“Known or Used” Not a Side-Step to PTAB Estoppel

Keeping with yesterday’s discussion of Patent Trial & Appeal Board (PTAB) estoppel in the district courts, a decision from earlier this year on yet another aspect of this estoppel has been recalibrated. Back in January, the Central District of California explained in The California Institute of Technology v. Broadcom Limited, et al., that IPR estoppel (35 U.S.C. § 315(e)(2)) applies where the same IPR reference is later raised in court under the “known or used” prong of pre-AIA 35 U.S.C. § 102(a) instead of as a “patent or printed publication” as done in the IPR.

Upon Motion for reconsideration, the Court has agreed that it’s earlier Order required further clarification.

Upon rehearing (here), the Court explained that the analysis in its previous Estoppel Order was somewhat ambiguous and issued a new, clarifying order. While, the Court still arrived at the same conclusion and found estoppel applied, it provided an expanded rationale to support its conclusion.

First, the Court noted the dearth of cases addressing the exact issue, whether statutory IPR estoppel can prevent a challenger from relying on the “known or used” invalidity theory where the related prior art publication could have been asserted in an IPR. The court then looked to similar lines of cases, including cases where the court addressed estoppel as to prior art systems, and whether the availability of that system’s user manual was or should have been raised during an IPR.

The court divided the cases into two categories: Those that adopted a “superior and separate reference” standard before finding estoppel, such as in the Star Envirotech, Inc. v. Redline Detection, LLC, No. SACV 12-01861 JGB (DFMx), 2015 WL 4744394, at *4 (C.D. Cal. Jan. 29, 2015) line of cases, and those cases that did not, such as the Clearlamp, LLC v. LKQ Corp., No. 12 C 2533, 2016 WL 4734389, at *8 (N.D. Ill. Mar. 18, 2016) line of cases. The Court highlighted the following passage from Clearlamp as particularly compelling “(“While LKQ seeks to cloak its reliance upon UVHC3000 as a product, so as to avoid § 315(e)(2) estoppel, such an argument is disingenuous as it is the UVHC3000 datasheet upon which LKQ relies to invalidate the asserted claims”)

The Court then declined to follow Star Envirotech and SRAM’s “superior and separate reference” standard, and instead held that “[t]he statute does not include such requirements, and they would likely extend the reach of statutory IPR estoppel beyond its intended scope.” The court instead agreed with the perceived approaches in the Clearlamp line of cases that “if a patent challenge is simply swapping labels for what is otherwise a patent or printed publication invalidity ground,” then estoppel should apply. The court concluded that there “must be some substantive difference between the two theories that is germane to the invalidity dispute at hand,” otherwise, estoppel will apply.

This appears to be the only case now that has addressed the exact issue of whether a patent owner is estopped from asserting a “known or used” challenge in district court based on prior art that could have presented in an IPR. As in the case of system art, the ability of a defendant to pursue such exceptions may depend on the particular analysis adopted by the district court.

Scott A. McKeown is an author of the Patents Post Grant