Chief Judge Stark granted a patent owner’s motion for summary judgment of inter partes review (IPR) estoppel, holding that obviousness defenses based on a prior art product could not be asserted because a prior art publication disclosing all of the product’s relevant features could have been raised during an IPR that reached a final written decision.

The case began in 2013 when Wasica filed a patent infringement suit against Schrader for allegedly infringing claims related to monitoring air pressure in tires. In response, Schrader filed petitions for IPR challenging the claims of the asserted patent. The district court stayed the case pending IPR resolution. Following a final written decision and appellate review by the Federal Circuit, several claims survived the IPR. The district court then lifted the stay, and Wasica proceeded on allegations of infringement of only one of the surviving patent claims. Schrader raised three obviousness defenses, each relying on a prior art product—namely, tire pressure sensors manufactured for the Chevrolet Corvette—in combination with a patent or a combination of patents and printed publications.

Wasica moved for summary judgment on all of Schrader’s obviousness defenses, arguing that Schrader was estopped under 35 U.S.C. § 315(e)(2) from asserting obviousness grounds that could have been raised in the IPR. Wasica argued that all of the patents and printed publications relied on by Schrader either were, or could have been, raised during the IPR. Wasica further contended that one of the printed publications disclosed all of the relevant features of the prior art product. Schrader countered that estoppel did not apply because the IPR statute does not allow challenges based on prior art products and that, as such, its obviousness defense could not have been raised in the IPR.

The district court agreed with Wasica. First, the court acknowledged the split among district courts regarding the scope of § 315(e)(2) estoppel. Next, the court explained that the IPR statute distinguishes between the grounds that may be raised (under § 102 and § 103) and the evidence that can be used to support those grounds (patents and printed publications). The court then found that the prior art product was “materially identical (i.e., disclose[d] the same claim elements)” to a printed publication that reasonably could have been raised in the IPR. Thus, the court ruled that the grounds reasonably could have been raised, and so Schrader’s obviousness defenses were estopped.

Practice Tip: Courts continue to wrestle with how to apply IPR estoppel under § 315(e)(2) to prior art products asserted in support of defenses raised under § 102 or § 103. Several decisions have construed estoppel narrowly and have held that it cannot be applied to prior art products, while other decisions have considered whether there are substantive differences between the prior art product and printed publication that would preclude the application of estoppel. This area of law continues to develop, but until the Federal Circuit rules on the issue, litigants should consider their strategies carefully. Patent owners who can file suit in more than one district should consider how the potential forums have applied estoppel to a prior art product in previous rulings. Accused infringers should consider whether pursuing an IPR may subsequently foreclose defenses that are based on a prior art product.

Wasica Fin. GmbH v. Schrader Int’l, Inc., 13-cv-01353 (D. Del. Jan. 14, 2020) (Stark, C.J.)