United States: PTAB: Unidirectional Language Of AIA Estoppel Dooms Common-Law Claim Preclusion Argument Based On District Court's Final Judgment Of No Invalidity

The Patent Trial and Appeal Board has denied a patent owner's motion to terminate an inter partes review (IPR) proceeding finding that the unidirectional nature of estoppel under 35 U.S.C. § 315(e) renders common-law claim preclusion inapplicable as a basis for termination.

Patent Owner moved to terminate an IPR after Petitioner successfully joined the proceeding, which was originally filed by another party. Because Petitioner had unsuccessfully litigated invalidity of the patent in district court, Patent Owner argued that termination was proper on a theory of claim preclusion. The district court had issued a final judgment of no invalidity after Patent Owner and Petitioner had fully and fairly argued their cases. Petitioner's joinder in the IPR, Patent Owner alleged, was nothing more than a collateral attack on the final judgment. Petitioner responded that common-law claim preclusion does not apply to IPRs due to differing burdens of proof between district court actions and IPRs, and the proceedings lacking the same nucleus of operative facts.

While the Patent Trial and Appeal Board (PTAB, the "Board") ultimately decided in favor of Petitioner, it shored up its analysis on three prongs of support: (1) the opinion of the Court in Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104 (1991), (2) the explicit language in the AIA, 35 U.S.C. § 315(e) and (3) the Congressional intent in passing 35 U.S.C. § 315(e).

First, the Board found that contrary to Patent Owner's interpretation, Astoria stood for the premise that the presumption of common-law preclusion exists only as far as "Congress has failed to expressly or impliedly evince any intention on the issue."

Second, the Board dissected the language of 35 U.S.C. § 315(e) and found that it exhibits a one-way avenue. According to the Board, Section 315(e) states that following a final written decision, the petitioner in an IPR "may not request or maintain a proceeding before the Office," nor "assert either in a civil action...or in a proceeding before the ITC" a challenge to a claim on a ground petitioner "raised or reasonably could have raised during the inter partes review." The Board further noted that the statute is silent on the reverse scenario: a party in a fully-litigated district court action later challenging the same claim on the same grounds in an IPR.

Third, the Board concluded that Congress' act of passing the America Invents Act (AIA), which contained its own specific estoppel provisions, "evinced" the intention that common-law claim preclusion was superseded. The Board determined that existence of different burdens of proof between IPRs and district court actions, the removal of the dual-directional language from the predecessor statute to IPR (inter partes reexamination (35 U.S.C. § 317)) and the need to give effect to § 315—which would become redundant if interpreted to be multi-directional—all evidenced Congress' intent for IPR estoppel as a unidirectional barricade.

Practice Tip: With its one-way estoppel provision confirmed by at least one PTAB panel, the AIA appears to provide patent challengers a second bite at the apple in an IPR proceeding. After receiving a final judgment in district court, patent challengers who fail to prove invalidity by clear-and-convincing evidence may not be precluded from bringing the same claims and evidence against a patentee under a lower burden of proof, and should consider this avenue as a viable option in their overall litigation strategy.

OpenSky Indus. v. VLSI Tech. LLC, IPR2021-01064, Paper 132 (P.T.A.B. Apr. 4, 2023)

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