PTAB Collateral Estoppel as Summary Judgment Tool

Unchallenged Claim Falls on Summary Judgement

Back in 2016, I flagged a few district court decisions that leveraged Patent Trial & Appeal Board (PTAB) fact-finding on summary determination. These decisions weighed the fact finding of the expert agency as “compelling evidence” and noted the Board”s “expertise in evaluating prior art and assessing patent validity.”  While crediting the fact finding on common technical issues, these decisions stopped short of finding outright issue preclusion based upon the earlier PTAB proceeding.

However in some instances, PTAB determinations might be leveraged to attack claims that slipped through the PTAB net.

In Intellectual Ventures I, LLC v. Lenovo Group Ltd., Plaintiff Intellectual Ventures (“IV”) defendant EMC Corp. petitioned for inter partes review, challenging certain claims of the subject patent eventually leading to a Final Written Decision declaring the claims to be unpatentable.  In particular, the PTAB noted that a prior art reference (Reschke) met the limitations found in independent claim 1.  Prior to institution (but after the petition was filed), IV served its infringement contentions, which included a clam not included in the IPR petition (dependent claim 11).

In the district court, EMC moved for summary judgment on the invalidity of dependent claim 11, arguing that (1) IV is collaterally estopped from asserting claim 11, and (2) there was no genuine dispute of fact that claim 11 is obvious (under § 103) over the Reschke reference.

In response, IV argued that (1) claim 11 must be evaluated separately from claim 1 (and collateral estoppel therefore cannot apply), (2) the PTAB’s lower standard of proof makes collateral estoppel inapplicable, (3) and the PTAB’s broader claim construction standard also renders collateral estoppel inappropriate.

The court granted EMC’s motion (here), noting that collateral estoppel applies to claim 11 because the differences between it and claim 1 did not materially alter the invalidity analysis.

The court first observed that collateral estoppel (following the law of the First Circuit) requires the following elements to be met:

" (1) the issue sought to be precluded is the same as the one involved in the earlier action;
  (2) the issue was actually litigated;
  (3) the issue was determined by a final judgment; and
  (4) the determination of the issue was essential to the earlier judgment.

The court also noted that “the party against whom the preclusion is asserted must have ‘had a full and fair opportunity for judicial resolution of the same issue.’”

The court primarily focused on the first element – whether the issue sought to be precluded is the same as in the previous action.  To evaluate this issue, the court looked to relevant Federal Circuit precedent, first determining that “final judgment[s] from the PTAB on the invalidity of a patent claim [have] an issue-preclusive effect on any pending actions involving that patent.”  This holds true even though actions in district court and the PTAB have different burdens of proof and claim construction standards.  Furthermore, asserted unadjudicated claims need not be identical to already adjudicated claims for collateral estoppel to apply, as long as “the differences between the unadjudicated patent claims and adjudicated patent claims do not materially alter the question of invalidity.”  Lastly, the court noted that in related circumstances, “the PTAB may apply collateral estoppel to unadjudicated dependent claims where the adjudicated independent claim was found unpatentable in a prior IPR proceeding.”  Finding, based on this precedent, that collateral estoppel applied to the PTAB’s decision on claim 1, the court looked to whether the differences between claims 11 and 1 “materially alter[ed] the invalidity analysis” and found that they did not.

Going forward, such estoppel may be argued as another factor militating in favor of a stay even where there is not a complete alignment between asserted and challenged claims.

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