United States: Petitioner Estoppel Applies: Giving Effect To "Reasonably Could Have Raised"

Holding:

In Click-to-Call Technologies LP v. Ingenio, Inc., No. 22-1016 (Fed. Cir. Aug. 17, 2022), the Court of Appeals for the Federal Circuit ("the Federal Circuit") reversed a district court decision granting summary judgment of invalidity, finding the district court erred in not applying the petitioner estoppel provision of 35 U.S.C. § 315(e)(2). The Federal Circuit held that petitioner estoppel applied as a matter of law, and that Ingenio was therefore estopped from asserting invalidity of a claim based on a ground not asserted in its IPR petition. The Federal Circuit also affirmed the district court decision that Click-to-Call could not add new claims to its asserted claims for trial, finding no abuse of discretion in this decision, and remanded for further proceedings.

Background:

Ingenio petitioned for inter partes review ("IPR") of U.S. Patent No. 5,818,836 ("the '836 patent"), challenging claims 1, 2, 8, 12, 13, 15, 16, 18, 19, 22-24, and 26-30 as unpatentable as anticipated and obvious. The Patent Trial and Appeal Board ("Board") instituted the IPRfor only some of the challenged claims (i.e., claims 1, 2, 8, 12, 13, 15, 16, 19, 22, 23, 26, 29, and 30) and only some of the asserted grounds (i.e., those based on the Dezonno reference, but not on the Freeman reference). IPR2013-00312, Paper 26, at *2, *30 (P.T.A.B. Oct. 30, 2013). Of relevance to this appeal, claim 27 was not among the instituted claims because it was challenged based only on the non-instituted Freeman grounds, not the instituted Dezonno grounds. Click-to-Call, at *2. The subsequent Final Written Decision ("FWD") held the instituted claims unpatentable.¹

After the FWD issued and while the IPR was still pending, the Board's practice of partial institution was abrogated by the Supreme Court's decision in SAS Institute, Inc. v. Iancu, 138 S.Ct. 1348 (2018). Ingenio did not seek remand to the Board to request consideration of the non-instituted claims and grounds, including claim 27. Click-to-Call, at *2.

Related district court infringement litigation in the Western District of Texas (1:12-cv-00465) was stayed pending the IPR. Once revived, Ingenio moved for summary judgment of invalidity of claim 27 based on the Dezonno reference. Click-to-Call opposed, arguing that Ingenio was estopped under 35 U.S.C. §315(e)(2). Click-to-Call, at *2. The district court disagreed and granted Ingenio's motion for summary judgment of invalidity of claim 27 based on Dezonno. Click-to-Call, at *5-6.

Federal Circuit:

The Federal Circuit reversed, holding that 35 U.S.C. §315(e)(2) applied in this case to estop Ingenio from relying on Dezonno as a basis for alleging invalidity of claim 27 in the district court litigation. Click-to-Call, at *7. According to the Federal Circuit, the district court erred by analyzing Click-to-Call's estoppel argument under common law issue preclusion, rather than under the statutory basis of 35 U.S.C. §315(e)(2). Click-to-Call, at *7.

Specifically, the district court relied on the "actually litigated" prong of issue preclusion, which the Federal Circuit noted is not a component of IPR petitioner estoppel. Id. IPR petitioner estoppel applies to grounds that "reasonably could have [been] raised," in the petition and that basis for finding estoppel was never considered by the district court. Id.

The Federal Circuit noted that Ingenio's IPR petition included a challenge to claim 27 and included unpatentability challenges based on Dezonno, showing that Ingenio "reasonably could have raised" Dezonno as a ground to challenge claim 27 in its petition. Id. at *8. The Federal Circuit rejected Ingenio's argument that 35 U.S.C. §315(e)(2) does not apply because the patentability of claim 27 was not decided by a Final Written Decision, noting that it is the petitioner's contentions that define the scope of the IPR petitioner estoppel:

Id. at *9-10.

The Federal Circuit also commented that Ingenio could have sought remand post-SAS to address claim 27 but chose not to. Id. at *10.

Ingenio's arguments based on Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016) also failed. Shaw's holding that non-instituted grounds were not subject to IPR estoppel was overruled in Cal. Inst. of Tech. v. Broadcom Ltd., 25 F.4th 976, 989 (Fed. Cir. 2022) ("Caltech"). Id. at *11.

Id.

The Federal Circuit noted that even if Shaw had not been overruled, estoppel would still apply because the facts of Shaw were inapposite. In Shaw, grounds raised in the petition but not instituted by the Board were not subject to estoppel. In this case, the grounds Ingenio asserted against claim 27 in the district court were not asserted against claim 27 in the petition. Thus, unlike the facts in Shaw, "[t]he Board never denied institution of claim 27 as anticipated by Dezonno." Id. at *12, FN 3.

Takeaways:

While this specific fact pattern involving partial institution will not come up in the future due to SAS, this case does provide substantive legal direction on the application of petitioner estoppel. When considered along with the Federal Circuit's overruling of Shaw in CalTech, we are seeing a more robust application of the petitioner estoppel provision of 35 U.S.C. §315(e)(2). "Reasonably could have raised" focuses on whether a petitioner could have raised in an IPR petition the grounds it later seeks to assert in a related district court litigation.

This case also provides a cautionary tale to litigants and judges: don't confuse statutory estoppel under 35 U.S.C. §315(e)(2) with common law estoppel concepts. Statutory IPR estoppel has specific provisions that must frame the analysis which are quite distinct from common law estoppel. In particular, the provision in 35 U.S.C. §315(e)(2) estopping arguments that "reasonably could have [been] raised" in an IPR petition is a hurdle petitioners/defendants must overcome to avoid application of estoppel in the related litigation.

This case also reminds practitioners that the petition defines the scope of the estoppel, not the contents of the instituted IPR or the written decision, as long as there is an issued final written decision. Careful consideration and strategy about what grounds to assert and the estoppel implications will continue to be an important part of preparing an IPR petition.

Finally, when an appellate decision overturns a lower court decision, think through the implications for pending cases. For example, when the Supreme Court in SAS ended the Board's practice of partial institution and undermined the Federal Circuit's interpretation of 35 U.S.C. 315(e)(2) in Shaw, parties considered seeking remands to the Board to request the Board consider all non-instituted grounds. There may be procedural opportunities presented that will be lost if not exercised immediately.

Footnote

1. On appeal, the Federal Circuit vacated and remanded for dismissal of IPR2013-00312 based on the time bar of 35 U.S.C. 315(b). Click-To-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321 (Fed. Cir. 2018). In Thryv, Inc. v. Click-To-Call Techs., LP, 140 S. Ct. 1367 (2020), the Supreme Court vacated the Federal Circuit judgment and remanded the case with instructions to dismiss for lack of appellate jurisdiction over a non-appealable institution decision. The Federal Circuit dismissed the appeal. Click-to-Call Techs., LP v. Ingenio, Inc., 810 F. App'x 881 (Fed. Cir. 2020).

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