Ingenico v. IOENGINE and the Diminishing Role of Sotera Stipulations

In Ingenico v. IOENGINE, No. 2023-1367 (Fed. Cir. May 7, 2025), the Federal Circuit resolved a long-standing split among District Courts in favor of petitioners regarding inter partes review (IPR) estoppel under 35 U.S.C. § 315(e)(2). Specifically, the Federal Circuit held that a petitioner is not estopped from raising system art in a later District Court action even where that system art was described in a patent or printed publication that could have formed a ground of unpatentability in a proceeding before the Patent Trial and Appeal Board (PTAB). In doing so, the Federal Circuit clarified what constitutes “ground[s] that the petitioner raised or reasonably could have raised” under § 315(e)(2), holding that the “ground” — not necessarily the prior art itself — governs the scope of IPR estoppel.

While the decision generally gives petitioners greater flexibility to use system art in District Court proceedings, it could also render Sotera stipulations — a popular tool for petitioners to overcome discretionary denials — less effective, as we explain below.

The decision

Ingenico challenged patents owned by IOENGINE at the PTAB, which resulted in final written decisions of unpatentability of most, but not all, of IOENGINE’s claims. Ingenico also filed a declaratory judgment action in District Court. During trial, Ingenico relied on a software product called “Firmware Upgrader” and documents relating to that product — including emails, a “Readme” user guide, and a 2002 press release — to assert that the claimed invention was known or used by others, on sale, or in public use. Ingenico at 5.

After a jury found the claims invalid for anticipation and obviousness, IOENGINE appealed, claiming that it was entitled to a new trial because Ingenico should have been precluded from asserting the Firmware Upgrader as system art under Section 315(e)(2). Id. at 11. Section 315(e)(2) provides that a petitioner in an IPR that results in a final written decision may not later challenge in District Court or the International Trade Commission the validity of a claim “on any ground that the petitioner raised or reasonably could have raised” during that IPR.

IOENGINE argued that the Firmware Upgrader was “entirely cumulative and substantively identical” to the “Readme” user guide, which IOENGINE argued was a “printed publication” that reasonably could have been raised during the IPR. Id. The Federal Circuit disagreed. But instead of considering whether the “Readme” user guide qualified as a printed publication that Ingenico could have presented to the PTAB, the Federal Circuit framed the issue as depending “on the proper interpretation of the term ‘ground’ used in 35 U.S.C. § 315(e)(2)” — a matter of statutory interpretation. Id.

The Federal Circuit first turned the language of § 311(b). It observed that Congress limited IPR to “a ground that could be raised under section 102 or 103” and to invalidity challenges based on “prior art consisting of patents or printed publications.” Id. at 12. Thus, a petitioner in an IPR has no opportunity to argue that the claimed invention “was known or used by others, on sale, or in public use.” Id. at 12. The panel explained that Congress reserved those invalidity arguments, which normally could be raised under §§ 102 and 103, for the courts. Id. at 13.

Next, the panel held that the term “ground” as used in § 315(e)(2) does not mean “prior art.” Id. If Congress had wanted estoppel to apply to “prior art,” the panel reasoned, then it could have said so in § 315(e)(2). But instead, Congress chose to apply estoppel to “grounds” — the theories of invalidity available under §§ 102 and 103 — rather than the prior art used to support those grounds. Id. at 14-15. Accordingly, the Federal Circuit stated IPR estoppel “does not preclude a petitioner from relying on the same patents and printed publications as evidence in asserting a ground that could not be raised during the IPR,” e.g., grounds arguing that the claimed invention was known or used by others, on sale, or in public use. Id.

Turning back to the facts of this case, the Federal Circuit concluded that Ingenico’s challenge to IOENGINE’s patents as being known or used by others, on sale, or in public use were grounds that could not have been raised during the IPR. Further, it concluded that the Readme file and other printed publications on which Ingenico relied were evidence to support those grounds and not grounds in themselves. Finally, it concluded that, to the extent those printed publications could reasonably have been raised during IPR, they could have been raised only to argue that the claimed invention was described in a printed publication — a separate ground that had not been raised at trial. Id. at 16. Therefore, the Federal Circuit determined that IPR estoppel did not preclude Ingenico’s reliance on the Firmware Upgrader product in conjunction with other printed publications at trial to prove that the claimed invention “was known or used by others, on sale, or in public use.” Id.

Takeaways

In Ingenico, the Federal Circuit resolved a long-standing split among District Courts related to IPR estoppel in favor of patent challengers. The Federal Circuit narrowed the scope of U.S.C. § 315(e)(2) estoppel to “grounds” (i.e., theories of invalidity under §§ 102 and 103) that rely on prior art consisting of patents or printed publications. In doing so, the Federal Circuit concluded that a petitioner can assert system art in a District Court action — even system art that is described in a printed publication that reasonably could have been raised in IPR — to show that the claimed invention was known or used by others, on sale, or in public use. The Federal Circuit went even further and held that a petitioner may rely on the same patents or printed publications in District Court to support theories of invalidity not available in an IPR, such as invalidity based on prior public use or sale.

While on its face this decision appears to be a win for petitioners, it may also create some tactical complications for them. Petitioners frequently attempt to avoid discretionary denial under § 314(a) by stipulating that they will not raise in District Court any ground they raised or reasonably could have raised at the PTAB. “Sotera stipulations,” as they have come to be known, became a popular tool for circumventing § 314(a) discretionary denials, particularly after the 2022 Fintiv memo in which former U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal directed the PTAB not to discretionarily deny institution in view of parallel District Court litigation where a petitioner filed a Sotera stipulation.

But that all changed earlier this year when the USPTO rescinded the 2022 Fintiv memo. As it currently stands, Sotera stipulations are “highly relevant,” according to a memo from Chief Judge Boalick, but not dispositive. The Board considers Sotera stipulations as part of its holistic analysis under Fintiv, but the most recent decisions out of the Office denying institution suggest that Sotera stipulations are less persuasive to the USPTO than time-to-trial considerations.

The Ingenico decision may further limit the usefulness of Sotera stipulations. Now that the Federal Circuit has said that petitioners may rely on the same patents and printed publications used at the PTAB in District Court, a petitioner may need to put forth a more robust Sotera stipulation — such as one that foregoes all invalidity grounds — to avoid discretionary denial. Petitioners who are unwilling to do so might end up without the benefit of the IPR process to begin with, rendering the narrowing of IPR estoppel by the Federal Circuit a hollow victory.