After an inter partes review finds certain claims of a patent unpatentable, may the patentee assert other claims, immaterially different, in district court without being collaterally estopped? This was the question presented in our Case of the Week, and the Federal Circuit answered yes.

In 2017, Kroy sued Groupon for infringement of 13 claims of Kroy’s US Patent No. 6,061,660. Groupon subsequently filed two IPRs that challenged 21 claims, but not all of them, in the ’660 patent. At the conclusion of the IPRs, the PTAB determined all 21 claims Groupon had challenged were unpatentable. Then Kroy filed an amended complaint to assert other ’660 patent claims—ones which had not been included in the IPRs—against Groupon. Groupon motioned to dismiss the newly asserted claims under the doctrine of collateral estoppel. The district court granted Groupon’s motion to dismiss and Kroy appealed. The Federal Circuit reversed and remanded.

As the district court discussed in its decision, there are four requirements for collateral estoppel: (1) the identical issue was previously adjudicated; (2) the issue was actually litigated; (3) the previous determination was necessary to the decision; and (4) the party precluded from relitigating the issue was fully represented in the prior action. The district court reasoned the four requirements had been met and the newly asserted claims were immaterially different from one or more of the claims the PTAB had found unpatentable. Therefore, the district court held that collateral estoppel applied.

Upon review, the Federal Circuit agreed with the four requirements for collateral estoppel, but identified some exceptions. One applies when the prior adjudication requires a lower burden of proof than the subsequent adjudication wherein estoppel is sought. Kroy argued that IPRs require a lower legal standard of proof than the district court applies to find a claim unpatentable. The Federal Circuit agreed. In an IPR, the petitioner must demonstrate unpatentability by a preponderance of the evidence. At the district court, one must demonstrate unpatentability by clear and convincing evidence—a higher standard than preponderance of the evidence.

Therefore, the Federal Circuit found the district court’s dismissal of Kroy’s newly asserted claims was improper, even if the claims were immaterially different from those the PTAB had found unpatentable.

Groupon argued that precedent set by the case XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d 1282 (Fed. Cir. 2018), supported the position that a final written decision by the PTAB establishes collateral estoppel in district court. However, the Federal Circuit distinguished that in XY, the patent claim asserted in the district court was the same  as the one found unpatentable by the PTAB. In the present case, the newly asserted claims were technically different from those found unpatentable by the PTAB.

Groupon further argued the precedent of Ohio Willow Wood Co. v. Alps S., LLC, 735 F.3d 1333 (Fed. Cir. 2013), supported dismissal of Kroy’s claim. The Federal Circuit distinguished the present case by noting that in Ohio Willow Wood, a prior district court invalidity ruling had estopped immaterially different claims from being asserted in a subsequent district court case. Thus, in Ohio Willow Wood, the same legal standard for determining unpatentability applied in both the preceding case and the case being sought to be estopped; therefore, collateral estoppel applied.

The full opinion can be found here.

By Ann Bernert

ALSO THIS WEEK

U.S. Synthetic Corp. v. ITC, Appeal No. 23-1217 (Fed. Cir. Feb. 13, 2025)

In an appeal from a decision of the United States International Trade Commission (ITC), the Federal Circuit reversed a determination that a patent-in-suit was ineligible for patenting. The patent concerned polycrystalline diamond compacts, or products made from a synthetic diamond table bonded to a hard metal substrate, such as may be used in drill bits. The patent claimed such a product. The administrative law judge (ALJ) at the ITC found the claims ineligible for patenting because their subject matter was abstract—a decision that was affirmed by a divided panel of Commission judges. In a 23-page decision, a unanimous Federal Circuit panel reversed, and held that the claimed composition of matter was not abstract. The panel also affirmed the ALJ’s and the Commission’s findings that challengers had not proved the claims were invalid for lack of enablement.

The opinion can be found here.

By Nika Aldrich