Jan 28, 2020Legal
PTAB Estoppel: Grounds vs. Evidence

District of Delaware Considers Physical Products & Redundant Publications

Back in August, I pointed out that district courts continue to grapple with whether or not physical products described by prior art publications of an earlier Patent Trial & Appeal Board (PTAB) trial are subject to 315(e)(2) estoppel. That is, by virtue of utilizing a product manual in the earlier PTAB proceeding, whether the actual products corresponding to such a manual can be considered “raised, or reasonably could have been raised” under 35 U.S.C. § 315(e)(2).

The view of some districts has been that since physical products can’t be raised at the PTAB, such evidence is simply outside the scope of estoppel.  Others take a narrower view, weighing the potential technical superiority of the physical product to the previously used publication.  In another twist on this fact pattern, the District of Delaware recently considered whether the underlying evidence of these disputes should be the focus at all.

In Wasica Finance GmbH et al v. Schrader International Inc., the Court explained (here):

" [Defendant].  .   . does not dispute that a 1990 article the parties refer to as “Siuru” is a printed publication that discloses all of the relevant features of the [physical product] and that Siuru reasonably could have been raised during the IPR.  .    .    .¶ The parties’ dispute (which the parties agree the Federal Circuit has not addressed) is whether an obviousness combination – whose only relevant difference from a prior IPR combination is the inclusion of a physical product as one component, where all the relevant features of that physical product had been disclosed in a patent or printed publication that reasonably could have been raised during the IPR – is estopped as a “ground” that “reasonably could have been raised” during the IPR. That is, does IPR estoppel extend to invalidity “grounds” that include a physical product when a patent or prior art publication – to which the physical product is entirely cumulative – was reasonably available during the IPR?

[Patent Owner] contends that [defendant]  is so estopped. [Patent Owner] observes that moving from a printed publication (such as a manual describing a device) in an IPR proceeding to a physical product (such as the device described in the manual) in litigation merely swaps evidentiary proofs supporting the same “ground” for invalidity that was raised or reasonably could have been raised during the IPR.  .  .  .

As [Patent Owner] observes, 35 U.S.C. § 312(a)(3) identifies as separate requirements to be included in an IPR petition “the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim” (emphasis added). In this way, the Patent Act distinguishes between grounds and evidence. Since the estoppel provision, § 315( e )(2), applies to grounds, a petitioner is estopped from proceeding in litigation on those grounds, even if the evidence used to support those grounds was not available to be used in the IPR. See also generally 35 U.S.C. § 315(e)(l) (estopping IPR petitioner from requesting or maintaining IPR proceeding with respect to claim “on any ground that the petitioner raised or reasonably could have raised” in previous IPR that concluded with final written decision).   .   .   .¶The Siuru 1990 prior art publication also reasonably could have been raised in the IPR and is materially identical (i.e., discloses the same claim elements) to the [physical products].

(Internal citations omitted)

The Court continued in a footnote, explaining its concerns over the “physical product” exception, explaining:

" The Court’s decision is based on its agreement with [Patent Owner] that the statutory distinction between “grounds” and “evidence” leads to the conclusion that estoppel can apply to cumulative evidence that is offered in litigation to support the same invalidity “grounds” that were presented in an IPR. Although not the basis for the Court’s decision, the Court does also share [Patent Owner’s]concern that endorsing Defendants’ position could “gut the estoppel provision entirely. In future litigation, defendants will simply swap out publications that were available through a diligent search with the same prior art, only in a slightly different format or in a version that could not have been found in a search (such as public white papers, presentations, and data sheets that were not widely circulated).”

Thus, in those districts where a physical product is now considered outside of 315(e)(2) estoppel by definition, perhaps this analysis of grounds vs. evidence could lead to a change of practice.  Either way, the issue will certainly head to the Federal Circuit shortly.

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

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