According to 35 U.S.C. §315(e)(1) and (2), a petitioner in an inter partes review (IPR) that results in a final written decision (FWD) may not raise in the USPTO or a civil action or an ITC proceeding “any ground that the petitioner raised or reasonably could have raised during that inter partes review.” While the statutory language seems relatively straightforward, there have been a variety of views in the courts regarding the scope of estoppel under §315(e)(2). Practitioners will want to be aware of the evolving law of estoppel, as it can have significant consequences. In California Institute of Technology v. Broadcom Ltd., No. 16-cv-03714 (C.D. Cal.), for example, Broadcom could not pursue its litigation invalidity contentions due to petitioner estoppel. As a result, only infringement and damages were before the jury, which returned a verdict on Jan. 29, 2020, of infringement and awarded $1.1B in damages.

The discussion of petitioner (or IPR) estoppel typically begins with the statutory language above, the Federal Circuit decision in Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016) (Shaw), and the Supreme Court’s subsequent decision in SAS Institute, Inc. v. Iancu, 138 S.Ct. 1348 (2018) (SAS).

When Shaw was decided, the Patent Trial and Appeal Board (PTAB) had a practice of partial institution of IPRs. This practice created multiple categories of grounds: 1) petitioned, instituted grounds 2) petitioned, non- instituted grounds and 3) non-petitioned grounds. Which were subject to estoppel under §315(e)(2)? In Shaw, the Federal Circuit determined that estoppel did not apply to the second category—grounds the PTAB declined to review when it instituted on some, but not all grounds. The Court explained that the “plain language” of § 315(e) prohibits the application of estoppel to petitioned, non-instituted grounds, reasoning that an “IPR does not begin until it is instituted,” and thus grounds not instituted were not raised, and could not reasonably have been raised, “during” that IPR. Shaw, 817 F.3d at 1300.

Following the Federal Circuit’s 2016 Shaw decision, a split developed in the district courts. Some declined to hold non-petitioned grounds (category 3 above) estopped because, following the logic of Shaw that IPRs did not begin until institution, they were never part of an IPR. On the other side of the split, some district courts held non-petitioned grounds could be estopped, otherwise the statutory phrase “or reasonably could have raised” would be meaningless.1

But then came the Supreme Court’s 2018 decision in SAS, which made institution of IPR petitions an “all or nothing” game; an institution decision must be binary—either all challenged claims are instituted, or all are denied.

While SAS did not involve IPR estoppel, it eliminated the possibility of petitioned, non-instituted grounds in the partial institution context (category 2 above), the fact pattern addressed by Shaw. SAS rendered the circumstances addressed by the Federal Circuit in Shaw a nullity.” WiLan Inc. v. LG Electronics Inc., 2019 U.S. Dist. LEXIS 191173, at *19 (S.D. Cal. Nov. 4, 2019). Following SAS, district courts would no longer need to decide whether IPR estoppel—which by statute requires a final written decision—applied to petitioned, noninstituted grounds. Instead, the estoppel battleground turned to non-petitioned grounds and whether petitioner “reasonably could have raised” them.

Post-SAS, consensus appears to be emerging among district courts that grounds petitioner “reasonably could have raised” in its petition may be estopped. As one court expressed it, “every post-SAS district court decision the Court has found addressing IPR estoppel and Shaw has rejected the contention that IPR estoppel does not apply to non-petitioned grounds.… And LG has not provided the Court with any post-SAS case law to the contrary.” WiLan Inc., at *19-20, citing Palomar Techs., 373 F. Supp. 3d 322 at 328-29, 331; Am. Tech. Ceramics Corp. v. Presidio Components, Inc., 2019 U.S. Dist. LEXIS 14873, 2019 WL 365709, at *3-5 (E.D.N.Y. Jan. 30, 2019); Cal. Inst. of Tech. v. Broadcom Ltd., 2018 U.S. Dist. LEXIS 221754, 2018 WL 7456042, at *4-8 (C.D. Cal. Dec. 28, 2018); Trs. of Columbia Univ. v. Symantec Corp., 390 F. Supp.3d 665, 676-81 (E.D. Va. 2019); SiOnyx, LLC v. Hamamatsu Photonics K.K., 330 F. Supp. 3d 574, 599-601 (D. Mass. 2018).[2]

This article discusses developments in petitioner estoppel by looking at recent cases, including interpreting the “reasonably could have raised” provision of 35 U.S.C. §315(e), whether prior art that could not have been raised directly in an IPR is estopped, and the impact on multiple petition practice. This article, written solely for educational purposes and not written at all to render legal advice, ends with some practical suggestions for practitioners to consider.

