A district court judge recently addressed the scope of estoppel for a petitioner in an inter partes review (IPR). Specifically, the court clarified the meaning of a “ground for invalidity” as it relates to the estoppel effect of 35 U.S.C. § 315(e).

Under 35 U.S.C. § 315(e), a petitioner in an IPR is estopped from later asserting invalidity “on any ground that the petitioner raised or reasonably could have raised” during the proceeding. In Shaw Indus. Group, Inc. v. Automated Creel Sys., Inc., the Federal Circuit limited the reach of 315(e) by holding that its estoppel effect does not apply to any petitioned but non-instituted ground. 817 F.3d 1293 (Fed. Cir. 2016).  Here, the court was faced with interpreting the meaning of a petitioned “ground for invalidity,” which, under Shaw, would avoid 315(e)’s estoppel effect.

Plaintiff argued that Defendant’s current theory of how a prior art reference anticipates a claim is completely different from the theory that was previously presented to, and rejected by, the Patent Trial and Appeal Board (PTAB).  According to the Plaintiff, Defendant’s new theory is a different invalidity “ground,” which Defendant only set forth after the PTAB was not persuaded by its original theory.  Plaintiff contended that a denied “ground” should not be broadly interpreted to include the claim, the prior art references, and the general theory of invalidity. Rather, for purposes of the estoppel effect, a “ground” should be narrowly limited to the petitioner’s element-by-element invalidity analysis with specific citations to evidence that was presented in the IPR petition. Plaintiff further argued that, if a “ground” is not limited in this way, “a defendant could assert numerous bare-bones grounds in an IPR petition, knowing that those grounds would be rejected by the PTAB, but thus preserved [under Shaw] for later use in the district court.”

In clarifying the meaning of a “ground for invalidity,” the court first recognized that a defendant could construct a “brand-new invalidity theory” using the same prior art that it presented in its petition for IPR. Because of this possibility, the court explained that if the “thrust” of a defendant’s invalidity theory is different from that presented to the Patent Trial and Appeal Board (PTAB), it is probably subject to the estoppel effect of 315(e). The court further explained that a defendant is not locked into the precise arguments that it made to the PTAB. However, “if the new theory relies on different, uncited portions of the prior art, attacks different claim constructions, or relies on substantially different claim constructions, then the new theory is tantamount to a new invalidity ground, and the court will treat it like a non-petitioned ground subject to estoppel.”

Douglas Dynamics, LLC v. Meyer Prods. LLC, 14-cv-886 (W.D. Wis. May 15, 2017) (J. Peterson)