When Does IPR Estoppel Apply to Product or System Art in District Court?

Principals Kelly Del Dotto and Casey Kraning, alongside Law Clerk Hui Kwon Yang, authored an article for World Intellectual Property Review exploring the various and conflicting approaches District Courts have taken when applying § 315 estoppel to prior art products and systems in the absence of Federal Circuit guidance on the matter. Read the full article at World Intellectual Property Review. The article was originally published on March 27, 2024.

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Inter partes review (IPR) estoppel under 35 U.S.C. § 315(e)(2) estops an IPR petitioner from later challenging a patent claim in the District Courts on any ground the petitioner “raised or reasonably could have raised” during the IPR. 

Whether a petitioner could be estopped from asserting product or system art in the District Courts, despite that art being unavailable in an IPR challenge, has not yet been addressed by the Federal Circuit. As a result, the District Courts remain split on this issue. 

Background: IPR estoppel under § 315(e)(2) 

When Congress enacted the America Invents Act in 2012, it included an estoppel provision in an effort to avoid duplicative and abusive validity challenges before the Patent Trial and Appeal Board and the District Courts. Under § 315(e)(2), a petitioner who receives a final written decision in an IPR is also estopped from subsequently asserting in a District Court “that the claim is invalid on any ground that the petitioner raised or reasonably could have raised” during that IPR. 

In an IPR proceeding, a petitioner is limited to challenging patent validity under 35 U.S.C. §§ 102 or 103 (anticipation or obviousness, respectively), and only on the basis of prior art consisting of patents or printed publications. 35 U.S.C. § 311(b). 

A petitioner in an IPR proceeding cannot challenge validity with prior art products or systems. See Medline Indus. v. CR Bard (N.D. Ill. Sept. 14, 2020). 

If a patent or printed publication “relate[s] to and describe[s] a physical product”, however, it “can, like other patents and printed publications, be raised in an IPR.” Wasica Fin v. Schrader (D. Del. 2020) (Fish & Richardson represented Wasica). 

Whether something constitutes a printed publication or a prior art product or system is often debated and is at the center of a court’s application of estoppel provisions. 

Estoppel in District Court 

While District Courts have acknowledged that prior art products and systems are categorically excluded from serving as prior art in an IPR proceeding, whether a petitioner is estopped from raising those same products and systems in subsequent District Court litigation remains in dispute, even within certain districts. See, e.g., Wasica (“Physical products cannot be raised during IPR proceedings”) (citing Clearlamp v. LKQ, 2016). 

District Courts have also reached different conclusions regarding to what extent estoppel applies to patents and printed publications when they are later asserted in combination with prior art products and systems. 

District of Delaware 

One of the busiest districts for patent litigation, the District of Delaware is split on the issue of estoppel of prior art products. 

In Wasica, as a matter of first impression, Judge Stark found that estoppel may still apply to physical products despite their unavailability in an IPR. The physical product at issue was a sensor for monitoring air pressure in tires. There was no dispute that the physical product, the sensor itself, was materially identical to a printed publication that reasonably could have been raised in the IPR. 

Judge Stark applied estoppel to this product when the physical product was used in addition to printed publications — which were already raised or reasonably could have been raised during the IPR — that presented the same evidence of invalidity. He distinguished “evidence” from “grounds” such that § 315(e)(2) estopped a ground of invalidity in subsequent District Court litigation despite the unavailability of the evidence (i.e., the sensors) for that “ground” in the IPR. 

The District of Delaware has not uniformly followed Judge Stark’s Wasica decision. In Chemours v. Daikin Industries, Judge Noreika found that “[a]s a matter of statutory interpretation, estoppel does not apply to [] prior-art products.” (Fish & Richardson represented Chemours). 

The products at issue were fluoropolymers. Judge Noreika reasoned that, because prior art products cannot be used to challenge validity in an IPR, “any invalidity theory relying upon that product as a prior art reference is not a ‘ground’ that reasonably could have been raised during the IPR,” and thus cannot be estopped. 

Specifically, Judge Noreika cited an earlier Northern District of Illinois case that had adopted the interpretation of “ground” (as used in § 315(e)(2)) as “‘specific pieces of prior art’ that are ‘the basis or bases on which a petitioner challenges a claim’” (citing Medline Indus., 2020). 

