IP Law Daily, PATENT NEWS: Supreme Court declines invitation to narrow IPR estoppel, (Jun 28, 2023)

By Cheryl Beise, J.D.

The Court’s denial leaves Apple and Broadcom on the hook for infringement of Caltech patents.

The Supreme Court on Monday denied a petition for certiorari filed by Apple and Broadcom seeking review of a Federal Circuit decision holding that inter partes review (IPR) estoppel under Section 315(e)(2) of the Patent Act precludes a party from raising invalidity arguments in litigation that could have been raised during a prior IPR proceeding. The Supreme Court’s 2018 decision in SAS Institute, Inc. v. Iancu made clear that it is the IPR petition, not the institution decision, that defines the scope of the IPR. Apple and Broadcom had argued that estoppel should be limited to grounds of invalidity that were actually asserted in the petition. In an amicus brief filed May 23, the government urged the Court to deny the petition, arguing that the Federal Circuit’s interpretation of IPR estoppel was correct (Apple Inc. v. California Institute of Technology, Dkt. No. 22-203).

Background. Caltech sued Apple, Inc., as well as Broadcom Corporation, one of Apple’s Wi-Fi technology providers, alleging that certain Broadcom Wi-Fi chips and Apple products incorporating the chips, including smartphones, tablets, and computers, infringed three patents directed to chips and methods for improving speed and reliability of data transmissions. On summary judgment, the district court applied inter partes review (IPR) estoppel to find that Apple was precluded from raising invalidity arguments not raised in prior IPR proceedings before the Patent Trial and Appeal Board. A jury found in Caltech’s favor on the infringement claims and awarded Caltech $270 million in damages from Broadcom and $837 million from Apple. Both sides appealed.

The Federal Circuit affirmed the district court’s invalidity judgment and the jury’s infringement verdict as to two patents, but reversed the verdict as to the third patent. Regarding invalidity, the Federal Circuit affirmed that Apple and Broadcom were estopped from claiming the invalidity of the Caltech patents on a ground not raised in their petitions for inter partes review. The IPR estoppel provision, 35 U.S.C. § 315(e)(2), provides: “The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert … in a civil action arising in whole or in part under section 1338 of title 28 … that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”

Before trial, Apple filed several IPR petitions—each unsuccessful—challenging the validity of the claims at issue. Before the district court, Apple and Broadcom argued that the asserted claims would have been obvious over new combinations of prior art not asserted in the IPR proceedings. The district court found that Apple and Broadcom were estopped from asserting these new claims, and the Federal Circuit agreed. It was undisputed that Apple was aware of the prior art, but omitted from its petitions certain combinations. In reaching its conclusion, the court found that it was necessary to reverse its earlier decision in Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293, 1300 (Fed. Cir. 2016). In Shaw, a panel of the court had found that this precluded relitigation of issues that could have been raised in the proceeding itself, but not to issues that merely were raised, or could have been raised, in the petition—on the grounds that since the PTAB often did not accept review on every issue presented, it would be inequitable to preclude later litigation of issues never even accepted for consideration. However, the Federal Circuit found that this rationale had since been undercut by SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), in which the Supreme Court made clear both that there is no partial institution authority conferred on the Board and that it is the IPR petition, not the institution decision, that defines the scope of the IPR. The court vacated the damages award and remanded the case for a new trial on infringement of the third patent.

Apple’s petition. Apple then filed petition for certiorari seeking review of the Federal Circuit’s ruling on the IPR estoppel. Apple’s petition had asked, “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.’”

In its response brief, Caltech maintained that that district court and the Federal Circuit correctly determined that Apple had ample opportunity to raise the invalidity arguments during IPR proceedings because it was aware of the later asserted prior art references prior to filing its petitions challenging the three Caltech patents.

The Supreme Court sought the views of the United States. In an amicus brief filed May 23, the government agreed that the Federal Circuit’s interpretation of Section 315(e)(2) correctly gives effect to Congress’s intent that some grounds not raised during an instituted review can nevertheless trigger estoppel because the petitioner “reasonably could have raised” them. This interpretation also comports with common-law estoppel principles and serves the policy goal of offering the option of inter partes review as a “quick and cost effective alternative[] to litigation.” 2011 House Report 48. The interpretation urged by Apple and Broadcom “threatens to multiply the costs and burdens that Congress established inter partes review to mitigate.”

The case is Dkt. No. 22-203.

Attorneys: William F. Lee (Hale and Dorr LLP) for Apple Inc., Broadcom Inc., Broadcom Corp., and Avago Technologies International Sales Pte. Limited. Kathleen M. Sullivan (Quinn Emanuel Urquhart & Sullivan, LLP) for California Institute of Technology. Elizabeth B. Prelogar, Solicitor General, U.S. Department of Justice, for United States.

Companies: California Institute of Technology; Apple Inc.; Broadcom Inc.; Broadcom Corp.; Avago Technologies International Sales Pte. Limited

News: Patent FedCirNews USPTO GCNNews