Administrative Estoppel

May 28, 2015

Estoppel/Preclusion Generally• Elements of Collateral Estoppel / Res

Judicata:– A right, question, or fact – in issue and determined– by a court of competent jurisdiction– cannot be disputed in a subsequent suit – between the same parties or their privies.

• Montana v. United States (U.S. 1979)• “res judicata” = “claim preclusion”• “collateral estoppel” = “issue preclusion”

Administrative Estoppel Generally

• “When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.”– U.S. v. Utah Constr. & Mining (U.S. 1966)

B&B Hardware v. Hargis Indus. (US Mar 24)• “So long as the other ordinary elements of

issue preclusion are met, when the uses adjudicated by the TTAB are materially the same as those before the district court, issue preclusion should apply.”

• Potential for material difference between marketplace and application usages?

Procedural Set-Up

PatentDefendant

Infringement

Procedural Set-Up

PatentDefendant

Infringement

Petitioneror

Requestor

Reexam/IPR/PGR

Patent

Procedural Set-Up

PatentDefendant

Infringement

Petitioneror

Requestor

Reexam/IPR/PGR

Patent

RE CON CIP

Statutory Petitioner Estoppel – IPR/PGR• Petitioner barred from later challenging on

grounds “raised or reasonably could have raised.” 35 USC 315, 325.

• Scope unclear. Legislative History: – “Adding the modifier ‘reasonably’ ensures that

could-have-raised estoppel extends only to that prior art which a skilled searcher conducting a diligent search reasonably could have been expected to discover.”

• Pending Legislation: Strikes “or reasonably could have raised” from PGR only.– Innovation Act of 2015, PATENT Act of 2015

Statutory Petitioner Estoppel – IPR/PGR• No cases interpret yet. BUT: prior statute “could-

have-raised” for inter partes reexamination. 35 USC 315(c) (2006).

• Acco Brands v. PC Guardian (ND Cal. 2008)– Prior art = computer (no publication)– Statute limits to printed publications– Could not have been raised. No estoppel.– FN: “The Court is uncomfortable … [and] not

convinced that defendant could not, somehow, have gotten the … information to the PTO had it actually wanted to.”

• Scope of grounds “could” raise for IPR (102/103/printed) vs. PGR (all).

Statutory Petitioner Estoppel – IPR/PGR• expressio unis est exclusio alterius• Callaway Golf v. Kappos (E.D. Va. 2011); IPRx

(35 USC 317(b))– “Congress’s failure to include a more general

collateral estoppel provision supports the conclusion that Callaway’s collateral estoppel has no statutory basis.”

• WABCO Holdings v. Bendix (DNJ 2010)– “If Congress thought that a third-party requester in

an ex parte reexamination would receive two bites of the apple …, then it could have estopped the party in the same way that it does in inter partes reexaminations. Congress chose not to.”

Petitioner Estoppel – Material Difference?• “To allow reconsideration of an interlocutory

order based upon the subsequent decision of another adjudicative tribunal – which was driven by a different claim construction, different arguments by the parties, different evidence, and a different legal standard – would remove all considerations of finality and consistency by allowing parties to challenge a court's ruling whenever that party identifies, in hindsight, an improved legal argument.”

• Va. Innovation v. Samsung (E.D. Va. 2014)

Patentee Estoppel (IPR/PGR)• 37 CFR 42.73(d)(3)• “A [patentee] is precluded from taking action

inconsistent with the adverse judgment, including obtaining in any patent:– (i) A claim that is not patentably distinct from a

finally refused or canceled claim; or– (ii) An amendment of a specification or of a

drawing that was denied during the trial proceeding, but this provision does not apply to an application or patent that has a different written description.”

• Limits continuation practice.

Patentee Estoppel (Interference)• Two Forms? “by judgment” and “for failure to file

a motion” (cf. waiver; procedural default).

• Biogen v. Japanese Foundation (FC May 7)• 1993: X loses interference to Y

– DNA sequences encoding hFIF proteins• 2009: interference declared, but judgment to Y

because same subject matter– DNA sequences encoding mature hFIF proteins

• 2013: Y wins again, affirmed by FC– Precursor and mature hFIF proteins

Patentee Estoppel (Interference)• Biogen v. Japanese Foundation (FC May 7)• “Estoppel by judgment”: not patentably distinct,

despite:– restriction requirement;– Y had additional interferences with third parties with

separate counts for protein and DNA;– (X did not submit evidence at correct time)

• “Estoppel by failure to file motion,” see MPEP 2308.03, not reached by FC. X had tried, but failed, to add counts to the prior interferences.– “Where the prior judgment . . . is not strictly res

judicata . . . That judgment may nonetheless create an estoppel as to matters actually in issue or points controverted.” Stoudt (CCPA 1981)

Fix Litigation By Going Back to PTO?• ArcelorMittal (FC May 12)

– Only independent claim: steel sheet with “a very high mechanical resistance”

• 1. DCt: tensile strength > 1500 MPa.• 2. Reissue filed• 3. CAFC affirms claim construction.• 4. Reissue: “wherein said mechanical resistance

is in excess of 1000 MPa” in dependent claim.• 5. DCt: Claims broadened in reissue = invalid.• 6. CAFC affirms, claim construction was law-of-

the-case. See also Anderson (FC 1998).

Fix Litigation By Going Back to PTO?• “In situations, where the issue decided in Court

did not invalidate claims, but applies in one or more respects to the claims being reexamined, the doctrine of collateral estoppel may be applied in reexamination to resolve the issue. For example, where a finding that reference X meets a limitation of a claim was necessary to the final decision of the Court invalidation of claim 5, collateral estoppel would attach to the same limitation in claim 2, which was not invalidated (e.g., because claim 2 contained additional limitations not found in claim 5).” MPEP 2659.

Timing Problems• Stay of Litigation (separate topic)

– Prejudice, Simplification, Reduction of Burden• Race to Judgment: Fresenius v. Baxter (FC

2013)– 1. CAFC Affirms Not Invalid, Remand Damages– 2. USPTO (Reexam): Invalid– 3. DCt Enters Final Judgment– 4. CAFC Affirms Reexam Invalid– 5. Pending damages (on appeal) extinguished.

• IPR/PGR Estoppel – only effective on “final written decision” of PTAB.

Administrative Estoppel

May 28, 2015