In Oil-Dri Corporates of America v. Nestle Purina Petcare Company, the court recently held that a defendant who has filed a parallel inter partes review (IPR) petition is estopped from raising invalidity grounds in the district court that were not, but reasonably could have been, raised in the defendant’s IPR petition. Oil-Dri, 1-15-cv-01067 (ILND August 2, 2017, Order). In this case, Purina raised several invalidity arguments in district court, some of which were not raised in Purina’s IPR petition. Id. at 5.

The court’s analysis primarily rested on the Federal Circuit’s recent decision in Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., which stated that 35 U.S.C. § 315(e) creates estoppel for any ground raised or that the petitioner reasonably could have raised “during . . . IPR.” Shaw, 817 F.3d 1293, 1300 (Fed. Cir. 2016). Post-Shaw, district courts permitted invalidity arguments that were petitioned, but not instituted (“noninstituted grounds”). The Oil-Dri court distinguished its case from Shaw, because the Shaw decision focused on noninstituted grounds rather than nonpetitioned grounds, and “[t]he Federal Circuit has not yet considered the precise issue of whether nonpetitioned grounds can give rise to estoppel.” Order at 13.

The Oil-Dri court stated that, “[i]f a party does not include an invalidity ground in its petition that it reasonably could have included, it necessarily has not raised a ground that it ‘reasonably could have raised during [the IPR proceeding].’” Order at 16. The court determined that IPR estoppel may apply if the petitioner reasonably “could have raised” its nonpetitioned grounds in its IPR petition. Order at 20.

Oil-Dri provided the declaration of a registered patent agent, who contended that a “reasonably skilled patent searcher” would have located the seven prior art references that Purina could have included in its IPR petition (the “Purina IPR”). Because Purina did not counter Oil-Dri’s position on four of those prior art references, the court determined that Purina is estopped from raising those four references with respect to the claims challenged in the Purina IPR.

Interestingly, the court left open the decision as to the remaining three references, and subsequently ordered both parties to confer and choose a court-appointed expert to offer an opinion on “whether a skilled searcher conducting a diligent search reasonably would have discovered [the three remaining prior art references].”

Oil-Dri Corporates of America v. Nestle Purina Petcare Company, 1-15-cv-01067 (ILND August 2, 2017).