Authored by Brian S. Mudge
In three recent opinions, the Board has again ruled on the effect of statutory provisions governing estoppel under 35 U.S.C. §315(e)(1) and 35 U.S.C. §325(e)(1) following a final written decision. As shown by these decisions, the Board may, but is not required to, terminate a later proceeding after a final decision that triggers estoppel. These decisions also demonstrate that estoppel may be applied to bar not only prior art challenges, but also challenges under 35 U.S.C. §101 or §112.
CBM2015-00015 and CBM2015-00016:
Background. The Board issued a consolidated order addressing estoppel in these two CBM proceedings (along with other CBM proceedings not addressed here) in which trial had been instituted. CBM2015-00015 (“the ’015 CBM”) involved a challenge to claim 1 of the ’221 patent under section 101. CBM2015-00016 (“the ’016 CBM”) involved multiple grounds for challenging several claims of the ’458 patent, including a challenge to claim 1 of the ’458 patent under section 101.1 Petitioner had previously challenged claims of the ’221 and ’458 patents in CBM2014-00102 (“the ’102 CBM”) and CBM2014-00106 (“the ’106 CBM”), respectively. After trial had been instituted in the ’015 and ’016 CBMs, the Board on September 25, 2015 issued final written decisions in the prior ’102 and ’106 CBMs, ruling that claim 1 (among other claims) of the ’221 patent and claim 1 of the ’458 patent are unpatentable under section 103. The Board then requested briefing from the parties on whether 35 U.S.C. §325(e)(1) estopped Petitioner from arguing unpatentability of claim 1 of the ’221 patent and claim 1 of the ’458 patent in the ’015 and ’016 CBMs.
Ruling on Estoppel. Analyzing estoppel under 35 U.S.C. §325(e)(1) ‒ which applies when a CBM review has resulted in a final written decision ‒ the Board determined that estoppel under §325(e)(1) applies to Petitioner in the pending ’015 and ’016 CBMs because the same party was petitioner in the prior ’102 and ’106 CBMs, each of which resulted in a final written decision. Thus, the Board ruled that Petitioner “cannot ‘request or maintain’ a proceeding before the Office” as to claim 1 of the ’221 patent and claim 1 of the ’458 patent “on any ground” that Petitioner “raised or reasonably could have raised” in CBM2014-00102 or CBM2014-00106, respectively.2
Next, the Board concluded that, under §325(e)(1), Petitioner is estopped from maintaining its challenges under section 101 to claim 1 of the ’221 patent and claim 1 of the ’458 patent. Petitioner argued that it could not reasonably have raised a section 101 challenge in the prior ’102 and ’106 CBMs because they pre-dated the Supreme Court’s Alice3 decision and CBM proceedings allegedly treated section 101 arguments differently pre- and post-Alice. However, the Board rejected Petitioner’s argument, holding that the statutory estoppel provision does not make an exception for intervening caselaw that “merely clarifies jurisprudence.” The Board further noted that Petitioner could have relied on the Supreme Court’s decisions in Bilski and Mayo, along with several Federal Circuit cases that found computer-based method claims invalid under section 101, to mount a section 101 challenge in the prior ’102 and ’106 CBMs.4 As a result of the estoppel determination, the Board ruled that Petitioner cannot present argument as to claim 1 of the ’221 patent and claim 1 of the ’458 patent at the oral hearing, and dismissed Petitioner from the ’015 CBM and from ’016 CBM (as to claim 1 only).5
However, the Board refused to authorize Patent Owner to file a motion to terminate the ’015 and ’016 CBMs. The Board reasoned that while the estoppel provisions act to bar a petitioner from requesting or maintaining a proceeding, they do not proscribe any actions by the Board. Since the proceedings are in the late stages with a fully developed record (and there are additional related Board proceedings pending), the Board determined that it would resolve these cases together and not terminate the ’015 and ’016 CBMs.6
Background. IPR2014-01465 (“the ’465 IPR”) involved a challenge to claim 1 (the sole claim) of the ’694 patent based on the Estrin reference.7 Petitioner had previously challenged claim 1 of the ’694 patent in IPR2014-00587 (“the ’587 IPR”). After trial had been instituted in the ’465 IPR, the Board on September 23, 2015 issued a final written decision in the prior ’587 IPR, ruling that claim 1 of the ’694 patent was not proven unpatentable. Patent Owner then moved for termination of the’465 IPR, arguing that Petitioner was estopped pursuant to 35 U.S.C. §315(e)(1).