So, where are we now?

I. “Reasonably could have raised”

Initially, the Northern District of California was part of a minority of district courts that applied estoppel only to grounds that were petitioned and instituted, not to non-petitioned grounds because, according to Shaw, the “IPR does not begin until instituted.” See also Finjan, Inc. v. Blue Coat Systems, LLC, 238 F. Supp. 3d 839, 856 (N.D. Cal 2017); Verinata Health, Inc. v. Ariosa Diagnostics, Inc, 2017 WL 235048, at *2–3 (N.D. Cal. Jan. 19, 2017); Intellectual Ventures I LLC v. Toshiba Corp., 221 F. Supp. 3d 534 (D. Del. 2016); Koninklijke Philips N.V. v. Wangs All. Corp., No. CV 14-12298 (D. Mass. Jan. 2, 2018).

On the other side of the split, courts applied estoppel more broadly to include grounds that were never petitioned in the first place but “reasonably could have [been] raised.” See FN 1 “Estoppel to non-petitioned grounds” list. The logic being that the recitation “or reasonably could have [been] raised” in § 315(e)(1) would otherwise be meaningless:

Prior to SAS, a minority of district courts had held that only grounds actually raised in the petition could count as grounds that “reasonably could have been raised”; under that view, a petitioner could hold back certain grounds from its petition and be free to raise them later before a district court. …. After SAS, that cannot be correct. Because the PTAB must now institute review (if at all) on all claims and grounds, there will be no such thing as a ground raised in the petition as to which review was not instituted. Accordingly, for the words “reasonably could have raised” to have any meaning at all, they must refer to grounds that were not actually in the IPR petition, but reasonably could have been included.

SiOnyx, LLC v. Hamamatsu Photonics K.K., No. 15:13488-FDS, 2018 WL 4177941, at *18-19 (D. Mass. Aug. 30, 2018). As one court explained, equities also pointed to broader application of estoppel because “[a]llowing [the defendant] to raise arguments here that it elected not to raise during the IPR would give it a second bite at the apple and allow it to reap the benefits of an IPR without the downside of a meaningful estoppel.“ Parallel Networks Licensing, LLC v. Int’l Bus. Machs Corp., No. 13-2072 (KAJ), 2017 WL 1045912 at *11-*12 (D. Del. Feb. 22, 2017).

Thus, petitioners should be aware that courts may be applying estoppel more frequently, especially in our post-SAS world.

II. Prior Art Other Than Patents and Printed Publications

By statute, only patents and printed publications are available to support assertions of unpatentability in IPRs. 35 U.S.C. §311(b). Does estoppel apply to invalidity allegations based on evidence other than a patent or printed publication where that evidence was described by prior art patents or printed publications that were, or reasonably could have been, raised in an IPR? There are district court decisions going both ways, and the inquiry, like almost every legal inquiry, is very case-specific. The concern expressed by various courts is that parties will engage in gamesmanship, characterizing a reference as a product to avoid estoppel when in fact a corresponding patent or printed publication is the real reference.

In Star Envirotech, Inc. v. Redline Detection, LLC, 2015 U.S. Dist. LEXIS 107149 (C.D. Cal. Jan. 29, 2015), the court found petitioner estoppel did not apply to a physical machine because the machine disclosed features not included in the instruction manual, so was therefore a “superior and separate reference.”

In other cases, courts have found that a printed publication describes the product, and therefore estoppel applies to arguments on based on the product as well. For example, in Wasica Finance GmbH v. Schrader Int’l, 2020 U.S. Dist. LEXIS 9699 (D. Del. Jan. 14, 2020), Judge Starkdecided estoppel applied to a physical product that was “materially identical” to a prior art patent that reasonably could have been raised in a prior IPR.

In particular, in July 2013, Wasica sued Schrader for infringement. Schrader filed IPR petitions and asserted unpatentability for anticipation and obviousness based on the Oselin patent. The PTAB FWD upheld the patentability of Wasica’s claim over Oselin, and the Federal Circuit affirmed.

