Supreme Court Taking Additional Look at Apple’s Estoppel Petition

by Dennis Crouch

The Supreme Court has added a fourth case to its list of potentials for 2023: Apple Inc., v. California Institute of Technology, Docket No. 22-203.  The case is extremely important for our patent system because it could define key aspects of the interplay between inter partes review (IPR) proceedings and parallel district court litigation.

IPR Estoppel Provision: In traditional patent infringement litigation, accused infringers almost always raise invalidity defenses — arguing that the patent fails to satisfy the conditions of patentability set forth in the Patent Act.  For the past decade, IPRs have offered an additional powerful tool to challenge validity.  As the IPR system was being developed, patent holders were concerned about repeat harassment and argued that patent challengers should be required to choose their battleground: either the PTAB or Court, not both.   Aspects of the eventual compromise are codified in the estoppel provision of 35 U.S.C. 315(e)(2).  The statute becomes effective once an IPR reaches a final written decision as to some claim in the challenged patent. At that point, the IPR petitioner is prohibited from asserting in court that any challenged claim is “invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”  Id.  The question in the case is statutory interpretation – what did Congress mean by “could have raised during that inter partes review”?

Apple lost its IPR against CalTech’s patent and subsequently attempted to maintain further obviousness arguments in the parallel infringement litigation. The district and appellate courts applied 315(e)(2) estoppel to prohibit those additional obviousness arguments — concluding that Apple reasonably could have raised them in its initial IPR petition.  Apple’s appeal to the Supreme Court argues that the Federal Circuit misconstrued the statute. Apple’s argument hinges on three key points:

  1. The statutory estoppel applies only to grounds that could have been raised “during” the IPR;
  2. The IPR begins only at the point where the PTAB grants the petition to institute an IPR; and
  3. Once the IPR is instituted, the petitioner is barred from raising new grounds (except for rebuttal-type issues).

The Federal Circuit’s error (according to Apple) is that the court found that estoppel applies to any ground that could have been raised in the petition. But, the petition is pre-IPR and thus not “during” the IPR as the statute requires.  The petition for writ of certiorari asks the following question:

Whether the Federal Circuit erroneously extended IPR estoppel under 35 U.S.C. § 315(e)(2) to all grounds that reasonably could have been raised in the petition filed before an inter partes review is instituted, even though the text of the statute applies estoppel only to grounds that “reasonably could have [been] raised during that inter partes review.”

Petition.

What’s the news: The Supreme Court has issued a CVSG – Call for the Views of the Solicitor General – in the case.  What this means is that at least four justices think that case has potential but that they would like to hear the Biden Administration’s views on whether this is an appropriate vehicle. The SG’s office is already working on three other briefs. Two focus on eligibility (Interactive Wearables & Tropp), and the other addresses the PTO-FDA interaction involving skinny-label infringement (Teva v. GSK).

My view on the estoppel issue:

  1. Point for CalTech: The Federal Circuit’s solution here is the better policy.  Parties should not be given repeated affirmative opportunities to attempt invalidation of the same patent claims. Rather, the process should follow the general use-it-or-lose-it rule of litigation that forces parties to bring their best arguments to the table and see if they are good enough.  Here, Apple made a strategic decision to bring certain arguments to the PTAB — most likely because they were the best arguments.  It doesn’t help anyone to now let them bring on the third-string as a measure of patent invalidity.
  2. Point for Apple: A pure textual reading of the statute favors Apple. If the IPR does not start until initiated, “during” the IPR would not include any petition-stage actions.
  3. Match for CalTech: Apple’s reading removes essentially all meaning from the “reasonably could have raised” provision since petitioners basically cannot add any new grounds once the petition is granted. The statute’s purpose though was to prevent abusive and serial patent challenges.

I always hope that the Supreme Court takes patent cases because of both the drama and potential for meaningful and positive reform.  Likewise, I hope that the court takes this case, but then affirms.

