Far-Reaching Effect of IPR Estoppel Dooms Invalidity Defense Based on Prior Art Product

In considering a motion to dismiss infringement claims for two related patents, the District of Massachusetts recently held that pre-suit knowledge of a “parent” patent, without more, is insufficient to establish pre-suit knowledge of the “child” patent for purposes of indirect and willful infringement.

Following a jury verdict finding trade secret misappropriation, the District Court for the District of Massachusetts granted-in-part a plaintiff’s motion for a permanent injunction to prohibit defendants from using plaintiff’s trade secrets. The district court further required defendants to reassign to plaintiff patents and patent applications that disclosed or were derived from plaintiff’s trade secrets as part of its equitable relief.

In ruling on a recent motion to strike, a judge in the Eastern District of Texas permitted a damages expert to rely on a damages theory based on defendant’s “avoided costs,” holding that this theory did not run afoul of the “entire market value rule.”

The Federal Circuit recently vacated a decision by the Patent Trial and Appeal Board after concluding that the board’s analysis of licensing evidence offered as a secondary consideration of nonobviousness constituted legal error and was not supported by substantial evidence. According to the court, the board applied a more exacting and improperly heightened nexus standard than is required by law for license evidence.

A Northern District of California judge recently granted a motion to reconsider his summary judgment ruling that defendant was barred from raising certain “device art” due to IPR estoppel under 35 U.S.C. § 315(e)(2). In the original ruling, the judge adopted the broader rule that IPR estoppel applies to device art that is “materially identical” to patents or printed publications that petitioners raised, or could have raised, in an IPR. Following that ruling, however, the Federal Circuit issued its Ingenico decision adopting the narrower view that IPR estoppel applies only to “grounds” based on patents and printed publications and not to device-based grounds. Citing Ingenico as a “change of law,” defendant moved for reconsideration of the court’s ruling, and the court granted the motion.

In a recent decision designated as Informative, the USPTO Director determined that the Patent Trial and Appeal Board abused its discretion by instituting two inter partes review proceedings challenging the same patent, based on petitions advancing different constructions of the same claim term. The Director expressed concerns that permitting multiple petitions based on alternative claim constructions effectively circumvents word count limitations, strains board resources, and undermines procedural efficiency.

Earlier this year, the Federal Circuit’s decision in Qualcomm Inc. v. Apple Inc. (Qualcomm II) raised questions about the extent to which petitioners can rely on applicant admitted prior art (“AAPA”) in inter partes review proceedings.  The Federal Circuit’s recent decision in Shockwave Medical, Inc. v. Cardiovascular Sys., Inc. largely cabins the Qualcomm II decision to its particular facts and makes clear that AAPA can be used as evidence of background knowledge as part of an obviousness argument.

The Federal Circuit recently reversed a PTAB determination on remand that a patent was obvious over applicant admitted prior art (“AAPA”) in combination with prior art patents, holding that expressly designating AAPA as a “basis” for a ground is improper under 35 U.S.C. § 311(b). In doing so, the Court rejected the PTAB’s “blanket rule” that “AAPA used in combination with prior art patents or printed publications under § 311(b) is ipso facto not the basis or part of the basis of a ground.” Ultimately, while the case clarifies that expressly listing AAPA in an IPR ground is improper, the precise line between proper and improper uses of AAPA in other instances remains unclear.