IPR Estoppel Applies to Claim Not Addressed During Pre-SAS Proceeding

By on September 1, 2022
Posted In Patents

In the companion district court case to the Supreme Court’s 2019 Thryv v. Click-to-Call decision regarding the scope of review for inter partes review (IPR) decisions, the US Court of Appeals for the Federal Circuit addressed what it characterized as “a rather unusual set of circumstances” to find that the accused infringer was estopped from challenging in district court the validity of a claim for which the Patent Trial & Appeal Board (Board) had refused to institute IPR. Click-to-Call Techs. LP v. Ingenio, Inc., Case No. 22-1016 (Fed. Cir. Aug. 17, 2022) (Stoll, Schall, Cunningham, JJ.)

Click-to-Call filed suit against Ingenio alleging patent infringement of 16 claims. Ingenio filed a petition for IPR challenging the 16 claims and one additional dependent claim. The Board only partially instituted the IPR, and in its final written decision addressed and found persuasive un-patentability grounds based on a Dezonno reference but refused to consider grounds based on a Freeman reference (leaving one of the asserted claims unaddressed). Ingenio had successfully requested a stay of the district court suit pending resolution of the IPR. During the appeal of the Board’s decision regarding the IPR, the Supreme Court in SAS Institute, Inc. v. Iancu, overruled the practice of partial institutions. However, Ingenio never sought remand under SAS for the Board to consider its challenge to the unaddressed asserted claim.

After the IPR appeal had run its course, the district court lifted the stay and Ingenio moved for summary judgment of invalidity. Ingenio argued that the unaddressed asserted claim (which was the only asserted claim not found unpatentable in the IPR) was invalid based on the same Dezonno reference that Ingenio had used against the other asserted claims. Click-to-Call argued that 35 U.S.C. § 315(e)(2) estopped Ingenio from raising this invalidity ground. Click-to-Call also moved to amend its selection of asserted claims to add two additional claims that were not at issue in the IPR. The district court found that Dezonno anticipated the unaddressed asserted claim and denied Click-to-Call leave to amend its asserted claims. Click-to-Call appealed.

Click-to-Call argued that Ingenio was estopped from asserting invalidity of the unaddressed asserted claim. The Federal Circuit agreed and found that IPR estoppel applied. Specifically, the Court found that district court erred by only analyzing common law issue preclusion, focusing on whether the argument had been “actually litigated” instead of following the language of IPR estoppel under § 315(e)(2), which estops grounds that “reasonably could have [been] raised.” The Court found that the statutory language precluded Ingenio from arguing that Dezonno anticipated the unaddressed asserted claim. The Court explained that Ingenio’s IPR petition included not only a challenge to the unaddressed asserted claim based upon Freeman, but also unpatentability challenges to other claims based on Dezonno. The Court viewed this as evidence of Ingenio’s awareness of Dezonno as an anticipatory ground that it “reasonably could have raised” in the IPR. The Court was unpersuaded by Ingenio’s arguments that there was no estoppel with regard to the unaddressed asserted claim since it was not “part of the Board’s Final Written Decision,” explaining that is not a requirement of § 315(e)(2). Although § 315(e) estoppel applies on a “claim-by-claim basis” and recites “an inter partes review of a claim in a patent under this chapter that results in a final written decision,” the Court noted that Ingenio included the unaddressed asserted claim in its petition and the IPR resulted in a final written decision. Thus, the Board’s legal error (corrected by SAS) of failing to include the unaddressed asserted claim in its final written decision did not absolve Ingenio of the estoppel triggered by its choice to challenge the unaddressed asserted claim at the Board. The Court highlighted the Supreme Court’s SAS statement that “the statute tells us that the petitioner’s contentions, not the Director’s discretion, define the scope of the litigation all the way from institution through to conclusion.” The Federal Circuit  also pointed to the  statement in its Caltech v. Broadcom decision that “it is the petition, not the institution decision, that defines the scope of the IPR.”

The Federal Circuit was also unsympathetic because Ingenio—unlike pre-SAS petitioners whose partially instituted proceedings went to a final written decision before SAS issued—had the long pendency of its IPR appeal to seek a SAS remand directing the Board to address its non-instituted claims and grounds. Ingenio conceded at oral argument that it “could have” sought SAS remand to address the unaddressed asserted claim but did not do so because its Dezonno ground was successful. The Court also noted Ingenio’s reliance on the Federal Circuit’s earlier estoppel ruling in Shaw Indus. v. Automated Creel Systems (that unpatentability grounds included in a petition but rejected by the Board at institution are not subject to IPR estoppel) was “out-of-date” because the Court had already overruled Shaw. The Court reiterated its holding in Caltech that to give effect to the language “reasonably could have raised,” “estoppel applies not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all grounds not stated in the petition but which reasonably could have been asserted against the claims included in the petition.” Thus, the unaddressed asserted claim could have been asserted in the petition or addressed on remand.

The Federal Circuit also affirmed the district court’s decision to deny Click-to-Call’s request to assert infringement of two claims that were not challenged in the IPR. The Court interpreted the district court’s partial rationale in granting Ingenio’s motion to stay the case (i.e., that the IPR would “simplify the issues in th[e] case” because “a[ll] but one of the claims to be asserted at trial in this case” were at issue in the IPR) as indicative that the district court did not envision adding other claims to the case post-IPR. The Court also noted that Click-to-Call had not pointed to any briefing or statements where it hinted at adding claims before the stay. The Court further stressed that Click-to-Call did not request leave to amend its asserted claims in any of the status reports filed during the six-plus years that the case was stayed. Nor did Click-to-Call request leave to amend its asserted claims after the Board’s final written decision, until it filed its response to Ingenio’s summary judgment motion (six years later) in 2020.