In the infringement litigation, Schrader challenged the validity of Wasica’s claim based on obviousness over Oselin and 14 other patents and printed publications, and one physical product (ZR-1 sensors). In particular, Schrader argued obviousness over: (1) Oselin in view of the ZR-1 Sensors, (2) Oselin in view of the ZR-1 Sensors and in further view of any one of the 14 patents or printed publications, and (3) the ZR-1 Sensors in view of Oselin.

One of the printed publications disclosed all the relevant features of the physical product, so Wasica argued in a motion for summary judgment that Schrader should be estopped from asserting any of the obviousness combinations because the product was disclosed in the printed publication and the printed publication reasonably could have been raised during the IPRs.

The district court cited its own case law for the proposition that references that “reasonably could have [been] raised” during an IPR include “any references that were known to the petitioner or that could reasonably have been discovered by a skilled researcher conducting a diligent search.” Id. at *4, citing Parallel Networks Licensing, LLC v. IBM Corp., 2017 U.S. Dist. LEXIS 28461 (D. Del. Feb. 22, 2017); f’real Foods, LLC v. Hamilton Beach Brands, Inc., 2019 U.S. Dist. LEXIS 62547 (D. Del. Apr. 10, 2019).

The district court granted Wasica’s motion for summary judgment estopping Schrader from asserting obviousness on any of the three combinations of references, noting that Oselin was raised and the fourteen patent and printed publications reasonably could have been raised in the IPRs. Further, because one of the fourteen was materially identical to the physical product, “all of Schrader’s obviousness ‘grounds’ - ‘reasonably could have [been] raised during the IPR.’” Id. at *8-9.

The district court distinguished “grounds” and “evidence”: “IPR estoppel extend[s] to invalidity ‘grounds’ that include a physical product when a patent or prior art publication - to which the physical product is entirely cumulative - was reasonably available during the IPR.” Id. at *6. In the absence of Federal Circuit precedent, the court agreed with Wasica that petitioner estoppel applies to the “grounds,” even though the physical product was not available as evidence supporting a ground in the IPR. Id. at *7-8.

The estoppel order was followed a month later by a jury verdict of infringement and a damage award of $31M. Wasica Finance GmbH v. Schrader International Inc., Case No. 1-13-cv-01353 (D. Del. Feb. 14, 2020).

In a recent decision from the Central District of California, the court also found estoppel to defendants’ prior art contentions as a whole applied, notwithstanding defendant’s assertion that it also relied on non-printed publication “system” prior art. In Vaporstream, Inc. v. Snap, Inc., 2020 U.S. Dist. LEXIS 5642 (C.D. Cal. Jan. 13, 2020), Vaporstream filed for infringement on Jan. 10, 2017, of U.S. Patent Nos. 8,886,739, 8,935,351, 9,306,885, 9,306,886, 9,313,155, 9,313,156, 9,313,157, 9,338,111, and 9,413,711. Snap served its first invalidity contentions on Oct. 3, 2017. Between Dec. 26, 2017 and Jan. 9, 2018, Snap filed IPR petitions, which eventually resulted in FWDs in June and August 2019. In those FWDs, the PTAB held that the challenged claims from the ’739 patent, the ‘885 patent, the ‘155 patent, the ‘351 patent, and the ‘156 patent were all unpatentable, and the PTAB held that the challenged claims from the ‘886 patent, the ‘111 patent, the ‘711 patent, and the ’157 patent had not been shown to be unpatentable. Snap filed further invalidity contentions in the litigation on Jan. 12, 2018, and April 18, 2018.

Vaporsteam moved for partial summary judgment of non-obviousness based on petitioner estoppel. Vaporstream argued that § 315(e)(2) applied because all of the prior art references asserted in Snap’s expert’s report were classified as either patents or printed publications and, thus, should have been asserted in the IPR proceeding.

Snap argued that each of its expert’s obviousness combinations included at least one “system” prior art reference which could not have been raised during the IPR proceeding because they are not patents or printed publications.

Judge Huff disagreed, noting that other district courts have cautioned about gamesmanship:

[I]f a patent challenge is simply swapping labels for what is otherwise a patent or printed publication invalidity ground in order to “cloak” its prior art ground and “skirt’ estoppel,” then § 315(e)(2) estoppel still applies. California Inst. of Tech. v. Broadcom Ltd., No. 16-cv-3714 GW (AGRx), Docket No. 1432 at 11, 2019 U.S. Dist. LEXIS 141103 (C.D. Cal. Aug. 9, 2019); see, e.g., Oil-Dri, 2019 U.S. Dist. LEXIS 28279, 2019 WL 861394, at *10 …; Milwaukee Elec. Tool Corp. v. Snap-On Inc., 271 F. Supp. 3d 990, 1032 (E.D. Wis. 2017)…; Biscotti Inc. v. Microsoft Corp., No. 213CV01015JRGRSP, 2017 WL 2526231, at *8 (E.D. Tex. May 11, 2017)….

