The scope of IPR estoppel is a tricky issue that courts have gone different ways on. Everyone agrees that a party cannot argue invalidity in an IPR based on a prior art product (as opposed to reference), and that IPR estoppel extends to art the petitioner "reasonably could have raised" during the IPR.
Courts have gone different ways, however, when it comes to whether a party can assert invalidity at trial based on a product that embodies a reference that was asserted or could have been asserted at an IPR. In D. Del., as we've discussed, Judge Stark held that a party can be estopped from asserting invalidity where a product embodies all relevant features of a reference; Judge Noreika has held the opposite (and Judge Fallon has discussed the split).
This week, Judge Williams unsealed an opinion from last month where he chose a side in the split. After acknowledging that courts have gone different ways on this, he followed Judge Noreika's opinion in Chemours, and held that IPR estoppel does not apply to prior art products:
While the Court acknowledges that district courts addressing this very issue have come to different conclusions, see, e.g., Wasica Fin. GmbH v. Schrader Int'l, Inc., 432 F. Supp. 3d 448, 454 n.6 (D. Del. 2020), appeal dismissed, C.A. No. 2020-2124, 2020 WL 8374870 (Fed. Cir. Sept. 24, 2020) (noting the "division amongst District Courts that have considered this (or a closelyrelated) question"); Medline, 2020 WL 5512132, at *3 (citing Wasica, 432 F. Supp. 3d at 454), the Court also notes that the most recent decision from District held that, based on the statutory language, IPR estoppel does not apply to products covered by the actual prior art reference underlying the IPR where the actual prior art reference discloses the same claim limitations as the product. See Chemours, 2022 WL 2643517, at * 1-2. Accordingly, consistent with the Chemours decision, and "[i]n the absence of guidance from the Supreme Court or the Federal Circuit," the Court holds that, as a matter of statutory interpretation, IPR estoppel does not apply to the Eros product that EIS relies on as an invalidity ground to IPR Patents. Id. at *2 ("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.").
EIS, Inc. v. Novoluto GmbH, C.A. No. 19-1227, at 12-13 (D. Del. Aug. 30, 2023).
Also: Analysis of Hindsight Bias in Determining Whether Petitioner Should Have Raised a Reference
Separately, the Court looked at whether the defendant was estopped from discussing a written reference that it did not actually raise in the IPR.
In examining whether the defendant "could have raised" the reference, the Court looked to the parties' evidence, particularly the plaintiff's expert declarations. It found plaintiff's declarations to be lacking:
Turning to the crux of the IPR estoppel issue, [plaintiff] Novoluto contends that Yang would have been discovered by a skilled searcher conducting a diligent search because two prior art searches it commissioned—one by its expert . . . and the other by search firm Clarivate—"using well-known searching techniques on commercial patent databases and based on searching parameters available in 2019," turned up Yang in less than eleven hours and with a budget of $1,500, respectively. . . . In contrast, EIS submits evidence of two prior art searches conducted by skilled search firms-one search prior to filing the IPR proceedings and another search before it served its the invalidity contentions-that did not turn up Yang. . . . Having reviewed the parties' respective declarations, reports, and search queries-when provided-the Court concludes that Novoluto has failed to meet its burden of proving that the Yang reference could reasonably have been discovered by a "skilled searcher conducting a diligent search." . . . Although Novoluto's expert, Mr. Stoll, purportedly found Yang within " 10 hours of searching," . . . Mr. Stoll admits to reviewing Yang prior to formulating his search criteria. . . . As such, it is reasonable to infer that Mr. Stall's search criteria was plagued by hindsight bias.
Id. at 9.
Specifically, the Court noted how plaintiff's expert had used a very specific search term that was in the patent but absent from others:
Indeed, Mr. Stall's search criteria—while utilizing the main classification codes listed on the face of each of the IPR Patents, . . . as well as combination of keywords found in the IPR Patents . . . —includes the keyword "reciprocat*" . . . that is notably absent from the IPR Patents, but appears in Yang's abstract. . . .
Although Novoluto attempts to salvage its position by explaining that "Mr. Stoll included the term "reciproca*" in his search strings because the term "reciproca*" is replete in the prior art cited in the relevant prosecution histories and the IPR references that EIS relied on," . . . when the term "reciprocat*" is excluded from Mr. Stoll's search terms, his search queries fail to locate Yang. . . . Furthermore, Mr. Stoll fails to explain why the term " reciprocat*" was used as opposed to other technically-synonymous words . . . —such as "oscillate," which EIS contends that, if substituted for "reciprocat*," not turn up Yang.
Id. at 9-10.
The Court further noted that the expert failed to give detail about the search results or explain why he would actually have reached the relevant reference:
Also notably absent from Mr. Stoll's reports are the results of his searches, where Yang ranked among his search results, or an explanation as to why his search would not have ceased prior to locating Yang. In fact, there is no evidence suggesting that Mr. Stoll reviewed any of the nearly 5,000 references resulting from his search queries.
Id. at 10-11. As such, he held that estoppel does not apply:
Accordingly, because Novoluto has failed to carry its "burden of proving, by a preponderance of the evidence, that a skilled searcher exercising reasonable diligence would have identified" Yang, . . . the Court cannot conclude, as a matter of law, that Yang reasonably could have raised during the IPR proceedings challenging the IPR Patents. Thus, EIS is not estopped from raising Yang, alone or in combination, as an invalidity ground to the IPR Patents.
Id. at 11. That sounds final. I don't think they are getting another shot at this. But it's a good lesson for all of us on what to include in expert declarations (on either side) next time this issue comes up!
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