The Impact of SAS Institute on Statutory Estoppel

IPR estoppel is established under 35 U.S.C. § 315(e)(2), which provides that “the petitioner in an inter partes review of a claim in a patent . . . that results in a final written decision . . . may not assert . . . in a civil action . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” (emphasis added). Prior to the Supreme Court’s decision in SAS Institute, the courts did not apply statutory estoppel to grounds upon which the Patent Trial & Appeal Board (PTAB) refused to institute trial. The reasoning was that statutory estoppel under 35 U.S.C. § 315(e)(2) only applied to grounds adjudicated in a Final Written Decision (FWD). As such, grounds shaken out (i.e., partial institutions) prior to trial could not be covered by such estoppel.

Post-SAS, of course, there are no longer partial institutions and this previous distinction simply goes away. But what happens to those partially instituted cases that remain pending, can a petitioner side-step the revived SAS grounds in the hope of holding onto this estoppel exception?

This question was recently answered in SiOnyx, LLC et al v. Hamamatsu Photonics K.K. et al, 1-15-cv-13488 (MAD August 30, 2018, Order) (Saylor, USDJ)

In this dispute, petitioner had IPR grounds that were denied institution. While on appeal to the Federal Circuit, SAS Institute was decided. However, the petitioner did not raise SAS on appeal (i.e., seek remand of its case to address the revived SAS grounds. In this regard, the Massachusetts Court explained the Federal Circuit’s practices relative to such transitional cases, and faulted the petitioner, explaining (here):

" At the time the Supreme Court handed down [SAS Institute], [defendant’s] time to appeal the PTAB’s decision had not yet run. . . . [Defendant] could have appealed and sought such a remand in order to allow the PTAB evaluate the claims and grounds that it raised in its petition on which the PTAB did not institute review. It therefore ‘reasonably could have raised’ those grounds before the PTAB against any claim in the [patent], and is estopped from raising them again before this Court.

Many petitioners have foregone a formal revival of their SAS grounds through joint waiver, or even silence, to keep their proceeding moving. Still other may simply avoid briefing of weaker grounds. While these decisions make sense in many instances, full statutory estoppel is likely to apply to these orphaned trial grounds going forward.

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