Estoppel effects of post-grant patent proceedings under the AIA


By now, most patent practitioners are quite familiar with the post-grant patent proceedings (e.g., IPR, PGR, CBM) newly established by the AIA, and their key features, such as the stay and estoppel provisions.  Numerous courts have addressed the issue of a stay of civil litigation during the pendency of a post-grant proceeding.  The growing defense strategy, upon being sued for patent infringement, is to file a post-grant patent proceeding and seek a stay of the civil litigation, which allows the defendant to move the patent validity issue into a more favorable and usually less expensive forum.  Most statistics show that courts in the various jurisdictions with active patent case dockets are quite willing to stay cases.

In addressing motions to stay pending a post-grant proceeding, courts often reference the estoppel effect as weighing in favor of efficiency factors.  Under IPR and PGR rules, if the Board renders a final written decision, then a petitioner may not assert in a district court or ITC action that a claim is invalid on any ground that the petitioner “raised or reasonably could have been raised” (the rule is different for CBMs, where the estoppel is limited to actually raised grounds).  The stay logic for a district court is that this estoppel will streamline litigation because either the patent will not survive, in which case the litigation is over, or if the patent survives, the defendants will not waste time and resources re-litigating the validity issues.

A number of district courts have recently extended this logic in third-party situations, where the defendants seeking the stay are not the petitioners of the post-grant proceeding.  As the court in Evolutionary Intelligence, LLC v. Millenial Media, Inc., Case No.: 5:!3-c-v-04206 (N.D. Cal.) recently observed:  “Typically, the benefit of a stay pending IPR is contingent in part upon the IPR proceeding’s estoppel effect, i.e., the prohibition that the petitioner is precluded from relitigating the same issues that were raised or reasonably could have been raised during the IPR proceeding.  The posture of the parties in this case calls that benefit into question… because [defendant] is not a party to the relevant IPR proceeding… is not necessarily bound by this statutory provision.”  Dkt. 113, Order Granting Motion to Stay Pending Inter Partes Review (June 11, 2014).  Consequently, the Evolutionary court granted a conditional stay, contingent upon the defendant agreeing to be bound by the same estoppel as the petitioners.  This approach was also adopted by a court in the Central District of California as well.  See Locata LBS, LLC v., LLC, et al., Case No. 2:13-cv-07664, Dkt. 102 (July 11, 2014).  Thus, the trend shows that courts are taking the estoppel benefits and obligations quite seriously in how they manage their dockets.

However, as yet, no court has yet had an opportunity to directly address the estoppel effect itself, for example, in a situation where a patent litigation has resumed after conclusion of the post-grant proceeding.  On the one hand, this appears to be primarily due to the fact that very few patents claims challenged in a post-grant proceeding have survived in any meaningful way to test estoppel on resumption of a litigation.  On the other hand, commentators have observed that the post-grant proceeding statistics may be balancing out with more petitions for post-grant patent proceedings being denied and more decisions upholding the patentability of challenged claims.

As more and more patents survive post-grant proceedings, the issue of the estoppel effect will move to the forefront and defendants will have to face the consequences of their strategic choices.  If an asserted patent survives, what does that really means to a defendant in civil litigation?  One part of the estoppel, against grounds actually raised, present only a minimal issue.  If the patent could not be invalidated in a favorable forum on a certain reference or combination of references, then it is highly unlikely that a defendant would ever want to assert the same ground in litigation where the standard and burden of proof are higher.

But the second part of the estoppel, against grounds that reasonably could have been raised, presents a greater concern.  This part could cover prior art references known to the petitioners, but not asserted in the petition.  It may cover prior art references not actually known, but that would have been uncovered in a reasonable prior art search.  It may even be open to cross-estoppel effects, where two different petitioners challenged the same patent.  If only those grounds that would have been unreasonable to assert at the time of the petition are preserved, not much may be left to the defendant.  The result could be a fully bifurcated system where patent validity becomes solely determined in the patent office.

Numerous other issues and concerns are implicated by the estoppel provision in post-grant patent proceedings.  We will continue to monitor and look for indications and decisions by the courts on how the estoppel provision will be interpreted and enforced. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Glaser Weil IP File | Attorney Advertising

Written by:


Glaser Weil IP File on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.