PTAB Petitions Dipped in Q2 as Courts Clarified Estoppel Rules

The Patent Trial and Appeal Board (PTAB) saw 302 petitions for America Invents Act (AIA) review in the second quarter of 2023, including 297 petitions for inter partes review (IPR) and five petitions for post-grant review (PGR). Filings were down by 14% compared to Q2 2022, which saw 352 petitions filed; and down by 12% compared to the preceding quarter, during which 345 petitions were filed.

The second quarter brought further clarity over one of the most important issues impacting would-be petitioners: the proper scope of inter partes review (IPR) estoppel, which bars (or estops) a defendant from raising certain IPR validity arguments in subsequent district court challenges. This has been at issue since February 2022, when the Federal Circuit issued a precedential decision that significantly expanded the reach of such estoppel. In Caltech v. Broadcom, it held that a petitioner is estopped not just from later asserting arguments actually raised in a successful petition, but also from including those arguments that they “reasonably could have” included. The US Supreme Court’s June 26 denial of a certiorari petition from codefendants Apple and Broadcom effectively upholds Caltech with respect to estoppel.

Yet that decision is far from the last word on the issue. In addition to the proposals in the USPTO’s aforementioned ANPRM that relate to estoppel, which also include a potential requirement that parties must agree to Sotera stipulations (consenting to broader district court estoppel) to avoid discretionary denial, the Federal Circuit has since clarified other uncertainties with respect to estoppel that were not resolved in Caltech. In Ironburg Innovations v. Valve, the court addressed two underlying considerations. The first, the question over the proper standard for determining whether a party “reasonably could have raised” an argument in its PTAB petition, had not been fully dealt with before by the appellate court but was not disputed by the parties here, who both agreed with the district court that the standard covers any grounds that “a skilled searcher conducting a diligent search reasonably could have been expected to discover”. The Federal Circuit adopted this position as well, concluding that this standard correctly delineates which grounds the petitioner “reasonably could have raised” in its petition.

Second, the Federal Circuit addressed the issue of which party holds the burden of proof under this standard, noting that the district court appeared to have treated petitioner Valve as holding that burden. However, the appellate court instead agreed with the petitioner that the “burden of proving, by a preponderance of the evidence, that a skilled searcher exercising reasonable diligence would have identified an invalidity ground rests on the patent holder, as the party asserting and seeking to benefit from the affirmative defense of IPR estoppel”. The Federal Circuit treated this conclusion as “consistent with the general practice that a party asserting an affirmative defense bears the burden to prove it”.

See RPX’s second-quarter review for more on the PTAB and other trends impacting patent litigation in Q2 and the first half of 2023.