Scott Mckeown
Nov 17, 2018

Equitable Defenses at the PTAB

Assignor Estoppel Precluded by AIA Statutes…But What of Other Equitable Defenses?

The doctrine of assignor estoppel bars the assignor of a patent from challenging the validity of the patent after it is assigned. In considering this defense to an AIA trial proceeding, the Patent Trial & Appeal Board (PTAB) had consistently held that this common-law doctrine is subject to abrogation by statute, and that the AIA statutes do exactly that. The Federal Circuit recently agreed.

However, the Board has considered and applied other equitable defenses. For example, the Board has applied waiver (prior to the Federal Circuit’s determination that tribal immunity did not apply to the PTAB). Thus, equitable defenses that do not conflict with the AIA statutes may be leveraged.

One equitable defense that could become more prominent going forward —given the alignment of claim construction standards between the PTAB and courts— is judicial estoppel.

Before considering the applicability of judicial estoppel, a brief overview of the assignor estoppel determination of the Federal Circuit may be helpful. In Arista Networks, Inc. v. Cisco Systems, Inc., ___ f .3d ___, Nos. 2017-1525, -1577 (Fed. Cir. 2018) (here), the Federal Circuit considered the PTAB’s decision that assignor estoppel does not bar a challenge to a patent’s validity in an inter partes review. The Court affirmed that it did not, reiterating the PTAB’s finding that § 311(a) leaves no room for assignor estoppel in IPR proceedings.

The Court explained:

" [H]ere, ‘a statutory purpose to the contrary is evident.’ In particular, we view § 311(a) as governing the question of whether Congress intended assignor estoppel to apply in the IPR context. Section 311 (a) states, in relevant part, ‘(a) In General.—Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent.’ . . . [T]he statute allows any person ‘who is not the owner of a patent” to file an IPR.’ We agree [with Arista]. Where ‘the statutory language is plain, we must enforce it according to its terms.’ In our view, the plain language of this statutory provision is unambiguous.

In response to Cisco’s claims that the statute does not directly address the application of assignor estoppel to IPRs, the Court explained:

" Cisco views § 311(a) as reflecting two principles: first, that an IPR must begin as an adversarial proceeding, rather than as a means for a patent owner to confirm the patentability of certain claims; and second, that there is no Article III-like standing requirement for filing an IPR. In our view, however, the statute, by its terms, does more —it delineates who may file an IPR petition. The plain language of § 311(a) demonstrates that an assignor, who is no longer the owner of a patent, may file an IPR petition as to that patent.

The Court also denied Cisco’s argument that allowing assignor estoppel in other forums, but not the IPR, would encourage forum shopping, asserting that this was “an intentional congressional choice. . . consistent with the overarching goals of the IPR process.”

Thus in preventing the equitable defense of assignor estoppel, the Court looked to the statute’s language for an expression of abrogation.

Getting back to judicial estoppel, while one would think that parties battling over a same (Phillips) standard would keep consistent as to their factual assertions and legal arguments, such is not always the case. In the Board’s new Phillips rule, the agency suggests that the Board consider “any prior claim construction determination concerning a term of the claim in a civil action, or a proceeding before the International Trade Commission, that is timely made of record in the inter partes review proceeding.”  But, there is no requirement that the Board adopt such.

As to arguments of the parties that may be inconsistent, the Board is not required to hold parties to those earlier statements either (outside of normal considerations of fairness and credibility).  That said, for petitioners there is an additional statutory tool.  35 U.S.C 301(a)(2) explains that “statements of the patent owner filed in a proceeding before a Federal court or the Office in which the patent owner took a position on the scope of any claim of a particular patent” may be submitted to the office at any time.  And, that this information be utilized to “determine the proper meaning of a patent claim in a proceeding that is ordered or instituted pursuant to section 304, 314, or 324.”  But again, there is not absolute requirement that the patent owner be held to such statements.  Moreover, by its plain language, this statute cannot be leveraged by patent owners against inconsistent petitioners.

For these reasons, judicial estoppel may be the best tool going forward to hold a party to their earlier, inconsistent position. As a reminder, judicial estoppel precludes a party from taking a position in a case that is clearly contradictory to a position it has taken, and accepted, an in earlier legal proceeding.

Given the PTAB’s routine discovery requiring the production of inconsistent positions, and 35 U.S.C. § 301, which was part of the AIA itself, it could be argued that the  equitable defense of judicial estoppel, unlike assignor estoppel, has not been abrogated.

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