IP Law Daily, PATENT—Fed. Cir.: Federal Circuit limits scope of patent office estoppel rule, (Jul 26, 2024)

By George Basharis, J.D.

The appellate court upheld the PTO’s authority to issue an estoppel regulation for inter partes review proceedings, but found the agency applied it too broadly to previously issued patent claims.

The U.S. Court of Appeals for the Federal Circuit has partially vacated and remanded a Patent Trial and Appeal Board ruling that had invalidated all claims of a SoftView LLC patent based on estoppel from a prior inter partes review (IPR) proceeding. The court’s decision, while upholding the Patent and Trademark Office’s authority to issue estoppel regulations, significantly limits its application to previously issued patent claims (SoftView LLC v. Apple Inc., No. 23-1005, 23-1007 (Fed. Cir. July 26, 2024)).

The case centered on the Patent and Trademark Office’s (PTO) regulation 37 C.F.R. § 42.73(d)(3)(i), which prohibits patent owners from obtaining claims that are not “patentably distinct” from claims canceled in an IPR. The Federal Circuit upheld the PTO’s authority to issue this regulation under the America Invents Act but found the agency had applied it too broadly to previously issued patent claims that were not amended during reexamination.

SoftView’s U.S. Patent No. 7,461,353 (the ’353 patent), directed to displaying internet content on mobile devices, has been challenged in multiple PTO proceedings. In 2014, the Board found 18 claims of the ’353 patent unpatentable in an IPR proceeding initiated by Kyocera. Subsequently, in inter partes reexamination proceedings requested by Apple and Motorola, the examiner rejected most claims as obvious. On appeal, the Board reversed the obviousness rejections but invalidated all claims under the PTO’s estoppel regulation, finding them not patentably distinct from the claims canceled in the IPR.

The Federal Circuit addressed three main issues in its ruling: the interpretation of “patentably distinct,” the PTO’s authority to issue the regulation, and the application of the regulation to previously issued claims. The court rejected SoftView’s argument that the PTO regulation should be interpreted as merely codifying common law collateral estoppel principles. Instead, it found the agency properly gave “patentably distinct” the same meaning used in double patenting and interference contexts—prohibiting claims that would be anticipated by or obvious over previously canceled claims.

Moreover, the court upheld the PTO’s authority to promulgate the estoppel regulation under 35 U.S.C. § 316(a)(4), which allows regulations “governing inter partes review” and its relationship to other proceedings. Citing a 2016 U.S. Supreme Court decision, CuozzoSpeed Techs., LLC v. Lee, 579 U.S. 261 (2016), the Federal Circuit found this statutory provision is not limited to procedural rules, contrary to SoftView’s contention. The court also determined that the regulation’s purpose of preventing inconsistent actions aligns with the PTO’s goal of ensuring trial integrity and giving practical effect to IPR decisions, thus tying it closely to the statutory authority granted for regulating inter partes review.

However, while affirming the regulation’s validity, the court found the Board erred in applying it to invalidate previously issued patent claims that were not amended during reexamination. The regulation by its terms only prohibits “obtaining” claims not patentably distinct from canceled claims—not maintaining existing claims.

“Drawing a distinction between obtaining a new claim and maintaining a previously issued claim makes sense,” the court explained. “It is reasonable to characterize ‘obtaining’ a new claim that is not patentably distinct from a finally refused or canceled claim as an ‘action inconsistent with the adverse judgment’ under 37 C.F.R. § 42.73(d)(3), because such an action can fairly be viewed as an effort to circumvent the prior adverse judgment. By contrast, seeking to maintain an already issued claim cannot be viewed as circumventing a subsequent decision on related claims.”

The court vacated the Board’s invalidity ruling for the previously issued claims and remanded for further consideration. However, it affirmed the application of estoppel to claims that were amended during reexamination, finding SoftView had not adequately challenged the Board’s analysis of whether those claims were patentably distinct from the canceled IPR claims.

The Case is No. 23-1005 and 23-1007.

Judge: Bryson, W.

Attorneys: Alan Burnett (Law Office of R. Alan Burnett) for SoftView LLC. Edmund Hirschfeld (Orrick, Herrington & Sutcliffe LLP) for Apple Inc.

Companies: SoftView LLC; Apple Inc.

Cases: Patent FedCirNews USPTO GCNNews