The provision of the America Invents Act, 35 U.S.C, was touted originally as a check against patent challenges using inter partes review (IPR), proceeding to attack patent serially on same or similar ground. That provision precludes an IPR petitioner, or the real party in interest or privy of the petitioner, from asserting invalidity challenges in subsequent IPR, district court, or International Trade Commission (“ITC”) proceedings “on any ground that the petitioner raised or reasonably could have raised during” an IPR that resulted “in a final written decision.” Given the frequency of IPR and associated district court challenges, the scope of the AIA’s estoppel provision, with respect to the parties and arguments it estops, has become and will continue to be a critical and frequently contested issue for litigants.

Estoppel typically applies and to parties that controlled proceedings

The estoppel affected by section 315(e), applies to petitioner in an IPR that reached a final decision, in addition to the real parties in interest. Under the PTAB (Patent Trial and Appeal Board) regulation and case law, to be an RPI, a party must control the IPR proceedings. Though the precise level of control required to be an RPI, has not been solved conclusively by PTAB or the Federal Circuits, practitioners should exercise care, and assume estoppels . the question is whether a party has  a ‘privity’ relationship with a petitioner such that the party would be estopped under section 315,is informed by six factors propounded by the Supreme Court .

IPR Estoppels typically applies to instituted claims

Under Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016), estoppel generally applies only to claims and grounds that were instituted in the prior IPR. In Shaw, the Federal Circuit emphasized that Section 315(e) applies to grounds that were raised or reasonably could have been raised “during” the prior inter partes review, and it held that “[t]he IPR does not begin until it is instituted.” Id. at 1300. Accordingly, the Court held those invalidity grounds that were raised in the petition, but on which the Board did not institute, “never became part of the IPR,” and therefore the petitioner neither “raise[d]” nor reasonably could have raised them during the IPR “trial.” Id.  On the basis of its interpretation of the IPR as beginning upon institution, the Federal Circuit concluded that estoppel could not apply to non-instituted IPR grounds raised in the IPR petition submitted before—rather than “during”—the IPR.

Courts have relied on Shaw to interpret the scope of Section 315(e) estoppel narrowly. In Illumina, Inc. v. Qiagen, N.V., for example, Judge Alsup followed Shaw and declined to estop a challenger from asserting “grounds raised in a petition but not instituted.”

Practitioners should recognize that the interpretation of Estoppel provision could change in future

While Courts generally have applied estoppel narrowly in view of Shaw, these decisions may not provide durable benefits for challengers. As an initial matter, the Federal Circuit’s decision in Shaw has been subject to criticism and therefore may be reconsidered by the Federal Circuit at some point in the future.  In denying a recent petition for mandamus review of the district court’s estoppel decision in Verinata Health, the Federal Circuit declined to re-visit Shaw interlocutorily but did not affirmatively endorse its rule.

Were the PTAB to take that approach more regularly in view of Shaw, so that estoppel would attach to more grounds raised in a petition, but would not extend to grounds that the petition did not raise, petitioners could limit the potential scope of estoppel by including fewer grounds for invalidity in IPR petitions. At this juncture, however, with both the law and the PTAB’s institution practices in flux, practitioners are not encouraged to pursue such a strategy. Rather, given the potential estoppel and adverse inferences associated with failed IPR challenges, petitioners should include their most persuasive arguments in IPR petitions and consider pursuing multiple IPR petitions to maximize the breadth of the IPR challenge.