PTAB provides guidance on AIA estoppel provisions

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The America Invents Act estoppel provisions play an important role in IPR, CBM and PGR practice at the PTAB, influencing questions such as what type of petition to file, which claims to challenge, what prior art and grounds of unpatentability to pursue and even whether to file a petition at all. But there remains ambiguity about the scope of estoppel. Three recent PTAB decisions (Dell, Westlake and most recently Apotex) provide a helpful guide as to the types of grounds that may be estopped. Based on this guidance, the pros and cons of different litigation strategies can be assessed and petitioners can assess how best to reserve some invalidity challenges for district court or the ITC.

The estoppel provisions of the America Invents Act (AIA) play a fundamental role in inter partes review (IPR), covered business method (CBM), and post-grant review (PGR) practice before the Patent Trial and Appeal Board (PTAB). With the power to restrict future challenges to the validity of a patent, the potential for estoppel stemming from the AIA has influenced answers to fundamental questions such as what type of petition to file (for example, IPR petition versus CBM petition, when both are options), which claims to challenge in a petition, what prior art and grounds of unpatentability to pursue in a petition, and even whether to file a petition at all. Despite the importance of the AIA's estoppel, some have argued that ambiguity remains as to its scope. With only limited legislative history, and no significant analysis by district courts or the Federal Circuit, recent decisions from the PTAB provide a helpful guide. Indeed, one recent decision, Apotex Inc v Wyeth LLC, IPR2015-00873, Paper No 8 (September 16 2015), provides significant insight on this issue that may affect strategies and use of IPRs, PGRs, and CBMs.

This article touches on the history of the AIA's estoppel provisions, how the scope of estoppel has and continues to be clarified in PTAB decisions, and the potential ramifications of those refinements.

The estoppel associated with IPR proceedings is defined by 35 USC § 315(e), which provides that a petitioner (or the real party in interest or privy of the petitioner) in "an inter partes review of a claim in a patent" that "results in a final written decision may not":

1) request or maintain a proceeding before the [USPTO] with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review;

2) assert either in a civil action … or in a proceeding before the International Trade Commission … that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

PGR proceedings are subject to similar estoppel under 35 USC § 325(e). CBM proceedings also have similar provisions regarding estoppel at the USPTO, but are subject to narrower estoppel with respect to invalidity challenges in district court and the ITC. Table 1 shows the broad classes of estoppel that apply after a final written decision in an IPR, PGR, or CBM proceeding.

Table 1: Broad classes of estoppel
Type of challenge	Estoppel at the USPTO	Estoppel in district courts and the ITC
IPR	“any ground that the petitioner raised or reasonably could have raised”	“any ground that the petitioner raised or reasonably could have raised”
CBM	“any ground that the petitioner raised or reasonably could have raised”	“any ground that the petitioner raised”
PGR	“any ground that the petitioner raised or reasonably could have raised”	“any ground that the petitioner raised or reasonably could have raised”

But what does "reasonably could have raised" actually mean? If a would-be petitioner knows of a large number of prior art references, could that petitioner reasonably be expected to be able to raise all grounds of unpatentability associated with those references? And what about references that the petitioner does not know of – what sort of diligence should be expected of a petitioner? These types of questions caused one representative in the House to characterise the "reasonably could have raised" standard as "treacherous" (statement of Andrew J Pincus, Hearing before the House Subcommittee on Intellectual Property, Competition, and the Internet, 112th Cong 112-20 (March 11 2011)).

The legislative history of the AIA provides some limited guidance. When comparing the "reasonably could have raised" standard with the "could have raised" standard of the no-longer-available inter partes reexamination process, former Senator Jon Kyl explained that "[a]dding the modifier 'reasonably' ensures that could-have-raised estoppel extends only to that prior art which a skilled searcher conducting a diligent search reasonably could have been expected to discover", and not to a "scorched-earth search around the world" (statement of Senator Kyl, 157 Cong Rec S1375 (daily ed March 8 2011)). Reflecting on the inter partes reexamination process and its "could have raised" estoppel – perhaps suggestive of the intended scope of "reasonably could have raised" – he also explained the USPTO "has generally declined to apply estoppel … to an issue that is raised in a request for inter partes reexamination if the request was not granted with respect to that issue". But he went on to explain that "raised or reasonably could have raised" estoppel "effectively bars … a party or his real parties in interest or privies from later using inter partes review or ex parte reexamination against the same patent, since the only issues that can be raised in an inter partes review or ex parte reexamination are those that could have been raised in the earlier post-grant or inter partes review".

