The document discusses differing interpretations of inter partes review (IPR) estoppel between district courts and the Patent Trial and Appeal Board (PTAB). Currently, district courts interpret estoppel narrowly under Shaw Industries, only applying it to grounds instituted in IPR. In contrast, the PTAB broadly interprets estoppel to also include grounds that reasonably could have been raised in IPR. The Federal Circuit's guidance is needed to clarify the scope of estoppel and better align interpretations with legislative intent.

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District Courts And PTAB Are Divided On IPR Estoppel
Law360, New York (March 8, 2017, 10:51 AM EST) --
Since the America Invents Act created inter partes review, practitioners have sought
guidance regarding the scope of estoppel to be applied to prior art that “reasonably
could have been raised during” an IPR. Currently, district courts and the Patent Trial
and Appeal Board are divided on the application of IPR estoppel.
The statute governing IPR estoppel prevents a petitioner or real party in interest from
asserting invalidity in a subsequent proceeding “on any ground that the petitioner
raised or reasonably could have raised during that inter partes review.” 35 U.S.C. §
315(e) (2011). Section 315(e)(1) prevents a challenge to patent validity in a subsequent
proceeding before the U.S. Patent and Trademark Office. Section 315(e)(2) prevents
such a challenge in a subsequent civil action or U.S. International Trade
Commission proceeding.
The legislative history of the statute shows Congress intended a broad application of
estoppel. See, e.g., 157 Cong. Rec. S1375, 1358 (Daily Ed. March 8, 2011) (Statement of
Senator Grassley) (indicating that inter partes review “will completely substitute for at
least the patents-and-printed publications portion of the civil litigation”).
Federal Circuit Guidance: Shaw
In Shaw Industries Group v. Automated Creel Systems, 817 F.3d 1293, 1296 (Fed. Cir.
2016), the Federal Circuit held that estoppel does not apply to grounds denied by the
PTAB in an IPR because the “IPR does not begin until it is instituted.” District courts
post-Shaw have thus held that grounds asserted, but denied, in an IPR can be raised in subsequent
litigation. See e.g., Illumina Inc. v. Qiagen NV, 2016 U.S. Dist. LEXIS 122571 at *6 (N.D. Cal. Sep. 9,
2016); Karl Storz Endoscopy-America Inc. v. Stryker, 2016 U.S. Dist. LEXIS 63649 at *28 (N.D. Cal. May 12,
2016).
In Intellectual Ventures I LLC v. Toshiba Corp., Toshiba challenged the validity of IV’s patent in district
court, claiming IV’s patent was obvious in light of two patents that Toshiba had not asserted in its
previous IPR petition. See Intellectual Ventures I LLC v. Toshiba Corp., 2016 U.S. Dist. LEXIS 174699, at
*38 (D. Del. Dec. 19, 2016). Id. The court observed that interpreting Shaw to allow Toshiba to assert
“references that were never presented to the PTAB at all (despite their public nature) confounds the
very purpose of” the IPR. Id. But the court could not “divine a reasoned way around the Federal Circuit’s
interpretation in Shaw.” Id. Thus, the court refused to apply estoppel.
Jon W. Gurka
James Smith

