Intellectual Property > IP Newsflash > IPR Estoppel Extends Only to Instituted (and Subsumed) Grounds; Arguments in Support of a Motion to Stay, Amidst Developing Law, Do Not Judicially Estop All Invalidity Arguments
27 Jan '17

On January 19, 2017, Judge Susan Illston of the Northern District of California granted-in-part and denied-in-part a group of plaintiffs’ (collectively, “Plaintiffs”) motion to strike portions of defendant Ariosa Diagnostic, Inc.’s (and its parent company) (collectively, “Defendants”) invalidity contentions. Specifically, Plaintiffs argued that Defendants’ invalidity contentions were barred by (1) statutory estoppel under 35 U.S.C. § 315(e) and (2) judicial estoppel.

The court first took on Plaintiffs’ statutory estoppel argument. Plaintiffs contended that, under the recent Federal Circuit decision in Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293 (Fed. Cir. 2016), the scope of IPR estoppel includes a bar on any invalidity grounds raised, or that reasonably could have been raised, in an IPR petition (i.e., before institution). Defendants countered that Shaw held that estoppel applies only to grounds raised, or that reasonably could have been raised, during IPR proceedings, i.e., after institution of the IPR. Judge Illston agreed with Defendants and noted that “limiting IPR estoppel to grounds actually instituted ensures that estoppel applies only to those arguments, or potential arguments, that received (or reasonably could have received) proper judicial attention.” The court then applied the contours of statutory estoppel to the facts of the case and granted Plaintiff’s motion to strike two out of the three invalidity grounds. The court held that, while the IPR was instituted on only one of the three grounds, a second ground nevertheless was subject to estoppel because it was “simply a subset of the instituted grounds.”

Regarding judicial estoppel, Plaintiffs argued that Defendants should be barred from raising any invalidity arguments set forth in any of its IPR petitions. Specifically, Plaintiffs contended that Defendants “argued numerous times before this Court that pending IPR petitions would simplify this litigation through statutory estoppel or invalidation, and therefore derived an unfair advantage and should be estopped from raising nearly all of [their] invalidity arguments.” The court found this judicial estoppel argument unpersuasive, noting, “[t]he Court sees nothing ‘clearly inconsistent’ about [Defendants’] arguments in support of staying this case and its desire to maintain its invalidity defenses moving forward.” The court acknowledged that Defendants had stated in a motion for stay that they would be “estopped from asserting that the claims of the ’430 Patent are invalid under 35 U.S.C. § 102 or 103.” But the court followed by noting that “[e]ven if [Defendants] did state that such broad estoppel would apply, the Federal Circuit has only recently begun to clarify the scope of IPR estoppel, such that any inconsistency between [Defendants’] previous and current positions is excusable.”

Verinata Health, Inc., et. al. v. Ariosa Diagnostics, Inc., et. al., 3-12-cv-05501 (N.D. Cal. January 19, 2017) (Illston, J)