Many questions remained following the AIA's enactment with respect to the scope of the "raised or reasonably could have raised" standard.

Prior to the decision in Apotex, some guidance as to the scope of estoppel was provided in two decisions that have been designated as "representative" by the PTAB.

Dell Inc v Elecs and Tele Telecomms Research, Inst, IPR2015-00549, Paper No 10 (March 26 2015) involved a situation in which a petitioner attempted to file a new IPR petition after already having filed one that resulted in a final written decision. In the new IPR, it was alleged that claims 1 to 9 of the patent-at-issue were invalid as obvious based on two references named Mylex and Hathorn. In the previous IPR, the same petitioner had alleged claims 1 to 9 were obvious based on a number of references including Mylex, and that claims 1 to 3 and 5 to 8 were anticipated based on Hathorn. The PTAB instituted a trial in the previous IPR only on the anticipation ground (that is, based on Hathorn) and ultimately found in its final written decision that none of the claims should be invalidated.

The question in Dell was whether the petitioner "reasonably could have raised" in the earlier proceeding the grounds it now proposed. With respect to claims 1 to 3 and 5 to 8 (that is, the claims instituted upon in the earlier IPR), the PTAB found the fact that the Mylex and Hathorn references had both been cited in the earlier IPR to be determinative in estopping the petitioner from attempting to invalidate those claims again. The PTAB explained that "the differences in how the references have been asserted in these proceedings [has] no weight on our determination of whether the grounds raised in the instant Petition could have been raised in the [earlier proceeding]". However, estoppel did not apply as to claims 4 and 9, even though the earlier IPR petition addressed them, because they were not part of the earlier final written decision.

The latter point – that estoppel applies on a claim-by-claim basis – was also explained in the context of CBM proceedings in Westlake Servs, LLC v Credit Acceptance Corp, CBM2014 00176, Paper No 28 (May 14 2015). The PTAB explained: "By its terms, estoppel is invoked under Section 325(e)(1) as to 'a claim in a patent' that 'results in a final written decision under' 35 USC § 328(a)." Therefore, if a final written decision in an earlier proceeding only ruled on a subset of claims of a patent (as was the case in Westlake), estoppel would not apply to the other claims. Notably, the PTAB explained that arguments relating to "harassment or abuse of patent owners through serial petitions" are more appropriately addressed by 35 USC § 325(d), which provides the PTAB with the discretion to "take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office".

Together, Dell and Westlake suggest: (1) "reasonably could have raised" estoppel may apply to a ground of unpatentability if it is made up of references cited in an earlier IPR, PGR or CBM proceeding; and (2) "reasonably could have raised" estoppel may not apply to a ground of unpatentability against claims of a patent that were not the subject of a final written decision. Dell and Westlake may have led a petitioner to conclude that a focused petition, relying only on what a petitioner views as the strongest prior art, and targeting only a limited subset of claims (for example, claims asserted in a corresponding district court litigation), would be an optimal approach. However, the recent guidance in Apotex suggests that alternative approaches may sometimes be optimal from a petitioner's perspective.

Apotex involved another situation in which a petitioner attempted to file a second IPR petition after a first one resulted in a final written decision that did not find any claims unpatentable. The second IPR petition included two proposed grounds of unpatentability. Ground 1 alleged that claims 1 to 3, 6 to 9, 12, 13, 18 and 19 of the patent-at-issue were obvious based on references called CN '550, Kirsch, and Herman. Ground 1 was the same as one proposed in the first IPR petition. However, the PTAB did not institute that ground in the first IPR, finding it to be "redundant" to other instituted grounds.

Ground 2 alleged that claims 4, 5, 10, 11, 14-17, and 20-23 of the patent-at-issue were obvious based on CN '550, Kirsch, Herman, and two additional references called Pawelczyk and Remmers. While all prior art in ground 2 was cited in the first IPR petition, it was not proposed as a ground of unpatentability.

The PTAB in Apotex held that estoppel did not apply to ground 1. In particular, because ground 1 was not instituted in the first IPR after it was found redundant, ground 1 was viewed as not having actually been raised during an IPR proceeding, but rather raised during a "preliminary proceeding". The PTAB also viewed the fact the ground had been found to be redundant in the first IPR to preclude a finding that the ground could have "reasonably" been raised in the first IPR proceeding. In other words, while ground 1 was raised during a "preliminary proceeding" (that is, pre-institution), it was not raised, and could not have been reasonably raised, during the first IPR proceeding itself because of the PTAB's redundancy finding.