Ruling on Estoppel. The Board analyzed estoppel under 35 U.S.C. §315(e)(1), which applies to a petitioner in an IPR that has resulted in a final written decision. Section 315(e)(1) is the same in all material respects, as to the effect of estoppel, as 325(e)(1) (which applies to final decisions in PGRs and CBMs). There was no dispute that the same petitioner challenged to claim 1 of the ’694 patent in the two IPRs, and that the petition in the prior ’587 IPR resulted in a final written decision. Thus, the central issue disputed by the parties, and considered by the Board, was whether Petitioner reasonably could have raised, in the prior IPR, the ground of unpatentability based on the Estrin reference.
Under section 315(e)(1), the Board concluded that Petitioner reasonably could have raised Estrin as grounds for unpatentability in the earlier IPR and therefore is estopped from maintaining the later ’465 IPR.8 Based on legislative history and a prior PTAB decision, the Board explained that “what could have been raised” would be broadly construed to include “prior art which a skilled searcher conducting a diligent search reasonably could have been expected to discover.”9 Crediting the evidence submitted by Patent Owner, the Board found that a skilled searcher conducting a diligent search would likely have searched IEEE Xplore, a well-known online database of technical literature in computer science and electronics, and would have located Estrin, a published paper from an IEEE symposium.10
Petitioner made two arguments as to why it could not have raised Estrin earlier, both of which were rejected by the Board. First, Petitioner argued that it was not aware of Estrin at the time it filed the prior ’587 IPR petition. However, the Board disagreed, stating that the legislative history does not limit “what reasonably could have been raised” only to art which Petitioner itself was in fact aware. Second, Petitioner contended that it could not have anticipated certain arguments made by Patent Owner in the earlier proceeding that “opened the door” for Petitioner to assert Estrin in the later petition. The Board disagreed with this position as well, noting that Petitioner cited no authority to support its contentions, and that the proper focus was on what a diligent searcher could be expected to discover, not whether Petitioner could foresee how Patent Owner would argue its case.11 As a result of the estoppel determination, the Board ruled that Petitioner cannot participate in the rest of the proceeding.12
Finally, the Board turned to the question of terminating the ’465 IPR. Considering the estoppel provisions, the Board noted that §315(e)(1), like §325(e)(1), neither prohibits the Board from reaching a final decision nor mandates that the Board reach a final decision; rather, the statute only limits action by a petitioner in requesting or maintaining a petition.13 Citing Rule 42.72, the Board stated that it “may” terminate a proceeding without reaching a final decision “where appropriate.” Under the “totality of the circumstances,” including the fact that oral argument was requested but not yet held, and no final decision had been reached, the Board determined that it was appropriate to terminate the proceeding without proceeding to render a final written decision – despite Petitioner’s argument that the record was fully developed.14
Background. CBM2015-00124 (“the ’124 CBM”) involved a challenge to a number of claims of the ’317 patent, including claims 1, 6-8, 12-13 and 16, under section 101, and also claim 13 under section 112.15 Petitioner had previously challenged these same claims of the ’317 patent in CBM2014-00112 (“the ’112 CBM”). Before trial was instituted in the ’124 CBM, the Board on September 25, 2015 issued a final written decision in the prior ’112 CBM, ruling that claims 1, 6-8, 12-13 and 16 of the ’317 patent are unpatentable under section 103.
