PTAB Year in Review – Splitting Hairs – IPR Estoppel as Applied to Product Art

Introduction

The possibility of being estopped from asserting prior art in district court is a risk that must be considered when filing an IPR petition. 35 U.S.C. § 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 As applied to printed publications, the estoppel inquiry is fairly straightforward. As applied to product art, the inquiry is anything but.

On first blush, it would seem that a patent challenger cannot be estopped from asserting product art, standing alone, since IPRs may only be brought “on the basis of prior art consisting of patents or printed publications.”² But the problem is that products are rarely asserted in district court standing alone. Rather, printed publications such as product manuals and the like are often used in district court to describe how the products operate. And, even when products are asserted standing alone, they may be cumulative of publications that were or reasonably could have been asserted in an IPR. So when does estoppel apply?

The answer to that question “has not been definitively resolved.”³ In fact, three distinct approaches to answering the question have emerged. One line of cases, based on a decision authored by Judge Stark while a district judge in Delaware, adopts a broad view of § 315(e), holding that estoppel extends to products that are cumulative of references that could have been raised in an IPR—i.e., “a printed publication invalidity theory in disguise.”⁴ Another line of cases, based on a decision authored by Judge Noreika and endorsed by Judge Bryson sitting by designation in Delaware, adopts a narrower view of § 315(e), holding that estoppel does not apply to any invalidity theory that relies even in part on product art. And still a third line of cases splits the difference, employing a burden-shifting framework requiring a plaintiff to prove cumulativeness on a limitation-by-limitation basis. This Article addresses each of these approaches.

Judge Stark’s Broad Interpretation of § 315(e)

The broad view of § 315(e) was first articulated by Judge Stark (then Chief Judge of the District of Delaware) in Wasica Finance GmbH v. Schrader International, Inc.⁵ There, the patent challenger asserted a single prior art reference in an IPR and asserted that same reference, along with a physical product, in district court. The challenger argued that, because the product could not have been asserted in the IPR, there could be no estoppel, notwithstanding that the product was cumulative of the art that was asserted.⁶

Judge Stark disagreed. In his view, the invalidity ground asserted in district court was the same “ground” asserted in the IPR even though the “evidence used to support” that ground—i.e., the product art—was different.⁷ In so holding, Judge Stark pointed out that a contrary ruling would “gut the estoppel provision entirely” because a defendant could “simply swap out” estopped references with nearly identical product art so as to avoid estoppel altogether.⁸

This broad view of § 315(e), although currently the minority view, has found some currency inside and outside Delaware. For example, in Wirtgen America, Inc. v. Caterpillar, Inc.,⁹ Judge Wolson, sitting by designation in Delaware, held that a patent challenger was estopped from asserting an obviousness combination including a physical device that was cumulative of a printed publication asserted in an IPR. The court reasoned that, “[b]ecause the printed publication and the physical device fill the same gap” in the obviousness combination, the combination is in effect “the same ground” as asserted in IPR.¹⁰ To hold otherwise, the court observed, would create a “mammoth loophole” because patent challengers “would always add a physical device that is identical to patents or printed publications in the subsequent civil case just to evade estoppel.”¹¹ Other courts (including those in California and Texas) have taken a similarly broad view.¹²

Judge Noreika’s Narrow Interpretation of § 315(e)

On the other end of the spectrum is a line of cases taking a much narrower view of §  315(e). In Chemours Co. v. Daikin Industries, Ltd.,¹³ for example, Judge Noreika—also in Delaware—rejected Wasica’s approach and held instead that invalidity grounds involving product art are not estopped under § 315(e). The court reasoned that, “[a]s a matter of statutory interpretation,” estoppel applies only to “grounds”—i.e., “specific pieces of prior art that are the basis or bases on which a petitioner challenges a claim.”¹⁴ And, because product art cannot be used in an IPR “ground,” estoppel does not preclude the challenger from asserting such art in district court.¹⁵ Notably, Chemours did not ask whether the product art was cumulative of the estopped references—the answer to that question, in the court’s view, was irrelevant.

A majority of courts (including in Delaware and Illinois) have followed the Chemours approach.¹⁶ In fact, Judge Bryson (sitting by designation in the District of Delaware) recently endorsed this view in Prolitec Inc. v. ScentAir Technologies, LLC.¹⁷ Noting that both Wasica’s and Chemours’ interpretations of § 315(e) were “plausible,” Judge Bryson ultimately agreed with Judge Noreika that “grounds” refers to “the specific pieces of prior art that are the bases on which a petitioner challenges a claim.”¹⁸ Accordingly, he held, “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.”¹⁹

