IP Applying The Doctrine Of Issue Preclusion, Federal Circuit Affirms PTAB Unpatentability Finding
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  • Applying The Doctrine Of Issue Preclusion, Federal Circuit Affirms PTAB Unpatentability Finding

    On May 23rd, 2019, the Court of Appeals for the Federal Circuit (CAFC) issued an opinion affirming the Patent Trial and Appeal Board’s inter partes review (IPR) unpatentability decision.  Papst Licensing GmbH v. Samsung Elec. Am. Inc., __ F.3d __(Fed. Cir. May 23, 2019).  The CAFC ruled that claim-construction and prior-art rulings in an earlier IPR created issue preclusion barring the patent owner from contesting those issues in the appeal of a later IPR.

    Papst Licensing GMBH & Co. KG owns at least three patents describing an interface device for automatically connecting a data device and a host computer without requiring an end user to load additional software (e.g., a driver).  All three patents share the same specification and contain similar and in some cases identical claim terms.

    The patent challenger successfully petitioned the Patent Trial and Appeal Board (PTAB) to institute IPRs on all three patents, and the PTAB rendered final written decisions of unpatentability in all three IPRs.  The PTAB found each of the three patents unpatentable as obvious based on the same constructions of identical terms, and the same combination of prior art.  The patent owner appealed all three of the PTAB’s decisions, and the appeals were scheduled for oral argument on the same day.  Shortly before the oral argument, however, the patent owner voluntarily dismissed two of the appeals.  

    In its opinion, the CAFC first noted that the theory of issue preclusion applies even when the first action is an agency proceeding, provided that proceeding meets certain standards.  The CAFC then noted that it had previously ruled that IPR proceedings before the PTAB meet these standards.  The CAFC also found that, upon the patent owner’s voluntary dismissal of two of the three appeals, the PTAB’s decisions that were the subject of those two appeals became final for purposes of issue preclusion.  The Court concluded that because identically dispositive claim-construction and prior-art issues were presented in all three IPRs, the final decisions in the first two barred re-litigation of those issues in the third.

    The CAFC did note the “accepted rule” that “issue preclusion does not apply within the confines of a single case formed when multiple cases are formally consolidated.”  The CAFC observed that in this case, however, neither the three IPRs nor the three appeals had been consolidated.  The opinion thus suggests that the issue-preclusion result would have been different if the cases had been consolidated at some stage.

    Practitioners should take note of this decision when considering whether to seek to consolidate IPRs or IPR appeals.  Failure to do so could create a risk of issue preclusion between co-pending appeals—even on the legal issues of claim construction in two different patents.