Federal Circuit Finds That IPR Estoppel—Including Underlying Real-Party-In-Interest Findings—May Be Reviewable Even After Thryv v. Click-to-Call

March 10, 2021 – Article

As I have written about previously (articles here and here ), there is a growing body of case law defining the issues that are, and are not, appealable after the PTAB determines to institute an IPR. What’s not appealable includes, for example, the PTAB’s determination as to whether an IPR petition meets 35 U.S.C. § 312(a)(3)’s sufficiency requirement; whether, under 35 U.S.C. § 312(a)(2), the PTAB appropriately instituted an IPR notwithstanding a real-party-in-interest (RPI) dispute; and whether an IPR petition is time-barred under 35 U.S.C. § 315(b) as addressed in Thryv v. Click-to-Call. Adding to this developing area of the law, the Federal Circuit’s March 9, 2021, decision in Uniloc 2017 LLC v. Facebook et al. (Case No. 2019-1688) makes clear that the Court may still review certain RPI determinations if they are tied to an otherwise appealable issue: here, whether Facebook and LG were estopped from maintaining their IPRs based on an earlier IPR filed by Apple.

The procedural posture of this case is a bit long and convoluted, but the highlights are as follows. Facebook filed two IPRs against Uniloc’s ’433 patent on May 11, 2017, and thereafter on June 16, 2017, Facebook filed a new petition and motion to join a previous IPR filed by Apple. The claims challenged by Apple and Facebook largely overlapped; however, Apple did not challenge the ’433 patent’s claim 7 (which was challenged by Facebook in its separate IPRs). Later, on September 11, 2017, LG moved to join the two Facebook IPRs. This request was eventually granted.

After the PTAB granted Facebook’s motion to join and also instituted Facebook’s separate IPRs, it foresaw the possibility of a statutory estoppel issue arising under 35 U.S.C. § 315(e)(1) in light of the soon-to-be-issued final written decision in the Apple IPR. Ultimately, after the PTAB issued a decision in the Apple IPR upholding the patentability the ’433 patent’s claims 1-6 and 8, the PTAB (1) dismissed-in-part Facebook from its IPRs, finding that Facebook was estopped from maintaining its IPRs against all claims other than claim 7; and (2) determined that LG could stand in Facebook’s shoes and maintain the proceedings in full as “[t]he dismissal of Facebook . . . does not limit LG’s participation in any way.”

Turning first to whether the Federal Circuit can review and address the statutory estoppel question, the Court found that it can, at least based on the facts before it, because the estoppel-triggering event—the Apple IPR final written decision—occurred after institution of Facebook’s IPRs:

Thus, just as we concluded for the CBM estoppel provision of § 325(e)(1) in Credit Acceptance, we likewise interpret the similarly worded and focused IPR estoppel provision of § 315(e)(1) as not so closely tied to institution to render judicial review precluded when the estoppel-triggering event arises after institution….

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Critically, the particular circumstances in Credit Acceptance, i.e., one in which no cause for termination at the time of petition existed and the basis for termination developed while the proceeding was ongoing, is exactly that which happened here. When the Board instituted review in the ’1427 IPR, no estoppel could apply because no final written decision had been reached in the Apple IPR. Though the Board’s institution decision ordered supplemental briefing regarding the potential, future applicability of § 315(e)(1)’s estoppel provision, due to its awareness of the advanced state of the Apple IPR, the Apple IPR final written decision did not issue until months after institution in this proceeding. The Board’s ‘no estoppel’ decision thus was later than and separate from its earlier institution decision, and, consistent with the facts and reasoning of Credit Acceptance, is a decision we may review.

Next, the Court addressed the merits of Uniloc’s challenge, which is that Facebook should have been estopped from maintaining its IPR against claim 7 and that LG should have been estopped from joining and maintaining the rest of Facebook’s challenges because LG, by virtue of joining the Facebook IPRs, is a RPI or privy of Facebook. As to the first issue, the Court quickly concluded that because 35 U.S.C. § 315(e) clearly states that estoppel applies on a claim-by-claim basis, and because claim 7 was not challenged in the Apple IPR that Facebook joined, estoppel does not apply to that claim.

Regarding the second question, the Court found that “just because LG expressed an interest in challenging the ’433 patent’s patentability, through its filing of its own IPR petition and joinder motion, does not by itself make LG an RPI to Facebook’s IPR. The record lacks any evidence that LG exercised any control over Facebook’s decision to file for inter partes review (either in the Apple IPR and in this IPR) or Facebook’s arguments made during the proceedings, and vice versa.” In short, there was no evidence of record to suggest that LG was acting as Facebook’s proxy when it independently decided to file its own joinder petitions to assert its own interest in invalidating the challenged claims.

While there are a few takeaways from this decision, most important may be the Federal Circuit’s thus far consistent interpretation of the § 314(d) appeal bar that if an issue arises post-institution, such as third-party joinder and potentially also the application of statutory estoppel, these issues should not evade the Court’s review despite relating to institution. And perhaps equally important is the recognition for practitioners that although the Federal Circuit is unable to review on appeal the typical RPI decisions made by the PTAB—i.e., whether the PTAB correctly instituted review notwithstanding an argument concerning an unnamed RPI—the Federal Circuit may continue to develop its body of RPI case law through, for example, cases dealing with IPR estoppel. This case law may then be applied by the Board when making a typical RPI determination at institution, thereby influencing an aspect of the IPR-institution process that is not subject to judicial review.