Weaponizing Follow-On Petitions to Defeat IPR Estoppel

by Nicholas (Nic) Marais, Alston & Bird 

Since institution of the America Invents Act (AIA), the Patent Trial and Appeal Board has faced petitioners filing multiple follow-on petitions to invalidate the same claims of the same patent on different grounds. The problem with this is that many of these follow-on petitions are filed only after the patent owner submits its preliminary response or the Board denies institution of the first petition,[1] allowing the petitioner to adjust its position. Addressing this issue, the PTAB made precedential its General Plastic decision, where it used a seven-factor test to deny institution of follow-on petitions.[2]

Petitions denied under General Plastic, however, may allow petitioners to overcome IPR estoppel in district court.

IPR estoppel is dictated by 35 U.S.C. §315(e). Under §315(e), a petitioner is estopped from bringing a claim before the PTAB or district court that it “raised or reasonably could have raised” during a previous inter partes review.[3] Now, under General Plastic, the PTAB may also deny a claim when the seven-factor test is met.

In General Plastic, the Board relied on 35 U.S.C. §§314(a) and 325(d) to deny institution of five petitions after each was filed after the Board had already denied institution of two other petitions.[4] The Board reasoned that the Petitioner asserted new prior art to “shift [its] positions and arguments from the first-filed petitions based on the analysis articulated in [the] Decisions Denying Institution of those petitions.”[5] It therefore required, under the second factor, an explanation for why this prior art could not have been found earlier under reasonable diligence—language very similar to §315(e).[6]



The issue, then, arises with the conflict between the General Plastic decision and the Federal Circuit’s Shaw v. Automated Creel decision. In Shaw, the Federal Circuit indicated that IPR estoppel provisions as recited in §315(e) at a minimum do not apply to certain invalidity grounds raised by a petitioner and denied by the PTAB for redundancy.[7] Here, the Federal Circuit considered the term “during,” concluding that the petitioner “did not raise—nor could it have reasonably raised—the [referenced prior art] during the IPR” because no IPR was ever actually instituted on that ground.[8]

Essentially, the risk is that if a claim is denied institution under General Plastic, the claimant could argue that, under Shaw, it could not have reasonably raised the claim in that proceeding and so estoppel does not apply. This may apply notwithstanding the fact that denial under the seven-factor General Plastic decision requires a previous filing where the claim could have been reasonably raised.

In the wake of Shaw, a few courts have interpreted §315(e) to only apply to grounds actually instituted in an IPR proceeding.[9] In Intellectual Ventures, the District of Delaware did not apply estoppel where the petitioner’s grounds for invalidity were public documents at the time of the original IPR.[10] The court reasoned that institution of an IPR on a certain ground is required for estoppel to apply. While unable to “divine a reasoned way around the Federal Circuit’s interpretation in Shaw,” the court admitted that the defendant’s argument for applying estoppel was “perfectly plausible.”[11]



More recently, other courts have narrowly construed Shaw by giving meaning to the phrase “reasonably raised” and not requiring IPR institution to apply estoppel.[12] In Biscotti v Microsoft, the Eastern District of Texas applied estoppel even though the petitioner’s grounds were not instituted.[13] Here, the court read Shaw to say that a redundant ground was exempt from estoppel because, first, the petitioner did not raise that ground during the IPR and, second, it also could not have reasonably raised it because the Board did not allow them to.[14] Therefore, the court asserted that §315(e) estoppel did apply here because the grounds could have been reasonably raised in its first instituted petition. The court reasoned that estoppel applies to “grounds not included in a petition that a ‘skilled searcher conducting a diligent search reasonably could have been expected to discover.’”[15]

Applying this narrow interpretation to follow-on petitions is a challenge because the grounds contemplated were not raised in the first petition but were raised in subsequent petitions. So, which petition should the court look at to determine whether estoppel applies?

In cases where the Board denied institution of a petition when none of the grounds in the first petition were instituted, it does not matter which petition the court looks at.[16] Because the Petitioner was never able to raise any of its grounds of invalidity in any IPR, under Shaw, estoppel should not apply.

However, where a first IPR was instituted, grounds that were denied institution under the seven-factor analysis in subsequent petitions could be estopped from being raised in district court because those grounds could have been “reasonably raised” in the first petition.[17] Or, as stated by the Eastern District of Texas, a skilled searcher using reasonable diligence should have found the prior art in the first petition.[18] Indeed, the similarity between the language of the second factor and the language of §315(e) suggests that the district court may weigh the Board’s application of the seven-factor test as strong evidence that estoppel should be applied. Further, this application aligns with the purported efficiency of having these administrative procedures.

Yet, similar to a redundant claim, grounds denied under the seven factors in a follow-on petition were raised in a petition but not used during the IPR due to the Board’s action. Because these grounds therefore could not have been raised during the IPR, under Shaw, estoppel should not apply.

Perhaps the answer to whether estoppel should apply to such grounds can be found in the PTAB’s choice of statute applied in its denial. Because the PTAB has the discretion to deny a petition under §315(e)(1), choosing to instead apply the seven-factor test under §325(d) may indicate that the district court must consider all grounds later filed. However, this relies on the PTAB applying §315(e) where applicable, rather than denying all follow-on petitions under §325(d), where it holds broader discretion, placing a burden on the PTAB.

What is apparent is that if courts treat denied follow-on petitions as “redundant,” Shaw creates a weapon for petitioners to bypass estoppel. By raising new grounds in follow-on petitions, the effect is such that the petitioner can raise these grounds in district court when, based on the first petition alone, it would have been estopped from doing so. Because of the relatively low cost of filing petitions, these rulings may induce parties to more proactively file follow-on petitions on any grounds that they actually want to rely on in district court. Such a result would surely defeat the purpose of the inter partes review procedure.