Id. at *64-65.

Judge Huff explicitly rejected Snap’s argument that using the term “system” when naming the references in its invalidity contentions was sufficient to avoid estoppel. Snap’s invalidity contentions stated: “The following patents and publication are prior art[.]” Therefore, the district court held that Snap did not disclose system art in its invalidity contentions. As a result, the court found that Snap relied only on references in its invalidity contentions, which “could have been raised in the IPR proceedings.” Id. at *70. The district court held Snap estopped under § 315(e)(2) from asserting invalidity based on obviousness and granted Vaporstream’s motion for summary judgment of Snap’s obviousness defense.

In California Institute of Technology v. Broadcom Ltd., 2019 U.S. Dist. LEXIS 141103 (C.D. Cal. Aug. 9, 2019), Caltech sued Apple and Broadcom for infringement of three patents. Apple filed IPR petitions against those three patents. The PTAB issued a FWD holding that Apple did not show CalTech’s claims to be unpatentable. Broadcom argued that several references (slides) were raised in the litigation under the “known or used” prong of pre-AIA 35 U.S.C. §102(a) and as such, could not have been raised in the IPRs which are restricted to §102 and 103 grounds based on patents and printed publications.

Judge Wu granted summary judgment that petitioner estoppel applied against Apple and Broadcom with respect to their litigation invalidity arguments, which included grounds PTAB considered and grounds Apple “could have raised” in its petition. The court noted the concern Judge Huff articulated about simply “swapping labels.” Id. at *23. “Although the Court does not believe that a ‘known or used’ invalidity theory need be ‘superior’ to a printed publication invalidity theory to survive estoppel…, there must be some substantive difference between the two theories that is germane to the invalidity dispute at hand.” Id. at *24. In CalTech, Judge Wu found that Broadcom did not “present information in a way such that it includes germane differences to the prior art publications that were reviewable by the PTAB.” Id. at *44. “[T]he Court [found] that Defendants failed to show that estoppel should not be applied as to Defendants’ obviousness invalidity theories for the asserted claims that were addressed in IPR proceedings in final written decisions.” Id. at *45.

Thus, petitioners need to be aware of this potential situation in which prior art materials may not qualify as printed publications for purposes of an IPR proceeding but will be found sufficiently similar to printed publication materials for estoppel to apply in a litigation proceeding.

III. The impact of SAS

The Supreme Court in SAS held that PTAB’s practice of partial institutions, i.e., instituting on some petitioned claims but not others, contravened the statute, 35 U.S.C. § 318(a). And, while SAS only expressly answered the question of whether all claims must either be instituted or denied, the PTAB and Federal Circuit have both decided to proceed as if a binary decision based on asserted claims and grounds is required. “There will be no partial institution based on claims. There will be no partial institution of grounds.”3

So, what are the combined effects of SAS and estoppel on petitioner strategies?

In the pre-SAS world, it was common for petitioners to include multiple grounds in a single petition, maybe some stronger grounds and some weaker grounds. Petitioner could leave it to the Board to pick the most persuasive grounds. At least for estoppel considerations, there was little harm in and, and indeed, potential advantage to this strategy. If the multiple grounds were only partially instituted, the non-instituted grounds (category 2 above) would potentially fall within the Shaw exception to petitioner estoppel and live to fight another day as an infringement defense.

SAS has been a game changer on this strategy, indeed basically killing it. Because institution is now binary to all grounds, there is no longer potential, following institution, for any non-instituted and non-estopped grounds. Instead, where there are multiple grounds, a strong ground may pull along a weaker ground if an IPR is instituted,4 thereby meaning all would be estopped. But, equally, one or more weak grounds could sink the whole petition.5 While there would be no estoppel triggered, there would also be no IPR.

The PTAB has indicated that institution in each case will depend on the specific facts and, for example, there is no fixed number for a sufficient number of grounds on which it will institute.6 Several post-SAS decisions have been designated as “informative” and provide examples of the PTAB’s thinking.7 Especially because of the estoppel considerations, a petitioner must now even more carefully consider how many claims and grounds to assert.

