Ironburg and the Elusive “Skilled Searcher” Estoppel Standard for Newly Discovered Prior Art

Introduction

As any PTAB practitioner knows, the possibility of being estopped from asserting prior art in district court is a significant risk that must be considered when filing an IPR. Section 315(e)(2) prevents a petitioner, following a final written decision, from asserting invalidity grounds that the petitioner “raised or reasonably could have raised” in the petition.[1] That provision has teeth: the Federal Circuit has held that “estoppel applies not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all grounds not stated in the petition but which reasonably could have been asserted against the claims included in the petition.”[2]

Most Federal Circuit cases addressing IPR estoppel involve patent challengers trying to assert prior art they knew about when filing their IPRs but (for whatever reason) did not include in their petitions. In such cases, there is no dispute that the challengers “reasonably could have raised” the art in their petitions. But what about when a challenger discovers art after filing its petition? How does a court determine whether invalidity grounds based on that art “reasonably could have” been raised?

The Federal Circuit recently answered that question in Ironburg Inventions Ltd. v. Valve Corporation.[3] There, the court endorsed the “skilled searcher” standard most district courts had been applying to newly discovered art. Under that standard, an invalidity ground reasonably could have been raised in an IPR petition if a skilled searcher conducting a diligent search reasonably could have been expected to discover the ground prior to filing the petition. The court also clarified that the patentee bears the burden to establish that this standard has been met by a preponderance of the evidence.

Ironburg’s impact has yet to be seen, and it leaves some unanswered questions in its wake. Several of those questions are addressed here.

The Ironburg Case

The case began when Ironburg sued Valve for infringement of Ironburg’s video-game-console controller patent. Valve responded by filing an IPR challenging the claims on various grounds. The Board instituted partial review (pre-SAS[4]) and cancelled some, but not all, claims. In district court, Valve challenged the remaining claims based on the non-instituted grounds, as well as non-petitioned grounds involving art that Valve discovered after filing its petition. Ironburg responded that Valve was estopped under § 315(e)(2), and the district court agreed. The case went to trial, resulting in an infringement verdict and a damages award of more than $4 million.

On appeal, the Federal Circuit affirmed the district court’s ruling with respect to the non-instituted grounds but vacated the court’s ruling with respect to the non-petitioned grounds. As to the non-instituted grounds, the court held that because those grounds were included in the petition, they were “raised” during the IPR and thus subject to estoppel.[5] The court noted, moreover, that Valve’s choice not to seek remand after SAS for the Board to address the non-instituted grounds “does not shield it from estoppel.”[6]

As to the non-petitioned grounds, the Federal Circuit agreed with the district court that such grounds “reasonably could have been raised” in an IPR petition if “a skilled searcher conducting a diligent search reasonably could have been expected to discover” the grounds.[7] But the Federal Circuit disagreed with the district court’s determination that the patent challenger bears the burden to show that this standard has not been met. The Federal Circuit held instead that the patentee, “as the party asserting and seeking to benefit from the affirmative defense of IPR estoppel,” bears “the burden of proving, by a preponderance of the evidence, that a skilled searcher exercising reasonable diligence would have identified an invalidity ground.”[8] This burden allocation, the court reasoned, “is consistent with the general practice that a party asserting an affirmative defense bears the burden to prove it.”[9]

In so holding, the court rejected Ironburg’s argument that the burden should be borne by the patent challenger merely because details of its search efforts are uniquely within its possession and will often be claimed as privileged. The Federal Circuit noted that district courts frequently encounter and resolve such privilege issues without difficulty. In any event, such details are largely irrelevant because the inquiry focuses on what a skilled searcher would find by exercising reasonable diligence, not on what the patent challenger did (or did not) find.[10] Accordingly, the Federal Circuit vacated the district court’s estoppel ruling as to the non-petitioned grounds and remanded for the district court to determine whether Ironburg, as the party asserting estoppel, can meet its burden.

Summary of Estoppel Law

So where does that leave us? After Ironburg, IPR estoppel applies in the following scenarios:

 

Unanswered Questions

Ironburg’s holding sounds simple enough. But, as a practical matter, how can a patentee show that a skilled researcher would have found a prior-art reference by exercising reasonable diligence? Is it enough merely to show that the reference was cited during prosecution of the challenged patent? Can the patentee rely on the fact that the reference was cited in a third-party’s IPR petition? Perhaps, but not standing alone. In fact, Ironburg relied on precisely this type of evidence, and the Federal Circuit determined that it was insufficient without additional information. It is not enough, the court noted, for a patentee to show that another challenger was able to find the art at issue. Rather, the patentee must provide details about the challenger’s search—if the search was reasonably diligent, then estoppel could apply; but if the challenger performed a more rigorous search, then the mere fact that the challenger found the prior art does not imply that a skilled searcher also would have found it exercising mere reasonable diligence.[11]

Ironburg leaves a number of additional questions unanswered. For example, how diligent is “reasonably diligent”? Some commentators have suggested that Federal Circuit decisions addressing public availability of prior art could offer a clue.[12] In In re Lister, for example, the Federal Circuit addressed the accessibility of a prior-art reference at issue by noting 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.”[13] In the IPR-estoppel context, district courts have endorsed a similar inquiry into the reasonableness of certain keyword searching even before Ironburg.[14]

Further, how much additional searching would a skilled searcher have performed after finding relevant prior art included in the petition? Some courts have refused to apply estoppel where the patentee does not proffer evidence regarding why a skilled searcher would continue to look for prior art after discovering a relevant piece of art,[15] which seems consistent with Ironburg’s holding. Regardless, the Federal Circuit will eventually have to resolve these (and other related) issues.

Conclusion

In the end, Ironburg makes one thing clear: a patentee seeking to assert IPR estoppel must proffer affirmative evidence establishing the steps that a skilled searcher would take when exercising reasonable diligence. Mere assumptions about what a skilled searcher would do are insufficient.[16] Thus, patent owners should consider having their own searches conducted near the time that an IPR petition is filed and proffer evidence of such. Relevant evidence might include, for example, declarations from experts or neutral, third-party attorneys or search firms.[17] At least where a patentee relies on the search results of a third-party challenger, moreover, such evidence will require discovery from the challenger to determine whether its efforts were reasonably diligent. And, even though the patentee bears the burden on this score, the patent challenger would be wise to conduct a thorough prior-art search and proffer countervailing evidence of its own.

Finally, given that the patentee bears the burden, to the extent it wishes to have its expert opine on estoppel, it must submit an opening expert report addressing these issues—at least one court has held that a patentee’s expert cannot address estoppel for the first time in a rebuttal report.[18]

The full effects of Ironburg have yet to be seen. But Ironburg could significantly broaden the scope of discovery in district court and IPRs, leading to discovery and privilege fights in both venues.[19] It also could give rise to a “battle of the ‘search’ experts” regarding what steps a skilled searcher would take. Meanwhile, the Supreme Court recently denied certiorari in California Institute of Technology v. Broadcom Ltd., where the Federal Circuit adopted a broad view of estoppel as applying when a petitioner knew about an invalidity ground but failed to include the ground in its petition. For the time being, that broad view remains the law. But given that this area is rapidly evolving, PTAB practitioners and district-court litigators should pay close attention to further developments.