Extracted from Law360
In a previous article, we analyzed a district court opinion finding issue preclusion based on the outcome of an inter partes review decision invaliding the claims of a related patent.
Since that 2020 opinion from the U.S. District Court for the Northern District of California in Chrimar Systems v. Ruckus Wireless, a split developed between district courts — some finding preclusion based on the outcome of an IPR before the Patent Trial and Appeal Board, and others finding no preclusion.
Two recent rulings by the U.S. Court of Appeals for the Federal Circuit have resolved the split, reversing the course taken by the district court opinion addressed in our previous article. We offer updated and refreshed insights for patent owners and patent challengers to consider with respect to the impact of IPRs on issue preclusion in district court proceedings.
Claim Amendments and Protecting the Invention
Continuation practice is as popular as ever at the U.S. Patent and Trademark Office. This is due, at least in part, to the potential for patent challenges before the PTAB.
This is often seen as an advantage to the patent owner, permitting flexibility with future — perhaps narrower — claim scope that can be used to combat the negative consequences of a successful postgrant review or IPR, and it often presents an easier avenue for modifying claim scope than amendments at the PTAB.
The PTAB's amendment procedures are notoriously unsuccessful. According to a USPTO report, as of March 2024, "[t]he Board granted or granted-in-part [a motion to amend] in 87 of the 508 trials with an MTA (17%) and denied the MTA in 421 of the 508 trials with an MTA (83%)."[1]
Rather than attempt to amend at the PTAB and risk the high likelihood that such a motion will be denied, the patent owner that has a live application at the USPTO can simply file a continuation application, with the goal of obtaining allowance of new claims that include limitations different in scope from the claims subject to the IPR.
This provides the applicant the opportunity to submit multiple different amendments and submissions to the USPTO, as is often the case in prosecution before the USPTO, in order to achieve new, narrower claims, such that regardless of the outcome of the IPR, the patent owner can argue that the new patent is still viable.
As a result, it is often the case that postgrant review and IPR proceedings are initiated against patents with family members that are still pending at the USPTO, which leads to the inevitable question: How will district courts assessing new patents weigh a decision by the PTAB rejecting the claims of a related patent?
IPRs and Issue Preclusion at the District Court
In recent years, the impact of IPR decisions on district court proceedings has been a topic of increasing importance, with many different issues arising at the intersection of the PTAB and the federal judiciary.
As a fundamental matter, courts have struggled to decide whether IPR final decisions preclude district court proceedings on the same or related patents. A split in authority developed among district courts, with some courts following the PTAB's previous invalidity decisions based on collateral estoppel, and others relying on the different standards of proof between PTAB and district court proceedings, to find that estoppel does not apply.[2]
In two recent opinions, the Federal Circuit shed some light as to which school of thought prevails.
ParkerVision v. Qualcomm
In 2011 and 2014, ParkerVision Inc. brought patent infringement actions against Qualcomm Inc. relating to wireless communication technology. Qualcomm filed several petitions for IPR challenging the asserted patents.
As trial approached, Qualcomm filed Daubert motions seeking, among other things, exclusion of ParkerVision's validity expert on the grounds that collateral estoppel arising from the IPRs precluded ParkerVision from attempting to contradict any of the board's findings. The district court granted the Daubert motion as to the validity expert.
In August 2024, the Federal Circuit held that the district court abused its discretion in excluding the testimony of ParkerVision's validity expert and reversed. The Federal Circuit also held that a finding underlying an unpatentability decision in an IPR proceeding does not collaterally estop a patentee from making validity arguments regarding separate, related claims in a district court litigation.
The Federal Circuit compared the preponderance-of-the-evidence standard in an IPR proceeding with the clear-and-convincing-evidence standard in district court. The Federal Circuit concluded that "we are dealing with claims that have not been found unpatentable ... [T]hose claims remain presumptively valid and can only be found invalid in district court litigation by clear and convincing evidence."
Kroy v. Groupon
At the district court level, Kroy IP Holdings LLC filed a series of amended complaints,[3] asserting certain claims of the same patent that were not subject to IPR invalidations by the PTAB. Groupon Inc. filed a motion to dismiss, arguing that the PTAB's ruling on the related claims collaterally estopped the claims in the amended complaint.