Ruling on Estoppel. Using analysis similar to that in CBM2015-00015 (discussed above), the Board ruled that Petitioner was estopped from challenging claims 1, 6-8, 12-13 and 16 of the’317 patent in the later ’124 CBM. Despite Petitioner’s arguments, the Board found that Petitioner could have raised grounds under section 101 or 112 in the earlier CBM proceeding. Accordingly, the Board denied instituting trial on these claims in the ’124 CBM under §325(e)(1) (but did not apply estoppel to other challenged claims in this proceeding).16
Implications of the Estoppel Rulings:
First, following legislative history and prior PTAB caselaw, the PTAB reaffirmed that it will apply a broad reading of the potential scope of estoppel, to include prior art that a “skilled searcher” could have discovered conducting a “diligent search.” Thus, the Board rejected arguments that a prior art reference was unknown to the patent challenger, and ruled that estoppel barred the challenge because the patent owner provided evidence that a skilled searcher could have discovered the reference with a thorough prior art search using a known IEEE technical database. This demonstrates the Board’s willingness to put teeth behind the estoppel provisions, provided that the patent owner establishes through evidence that the prior art grounds could have been discovered earlier through a diligent search.
Second, the Board applied estoppel to preclude a petitioner from maintaining section 101 and 112 grounds in a second CBM petition following a final written decision in a prior CBM proceeding under §325(e)(1). Thus, a party challenging a patent in CBM proceedings would be well advised to include any potential section 101 or 112 grounds in the earliest-filed CBM petition, or risk being estopped from raising such grounds in a later CBM petition. Of note, however, a final decision in a prior IPR proceeding should not result in estoppel (in a later CBM) for grounds under section 101 or 112, since those grounds cannot be raised in an IPR. Similarly, a final written decision in a prior CBM proceeding should not result in estoppel (in a later IPR) for grounds under section 102(e) or 102(g), since those grounds cannot be raised in a CBM.
Third, the Board has made clear that, even if estoppel applies to bar a petitioner from further participation, it will not necessarily prevent the Board from continuing the proceeding and reaching a final decision. In two of the decisions discussed above, the proceedings were at a similar stage (trial instituted, record completed but before oral argument), yet the Board reached opposite conclusions as to whether the proceedings should be terminated. The main difference was that, in the decision where the Board declined to order termination, there were a series of related proceedings that remained to be argued and decided (and claims remained in the ’016 CBM).
Finally, as demonstrated by the ’124 CBM decision, the Board will clearly use estoppel as a basis for denying institution of trial in a later petition for those claims that are subject to a final written decision in a prior proceeding that predates the institution decision. In contrast to the other post-institution decisions, it appears highly likely that the Board will simply decline to institute trial when estoppel is triggered prior to the institution decision based on the early stage of a such case.
1 Apple Inc. v. Smartflash LLC, CBM2015-00015, paper 49 (Nov. 4, 2015).
2 CBM2015-00015, paper 49 at 3 (quoting 35 U.S.C. §325(e)(1)).
3 Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).
4 CBM2015-00015, paper 49 at 4.
5 Id. at 5.
6 Id. at 5-6.
7 Int’l Business Machines Corp. v. Intellectual Ventures II LLC, IPR2014-01465, paper 32 (Nov. 6, 2015).
8 IPR2014-01465, paper 32 at 4.
9 Id. at 5 (citing 157 Cong. Rec. S1375, S1367, S951, and Dell Inc. v. Elecs. and Telecomms. Research Inst., IPR2015-00549, paper 10 at 4–6 (PTAB Mar. 26, 2015)).
10 IPR2014-01465, paper 32 at 6.
11 Id. at 6-7.
12 Id. at 9.
13 Id. at 9.
14 Id. at 8-10.
15 Apple Inc. v. Smartflash LLC, CBM2015-00124, paper 7 (Nov. 10, 2015).
16 CBM2015-00124, paper 7 at 6-7.