The scope and applicability of inter partes review (“IPR”) estoppel continues to develop and reshape patent litigation across the country. After a ruling from the Federal Circuit in Apple Inc. v. California Institute of Technology (Caltech) in early 2022, the Supreme Court is now considering whether to take another look at pivotal IPR estoppel provisions in the America Invents Act (AIA).¹ In the current landscape, many uncertainties remain regarding exactly when, how, and to what extent IPR estoppel applies after a successful (or partially successful) IPR. These implications are significant and go far beyond the named parties in Caltech, as the potential benefits and risks of estoppel must be understood by litigants before filing an IPR petition.

The Evolution of IPR Estoppel

Under 35 U.S.C. § 315(e), IPR estoppel applies to “any ground that the petitioner raised or reasonably could have raised during that inter partes review.”² In practice, this typically prevents the petitioner from presenting certain paper art (e.g., patents and publications) in a parallel district court proceeding. However, the exact scope of this provision has been disputed ever since the IPR proceedings were codified in the AIA. Initially, courts largely dwelled on the “raised during” language in § 315(e) and the Patent Trial & Appeal Board’s (PTAB) a la carte approach of selecting only certain grounds presented in an IPR petition for institution. Following that theory, the Federal Circuit in Shaw Industries Group, Inc. v. Automated Creel Systems, Inc. found that because an IPR “does not begin until it is instituted,” it necessarily follows that IPR estoppel applies only to those actually at issue (e.g., those instituted by the PTAB).³ Accordingly, under Shaw prior art in non-instituted grounds could be asserted in a parallel district court proceeding.

This theory was dealt a blow by the Supreme Court’s holding in SAS Institute Inc. v. Iancu, which requires the PTAB to completely institute or deny review on all grounds presented in an IPR petition.⁴ District courts subsequently grappled to reconcile the Federal Circuit’s holding in Shaw with SAS and § 315(e). Because, post-SAS, the PTAB can now only consider the petition as a whole, the reasoning relied upon in Shaw seemed largely obsolete. Faced with conflict between SAS and Shaw, district courts subsequently applied divergent interpretations of § 315(e): a narrow view which applies IPR estoppel only for grounds which the PTAB actually reviewed in the IPR proceeding; and a broad view which applies IPR estoppel to any grounds that were raised or could have been raised in the IPR petition. It is this divergence that was presented to the Federal Circuit in Caltech.

Apple Inc. v. California Institute of Technology

After Caltech brought suit for patent infringement, co-defendants Apple Inc. and Broadcom challenged the validity of the asserted patents in the PTAB proceeding and subsequently lost.⁵ At trial, the court applied the broader view of IPR estoppel and precluded Apple and Broadcom from raising any invalidity theory to the jury that could have been raised in their IPR petition. The Federal Circuit subsequently affirmed the district court’s ruling on IPR estoppel,⁶ confirming that courts should apply the broader interpretation of IPR estoppel under § 315(e).⁷ In doing so, the panel explicitly overruled Shaw and clarified that “[IPR] estoppel applies not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all claims and grounds not in the IPR but which reasonably could have been included in the petition.”⁸ The Federal Circuit issued a subsequent errata that seemingly clarified that this holding applies only to claims actually challenged in the IPR, and not all of the claims in entire patent (assuming that less than all of the claims are asserted in the IPR petition).⁹

In the pending petition for certiorari, Defendants present one issue: “Whether the Federal Circuit erroneously extended IPR estoppel under 35 U.S.C. § 315(e)(2) to all grounds that reasonably could have been raised in the petition filed before an inter partes review is instituted, even though the text of the statute applies estoppel only to grounds that reasonably could have [been] raised during that inter partes review.”¹⁰ The parties completed briefing in late 2022, and the Supreme Court has subsequently requested briefing from the Solicitor General on behalf of the United States.¹¹ Given that the Supreme Court’s term ends in June, it is unlikely that arguments would be heard until at least Fall 2023, if the Petition for Certiorari is granted.

Potential Implications and Unresolved Questions

The exact scope and application of IPR estoppel has significant implications for defendants’ strategies across all patent litigation. Invalidity is a bedrock defense for litigants, so if the broader interpretation of § 315(e) is upheld, alleged infringers may face a tough choice in the early stages of litigation that may shape their entire litigation strategy. A party could choose to present a limited scope of prior art (given word-count restrictions) to an expeditious and (often) technically knowledgeable panel at the PTAB. For alleged infringers that elect this route, the broader interpretation of § 315(e) may result in petitions that present more grounds (albeit in less detail) in order to obtain institution on additional prior art references.

Alternatively, alleged infringers can choose to forego an IPR proceeding to preserve a wider range of prior art to present to a factfinder. While litigants are often required to reduce the universe of prior art available at trial, such a decision is usually deferred until later in litigation, allowing for discovery and additional time to determine the perceived strengths and weaknesses of a particular reference. The final decision of whether to file or forego an IPR may ultimately come down to a wide variety of factors, including the perceived strength of all available prior art, complexity of the technology at issue, and cost concerns.

Further clouding these impactful decisions are many unresolved questions surrounding IPR estoppel after Caltech. The Federal Circuit’s discussion of IPR estoppel in Caltech is narrow and left many questions unanswered. For example, does IPR estoppel also apply to system art if a paper reference exists that sufficiently describes the system (and could have been presented in the petition)? Are combinations of system art and paper art (whether presented or not presented in the petition) permitted? And finally, does IPR estoppel apply if the PTAB’s final written decision fails to evaluate certain claims or elements because its ultimate decision hinged on another limitation or on an independent claim?

These questions and many more will shape the scope of IPRs and patent litigation for years to come. It seems unlikely this is the last we’ve heard from the Federal Circuit and Supreme Court on this issue.

¹ See Apple Inc., et al. v. California Institute of Technology, Case No. 22-203, at (i) (Sept. 2, 2022) (Petition for writ of certiorari) (quotations omitted).
² See 35 U.S.C. § 315(e).
³ See Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293, 1300 (Fed. Cir. 2016), overruled by California Inst. of Tech. v. Broadcom Ltd., 25 F.4th 976 (Fed. Cir. 2022).
⁴ See SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1354 (2018)
⁵ See California Inst. of Tech. v. Broadcom Ltd., 25 F.4th 976, 982-83 (Fed. Cir. 2022)
⁶ Caltech obtained a favorable jury verdict with regard to infringement, but the Federal Circuit subsequently reversed and ordered a new trial. See California Inst., 25 F.4th at 992.
⁷ See id. at 991
⁸ Id.
⁹ See Apple Inc., et al. v. California Institute of Technology, No. 2022-2222, 2021-1527, slip op. at 2 (Fed. Cir. Feb. 22, 2022).
¹⁰ See Apple Inc., et al. v. California Institute of Technology, Case No. 22-203, at (i) (Sept. 2, 2022) (Petition for writ of certiorari) (quotations omitted).
¹¹ See Apple Inc., et al. v. California Institute of Technology, Case No. 22-203 (Jan. 17, 2023) (Docket entry inviting briefing from Solicitor General).

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