Feb. 4, 2022
Federal Circuit Expands IPR Estoppel - IPR Petitioners, Do Not Hold Anything Back
In California Institute of Technology v. Broadcom, No. 20-2222 (Fed. Cir. Feb. 4, 2022)) (“CalTech”), the Federal Circuit expanded the scope of IPR estoppel and held that such estoppel applies not just to claims and arguments that the Patent Trial and Appeal Board PTAB (“PTAB”) addressed, but also to “all grounds not stated in the petition but which reasonable could have been asserted against the claims included in the petition.” Thus, the Federal Circuit overruled its own 2016 decision in Shaw Industries v. Automated Creel Systems, which held that estoppel applies only to the arguments that the PTAB addressed in the final written decision. In light of this recent ruling broadening IPR-based estoppel, a petitioner should put forth its strongest grounds in an IPR since it now cannot withhold any prior art references or arguments in reserve for litigation. A petitioner must also be strategic in selecting certain claims to challenge in the IPR petition, evaluating whether there is greater value in asserting invalidity arguments against certain claims at the district court instead.
Feb. 8, 2022
Right to File IPR Can Be Contracted Away
In Nippon Shinyaku v. Sarepta Therapeutics, No. 2021-2369 (Fed. Cir. Feb. 8, 2022), the Federal Circuit held that Sarepta waived its right to file an IPR petition in view of a forum selection clause provided in a confidentiality agreement. The agreement at issue included a two-year covenant not to sue, which specifically identified “patent validity challenges before the U.S. Patent and Trademark Office or Japanese Patent Office.” After the two-year covenant period expired, a forum selection clause governed all “potential actions” arising under U.S. law relating to patent infringement or invalidity. The forum selection clause also stated that all such actions shall be litigated in the U.S. District Court for the District of Delaware. Although the forum selection clause did not specifically identify patent validity challenges before the U.S. Patent and Trademark Office, “potential actions” were specifically defined in the agreement to include “patent or other intellectual property disputes . . . filed with a court or administrative agency.” In this case, while the PTAB had granted institution in all seven of Sarepta’s IPR petitions, because Sarepta has contracted away its rights to challenge validity at the USPTO, the Federal Circuit held that Sarepta had to litigate the validity issues in the District of Delaware.
In light of this ruling, when entering into any type of patent-related agreement, it is important to consider whether the right to file IPR petitions is bargained away. Such agreements can include patent license agreements, confidentiality agreements, non-disclosure agreements, material transfer agreements, joint research/development agreements, consulting agreements, or even employment agreements.
September 15, 2022
A Minute Too Late – PTAB exercises its discretion to continue IPRs
In Polaris Innovations Ltd. v. Brent, Nos. 2019-1483, -1484 (Fed. Cir. Sept. 15, 2022), the Federal Circuit affirmed the PTAB’s exercise of its discretion to continue the IPRs when Polaris had sought to terminate the IPRs after the parties had settled.
At the PTAB, NVIDIA initiated IPR proceedings challenging two patents owned by Polaris. The PTAB issued final written decisions finding all challenged claims unpatentable, and Polaris appealed. Without reaching the merits, the Federal Circuit vacated the PTAB’s decisions and remanded in light of its decision in Arthrex I due to Appointments Clause issues relating to the appointment of administrative patent judges.
On remand, the PTAB administratively suspended the IPRs pending potential Supreme Court action. During that suspension, the parties settled and filed joint motions to terminate the proceedings. While those motions were pending, the Supreme Court issued Arthrex II (allowing the Director to review the decisions rendered by administrative patent judges), vacated the Federal Circuit’s Arthrex I decision, and reinstated the PTAB’s decision. Polaris appealed, asking the Federal Circuit to vacate the PTAB’s final decisions and remand for termination of the IPRs. The Federal Circuit disagreed and held that the motions were untimely because settlement and the motions to terminate occurred after the PTAB had already decided the IPRs on the merits. The Federal Circuit clarified that the statue permits the PTAB to proceed to a final written decision under 35 U.S.C. 317 (a) even if no petitioner remains in the proceeding.
September 28, 2022
Federal Circuit Clarifies Alice Analysis in Reversal of Rule 12 Dismissal – Importance of Written Description in Determining Eligibility
In Cooperative Entertainment, Inc. v. Kollective Technology, Inc., No. 2021-2167 (Fed. Cir. Sept. 28, 2022), the Federal Circuit reversed a Northern District of California decision granting the cloud service company Kollective’s motion to dismiss for lack of patentability under 35 U.S.C. § 101, and remanded for further proceedings.
Cooperative sued Kollective for infringement of U.S. Patent No. 9,432,452 (“the ’452 patent), which claimed systems and methods of structuring a peer-to-peer dynamic network for distributing large files. Kollective filed a motion to dismiss, arguing that the claims of the ’452 patent were directed to patent- ineligible subject matter under 35 U.S.C. § 101. After Cooperative filed an amended complaint, Kollective refiled its motion to dismiss. The district court held that the ’452 patent was directed to the abstract idea of the preparation and transmission of content to peers through a computer network and granted Kollective’s motion to dismiss.
On appeal, however, the Federal Circuit focused on the patent’s disclosure that the inventive concept was different from and improvement over the prior art. For example, the specification repeatedly explained that the “prior art fails …” and that the feature “does not exist in the prior art.” The Federal Circuit also noted that “[d]rawing all inferences in favor of Cooperative, as we must on a motion to dismiss, we conclude that claim 1 recites a specific technical solution that is an inventive concept. . . . This is not an ‘abstract idea implemented on a generic computer . . . .’” The Federal Circuit also found that determining whether the claimed network of the ’452 patent was well understood, routine, or conventional was a question of fact that should not have been resolved at the Rule 12(b)(6) stage on a motion to dismiss.