No Estoppel in the Name of Different Interests and Claims

By on March 17, 2021
Posted In Patents

The US Court of Appeals for the Federal Circuit found that 35 USC § 314(d) did not bar its review of a Patent Trial & Appeal Board determination that a petitioner was not estopped from maintaining inter partes review (IPR) proceedings since the alleged estoppel-triggering event occurred post-institution. Uniloc 2017 LLC v. Facebook Inc., Case Nos. 19-1688, -1689 (Fed. Cir. Mar. 9, 2021) (Chen, J.)

Facebook and WhatsApp (collectively, Facebook) filed two IPR proceedings challenging certain claims of Uniloc’s patents. Apple also filed a petition challenging a subset of claims of the patent. Facebook subsequently filed a third petition that was substantively identical to Apple’s petition and also filed a motion to join Apple’s IPR. LG Electronics filed petitions identical to Facebook’s three petitions and also filed motions to join Facebook’s IPRs. The Board instituted Facebook’s third petition and granted Facebook’s motion to join Apple’s IPR. The Board then instituted Facebook’s original IPRs and ordered the parties to “brief the applicability, if any, of 35 U.S.C. § 315(e)(1)” against Facebook, in light of the soon-to-be-issued final written decision for Apple’s IPR. At the time, LG’s petition and motion to join Facebook’s IPRs had not been decided.

In response to the Board’s order, Facebook argued that it should not be estopped under § 315 from challenging the patentability of any claim upon the issuance of a final written decision in Apple’s IPR. Facebook argued that if the Board did find it estopped, Facebook should be able to continue as a petitioner against one of the claims, which it never challenged, in Apple’s IPR. Facebook also argued that if LG’s IPR petition was granted and LG was joined as a party to its first IPR, the IPR should proceed as to all challenged claims (regardless of whether Facebook was found estopped) because LG was not a party in Apple’s IPR. Uniloc responded, arguing that once the Board issued a final written decision in Apple’s IPR, Facebook would be estopped as to all claims challenged in its first IPR and the Board must terminate that proceeding. Uniloc also argued that allowing LG to join the IPR would create inefficiency and confusion.

The Board ultimately instituted LG’s IPR petitions and granted LG’s motion to join Facebook’s IPRs. In its Patent Owner Responses to the original Facebook IPR petitions, Uniloc argued that LG should be barred from maintaining the first Facebook IPR once the Board issued a final written decision in the Apple IPR because LG was estopped as a real party in interest (RPI) or privy to Facebook. A few months later, the Board issued a final written decision in the Apple IPR upholding the patentability of all challenged claims. The Board’s decision in the first Facebook IPR found that Facebook was estopped under § 315(e)(1) as to claims also challenged in Apple’s IPR, but not other claims since § 315(e)(1)’s estoppel provisions apply only to grounds that the petitioner raised or reasonably could have raised “with respect to that claim.”

In its final written decision for the original Facebook IPRs, the Board found that all of the challenged claims were unpatentable as obvious. The Board explained that a primary reference taught the “attaches one or more files to the instant voice message” limitation, by reasoning that “attach” referred to creating an association between the files and the instant voice message, and construed the instant voice message as “data content including a representation of an audio message.” Uniloc appealed.

The threshold question for the Federal Circuit was whether 35 USC § 314(d)’s “No Appeal” provision barred review of the Board’s conclusion that under § 315(e)(1) a petitioner is not estopped from maintaining the IPR proceeding before it. Under the circumstances of this case, the Court found that § 314(d) did not preclude it from reviewing the Board’s § 315(e)(1) estoppel decision. Specifically, the Court found that as in its decision in Credit Acceptance regarding covered business method proceedings, the similarly worded and focused IPR estoppel provision of § 315(e)(1) is not so closely tied to institution to render judicial review precluded when the estoppel-triggering event arises after institution. Here, no cause for termination existed at the time of petition, and the basis for termination developed while the proceeding was ongoing, so the Court had jurisdiction to review the Board’s decision.

The Court then turned to the substance of the appeal. Uniloc raised four issues on appeal:

1. Was LG estopped as an RPI or privy of Facebook?

The Federal Circuit found that the Board’s determination that LG was not an RPI or privy of Facebook was supported by substantial evidence. The Court found no evidence in the record that LG exercised any control over Facebook’s decision to file for IPR, that Facebook recruited LG as an agent to advance its interests or act “as a proxy . . . to relitigate the same issues,” or that the two parties had any “preexisting, established relationship” suggesting coordination. The Court further explained that that LG’s own interest in challenging the patent’s patentability did not make it an RPI to Facebook’s IPR.

2. Was Facebook estopped as to the claim not at issue in the Apple IPR?

The Court applied a plain language interpretation of § 315(e)(1), finding that because one of the claims was not at issue in the Apple IPR, Facebook was not estopped from challenging that claim in the proceeding. The Court noted that in its limited role as a joined party in the Apple IPR, Facebook could not have raised any grounds for the patentability of the non-challenged claim. Having found no error, the Court affirmed the Board’s decision of no estoppel.

3. Did the prior art teach an “instant voice messaging application”?

The Federal Circuit found that substantial evidence in the IPR petition, the prior art and the credited testimony of LG’s expert supported the Board’s finding that the prior art taught the disputed claim limitation.

4. Did the prior art teach “attaches to”?

The Federal Circuit was unpersuaded by Uniloc’s arguments that the Board violated its due process in sua sponte construing the “attaches to” limitation in its final written decision and finding that the primary reference disclosed the “attaches to” limitation. Instead, the Court found that, considering the intrinsic evidence and the broadest reasonable interpretation standard applicable at the time Facebook filed the IPR petitions, the Board’s broader construction of “attaching to” was the best reading of the limitation as used in the patent. The Court also found that early filings and discussion of the term in detail at the oral hearing afforded Uniloc ample opportunity and notice to address the construction of the term. The Court also found that the petition, prior art and expert evidence supported the Board’s conclusion.

Practice Note: Parties should be careful in characterizing any relationships between inter partes petitioners and their individual interests. Keeping in mind estoppel, reference and word limit considerations, multiple proceedings to challenge a single patent on varied grounds may be appropriate. The availability of appellate review depends on case timing and particulars.