Finality Aspect of Common Law Estoppel May Not Matter for PTAB Estoppel Under 315(e)

Standing Dispute Highlights 315(e)(2) Estoppel Concern

Article III standing has been a problem for certain petitioners seeking review of adverse Patent Trial & Appeal Board (PTAB) AIA trial rulings. This is because, while the AIA statutes provide that anyone other than a patent owner may challenge a patent at the PTAB, Article III standing is necessary for petitioners to appeal adverse PTAB decisions to the Federal Circuit. Phigenix, Inc. v. ImmunoGen, Inc.  Since Phigenix, there have been a number of Federal Circuit decisions exploring the degree of harm necessary to convey Article III standing in this context.

Earlier this week, the Federal Circuit analyzed “competitor harm” as a basis for Article III standing along with the potential of adverse estoppel impact of 35 U.S.C. §315(e)(2) on the petitioner.. While the competitor harm analysis may be interesting from an academic standpoint, the more meaningful discussion for practitioners is the Court’s commentary on the 315(e) estoppel impact for such petitioners.

In AVX Corp., v. Presidio Components, Inc., (here) the Court explained, consistent with its precedent on point that estoppel impact does not constitute an injury in fact when the appellant ‘is not engaged in any activity that would give rise to a possible infringement suit. The court then turned to the impact of future estoppel impact and questioned whether 315(e) estoppel would even apply in such cases.

" [T]his court has not decided whether the estoppel provision would have the effect that AVX posits—specifically, whether § 315(e) would have estoppel effect even where the IPR petitioner lacked Article III standing to appeal the Board’s decision to this court. For this court to so hold, we would have to consider whether that reading of § 315(e) is tied to § 319’s right of appeal for any “party dissatisfied with the final written decision” of the Board. Relatedly, we would also have to consider whether § 315(e) should be read to incorporate a traditional preclusion principle—that neither claim nor issue preclusion applies when appellate review of the decision with a potentially preclusive effect is unavailable. .  .   .     .¶ If, in the future, a live controversy over the upheld claims arises between Presidio and AVX, and if either an infringement action or declaratory judgment action involving those claims is filed in district court, AVX can, in such an action, test whether § 315(e) bars it from raising the obviousness challenges that the Board reviewed and rejected. At that point, the parties presumably would be adverse on the issue.

But, 315(e) estoppel was disconnected from 319’s right of appeal in the legislative history. That is, where the statutory estoppel of inter partes reexamination only attached after all appeals were exhausted, AIA estoppel was deliberately modified to attach at the time of the PTAB’s Final Written Decision (FWD). Given that estoppel attaches by statute before appeal, and this was a legislative change from the older reexamination framework, the finality of common law estoppel might be a challenging argument for such petitioners absent some other link to the right of appeal.

Until the applicability of estoppel in this context is settled, the PTAB stakes are a bit higher for those petitioners seeking to clear a path for future product development.

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