Under this interpretation, products are specific pieces of prior art that may serve as bases for an invalidity challenge, and thus are “grounds”. Since these “grounds” could not have been raised in an IPR, estoppel does not apply. To date, the Northern District of Illinois has followed this view. See Medline Indus. v. CR Bard, 2020 (N.D. Ill. 2020); Sioux Steel v. Prairie Land Millwright Servs., (N.D. Ill. 2022). 

Magistrate Judge Fallon recently noted this split in Delaware in IPA Techs. v. Microsoft (D. Del. Feb. 8, 2023). Judge Fallon cited Wasica and held that a party asserting IPR estoppel must show that the “physical products, systems, and/or knowledge asserted in the litigation are entirely cumulative of the patents or prior art publications raised in the IPR.” (Emphasis added.) 

In other words, and in contrast to Judge Noreika’s Chemours opinion, estoppel could apply to prior art products and systems depending on the overlap in disclosures between the prior art products and the printed publications asserted in the IPR. 

Similarly, Judge Bryson, sitting by designation in Delaware, held that so long as the printed publications are used in combination with product or system art such that the “combination is substantively different from the grounds that were raised or reasonably could have been raised” in the IPR, estoppel did not apply. Ioengine v. PayPal (D. Del. 2022). The product or system art there was a specific type of camera, but only as described by documents, which the experts intended to rely on instead of relying on the camera itself. 

Though the plaintiffs argued that estoppel applied to these documents, Judge Bryson found that there was a material fact issue as to whether the documents could have been raised in the IPR (pointing to defendant’s argument that some of the documents were non-public documents obtained via subpoena). 

The court also held that because product or system art (i.e., the camera) could not be raised in an IPR, the product or system art may be combined with “other references that [petitioner] raised or reasonably could have raised” in the IPR, so long as that combination is “substantively different from the grounds that were raised or reasonably could have been raised” in the IPR. 

Notably, however, Judge Bryson recently revisited the issue of IPR estoppel against products in Prolitec v. ScentAir Technologies, and, after noting the split among courts, this time elected to follow the Chemours line of cases to hold that “IPR estoppel does not apply to device art, even when that device art is cumulative of patents and printed publications that were or could have been asserted in a prior IPR.” (D. Del. Dec. 13, 2023). 

Further deepening the Delaware District Court divide, Judge Williams has also aligned with the Chemours opinion in EIS v. IntiHealth (D. Del. Aug. 30, 2023). The party asserting estoppel argued at summary judgment that the asserted prior art product, a therapy device, should be estopped since it was a “mere substitution” for a patent already asserted in an IPR. Consistent with Chemours, but in contrast to Wasica, Judge Williams rejected this argument, finding that the device was not subject to estoppel even if “the actual prior art reference [in IPR] discloses the same claim limitations as the product.” 

Eastern District of Texas 

The Eastern District of Texas, another patent litigation-heavy district, has aligned with Judge Noreika’s Chemours opinion relying on statutory interpretation, finding that there is no estoppel to a prior art system since IPR proceedings are limited to invalidity grounds “only on the basis of prior art consisting of patents or printed publications” (E.D. Tex. May 11, 2017). 

The court reasoned in Biscotti v. Microsoft that because prior art systems cannot be raised as grounds for invalidity in an IPR, estoppel cannot apply. Despite the plaintiff’s characterization of the defendant’s prior art systems (i.e., an integrated video conferencing system) as printed subject matter in disguise (i.e., subject matter that could have been raised during IPR), the court noted that the defendant could not have raised the prior art system during the IPR. 

This decision notably differs from the District of Delaware court in Ioengine, where Judge Bryson sitting by designation held that so long as the printed publications are used in combination with product or system art such that the “combination is substantively different from the grounds that were raised or reasonably could have been raised” in the IPR, estoppel did not apply. 

Conclusion 

Because the Federal Circuit has not yet weighed in on the scope of estoppel under § 315(e)(2), parties seeking to retain products or systems for use as prior art in subsequent District Court litigation should carefully decide whether to rely on patents or printed publications in the IPR that may include similar disclosures to the products or systems.