23 thoughts on “Supreme Court Taking Additional Look at Apple’s Estoppel Petition

  1. 9

    What does “reasonably could have raised” mean in view of PTABs strict page limits and hypertechnical exclusions of new arguments and evidence during the IPR? Some sort of judicial release valve should be provided where obviously unpatentable claims are not rendered so by the PTAB. Without this, it can lead to PTAB finding unpatentable “Claim 1, wherein the car is red” but allowing “Claim 1 wherein the car is blue.” Petitioner is unfairly estopped from invalidating this otherwise unpatentable claim.

    1. 9.1

      The Caltech brief shared that in only the battle before the court, Apple had filed eight petitions spanning 112,000 words.

      You “concern” comes across more than a bit hollow.

  2. 8

    Hypertextual arguments (of the kind not involving website design), like this one, always leave me cold. But even under that paradigm, and certainly when taking a broader, more holistic view, I think CalTech wins. No second bytes for Apple.

  3. 7

    I know certain of my views can be unsophisticated, but shouldn’t a case considered to have started when the cash hits the barrel?

    37 CFR § 42.15 – Fees. (a) On filing a petition for inter partes review of a patent, payment of the following fees are due: (1) Inter Partes Review request fee: $19,000.00

    1. 7.1

      It is far less that you provide unsophisticated views, and far more that you cling to unsophistication Because they are your views.

      It’s like opinions. Everyone has one and everyone is welcome to express theirs.

      But an informed opinion is much better, and you delight in Staying uninformed.

  4. 6

    A pure textual reading of the statute favors Apple? If it could have been put in the petition, it could have been raised DURING the IPR. So a pure textual reading disfavors Apple. Apple’s reading means that any petitioner can pocket some references to use in a subsequent litigation and thereby escape estoppel.

  5. 5

    Point for Apple: A pure textual reading of the statute favors Apple. If the IPR does not start until initiated, “during” the IPR would not include any petition-stage actions.
    That position assumes that “during that inter parte review” only includes the time after the inter parte review was initiated. It doesn’t take much squinting for the Supreme Court to read that phrase to include when the petition was filed.

    I would argue that the phrase does not read “during the institution of the inter parte review,” and that the term “inter partes review” encompasses both the petition and the institution of the inter partes review. The title of Chapter 31 reads “Inter Partes Review”, and thus, each subsection of that chapter (i.e., §§ 311-319) was intended by Congress to be part of the inter partes review process.

    1. 5.1

      +1

    2. 5.2

      But when people look at Shaw and it’s progeny in a wooden manner, the notion of “there is Phase 1 and there is Phase 2” is lost, and only Phase 2 is viewed as “IPR.”

  6. 4

    > Apple’s reading removes essentially all meaning from the “reasonably could
    > have raised” provision since petitioners basically cannot add any new grounds
    > once the petition is granted.

    Putting policy issues aside, from a pure statutory construction standpoint, Apple’s reading of the estoppel provision would not render meaningless the “reasonably could have been raised” language of the AIA.

    For example, where the patent owner files a motion to amend, the petitioner can (and almost always does) oppose the motion by raising new grounds not raised in its IPR petition, including new prior art grounds. The petitioner can also raise new challenges against the proposed amended claims that couldn’t have raised in the original petition, such as 101/112. These would all be considered grounds that were raised “during” an IPR for purposes of the AIA.

    1. 3.1

      Whoops. This was supposed to be appended to Atari Man’s #1.

  7. 2

    If you want the court to take the case and then affirm, it would be the same result if they simply don’t take the case at all (the Fed Cir decision would stand).

  8. 1

    “Match for CalTech: Apple’s reading removes essentially all meaning from the “reasonably could have raised” provision since petitioners basically cannot add any new grounds once the petition is granted. The statute’s purpose though was to prevent abusive and serial patent challenges.”

    Agreed.

    But I never trust SCOTUS to get patent cases right.

