September 28, 2020 - Last Week in the Federal Circuit

Last Week in the Federal Circuit (September 21-25): Joinder and Statutory Estoppel

The Federal Circuit had a fairly busy week as summer officially came to a close. It issued six written decisions last week, three precedential. Below we provide our usual weekly statistics and our case of the week—our highly subjective selection based on whatever case piqued our interest.

Precedential opinions: 3

Non-precedential opinions: 3

Rule 36: 0

Longest pending opinion from argument: John Bean Technologies Corp. v. Morris & Associates, Inc., No. 20-1035 (145 days)

Shortest pending opinion from argument: Shea v. US, No. 19-2130 (100 days).

Case of the week: Network-1 Technologies, Inc. v. Hewlett-Packard Co., No. 18-2238 (Sep. 24, 2020)

Panel: Chief Judge Prost and Judges Newman and Bryson, with Chief Judge Prost writing the opinion.

You should read these cases if: you have a district court case involving IPR estoppel under 35 U.S.C. § 315(e).

This week’s case of the week addresses several issues, including two claim constructions, harmless error when a jury returns a general verdict, statutory estoppel, and invalidity for allegedly broadening claims during a reexamination. But we’re going to focus on just the statutory estoppel issue, so you’ll have to read the decision for the rest.

As relevant here, Network-1 Technologies owns a patent for power-over-Ethernet technology. It sued HP and others for infringement. One of the defendants petitioned for IPR of Network-1’s patent and the PTAB instituted review based on two references. HP then filed the first of two petitions requesting joinder to the already-instituted IPR. That first petition asked the Board to add new unpatentability grounds beyond those that the PTAB had already instituted. The Board denied HP’s first request. HP then filed a second petition requesting joinder. That petition raised only identical grounds to the already-instituted IPR. Although 35 U.S.C. § 315(b) time-barred HP from seeking its own independent IPR, the Board allowed HP to join the already-instituted IPR under 35 U.S.C. § 315(c). The PTAB eventually upheld the challenged claims’ patentability, which the Federal Circuit affirmed without opinion under Rule 36.

Back in the district court, the parties eventually went to trial on infringement and HP’s invalidity defense. The jury found that HP did not infringe any asserted claim and that HP had shown that all asserted claims are invalid. But the district court granted Network-1’s JMOL motion on invalidity. It held that 35 U.S.C. § 315(e) estopped HP from raising certain obviousness challenges because of HP’s involvement in the IPR. Although the obviousness grounds were based on different references from those in the IPR, the district court concluded that HP reasonably could have raised the obviousness grounds in the IPR.

HP appealed that ruling and the Federal Circuit reversed (technically, HP cross-appealed and the invalidity issue mattered because the Federal Circuit vacated and remanded the non-infringement ruling). The Federal Circuit focused on whether HP “reasonably could have raised” additional grounds as a joined party to an existing IPR. Relying on the recent decision in Facebook, Inc. v. Windy City Innovations, LLC (which we discuss here), the Court explained that “the joinder provision does not permit a joining party to bring into the proceeding new grounds that were not already instituted. Rather, it may only join the already-instituted proceeding as a party.” That was enough to defeat estoppel on the facts here: “Because a joining party cannot bring with it grounds other than those already instituted, that party is not statutorily estopped from raising other invalidity grounds.” Despite reversing the district court’s invalidity JMOL, the Court did not reinstate the jury’s verdict but remanded because the district court had not addressed Network-1’s alternative motion for a new trial on invalidity.

The Federal Circuit’s estoppel ruling here seems similar to its ruling (pre-SAS) in Shaw Industries Group v. Automated Creel Systems, Inc. There, the Court denied a mandamus petition seeking to force the PTAB to review a non-instituted alternative invalidity ground. The Federal Circuit reasoned in part that statutory estoppel under Section 315(e) would not bar the petitioner from raising its invalidity ground in another proceeding—because the PTAB had refused to institute on the alternative ground, that ground was not one that was raised or reasonably could have been raised. In both Shaw and Network-1, the Court seems to have ruled that when a rule, statute, or PTO practice prevent a petitioner from raising a ground, the statutory estoppel bar will not apply to that ground. One interesting possible effect from Network-1 may be that statutory estoppel applies differently to different parties in the same IPR proceeding—an original petitioner who had freedom to choose the grounds for review may be subject to a broader estoppel than parties who join later and are limited to the already-instituted grounds.