An Intermediate Approach: Collateral Estoppel Lite

Yet a third approach has also emerged that arguably attempts to bridge the gap between Wasica and Chemours. In Boston Scientific Corp. v. Cook Group Inc.,²⁰ the Southern District of Indiana rejected Chemours’ categorical exclusion of product art from § 315(e), but articulated a clearer framework than announced in Wasica for deciding whether product art is indeed cumulative. The court applied a burden-shifting framework for evaluating whether estoppel applies:

[A] plaintiff must show that each and every material limitation present in the physical device is disclosed in the estopped reference; the burden then shifts to the defendant. If the defendant, in response, points to a material limitation that is disclosed in the physical device that is not disclosed in the estopped reference, then the burden shifts back to the plaintiff to show why said limitation is (1) either not material or (2) is in fact specifically disclosed in the estopped reference.²¹

This framework fleshes out Wasica’s cumulativeness inquiry by requiring a particularized showing from the plaintiff that “each and every material limitation” in the product is in fact disclosed in the estopped reference. And, by employing a burden-shifting framework that allows both sides to argue why it is fair or unfair to allow the invalidity grounds to be asserted in district court, the Boston Scientific approach implicitly adopts equitable principles that are typically central to collateral estoppel.

Conclusion

The Federal Circuit has not yet weighed in on this issue, but as described above, two currently sitting Federal Circuit judges (Judge Stark and Judge Bryson) have taken opposing views. It is no wonder, then, that courts inside and outside of Delaware are split on the issue.

Chemours is arguably more faithful to the statutory text but seems to create a loophole that patent challengers can easily exploit. Wasica, on the other hand, seems to close the loophole but arguably strays from the statutory text. Wasica could also discourage patent challengers from filing IPR petitions if they face a significant risk of estoppel even as to product art. And, while Boston Scientific’s middle ground seeks to strike a balance between the two extremes, it is debatable whether the statutory text supports such a middle ground. As always, it is important to know your jurisdiction and judge, and to think strategically at the outset of an IPR about downstream estoppel issues.

[1] 35 U.S.C. § 315(e)(2).
[2] 35 U.S.C. § 311(b).
[3] Singular Computing LLC v. Google LLC, 668 F. Supp. 3d 64, 70 (D. Mass. 2023).
[4] IOENGINE, LLC v. PayPal Holdings, Inc., 607 F. Supp. 3d 464, 513 (D. Del. 2022) (Bryson, J., sitting by designation).
[5] 432 F. Supp. 3d 448 (D. Del. 2020) (Stark, J., sitting by designation).
[6] Id. at 453–54.
[7] Id. at 454.
[8] Id. at 455 n.7.
[9] 2024 WL 51010, at *9 (D. Del. Jan. 4, 2024). Sterne Kessler represented Wirtgen in this litigation
[10] Id.
[11] Id.
[12] See, e.g., Singular Computing, 668 F. Supp. 3d at 74; Hafeman v. LG Elecs., Inc., 2023 WL 4362863, at *1 (W.D. Tex. Apr. 14, 2023); see also California Inst. of Tech. v. Broadcom Ltd., 2019 WL 8192255, at *7 (C.D. Cal. Aug. 9, 2019), aff’d, 25 F.4th 976 (Fed. Cir. 2022); Biscotti Inc. v. Microsoft Corp., 2017 WL 2526231, at *8 (E.D. Tex. May 11, 2017).
[13] 2022 WL 2643517 (D. Del. Jul. 8, 2022).
[14] Id. (cleaned up).
[15] Id.
[16] See, e.g., IPA Techs. Inc. v. Microsoft Corp., 2024 WL 1797394, at *5–7 (D. Del. Apr. 25, 2024); EIS, Inc. v. IntiHealth Ger GmbH, 2023 WL 6797905, at *5–6 (D. Del. Aug. 30, 2023); Pact XPP Schweiz AG v. Intel Corp., 2023 WL 2631503, at *1 (D. Del. Mar. 24, 2023); Willis Elec. Co. v. Polygroup Macau Ltd. (BVI), 649 F. Supp. 3d 780, 814–15 (D. Minn. 2023); Medline Indus., Inc. v. C.R. Bard, Inc., 2020 WL 5512132, at *4 (N.D. Ill. Sept. 14, 2020); Milwaukee Elec. Tool Corp. v. Snap-On Inc., 271 F. Supp. 3d 990, 1031 (E.D. Wis. 2017).
[17] 2023 WL 8697973, at *22–23 (D. Del. Dec. 13, 2023).
[18] Id. at *23.
[19] Id. But see Wirtgen, 2024 WL 51010, at *9 (“Respectfully, I disagree. Judge Bryson based his conclusion on a distinction between a ‘ground’ and the evidence supporting that ground. And I agree that there’s a difference. But the physical device is not just a piece of evidence. It is part of the basis that animates the claim of invalidity.”).
[20] 653 F. Supp. 3d 541 (S.D. Ind. 2023).
[21] Id. at 594.

This article appeared in the 2024 PTAB Year in Review: Analysis & Trends report.