Continuing on the subject of defendants challenging multiple related patents, I listened to oral argument recently in a case involving an allegation of collateral estoppel from IPR proceedings on district court litigation of related claims that raised some interesting arguments. (Kroy IP Holdings, LLC v. Groupon, Inc., Case No. 23-1359).
In that case, the district court granted summary judgment finding claims invalid for not being patentably distinct from related claims invalidated in an IPR. The appellant challenged whether estoppel could apply in district court, given that the evidentiary burden in district court was higher. The panel interrupted the appellant, asking whether they had reviewed the Court's recent decision in ParkerVision, Inc. v. Qualcomm Inc., No. 2022-1755, 2024 WL 4094640 (Fed. Cir. Sept. 6, 2024), which the panel succinctly summarized as saying "you win" and suggesting the appellant take a seat. In ParkerVision, the court held that "Although we have not previously addressed the question of whether a finding underlying an unpatentability decision in an IPR proceeding collaterally estops a patentee from making validity arguments regarding separate, related claims in district court litigation, we now hold that it does not."
The appellee, prepared to address Parkervision, attempted to distinguish it on its facts, noting that there the challenger had unsuccessfully challenged the allegedly patentably indistinct method claims and failed to prove them unpatentable, and that the holding in Parkervision should be limited to scenarios in which the PTAB finds the allegedly estopped claims not proven unpatentable.
I am skeptical the appellee will prevail on this argument, given that Parkervision's holding was not based at all on the fact that the allegedly estopped claims had been found not unpatentable in an IPR (which was mentioned only in background). In fact, Parkervision did not address an application of collateral estoppel to determine related claims unpatentable, but rather granted a Daubert motion holding the IPR "collaterally estopped ParkerVision from relitigating characteristics of the prior art reference on which Qualcomm's invalidity contentions rested." Thus, the fact that the PTAB had found the method claims not proven unpatentable (which as a matter of logic would necessitate a finding that the method claims were patentably distinct from the invalidated apparatus claims) was not the reason collateral estoppel should not apply, but rather the different burdens of proof on underlying factual findings. The panel rightly seemed skeptical of this effort to distinguish Parkervision.
However, the appellee further argued (persuasively in my opinion) that the underlying basis for the presumption of validity and subsequent clear and convincing evidence standard is that the patent office has passed upon the validity of the claims, but that this presumption should not apply where the patent office has actually determined that the subject matter claimed is not patentable. The appellee also touched on the Federal Circuit's earlier decision in XY, LLC v. Trans Ova Genetics, 890 F.3d 1282 (Fed. Cir. 2018) (claims cancelled in an IPR have preclusive effect in district court litigation) and briefly touched on the difference between issue preclusion and claim preclusion. In my opinion, this is the key to distinguishing Parkervision.
The panel appears to have conflated issue preclusion (collateral estoppel applying to factual findings) with claim preclusion (res judicata, precluding relitigation of the same or materially similar claims). The use of these terms interchangeably is commonly done, even by the esteemed judges of the Federal Circuit. See, e.g., Soverain Software LLC v. Victoria's Secret Direct Brand Mgmt., LLC, 778 F.3d 1311, 1319 (Fed. Cir. 2015) ("Soverain argues that issue preclusion should not apply because claim 39 was not previously found obvious and does not present identical issues. Complete identity of claims is not required to satisfy the identity-of-issues requirement for claim preclusion.").
But these are slightly different concepts. See Phillips/May Corp. v. United States, 524 F.3d 1264, 1267 (Fed. Cir. 2008) ("The doctrine of res judicata involves the related concepts of claim preclusion and issue preclusion.”). Parkervision addressed issue preclusion ("a finding underlying an unpatentability decision"), not claim preclusion (whether the claims are materially distinct). The Kroy case in contrast, addresses whether claim preclusion applies to the bar relitigation of patentably indistinct claims . Thus, a conclusion in Kroy that claim preclusion may still apply would not be in conflict with Parkervision, and would seem to be in harmony with XY. After all, if the PTAB's unpatentability determination effectively cancels the claim, why shouldn't it apply to patentably indistinct claims? Of course, the challenger still must prove the claims to be patentably indistinct.
Further, the panel did seem concerned about the practical effects of requiring defendants to challenge every single asserted claim in an IPR—a concern that would be obviated by drawing a distinction between issue and claim preclusion in this context. Such a ruling would allow a defendant to knock out all patentably indistinct claims in one IPR, but also preserve a patentee's right to assert patentably distinct claims without any estoppel effects for underlying factual findings made on a lower evidentiary standard in IPR.
I'll be interested to see how the panel handles the case, and if it does not draw this distinction, whether it entertains further briefing in rehearing allowing the appellee to more fully address Parkervision (which issued after briefing had occurred).
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