretion on whether to institute or deny the petition.2 The PTAB’s institution discretion further allows the PTAB to pick and choose which claims and/or invalidity grounds of a petition to institute or deny.3 Moreover, the PTAB’s institution decisions are typically unreviewable,4 and the PTAB can consequently deny instituting a ground, for example, because it finds the ground “redundant” of other grounds filed by petitioner.5 Such redundant grounds may, in certain circumstances, avoid estoppel under the AIA.
The Estoppel Framework Under the AIA
The AIA created an estoppel regime to determine whether a petitioner can bring, in a subsequent proceeding, certain invalidity grounds the petitioner included in its initial petition:
The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision . . . may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.6
While § 315(e)(1) describes the applicability of estoppel in a subsequent PTAB proceeding (such as an IPR or Covered Business Method Review), the AIA includes a nearly identical provision regarding the applicability of estoppel in subsequent district court cases and ITC proceedings.7
Whether estoppel applies to a later PTAB proceeding or district court case is determined on a claim-by-claim basis.8 A petitioner’s risk of estoppel is therefore limited to preventing the petitioner from bringing the same invalidity “ground” (e.g., a particular anticipation reference or a particular combination of obviousness references) on the same claim in a subsequent PTAB proceeding or district court case. Furthermore, for estoppel to apply to a particular ground, the initial PTAB proceeding must “result in a final written decision” “with respect to th[e] claim” associated with that particular ground—filing and/or institution of a petition, alone, will not trigger estoppel.9
Another requirement for triggering estoppel is that the ground at issue must be one that petitioner “raised or reasonably could have raised” “during” the initial PTAB proceeding.10 As the Federal Circuit has recently held, a ground presented in a petition is “raised” “during” a PTAB proceeding, such as an IPR, when the PTAB chooses to institute a trial on that ground, because, according to the Federal Circuit, an IPR “does not begin until it is instituted.”11
Determining whether or not a ground “reasonably could have [been] raised” is more complicated, however, because there are numerous potential scenarios. For example, in some instances, a ground not included in an initial petition reasonably could have been raised if, for example, the ground is “based on prior art that could have been found by a skilled researcher’s diligent search.”12 In such instances, the petitioner is likely estopped from using that ground later (assuming the other requirements for estoppel are met). In other instances, for example, the PTAB may deny a ground included in a petition as “redundant” of other grounds and thus refuse to institute a PTAB proceeding that ground. In such instances, the denied redundant ground could not reasonably have been raised, because the PTAB prevented the petitioner from raising that ground.13 Thus, the redundant ground, initially presented in a petition for a PTAB proceeding, may also be available for use in subsequent PTAB and/or district court proceedings.
In light of courts’ treatment of “redundant” grounds, petitioners should carefully evaluate strategies for avoiding estoppel without compromising the effectiveness of their petitions. Two such strategies are considered below.
Strategy 1: File on Many Grounds
A first potential strategy for petitioners to avoid estoppel is to file a petition on a large number of grounds (e.g., many different prior art references and combinations) for each claim at issue. The goal of this strategy is to present the PTAB with a large number of grounds in the hope that the PTAB will institute on at least one ground per claim and deny the remaining grounds as “redundant,” thus preventing estoppel from attaching to the “redundant” grounds.14 The petitioner would then have a large number of prior art references and combinations available for a subsequent petition or district court case. This strategy applies only if the instituted grounds reach a final written decision (triggering estoppel) and not all claims are found invalid (otherwise no claims would remain for subsequent proceedings).
There are, however, potential drawbacks to filing on large numbers of grounds. There is an increased cost associated with filing on a large number of grounds. Additionally, filing on a large number of grounds may dilute the quality of the arguments made for each ground (e.g., due to space and/or cost constraints).
There is also no guarantee that the PTAB will deny grounds based on “redundancy,” and the PTAB instead may deny institution based on substantive deficiencies. Petitioners that choose to file on a large number of grounds may also be vulnerable to denials on substantive deficiencies because they are prevented from making the best arguments on any one ground due to space and/or cost constraints. Grounds denied based on substantive deficiencies may not be estopped in some cases;15 however, the value of presenting a ground that was substantively denied in a subsequent district court case may be compromised as juries may be particularly skeptical of invalidity arguments that have already been substantively denied by the PTAB. Substantive denials would be particularly damaging in cases where the PTAB does not institute on any ground and estoppel is not triggered, but the patent owner has arguments that the Patent Office already found substantive deficiencies in most, if not all, of the petitioner’s art.
Another issue is that filing on a large number of grounds may overwhelm the PTAB, and the PTAB may have difficulty identifying which grounds are most likely to be successful. For example, in Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., No. CBM-2012-00003, the petitioner asserted 422 grounds of unpatentability (averaging more than 21 grounds per claim). The PTAB responded by stating “that multiple grounds, which are presented in a redundant manner by a petitioner who makes no meaningful distinction between them, are contrary to the regulatory and statutory mandates, and therefore are not all entitled to consideration.” The PTAB then gave the petitioner seven days to notify the PTAB of a narrowed set of grounds.16 17 Petitioners should consider whether multiple grounds may obstruct the PTAB from identifying the grounds petitioner believes are the most persuasive, and petitioners should consider how to present a “meaningful distinction” between the grounds to help the PTAB evaluate the relative strengths of each ground. In sum, petitioners should weigh the benefits of possibly obtaining non-estopped art against the potential costs of filing on a large number of grounds per claim.
Strategy 2: Include Select “Redundant Grounds”
A second potential strategy for petitioners to avoid estoppel is to draft a large portion of a petition to grounds the petitioner believes are most likely to succeed, but to also draft a small portion of the petition to additional grounds that would be valuable in a subsequent petition or district court trial if they were not estopped.
An advantage to this strategy is that it allows the petitioner to narrowly focus the petition to a limited number of grounds that the petitioner believes are most likely to succeed and to provide a “meaningful distinction” between the grounds to help the PTAB evaluate the relative strengths of each ground.18 Further, by including additional grounds, but with less emphasis, the petitioner increases the number of potential grounds the PTAB may deny as redundant while minimizing the space taken away from the petitioner’s best grounds. Any grounds denied as redundant allow the petitioner to “hedge its bet” that the petition succeeds by maintaining some non-estopped art that would be available in a subsequent petition or district court trial.
There are, however, potential drawbacks to this strategy as well. For example, as discussed above with respect to the first strategy, there is no guarantee that the PTAB will deny any ground as redundant; and the PTAB may deny grounds based on substantive deficiencies. The less emphasized grounds may be especially vulnerable to rejection based on substantive deficiencies because they were not the focus of the petition. Also, even if only a small portion of the petition is allocated to the additional grounds, these additional grounds still take space away from the grounds the petitioner believes are most likely to be successful. Due at least to the PTAB’s broader claim construction and lower burden of proof than juries in district court, the PTAB is likely a petitioner’s best chance of invalidating the challenged claims. Thus, petitioners need to carefully consider any strategy that compromises the ability of a petition to succeed before the PTAB in order to avoid estoppel in district court or a subsequent PTAB proceeding.