IPR estoppel can be kind of terrifying as an accused infringer in a patent action. The statute says that an accused infringer may not assert invalidity on a ground that it could have raised in the IPR; but you can't raise product prior art, so product prior art should be safe, right?
Nope. Courts have sometimes held that product prior art may still be estopped, if there is patent or written prior art that is sufficiently similar. See, e.g., Wasica Fin. GmbH v. Schrader Int’l, 432 F. Supp. 3d 448, 453 (D. Del. 2020) (holding defendant estopped from asserting product art where “all the relevant features” of the art were in a printed publication that could have been raised in an IPR).
As Judge Stark notes in Wasica, courts have gone both ways on this, with some estopping arguments based on product art where similar written or patent art could have been raised in an IPR, and others permitting those arguments.
On Friday, Judge Noreika chose a side in this split: no estoppel for prior art products. Here is her thinking:
As a matter of statutory interpretation, estoppel does not apply to the prior-art products that Daikin relies on – regardless of whether those products are “cumulative.” Section 315(e)(2) states that an IPR petitioner “may not assert” in a later district court action “that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” 35 U.S.C. § 315(e)(2). “Although the Patent Act does not expressly define the term ‘ground,’ . . . courts have interpreted this term in the IPR estoppel context to mean the ‘specific pieces of prior art’ that are ‘the basis or bases on which a petitioner challenges a claim.’” Medline Indus., Inc. v. C.R. Bard, Inc., No. 17-7216, 2020 WL 5512132, at *3 (N.D. Ill. Sept. 14, 2020) (citations omitted). Based on this interpretation, “§ 315(e)(2) does not estop an IPR petitioner’s use in litigation of an invalidity theory that relies upon a product as a prior art reference because a prior art product cannot be used as a reference to challenge the validity of a patent claim in an IPR. Therefore, any invalidity theory relying upon that product as a prior art reference is not a ‘ground’ that reasonably could have been raised during the IPR.” Id. (citing 35 U.S.C. § 315(e)(2)).
Judge Noreika noted the disagreement, citing Wasica, and sided with the plain language of the statute:
The Court is aware that district courts addressing this issue have come to differing conclusions. See Wasica Fin. GmbH v. Schrader Int’l, Inc., 432 F. Supp. 3d 448, 454 n.6 (D. Del. 2020), appeal dismissed, No. 2020-2124, 2020 WL 8374870 (Fed. Cir. Sept. 24, 2020) (noting the “division amongst District Courts that have considered this (or a closely-related) question”) . . . . In the absence of guidance from the Supreme Court or the Federal Circuit, this Court aligns with those courts that have adhered more closely to the statutory language.
The statute at issue was the product of considered debate and careful thought. Congress could have broadened the categories of prior art on which IPR could be requested. Congress could have dictated that estoppel applies to products covered by the paper art underlying the IPR where the paper art discloses the same claim limitations as the product. But Congress did not do so. Adhering to well-accepted canons of construction, it is not for this Court to ignore Congress’s omission and create additional bases for estoppel.
This will undoubtedly give some comfort to defendants in Judge Noreika cases who bring IPRs (although keep in mind that Judge Noreika has also held that an accused infringer who wins their IPR may still have to go to trial).
But I'm not completely sure it resolves the issue for every case. What happens when a defendant brings an IPR on a combination of A+B, loses, then asserts the same combination plus a completely unnecessary product at trial?
Does estoppel apply, or does adding the unnecessary product to the combination allow a defendant to re-litigate essentially the same combination? I'm not sure what the Court may do under those circumstances, but I wouldn't want to put all of my eggs in that basket.
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