When claims survive an inter partes review, a petitioner has only limited options to challenge the surviving claims either at the patent office or in district court.

Title 35 of the U.S. Code, Section 315(e) provides that once an IPR reaches a final written decision, the petitioner is estopped from further challenging the claims using "any ground that the petitioner raised or reasonably could have raised during that inter partes review."

In 2022, the U.S. Court of Appeals for the Federal Circuit in California Institute of Technology v. Broadcom Limited overruled its prior precedent and announced that grounds that might have been raised during that inter pares review included not just instituted grounds from an IPR petition but also "all grounds not stated in the petition but which reasonably could have been asserted against the claims included in the petition."1

But until recently, the court had not weighed in on what grounds not stated in a petition reasonably could have been asserted against the claims included in the petition. On its face, the language seems straightforward.

Having made an invalidity case to the Patent Trial and Appeal Board, a petitioner cannot repeat that case elsewhere. Nor can the petitioner strategically divide its invalidity grounds, presenting some arguments to the PTAB and keeping others in reserve to deploy in district court.

Complications arise, however, when an unsuccessful petitioner seeks to assert art that it did not possess when it filed its IPR. What could that petitioner reasonably have raised? And who bore the burden of proving it?

In Ironburg Inventions Ltd. v. Valve Corp., the Federal Circuit has answered these questions.2 This article examines the decision and its impact on strategy at both the district court and at the patent office.

Ironburg sued Valve for patent infringement in 2015.3 Following IPRs, "much pretrial litigation and a change of venue," the case proceeded to trial on one patent, U.S. Patent No. 8,641,525.4

Prior to trial, the U.S. District Court for the Western District of Washington ruled that Valve was estopped from challenging the validity of the '525 patent based not only on grounds Valve raised in its IPR petition that were not instituted, but also grounds raised in a later-filed third-party petition based on references that Valve did not discover before filing its IPR.4

Thus, the trial proceeded on infringement and damages alone.5 At trial, the jury found for Ironburg, and Valve appealed.6 Valve's appeal raised several grounds, among them that the district court improperly imposed IPR estoppel on the invalidity references Valve did not discover until after it filed the IPR challenging the '525 patent.7

The Federal Circuit considered two sub-issues in conjunction with Valve's appeal on the estoppel issue: First, what is the proper standard by which to judge whether a reference is one the petitioner reasonably could have raised in an IPR petition? And second, which party bears the burden of proving a reference is one a petitioner reasonably could have raised?

Interestingly, the first sub-issue, while not fully addressed previously by the Federal Circuit, was not disputed by the parties.8 Both Ironburg and Valve agreed that the proper standard, also applied by the district court, was that "an IPR petition 'reasonably could have raised' any grounds that 'a skilled searcher conducting a diligent search reasonably could have been expected to discover.'"9

The Federal Circuit agreed and adopted this standard as the standard governing the reasonably could have raised prong of IPR estoppel.10

Next, the Federal Circuit turned to the second sub-issue, burden. Here, the Federal Circuit first considered where the district court had placed the burden to show "what a skilled searcher conducting a diligent search reasonably could, or could not, have been expected to discover."11 Concluding that, implicitly, the district court had placed the burden on Valve, the Federal circuit considered whether this was correct.

The court concluded it was not. The Federal Circuit held that the "burden of proving, by a preponderance of the evidence, that a skilled searcher exercising reasonable diligence would have identified an invalidity ground rests on the patent holder."12

This court analogized the patentee's estoppel position to an affirmative defense and noted that assignee the patentee the burden of proving its defense accords with the usual burden allocation.13 Because the district court improperly placed the burden on the patent challenger, Valve, the Federal Circuit remanded for further proceedings to establish whether Valve was estopped from asserting its new invalidity references.14

The obvious and immediate takeaway from Ironburg is that the Federal Circuit has set consistent and formal rules for litigating IPR estoppel for references not asserted in a petition. The patent owner must prove, by a preponderance of the evidence, that a skilled searcher conducting a diligent search reasonably would have been expected to discover the references in questions.

