New Use of Collateral Estoppel Permitted for IPRs

Collateral estoppel used to flip holding of patent validity

The Federal Circuit has expanded, in a precedential opinion, the ability for patent challengers to use collateral estoppel to prevail in inter partes reviews (IPRs) after losing their case before the Patent Trial and Appeal Board (PTAB) of U.S. Patent and Trademark Office (USPTO).

In the case before the Federal Circuit, Google lost at the PTAB on challenges to two independent claims, claims 14 and 18, and other dependent claims. In a parallel IPR concerning a related patent, the patentee saw the claims of the related patent invalidated and did not appeal the loss. The Federal Circuit invalidated claim 18 after finding—on appeal—that it was similar to one of the claims lost in the parallel IPR in view of the same prior art references set forth in the petition.

Google's petition did not challenge the independent claims based on collateral estoppel. And challenges in IPRs can be made “only on the basis of prior art consisting of patents or printed publications.” 35 U.S.C. § 311. The Federal Circuit excused the lateness of the collateral estoppel theory because the decision underlying it did not become ripe until after the petition was filed.

While the challenge to claim 18 in Google's petition was based on the same combination of prior art references found in the estopping decision, the petition's challenge to claim 14 was based on a different combination of prior art references than those in the parallel IPR. Thus, despite the guidance that “the petitioner’s petition … is supposed to guide the life of the litigation,” SAS Institute Inc. v. Iancu, 138 S. Ct. 1348, 1356 (2018), the challenger was allowed to prevail on claim 14 as well. This outcome may have been driven by the patentee’s concession that claims 14 and 18 would stand or fall together. In a future case, a patent owner may well seek to hold the scope any collateral estoppel to track the scope of petition’s theories as set forth in the petition.

Several dependent claims avoided collateral estoppel. Google sought to further extend collateral estoppel by combining it with obviousness findings from the PTAB concerning “similar limitations in parallel dependent claims.” That extension was rejected by the Federal Circuit, which demanded Google raise collateral estoppel arguments with respect to the dependent claims in order to rely on collateral estoppel.