Obtaining vs. Maintaining: How SoftView v. Apple Reshapes Patentee Estoppel

by Dennis Crouch

This is our second discussion of collateral estoppel in as many days.  Yesterday I wrote about Koss v. Bose, a case where the Federal Circuit concluded that a district court’s final judgment of invalidity had a preclusive effect on USPTO IPR analysis — rendering the patentee Koss’s appeal moot.   Today’s focus is on SoftView v. Apple, and a focus on the USPTO’s estoppel regulations as they apply between an IPR and reexamination proceeding. Case No 23-1005 (Fed. Cir. July 26, 2024).

Background on IPR Estoppel Against the Patentee in PTO Actions: Using its regulatory power, the USPTO promulgated 37 C.F.R. § 42.73(d), which includes estoppel provisions for petitioners and patent owners respectively. Part (d)(3) is relevant for this case and reads as follows:

(3) Patent applicant or owner. A patent applicant or owner is precluded from taking action inconsistent with [an] adverse judgment [by the PTAB], 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.

As you can see, the regulation on its face prohibits a patent applicant or owner from taking actions that contradict a previous adverse judgment.  The portion of the provision at issue here is the specific (d)(3)(i) prohibition on obtaining claims that are not patentably distinct from claims that were refused or canceled.

Since administrative law is a recent focus, I wanted to pause here to consider the source of the USPTO’s authority to make this regulation. Although the office has historically quite limited procedural rulemaking authority under 35 U.S.C. § 2(b)(2)(A), the AIA provided much greater authority in the context of inter partes review proceedings.  In particular, 35 U.S.C. § 316(a)(4) provides the Director of the USPTO with authority to prescribe regulations “establishing and governing inter partes review under this chapter and the relationship of such review to other proceedings under this title.”  The Supreme Court in Cuozzo previously explained that § 316(a) provides broader authority that is not limited to purely procedural matters. Cuozzo Speed Techs., LLC v. Lee, 579 U.S. 261 (2016).

At oral arguments there was some amount of discussion of “how much discretion [has Congress] given the agency?”  Judge Bryson went on:

Judge Bryson: The agency presumably could not simply say that principles of obviousness don’t apply to proceedings that follow an IPR decision.

Or presumably, you would agree with me that they couldn’t say, well, if there’s an IPR decision with respect to one patent, then all related patents in any further proceedings before the agency will be governed by a rule requiring the patentee to meet a burden of proof, of showing validity. You would agree that those wouldn’t be valid applications of the authority the agency’s been given, right?

Sonal Naresh Mehta (on behalf of patent challengers Motorola and Apple): Yes, Your Honor.

In the final result, the court appears to be comfortable with the approach taken by the Agency because patentably-distinct is so closely tied to the obviousness doctrine applied in the original IPR proceeding.  It remains to be seen how far the agency might be permitted to go.

Common law collateral estoppel (issue preclusion) is a bit different – a bit tighter – than the USPTO promulgated estoppel provision.  You may remember from law school that issue preclusion only applies if the prior final decision involved the “same issue.”  Although courts allow for some slight differences, they require a very tight relationship between the issue decided in the prior case and that being precluded in the second case.  Thus, for instance, if a claim in a patent is found obvious by a district court, issue preclusion will not bar the patentee from subsequently asserting a different claim, unless it is effectively the same claim. The PTO regulation though is broader  and applies estoppel against any claim that is “not patentably distinct” from a claim already cancelled.  As we know from double patenting and interference cases,  not patentably distinct is analogous to obviousness, with the canceled claims serving as a stand-in for prior art.

SoftView argued that the regulation’s “patentably distinct” language should be interpreted as meaning “substantially the same” to align more closely with common law estoppel.  The appellate panel rejected this narrow interpretation, in favor of the established meaning of the term even if it represents a broader scope of estoppel.

Obtaining vs Maintaining a claim: So far we have two key points from the case: (1) the regulation was within the USPTO’s authority; and (2) the Board correctly interpreted the regulation to broadly estop obtaining not-patentably-distinct claims.  But, the patentee was able to get some traction on a third point – that the Board erred in applying § 42.73(d)(3)(i) to previously issued claims.

Pause again to look at the regulation above – and recognize that it prohibits “obtaining in any patent . . . A claim that is not patentably distinct from a finally refused or canceled claim.”  However, in the case, the PTAB found SoftView was estopped from maintaining claims similar to those already cancelled, even though these claims were already present at the time of the prior IPR.

On appeal, the Court sided with the patentee on this point. The regulation uses the term “obtaining” which does not apply to “maintaining an existing claim.” This is an important distinction that limits the regulation’s reach to new or amended claims rather than allowing an IPR to effectively automatically invalidate already-issued patent claims. The court vacated the Board’s decision as to the issued claims, remanding for further consideration consistent with this interpretation.  On remand the PTAB will need to actually do the obviousness analysis – and not rely upon the preclusion shortcut.

Some of the claims were amended — and as to those claims the court affirmed the Board’s application of § 42.73(d)(3)(i). SoftView unsuccessfully challenged the Board’s methodology for determining whether amended claims were patentably distinct from those canceled in the IPR.

Looking ahead, the impact of SoftView is potentially significant. Patent owners get some relief because their extant claims are not automatically subject to cancellation under § 42.73(d)(3)(i) based on IPR outcomes. However, the broad estoppel will apply to any attempt to amend or pursue new claims in a continuation application.

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Representative claim 87 of SoftView’s U.S. Patent No. 7,461,353 describes a mobile handheld device that incorporates several key technologies to enhance web browsing on small screens. The core innovation appears to be its approach to rendering web pages. Instead of simply shrinking web content to fit the screen, which can often result in illegible text or distorted layouts, this technology preserves the original layout, functionality, and design of the web page while adapting it to the device’s display. It achieves this by first rendering the page to fit the width of the screen, ensuring that users don’t need to scroll horizontally. Then, it allows users to zoom in and out, as well as pan across the page, all while maintaining the integrity of the original design at every zoom level and view.

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A separate appeal involving a family-member patent, the same panel of Judge Lourie, Bryson, and Reyna affirmed the Board’s cancellation. SoftView recently filed a petition rehearing en banc. The petition argues that the court overlooked or misapprehended several key issues, including the failure to properly apply the Graham factors for obviousness, failure to address all claim limitations, and acceptance of unsupported factual findings by the Board.  The briefing has an interesting focus on how to assess obviousness in the context of a known but complex product such as software.  “Post-KSR or otherwise, this Court has not addressed any software-related cases involving highly complex software where the alleged known prior art is not a prior art patent or publication but rather is software.”

SoftView 23-1006 en banc petition

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• Alan Burnett argued the case for SoftView;
• Sonal Mehta argued for Motorola Mobility and Apple;
• Farheena Rasheed argued for the USPTO as intervenor.