Another point to consider for post-SAS strategy is multiple parallel petitions. Consider, for example, Chevron Oronite Co. LLC v. Infineum USA L.P., IPR2018-00923, where institution was denied even though the petitioner established a reasonable likelihood of prevailing on two claims. Notwithstanding this denial, the petitioner had an effective post-SAS strategy. The denied petition was one of three petitions filed the same day against the same patent, each based on a different primary reference. Two of these three petitions were denied (IPR2018-00923 and IPR2018-00924), but one petition was instituted (IPR2018-00922) and resulted in a FWD holding all challenged claims unpatentable. Had petitioner combined all the grounds into a single petition, institution might have been denied given how many grounds were found insufficient to establish a reasonable likelihood of prevailing. Instead, by filing three separate but concurrent petitions, the grounds deemed insufficient in two petitions did not undermine institution of the third.

Multiple petitions may not, however, be an open door for an unlimited number of challenges. Indeed, the PTAB’s latest Trial Practice Guide indicates that multiple simultaneous petitions may be denied “to avoid substantial and unnecessary burden on the Board and the patent owner and could raise fairness, timing, and efficiency concerns.”8 This is on top of the previously established limitations on multiple sequential petitions.9 Several PTAB decisions have been designated as precedential and informative to help guide practitioners in evaluating the issue of multiple petitions.10

V. Practice Tips to Consider as an Educational Matter

The Supreme Court SAS decision changed how IPRs are instituted by the PTAB and, consequently, changed strategy and considerations for both petitioner and patent owner, not the least of which is the impact of petitioner estoppel. Post-SAS, a shotgun approach, hoping to hit the target with at least one ground, may no longer be viable. The hope or expectation that petitioned, non-instituted grounds can be held in the back pocket for use in litigation following a FWD is also a thing of the past. Furthermore, the potential estoppel of non-petitioned grounds and the PTAB’s decreased tolerance for multiple petitions puts pressure on the petitioner to get the petition right the first time. This puts a premium, post-SAS, on petitioner ensuring that, without hauling out the shotgun, all the potentially viable, and non-cumulative grounds based on patents and/or printed publications are raised and actually considered by the PTAB.

A. Petitioner

We have appeared to enter into a time when IPR estoppel has significant bite. District courts post-SAS are applying estoppel to non-petitioned IPR grounds that meet the diligent searcher test. This should make future parties more careful in pursuing IPR. If pursued, the IPR is more likely to be a party’s only shot at getting claims canceled on §102 anticipation and §103 obviousness grounds based solely on patents and printed publications.

Consider using an expert to address estoppel. A court’s application of the diligent searcher test will rely heavily on the submission of expert declarations. As an opponent of estoppel, a petitioner-defendant should seek to have their expert raise a credible factual dispute as to whether a skilled searcher conducting a diligent search reasonably could have been expected to discover the challenged reference. Foreign references available only in their native language or references that were provably unsearchable in the Patent Office’s EAST database at the time the party initiated proceedings in front of the Patent Office possibly may not be estopped. See, e.g., f’real Foods, LLC v. Hamilton Beach Brands, Inc., 2019 WL 1558486 (D. Del. Apr. 10, 2019).

B. Patent Owner

Before the PTAB, consider using the Patent Owner’s Preliminary Response to argue that the petition as a whole should not be instituted—even if patent owner cannot persuade that the petition fails for all claims. Similarly, if the petition is unduly complex, e.g., with an excessive number of grounds, patent owner can argue that the petition should be denied as lacking particularity, being unduly burdensome, and not being in “the interests of efficient administration of the Office and integrity of the patent system.” Also, consider carefully—and address as necessary—whether documents, particularly internet documents, were demonstrated by petitioner to be prior art as of the relevant date.11

In court, for the same reasons as raised for a petitioner, the patent owner should also consider using an expert to address estoppel on grounds that “reasonably could have [been] raised.” As a proponent of estoppel, the expert needs to provide testimony about the search tools available when the IPR petition was filed as well as the specific search strings that would have been used with those search tools to identify the prior art references at issue.

Point out label “swapping” and “cloaking” if the reference, system, or product asserted in the litigation is disclosed in a patent or printed publication that was or could have been raised in the IPR.