Relying on the Federal Circuit's guidance in Ohio Willow Wood Co. v. Alps South LLC in 2013, the U.S. District Court for the District of Delaware reasoned in 2018 that when the PTAB determines a claim is unpatentable, collateral estoppel applies to any claim that is immaterially different for the purposes of invalidity.
In comparing the unpatentable claim with the asserted claim, the district court concluded that the claims were immaterially different and granted Groupon's motion to dismiss.
In February, the Federal Circuit again clarified that because of the different standards of proof for invalidity at the PTAB and in district courts, issue preclusion does not preclude an infringement complaint at the district court when the same, or similar, claims are determined invalid by the PTAB.
The court clearly reasoned that "when a district court would necessarily rely on the Board's fact findings, and those facts have only been proven in a prior proceeding under a lower burden of proof than what is required in district court, collateral estoppel does not apply."
The Federal Circuit clarified that the reasoning in Ohio Willow Wood pertained to two separate proceedings, both of which were in district court. Accordingly, that case does not mandate the same analysis when one proceeding occurs at the PTAB and one occurs in district court.
Analysis
There are several takeaways relevant to both patent owners and patent challengers.
At the PTAB itself, the Federal Circuit's 2018 decision in MaxLinear Inc. v. CF CRESPE LLC[4] requires that issue preclusion applies when the same claims of the same patent are found to be invalid in a related IPR.
Similarly, issue preclusion also applies in the instance of a final IPR decision, either because the IPR was not appealed or because the Federal Circuit has affirmed. In either case, the claim is now canceled and cannot be litigated.[5] Accordingly, petitioners and patent owners alike should be aware that a final written decision serves as the ultimate final say with respect to a patent in any jurisdiction.
In instances regarding district court litigation and co-pending or nonfinal IPRs, though, the Federal Circuit has spoken. In light of the different standards of review, invalidity decisions as a whole at the PTAB do not preclude litigation of the same or materially same claims in district court.
Given the Federal Circuit's rulings, patent owners would be well served to have a robust continuation practice in order to secure claims of different scope.
Specifically, continuations permit flexibility with future — perhaps narrower — claim scope that can be used to combat the negative consequences of a successful postgrant review or IPR, and it often presents an easier avenue for modifying claim scope than amendments at the PTAB.
If the claims are different, issue preclusion simply should not apply.
As for defendants in district court actions for patent infringement considering a challenge to the validity of an asserted patent, it may be prudent to consider a broader IPR strategy.
Often, petitioners only challenge the specific claims asserted by the patent owner in the district court action. But the Federal Circuit's decisions in ParkerVision and Kroy may counsel in favor of challenging not only all the claims of an asserted patent but, perhaps, also related patents that have not yet been raised in the district court, particularly for claims that are so similar in scope that the same prior art would equally apply.
[1] https://www.uspto.gov/sites/default/files/documents/motion_to_amend_installment_9.pdf.
[2] See Papst Licensing GmbH & Co., KG v. Samsung Electronics. Co. , 403 F. Supp. 3d 572, 602 (E.D. Tex. 2019) (holding that issue preclusion due to an IPR did not apply because of the differing standards of proof between the PTAB and district court); Chrimar Systems Inc., et al. v. Ruckuss Wireless Inc., No. 16-CV-00186-SI, Dkt. Nos. 144, 146, Order Granting Defendants' Motions for Summary Judgment (N.D. Cal. July 31, 2020) (holding that because the "subject matter as a whole" was not materially different between the two claims, and the plaintiff failed to demonstrate how the invalidity analysis was altered by the amended claim, issue preclusion applied).
[3] Kroy IP Holdings LLC v. GroupOn Inc., No. 23-1359 (Fed. Cir. 2025).
[4] MaxLinear Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1376-77 (Fed. Cir. 2018).
[5] Fresenius USA Inc. v. Baxter Int'l Inc., 721 F.3d 1330, 1339 (Fed. Cir. 2013).