The Supreme Court recently found that issue preclusion (collateral estoppel) may apply to issues decided by an administrative board within the Patent and Trademark Office. However, district courts have not yet found an instance in which estoppel results beyond the explicit estoppel provisions in the America Invents Act (AIA). On December 15, 2015, in adidas AG et al. v. Under Armour, Inc. et al., Case No. 14-130-GMS (D. Del.), Judge Sleet denied the defendants’ motion to modify the district court’s earlier claim construction in light of the PTAB’s claim construction during inter partes review, finding that issue preclusion did not apply.
Prior to the claim construction hearing in the Delaware district court, Under Armour filed a petition for IPR on one of the patents-in-suit, arguing that under its proposed claim construction of a claim term, the challenged claims were anticipated by the prior art. (D.I. 190, Ex. 1 at 10-11). Under Armour's construction was “consistent with the construction rejected by the Court in its claim construction ruling.” adidas AG et al. v. Under Armour Inc. et al., 1-14-cv-00130 (D. Del.) (December 15, 2015, Order) at 2; (see D.I. 161.) In its Preliminary Response to the Petition, adidas stated that it disagreed with Under Armour's construction of the term, but did not propose any construction of its own. (D.I. 190, Ex. 2). adidas further argued that even under Under Armour's construction, the patented claims were not anticipated. The PTAB adopted Under Armour’s construction for purposes of its decision to deny the Petition and found that, even under its construction of the term, Under Armour had failed to show a reasonable likelihood of prevailing in its assertion that the claims were anticipated. (D.I. 190, Ex. 3.)
In the district court proceeding, the defendants argued that since the PTAB relied on a different claim construction than the Court, collateral estoppel should apply. However, the Court found that the PTAB’s decision not to institute an IPR was “not the type of adjudication that leads to issue preclusion.” adidas AG et al. v. Under Armour Inc. et al., 1-14-cv-00130 (D. Del.) (December 15, 2015, Order) at 2. The court reasoned that the PTAB had not reached a final decision on the construction of the claim term at issue and failed to present any analysis of the term, adopting Under Armour’s construction merely “for purposes of [the] decision.” Id. Specifically, the PTAB found that using Under Armour's own construction, it had not shown a reasonable likelihood to prevail with respect to at least one of the claims challenged in the Petition. (D.I. 190, Ex. 3 at 9-14.) Additionally, adidas did not present the PTAB with a different construction than the one it presented to the court. The court found that the “fact that [patent owner] did not provide the PTAB with any construction does not weigh in favor of issue preclusion in such a preliminary proceeding.” adidas AG et al. v. Under Armour Inc. et al., 1-14-cv-00130 (D. Del.) (December 15, 2015, Order) at 2. As such, the Court found that it was not bound by a “preliminary claim construction” used by the PTAB for the limited purpose of denying an IPR request. Id.
Although the district court did not find issue preclusion in adidas, the Supreme Court has suggested that issue preclusion may apply to issues decided by an administrate board within the PTO “when the usages adjudicated . . . are materially the same as those before the district court” and “[s]o long as the other ordinary elements of issue preclusion are met.” B&B Hardware Inc. v. Hargis Industries Inc., 135 S. Ct. 1293, 1310 (2015) (finding that the TTAB’s decision can have preclusive effect in district court proceedings). The adidas decision underscores the importance of coordinating PTAB and district court proceedings.