    1. 1.2

      See Lode_Runner’s comment above:

      “Putting policy issues aside, from a pure statutory construction standpoint, Apple’s reading of the estoppel provision would not render meaningless the “reasonably could have been raised” language of the AIA.

      For example, where the patent owner files a motion to amend, the petitioner can (and almost always does) oppose the motion by raising new grounds not raised in its IPR petition, including new prior art grounds. The petitioner can also raise new challenges against the proposed amended claims that couldn’t have raised in the original petition, such as 101/112. These would all be considered grounds that were raised “during” an IPR for purposes of the AIA.”

      Also:

      If Congress had intended that ALL 102/103 challenges had to be made in an IPR petition, they could have simply said that. And instead of saying “that could have been raised in THAT” ipr, they could just say the litigant is estopped from raising any validity challenge based on 102/103 art, period. They didn’t.

      1. 1.2.1

        If Scalia was still around, I’d expect him to take that kind of small-minded, unhelpful approach. I hope that the current members of SCOTUS will recognize the thing for what it is – you don’t get two bites at the apple, even if you’re Apple – and not buy into these games that are fine for law school but removed from reality, but as I said, I don’t trust SCOTUS to get patent cases right.

        1. 1.2.1.1

          The approach is only “unhelpful” when it rebuts your argument, right?

        2. 1.2.1.2

          Correct — even under my interpretation you don’t get two bites at any given apple. Raise an apple in IPR, can’t argue same apple in litigation.

          Your argument isn’t two bites at the apple: it’s one bite at one apple means you are forbidden from ever eating another/different apple for the rest of your life. It means that patents that deserve to be invalidated will not be because of a procedural barrier based on a results-driven interpretation of statutory language.

          1. 1.2.1.2.1

            ?? No way one reaches what you are suggesting.

          2. 1.2.1.2.2

            You seem to think the estoppel prevents other parties from biting at the apple. It does not. You also seem to think it is okay for challengers to game the system and save the best prior art for last. How many bites should they get?

            1. 1.2.1.2.2.1

              No one is debating the 3d party’s ability to challenge, just talking about a single plaintiff/defendant. There are two options: (1) require all 102/103 challenges in a single IPR and thereafter waive any and all anticipation/obviousness challenges in court or (2) preclude relitigating the arguments from the IPR in a subsequent litigation. As I mentioned above, I disagree with Dennis and believe the statutory language favors (2), which should be the end of the inquiry.

              However from a policy perspective, IPR was supposed to be a more efficient/less expensive way to adjudicate certain limited validity challenges, in a forum of presumed expertise. “Could have been raised” has been interpreted in court to mean “could have been found if you tried hard enough” — meaning under standard (1), the defendant could be precluded from arguing a grounds for invalidity about which he was completely unaware at the time he filed the IPR.

              So what would that do? Require a defendant to perform a global/scorched earth search for prior art prior to filing the IPR (which has time limits w/pending litigation), then squeeze absolutely everything into the IPR petition and hope that the PTO will carefully consider everything with as much scrutiny as it would an IPR based on a single reference. Anyone who has seen a patent with 1000 cited references knows the folly relating to the presumption that the PTO reviewed every one of those references.

              So again, putting statutory language which favors (2) aside, I believe the balance of equities favors not completely removing a defendant’s ability to raise 102/103 issues at trial simply because they may have pursued an IPR on a given reference.

              As to your question “how many bites should they get” my answer is the same: for a given defendant, they get one-bite-per-reference. If they argue Reference X in an IPR and fail, they should not be allowed to re-argue Reference X in the parallel litigation. As for “gaming the system” by saving your best art for last, I’m not sure strategically that’s the best option (you’re assuming a judge/jury will give your “best art” more weight than the PTO).

              1. 1.2.1.2.2.1.1

                No – your (1) DOES NOT exist and is controlled by the inclusion of “reasonable.”

                You seem to think otherwise — and it is most odd of you.

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