Addressing collateral estoppel issues, the Patent Trial and Appeal Board (PTAB or Board) concluded in two related decisions that a patent owner should not be estopped from raising in inter partes review (IPR) proceedings an issue that was previously decided during an inter partes reexamination of a related patent. BioDelivery Sciences Int’l, Inc. v. Monosol Rx, LLC, Case IPR2015-00165, Paper 70 (PTAB, Mar. 24, 2016) (Prats, APJ); BioDelivery Sciences Int’l, Inc. v. Monosol Rx, LLC, Case IPR2015-00168, Paper 69 (PTAB, Mar. 24, 2016) (Yang, APJ).

BioDelivery Sciences International filed two IPR petitions with respect to a patent covering rapidly dissolving films. The patent at issue is part of a large patent family that includes a patent that previously underwent inter partes reexamination, wherein all of the claims were rejected based on a reference to Chen. BioDelivery argued that because the reexamination decision for this related patent is final, the patent owner should be estopped from contesting the Board’s findings as to Chen during the IPRs.

Issue preclusion is appropriate only if (1) the issue is identical to one decided in the first action, (2) the issue was actually litigated in the first action, (3) resolution of the issue was essential to a final judgment in the first action, and (4) the party against whom issue preclusion is asserted had a full and fair opportunity to litigate the issue in the first action. In both cases, the Board found that issue preclusion did not apply because the issue was not essential to the final judgment during reexamination, explaining that the present action involves subject matter found in a dependent claim of the reexamined patent that was not specifically argued during the reexamination proceedings. Because the reexamination did not resolve whether Chen met the subject matter of the specific dependent claim of the reexamined patent, collateral estoppel does not apply.

The Board noted that issue preclusion is also inappropriate in these two cases because IPR proceedings under the America Invents Act offer procedural opportunities that were not available to parties during inter partes reexamination. Specifically, although inter partes reexamination proceedings allow for submission of evidence in affidavit form, there is no opportunity to cross-examine those affiants. In contrast, cross-examination is permitted in IPR proceedings, and this procedural distinction could result in a different outcome from the prior inter partes reexamination. For this additional reason, the Board found that issue preclusion is not appropriate in these proceedings.