On the other hand, the petitioner was estopped from asserting ground 2 because the petitioner was aware of the prior art contained in the ground when it filed the previous IPR (as evidenced by the previous IPR petition itself) and simply chose not to assert ground 2 in the previous IPR. The PTAB rejected arguments that its redundancy finding as to ground 1 applied to ground 2 (even though ground 2 simply included additional references as compared to ground 1, addressed dependent claims stemming from those addressed in ground 1, and likely would have been found to be redundant if proposed) because the petitioner "did not know, at the time it filed the [first IPR petition], that the [PTAB] would find the grounds proposed therein to be redundant".

The implications of the decision in Apotex may be significant. First, the PTAB's holding regarding redundant grounds could be extended with similar reasoning to suggest that any ground of unpatentability proposed in an IPR, PGR or CBM petition that is not adopted by the PTAB in its institution decision will not be estopped in any future proceeding or trial (even if other grounds are instituted and result in a final written decision). Second, while Dell and Westlake suggest that narrow and focused IPR, PGR and CBM petitions may be optimal from an estoppel perspective, Apotex suggests the opposite. That is, Apotex suggests that, to the extent possible, most if not all reasonable grounds of unpatentability should be proposed in a petition since one of two scenarios are likely to occur: (1) The PTAB may institute on all proposed grounds, increasing the likelihood of the challenged claims being found unpatentable; or (2) the PTAB may deny institution on one or more of the proposed grounds, potentially enabling those denied grounds to later be asserted in a future AIA proceeding or a district court or ITC proceeding.

Of course, practical limitations must be considered before would-be petitioners implement any strategy, such as the format requirements for petitions and the requirements for institution. Practitioners who routinely handle AIA proceedings will be quick to note that presenting multiple grounds in a petition, while also ensuring each ground meets the threshold standards for institution, is no easy task. Another consideration is timing. For IPR proceedings involving an asserted patent, it is important to prepare and file an IPR petition with multiple grounds early enough to ensure the one-year bar under 35 USC § 315(b) does not preclude the ability to pursue a subsequent IPR petition should the PTAB decline to institute one or more grounds in the first petition.

While decisions on preparing petitions are likely to be fact-specific, some possible IPR strategies regarding estoppel that flow from Dell, Westlake and Apotex are provided in table 2.

Table 2: Possible IPR strategies
Strategy	Some potential benefits	Some potential risks
Single ground of unpatentability against subset of patent’s claims (for example, asserted claims in a co-pending litigation)	May permit focused and well-explained petition Minimise risk of estoppel as to non-asserted claims	May encounter one-year bar issues under 35 USC § 315(b) if there is a later desire to file an IPR petition as to other claims The PTAB’s discretion under § 325(d) may still prevent institution of later submitted grounds Increase risk of estoppel as to grounds not proposed in petition
Multiple grounds of unpatentability against subset of patent’s claims (for example, asserted claims in a co-pending litigation)	Minimise risk of estoppel as to grounds not instituted by the PTAB Minimise risk of estoppel as to non-asserted claims	May encounter one-year bar issues under 35 USC § 315(b) if there is a later desire to file an IPR petition as to other claims The PTAB’s discretion under § 325(d) may still prevent institution of later submitted grounds Ability to satisfy the threshold standards for institution for each ground may be weakened
Single ground of unpatentability against all of patent’s claims	May permit focused and well-explained petition	Increase risk of estoppel as to claims not asserted in a co-pending litigation Increase risk of estoppel as to grounds not proposed in petition
Multiple grounds of unpatentability against all of patent’s claims	Minimize risk of estoppel as to grounds not instituted by the PTAB	Increase risk of estoppel as to claims not asserted in a co-pending litigation The PTAB’s discretion under § 325(d) may still prevent institution of later submitted grounds Ability to satisfy the threshold standards for institution for each ground may be weakened

Preparation of IPR, CBM, and PGR petitions is often fact-specific. One must take into account not only estoppel, but also other considerations such as the PTAB potentially using its discretion under 35 USC § 325(d) to deny subsequent petitions (as was noted in Westlake) even if estoppel does not technically apply. On the other hand, would-be petitioners interested in reserving arguments for district court or the ITC would be remiss to ignore the PTAB's recent guidance, since it may provide an avenue for ensuring that at least some invalidity challenges remain.

Daniel Zeilberger	Joseph Palys	Naveen Modi

© 2015 Paul Hastings. Zeilberger is an associate; Palys and Modi are partners in the firm's Washington DC office