2. Recently, in Verinata Health Inc. v. Ariosa Diagnostics Inc., the Northern District of California reviewed
the scope of estoppel under Section 315(e)(2). 2017 U.S. Dist. LEXIS 7728 (N.D. Cal. Jan. 19, 2017). Ariosa
filed two IPR petitions challenging Verinata’s patent on “three grounds of invalidity: (1) obviousness over
the combined teachings of Dhallan and Binladen; (2) obviousness over the combined teachings of Quake
and Craig; and (3) obviousness over the combined teachings of Shoemaker, Dhallan, and Binladen.” Id.
at *10-11. The PTAB instituted review on the third ground only, rejecting the two other grounds as
redundant. Id.
In the district court, Verinata moved to strike invalidity contentions that “defendants ‘raised or
reasonably could have raised’ during the IPR proceedings concerning the patents-in-suit” under 35
U.S.C. § 315(e)(2). Id. Quoting Toshiba and Shaw, the court narrowly interpreted Section 315(e) to apply
only to instituted grounds. The court commented, “limiting IPR estoppel to grounds actually instituted
ensures that estoppel applies only to those arguments, or potential arguments, that received (or
reasonably could have received) proper judicial attention.” Id. at 10. This reasoning highlights one
possible reason that courts apply a narrow estoppel under Section 315(e): a reluctance to estop parties
from asserting invalidity arguments that never received PTAB attention. A narrow interpretation places
courts in familiar territory: estopping arguments that have received proper PTAB attention in a final
decision subject to judicial review.
PTAB Estoppel Is Much Broader
The board applies estoppel in a much broader fashion than the district courts. In Apotex v. Wyeth, the
board denied an obviousness ground because the prior art had been cited, though not put forth as prior
art, in an earlier petition. IPR2015-00873, Paper 8, 2015 WL 5523393 at *2-3 (P.T.A.B. Sept. 16, 2015).
The board held that the obviousness ground was “a ground that petitioner could have raised” and thus
the petitioner was estopped from doing so under Section 315(e)(1). Id at *3.
The board has also held that petitioners are estopped from arguing new theories of invalidity involving
prior art previously relied upon in an IPR. In Dell Inc. et al. v. Electronics and Telecommunications
Research Institute, the petitioner sought to rely upon two prior art references from a previous IPR,
Mylex and Hathorn, in a new obviousness combination in a subsequent IPR. IPR2015-00549, Paper 10,
2015 WL 1731182 at *2-3 (P.T.A.B. March 26, 2015). Although the petitioner had used both references
in the previous IPR, they served different purposes: Hathorn was relied upon as an anticipatory
reference and Mylex was “asserted as one of a combination of references in three other obviousness
grounds.” Id at *3. In the subsequent IPR, petitioner sought to combine Mylex and Hathorn as a new
obviousness ground. Id. The board held that the new obviousness ground could have been raised in the
previous petition and that the petitioner was estopped under Section 315(e)(1). Id.
In a fairly straightforward application of Section 315(e)(1), the board in Ford Motor Co. v. Paice
estopped the petitioner from relying on three references it could have raised in its two prior petitions.
IPR2014-00884, Paper 38 2015 WL 8536739, at *6-7 (P.T.A.B. Dec. 10, 2015). The prosecution history
cited these references, and the petitioner had included them in a related petition filed the same day as
the two other IPR petitions. Id at *7. From this evidence, the board concluded that the petitioner “knew
or should have known” of the references, and thus should be estopped from asserting the prior art in
the IPR petition. Id.; see also Praxair Distrib., Inc., v. INO Therapeutics LLC, IPR2016-00781, Paper 10,
2016 WL 5105519 (P.T.A.B. Aug. 25, 2016) (continuing to apply estoppel broadly after Shaw).

3. Recent Attempts to Limit the Impact of Shaw
On Jan. 27, 2017, in Verinata Health Inc. et al. v. Ariosa Diagnostics Inc. et al., Illumina filed petition for a
writ of mandamus with the Federal Circuit seeking an order directing the district court to enforce the
statutory estoppel of Section 315(e)(2) against Ariosa. See In re: Illumina Inc. and Verinata Health Inc.,
Case No. 17-109 (Fed. Cir. Jan. 27, 2017). Illumina’s petition asks the Federal Circuit to decide whether
prior art grounds the petitioner reasonably could have asserted in an IPR petition, but never did, result
in estoppel. Another pharmaceutical company, Depomed, and two biotechnology trade associations,
Biotechnology Innovation Organization and Pharmaceutical Research and Manufacturers of America,
filed amicus curiae briefs supporting Illumina’s petition.[1] Ariosa admits that estoppel may apply to
grounds that were not raised but reasonably could have been raised, but argues that Illumina’s petition
is moot because the district court, in accordance with Shaw, denied estoppel on a ground that the board
denied as redundant. Id. Brief of Respondent at 19.
If the Federal Circuit confirms that estoppel applies to publicly available documents that a petitioner
could have, but did not raise in a petition, the Federal Circuit will need to define the boundaries of
“reasonably could have raised” as used in Section 315(e). The Federal Circuit will need to formulate a
test for deciding “reasonableness,” considering the scope of a reasonable search and the identity of a
reasonable searcher. For example, if a printed publication exists solely in a remote library, could the
document reasonably have been discovered? How much searching must be performed to be
reasonable? What persons have the proper qualifications to conduct a reasonable prior art search?
The Scope of "Reasonably Could Have Been Raised"
In Clearlamp v. LKQ Corp., the Northern District of Illinois explored the scope of “reasonably could have
been raised” under Section 315(e)(2) in an opinion issued just five days before Shaw. 2016 WL 4734389
(N.D. Ill. March 18, 2016). The court framed the issue as whether or not the datasheet “could not have
been found by a skilled searcher performing a diligence search.” Id. at *9. The court relied on Senator
Kyl’s statement in the AIA legislative history to conclude that “[a]dding the modifier reasonably ...
ensures could-have-raised extends only to prior art.” Id. at *7-8. According to the court, “[o]ne way to
show what a skilled search would have found would be (1) to identify the search string and search
source that would identify the allegedly unavailable prior art and (2) present evidence, likely expert
testimony, why such a criterion would be part of a skilled searcher’s diligent search.” Id. at *9.
The PTAB interprets “reasonably could have raised” similarly to that of the Clearlamp court. In Praxair
Distribution Inc. v. INO Therapeutics LLC, a decision issued after Shaw, the petitioner challenged the
validity of a patent based on two textbook references, Greenough and Jaypee. IPR2016-00781, Paper 10,
2016 WL 5105519 (P.T.A.B. Aug. 25, 2016). The petitioner had previously filed two other IPR petitions
challenging the validity of the same patent on different, but similar, grounds. Id. The board examined
legislative history and held that “reasonably could have been raised” should apply to “prior art which a
skilled searcher conducting a diligent search reasonably could have been expected to discovery.” Id.
The board then required the petitioner to demonstrate why it could not have raised the Greenough and
Jaypee references earlier. To show diligence in searching for the prior art, the petitioner submitted an
“Exemplary List of Search Results from Cardinal Intellectual Property” that included neither reference.
Id. The board noted, however, that the petitioner did not “‘identify the actual searcher, his or her skill
level and experience in the field, [] why he or she searched using keywords and keyword combinations,’
or explain whether [the references] were encompassed by the initial search results but not selected for

