Intellectual Property > IP Newsflash > District Court Precludes Defendant from Asserting Invalidity Grounds That It Raised or Could Have Reasonably Raised in IPR Proceeding
15 May '17

On May 11, 2017, Magistrate Judge Roy Payne in the Eastern District of Texas recommended that patentee Biscotti’s inter partes review (IPR) estoppel motion be granted–in-part and denied-in-part.

Biscotti initially filed suit against Microsoft on November 26, 2013, on a single patent–the ’182 patent–whose subject matter generally relates to video calling solutions. According to the ’182 patent, the video calling solutions provide, among other benefits, “high performance, high definition video quality, [and] simplified installation.” After the litigation began, Microsoft filed three petition for inter partes review of the asserted claims. The Patent Trial and Appeal Board (PTAB) instituted proceedings on some claims but declined to do so on others.  In April 2015, Microsoft filed three more petitions seeking review of the claims that the PTAB initially declined to institute. These April 2015 petitions were rejected for being time-barred under 35 U.S.C. § 315(b).

The claims of the ’182 patent were upheld in IPR, and, with the litigation stay lifted and the parties approaching their trial date in June 2017, Biscotti moved for partial summary judgment on whether Microsoft was estopped by 35 U.S.C. § 315(e)(2) from presenting certain invalidity defenses.

In ruling on Biscotti’s motion, the court recognized that a petitioner is barred from raising any ground “that [it] raised or reasonably could have raised during that inter partes review.” 35 U.S.C. § 315(e)(2) (emphasis added). The court found that an overly narrow reading of the estoppel provision (and, by extension, an overly broad reading of cases such as Shaw and HP, which applied a narrow reading of the estoppel provision) runs counter to the aims of the AIA by providing a forum to re-litigate arguments that were defeated in an IPR. Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293, 1300 (Fed. Cir. 2016), cert. denied, (U.S. Oct. 31, 2016); HP Inc. v. MPHJ Technology Inv., LLC, 817 F.3d 1339, 1347 (Fed. Cir. 2016). However, the court also acknowledged due process considerations and the chance to assert the merits of a ground for invalidity in some forum, whether court or the PTAB. See, Douglas Dynamics, LLC v. Meyer Prod. LLC, No. 14-CV-886-JDP, 2017 WL 1382556, at *4 (W.D. Wis. Apr. 18, 2017). With these competing considerations in mind, the court constrained Shaw to its facts, holding that estoppel applied to grounds that were sought and to prior art that was discoverable under the “skilled searcher standard.” Microsoft could still assert grounds for which it petitioned in IPR, but which the PTAB declined to institute for only procedural reasons, such as redundancy.

Biscotti Inc. v. Microsoft Corp, Case No. 2:13-CV-01015-JRG-RSP (E.D. Tex. May 11, 2016).