After SAS, Will Estoppel Also Apply to Grounds not Included in Petitions for Inter Partes Review and Post-Grant Review?

December 12, 2018 – Article

      Since the Supreme Court’s decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018), there has been significant discussion on SAS’s expected effect on estoppel for IPRs.  Essentially universal opinion holds that estoppel will apply to all grounds raised in the IPR petition due to the all-or-nothing institution standard applied by the Patent Trial and Appeal Board (“PTAB”) in response to SAS.  Post-SAS, final written decisions in IPRs will address all grounds raised in the petition if at least one ground meets the standard for institution, thus making estoppel applicable to all petition grounds as grounds “that the petitioner raised … during that inter partes review” under 35 U.S.C. § 315(e).

      Other discussion of SAS’s effect on estoppel for IPRs has addressed whether estoppel should apply to grounds not raised in the petition.  Prior to SAS, a conflict existed in district courts on this issue, with some courts finding estoppel applies and others not.  But given the PTAB’s all-or-nothing institution standard, it logically follows that grounds based on any prior art known by petitioner or that could have been found by a skilled searcher’s diligent search at the time the petition was filed would be a “ground that the petitioner … reasonably could have raised during that inter partes review” under 35 U.S.C. § 315(e).  In particular, since all grounds in a petition will now be considered if the petition is instituted, the grounds considered during the IPR clearly could have included any grounds based on the prior art known by petitioner or that could have been found by a skilled searcher’s diligent search at the time the petition was filed. 

      Accordingly, post-SAS, it is reasonable to conclude that estoppel should also apply to grounds not included in the IPR petition with an exception for grounds based on prior art that could not have been found by a skilled searcher’s diligent search.  Other than this narrow exception, the petitioner would be estopped from raising any prior art invalidity grounds in a district court or the ITC.  The petitioner of course still retains the right to raise all other invalidity grounds including patentability under § 101, indefiniteness, lack of enablement, and lack of written description under § 112, and non-prior-art-based invalidity under § 102 and § 103, such as on-sale bar or public use.

      In contrast to IPRs, there has been much less discussion of the potential impact of SAS on post-grant reviews (“PGRs”), understandably so given the prevalence of IPRs and the relative scarcity of PGRs.  Nevertheless, it would be expected that all grounds included in the PGR petition will be subject to estoppel if any claims survive a final written decision for the same reasons as for IPRs. 

      But what will the estoppel be for grounds not included in the PGR petition?  If the same estoppel is applied to grounds not raised in a PGR petition as likely applies to IPRs, then the estoppel would apply not only to prior art invalidity, but for all other statutory invalidity bases.  In other words, a PGR petitioner may lose all right to raise an invalidity defense in a district court or the ITC based on §§ 101, 102, 103, and 112.

      The statutory language for IPRs and PGRs supports this conclusion.  The estoppel language in 35 U.S.C. § 325(e) for PGRs is essentially identical to the corresponding language in 35 U.S.C. § 315(e) for IPRs with both sections reciting the same language that the petitioner “may not assert … that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”  The identity of this language strongly suggests that estoppel for IPRs should apply in the same manner as IPRs. 

      Moreover, just like invalidity grounds based on prior art known to the petitioner at the time of the IPR petition or that could have been found by a skilled searcher’s diligent search, it would be reasonable to conclude that the petitioner knew or reasonably could have known about all other invalidity bases under §§ 101, 102, 103, and 112 at the time of the PGR petition, with possible exceptions for on-sale bars or prior use that might only be found through discovery in litigation. And if IPR estoppel applies to prior art invalidity under both § 102 and § 103, it makes sense that PGR estoppel should not be limited to the statutory invalidity ground or grounds raised in the PGR petition, but to all statutory invalidity grounds available in a PGR.  Accordingly, PGR estoppel for grounds not raised in the petition should apply to all invalidity grounds under §§ 101, 102, 103, and 112 with its own narrow exceptions.

      Should this scope of estoppel apply to grounds not raised in IPR and PGR petitions, IPR petitioners and especially PGR petitioners must consider all potential invalidity grounds and carefully identify which grounds to include before filing a petition.  For IPRs, petitioners with co-pending litigations have sometimes withheld one or more grounds from the petition with the hope of relying on those grounds should the IPR fail.  Such a strategy is unlikely to succeed post-SAS.  Instead, IPR petitioners should expect that, other than the narrow exception, a failed IPR will prevent the petitioner from raising any printed prior art invalidity grounds in the litigation.

      For PGRs, petitioners have often limited the petition to invalidity based on § 101, particularly for software-related patents, or § 112, particularly for pharmaceutical-related patents.  Continuing this strategy for PGR petitioners after SAS may now subject the petitioner to a complete estoppel of all invalidity grounds under §§ 101, 102, 103, and 112, even if one or more of these statutory invalidity grounds was absent from the PGR.  Given the relative recency of the SAS decision and the absence of any judicial decision addressing the estoppel scope post-SAS, PGR petitioners who have subscribed to this strategy since SAS may be unaware of this potentially significant estoppel effect.

      Until district courts and ultimately the Federal Circuit address the estoppel scope for IPRs and PGRs post-SAS, it remains indeterminate if such a penal estoppel scope will apply to grounds not raised in the petition.  In the meantime, IPR and PGR petitioners would be advised to consider this possibility and prepare their petitions accordingly.