4. the exemplary list.” Id. (citing the patent owner preliminary response).
Further, the petitioner’s own expert testified that Greenough was “a thought leader” in the industry and
that a person of skill in the art would have sought out the works of Greenough and Jaypee. Id. The
authors of the textbook references were also well known in the relevant field and the petitioner
admitted that other articles authored by Greenough were cited during prosecution of the challenged
patent. Lastly, the board noted that the Greenough reference is catalogued and accessible at dozens of
public libraries and that both references are readily identified by searching Google Books using
keywords from the challenged patent specification. Id.
Recently in Great West Casualty Co. v. Intellectual Ventures II LLC, the board refused to apply Shaw to
limit estoppel. IPR2016-01534, Paper No. 13 at 11. The petitioner, in its fifth IPR petition against the
particular IV patent, sought to raise a new prior art reference. Id. The petitioner relied on Shaw and
Toshiba to argue that estoppel only applies to grounds “actually litigated in an inter partes review after
the institution decision.” Id. The board rejected this interpretation noting, “Congress would not have
included the additional words ‘or reasonably could have raised’ after ‘raised’ if Congress had desired to
limit the estoppel to grounds actually raised.” Id. at 12. The board rejected the reasoning in Toshiba and
interpreted Shaw to mean “estoppel does not apply to any ground of unpatentability that was
presented in a petition, but denied institution.” Id. at 13-14. Thus, estoppel applied to invalidity grounds
that could have been raised in a prior IPR petition.
The petitioner argued it could not have raised the reference earlier because (1) it was unaware of the
reference prior to filing the petition and (2) there was no evidence the reference could be found by a
diligent prior art searcher. Id. at 14-15. The board rejected the petitioner’s reasoning because it “did not
present search parameters such that [the board] could evaluate the ‘reasonableness’ of its search.” The
board also noted that the reference was indexed at the Library of Congress, and the reference was
related to another reference the petitioner had previously cited in an earlier IPR petition. Once again,
the board placed the burden on the petitioner to show it conducted a reasonable search.
Conclusion
The Federal Circuit should provide guidance to district courts going forward: Either follow the existing
reasoning from Shaw to narrowly apply prior-art estoppel under Section 315(e), or extend Shaw to more
broadly apply prior-art estoppel consistent with the legislative intent of Section 315(e). Currently,
however, one thing is certain — district courts are interpreting Shaw to apply Section 315(e)(2) one way,
while the board interprets nearly identical language in Section 315(e)(1) a different way. As more
patents survive IPRs, the application of estoppel for invalidity arguments in district court and the PTO
will become increasingly important.
Should the Federal Circuit adopt a broader estoppel that better aligns with legislative intent, that
estoppel will likely protect patent owners from facing most never-before-seen prior art references
during subsequent district court litigation and PTO proceedings. Although defendants may rely on new
prior art references that could not have been reasonably discovered, a broader estoppel should prevent
most strategic nonassertion of prior art during the IPR phase. Presently under Shaw, however,
defendants may still get multiple opportunities to invalidate patents using prior art references they
could have asserted in an IPR petition.
—By Jon W. Gurka and James Smith, Knobbe Martens Olson & Bear LLP

5. Jon Gurka is a partner and James Smith is an associate at Knobbe Martens in Irvine, California.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its
clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general
information purposes and is not intended to be and should not be taken as legal advice.
[1] Depomed is a litigant in another district court case that chose not to apply estoppel to prior art that
arguably could have been raised during an earlier IPR proceeding. Depomed, Inc. v. Purdue Pharma LP et
al., Civ. Act. No. 3-13-cv-00571 (MLC), Mem. Op. Dkt. No. 238 (D.N.J. Nov. 4, 2016). The district court in
Depomed found that “if a claim of patent is not instituted in an IPR, and there is no final written decision
as to that claim, the estoppel provisions of 35 U.S.C. § 315(e) do not apply.” Id.
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