Less obvious, at this time, is how patent owners will attempt to meet this burden. The arguments in Ironburg offer a clue.

There, both parties supported their positions by pointing to actual search results. Ironburg argued that Valve should have been expected to uncover the new references because another IPR challenging the '525 patent, filed shortly thereafter, did assert these references.

Valve responded by referring to its own initial search, which did not discover the references in question.15 Thus, parties going forward should consider doing the same. Patentees should consider what search terms a reasonable searcher would use and what sources they might search, and they should consider collecting evidence from search firms about what searches would be recommended for a case and why.

Patentees must be careful to remember that art uncovered in such searches may be relevant to information disclosure practice for continuations still pending at the PTAB and may need to be produced in the litigation.

And, despite not bearing the burden of persuasion, petitioners should likewise consider the evidence they will offer to show their efforts were reasonable and should closely work with their searches to document the search terms and sources used and the time taken in the search.

Pre-IPR decisions on public availability also provide clues. For example, in In re: Lister, a patent applicant appealed the rejection of his application to the Federal Circuit, arguing in part that the reference used in an anticipation rejection was not findable by an interested searcher.16

The Federal Circuit disagreed in 2009, stating that "[a] reasonably diligent researcher with access to a database that permits the searching of titles by keyword would be able to attempt several searches using a variety of keyword combinations."17

The Federal Circuit went on to note that because the invention at issue purported to make golf easier and faster for casual players, terms like "handicap" would reasonably be search terms.18 The decision suggests that the rationale underpinning the search and not just the number of searches conducted will be relevant to any analysis.

Parties should also expect Ironburg to have a significant impact on IPRs.19 The PTAB has commonly placed the estoppel burden on petitioners.

For example, in Praxair Distribution Inc. v. INO Therapeutics LLC, the PTAB imposed estoppel in 2016 under Section 315(e)(1), the portion of the statute particular to proceedings before the U.S. Patent and Trademark Office, because the petitioner failed to establish "a skilled searcher conducting a diligent search would not have expected to discover" the newly asserted references.20

Ironburg directly considered Section 315(e)(2), which relates to civil actions, but the same "reasonably could have raised" language appears in Section 315(e)(1) as well, and parties before the PTAB should prepare for the burden to change.

Thus, we anticipate that after Ironburg, both in federal court and at the PTAB, the patent owner must establish, by a preponderance of evidence, that a skilled searcher conducting a diligent search reasonably could have been expected to discover the references it seeks to exclude under Section 315(e) to benefit from the statutory estoppel provision.

Footnotes

1. California Inst. of Tech. v. Broadcom Ltd., 25 F.4th 976, 989-91 (Fed. Cir. 2022) (summarizing the development of IPR estoppel and overruling Shaw).

2. Ironburg Inventions Ltd. v. Valve Corp, 21-2296, 64 F.4th 1274, 1281 (Fed. Cir. 2023)

3. Id. at 1282-83

4. Id.

5. Id.

6. Id. at 1284.

7. Id. at 1296.

8. Id. 1297-98.

9. Id.

10. Id.

11. Id. at 1298

12. Id. at 1299.

13. Id.

14. Id.

15. Id. at 1298.

16. In re Lister , 583 F.3d 1307, 1315 (Fed. Cir. 2009).

17. Id. at 1315-16.

18. Id. at 1315-16.

19. However, in an EPR, the burden is already on the patent owner to establish estoppel — the requester must submit a certificate stating it is not estopped under 35 U.S.C. § 315(e)(l) or 35 U.S.C. § 325(e)(l), and because the proceedings are ex parte, the burden to prove otherwise naturally rests with the patent owner. See 37 CFR 1.1510(b).

20. Praxair Distribution Inc. v. INO Therapeutics LLC, Case IPR2016-00781, Paper 10 at 10. (PTAB Aug. 25, 2016).

Originally printed in Law360 on May 30, 2023.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.