Federal Circuit Affirms PTAB’s Decision Related To Estoppel Over IPR Joined Parties And Obviousness
On March 9, 2021, the United States Court of Appeals for the Federal Circuit (“CAFC”) issued an opinion affirming estoppel and obviousness rulings by the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”). Uniloc 2017 LLC v. Facebook Inc., ___ F.3d ___ (Fed. Cir. March 9, 2021). The CAFC ruled that it had jurisdiction to review the PTAB’s decision as to estoppel related to the inter partes review (“IPR”) estoppel provision of Section 315(e)(1). The CAFC further ruled that a joined party to a first IPR was not barred from maintaining review of claims that the primary challenger became estopped from challenging based on a decision in a second IPR to which the challenger was joined.
In May 2017, Facebook Inc. and Whatsapp, Inc. (collectively “Facebook”) filed two IPR petitions related to U.S. Patent No. 8,995,433 (the “’433 patent”)—a patent which Patent Owner Uniloc had sued several defendants over. The first petition challenged claims 1–8 of the patent, and the second challenged claims 9, 10, 12, 14, 17, 25, and 26 (the “Facebook IPRs”). A separate IPR petition was previously filed by Apple, Inc. (“Apple”) in November 2016, challenging claims 1–6 and 8 of the ’433 patent (the “Apple IPR”). After the PTAB instituted Apple’s IPR, Facebook in June 2017 filed a copy-cat IPR and joined as a petitioner in the Apple IPR, giving it three IPRs challenging various claims of the ’433 patent. Meanwhile, LG Electronics Inc. (“LG”) filed identical petitions to, and joined, the Facebook IPRs.
In May 2018, before finally deciding Facebook’s own IPRs, the PTAB issued a final written decision in the Apple IPR (to which Facebook had joined as a petitioner) upholding the patentability of each challenged claim (claims 1–6 and 8). The PTAB then ruled in the Facebook IPRs that Facebook was estopped from maintaining a challenge as to these claims, per Section 315(e)(1), which provides that a petitioner is estopped upon final written decision from maintaining a further Patent Office challenge on grounds it raised or reasonably could have raised in an earlier IPR. However, the PTAB ruled that Facebook was not estopped from maintaining its challenge as to claim 7, as the IPR estoppel provision of 315(e)(1) only applies to grounds that the petitioner raised or reasonably could have raised “with respect to that claim.” Accordingly, as claim 7 was not challenged in the Apple IPR, Facebook retained the right to challenge it in the Facebook IPRs. Complicating matters, however, was the fact that LG had joined only Facebook’s IPRs (and not Apple’s earlier IPR). The PTAB concluded that LG was not estopped from maintaining its challenges to claims 1–6 and 8, as it was not a party to the Apple IPR. In November 2018, the PTAB issued a final written decision in the Facebook IPRs finding all challenged claims unpatentable. Uniloc appealed each of these rulings to the CAFC.
As an initial matter, the CAFC considered whether it had jurisdiction to review the PTAB’s estoppel decision in light of the “no appeal” provision of Section 314(d) (which dictates that the determination by the Director of the PTAB as to whether to institute an IPR is final and non-appealable). The CAFC analogized to its prior ruling in Credit Acceptance, where it ruled that review was proper in relation to a “similarly worded” estoppel provision under the CBM scheme. Like in Credit Acceptance, in the instant case the CAFC found it persuasive that the alleged estoppel-triggering event (the final written decision in the Apple IPR) occurred after the institution of the Facebook IPRs. Accordingly, the CAFC ruled that it had jurisdiction to review the PTAB’s estoppel decisions.
Turning to the merits, the CAFC first considered whether LG should be estopped under Section 315(e)(1) from challenging claims 1–6 and 8 of the ’433 patent. Uniloc argued that because Facebook was estopped from maintaining its challenge to these claims, LG, as an alleged “real party in interest or privy of the petitioner” should likewise be estopped. The PTAB had ruled that nothing in the record supported a conclusion that Facebook and LG were “sufficiently close such that both should be bound” by the Apple decision and related estoppel. The CAFC agreed, noting that the filing of its own IPR petition and joinder motion did not by itself make LG a real party in interest to Facebook in either the Apple or Facebook IPRs, and that nothing in the record suggested that Facebook recruited LG to join as a party to the Facebook IPRs and thereby making LG an agent advancing Facebook’s interests. Similarly, there was no evidence that LG and Facebook had any preexisting relationship that would indicate coordination amongst the two regarding the Apple or Facebook IPRs or signal that LG was a real party in interest or in privity with Facebook. Accordingly, as LG was not a real party in interest or in privity with Facebook, it was not estopped with regard to claims 1–6 and 8.
Second, the CAFC considered whether Facebook was estopped from challenging claim 7 in the Facebook IPRs. Uniloc argued that Facebook should be estopped, because claim 7 was dependent on claim 1, which was decided in the Apple IPR. According to Uniloc, challenging claim 7 would give Facebook a second shot at challenging claim 1. The PTAB ruled that Facebook was not estopped from challenging claim 7, as Section 315(e) only limits estoppel to claims previously challenged. Since claim 7 was not raised in the Apple petition, the PTAB reasoned, estoppel should not apply. The CAFC agreed, ruling that the plain language of the statute supported the PTAB’s ruling, and that Facebook would not have had the opportunity to raise any grounds as to claim 7 during the Apple IPR, as claim 7 was not challenged.
Finally, the CAFC considered Uniloc’s appeal of the PTAB’s finding of unpatentability as to all challenged claims. As to claims 1–8, the CAFC found that the PTAB’s ruling of obviousness was supported by substantial evidence. As to the remaining claims, Uniloc argued that (among other issues) the PTAB violated its due process by sua sponte construing the term “attaches to” in its final written decision. The CAFC ruled that throughout the proceedings the parties made assertions as to the meaning of “attaches to,” and that Uniloc was thus afforded sufficient opportunity and notice to address the construction of the term. Given that the PTAB’s constructions and decisions were “substantially supported,” the CAFC affirmed.