Estoppel, or Lack Thereof, in Inter Partes Reexaminations

The Federal Circuit recently clarified the scope of estoppel for inter partes reexaminations, ruling in a pair of decisions that a district-court decision only estops arguments against individual claims of a patent and that a dismissal without prejudice does not estop the reexamination. In re Affinity Labs of Texas, 2016-1092, -1172, -1173 (Fed. Cir. May 5, 2017).

Affinity Labs sued Apple, Volkswagen, and others in district court over patents relating to audio content and connecting media players. Apple and Volkswagen each filed for inter partes reexaminations. The district court, meanwhile, found that claims 28 and 35 of a patent asserted against Volkswagen were valid over Volkswagen’s arguments. Apple, for its part, settled its district court case with Affinity Labs and filed a notice of nonparticipation in the reexamination. The district court dismissed the Affinity Labs–Apple case without prejudice.

To be clear, this case deals with inter partes reexamination, which the America Invents Act replaced with the now-popular inter partes review. The AIA allowed parties to file new requests for inter partes reexaminations through 2012, and pending requests could continue to completion. The requests from Volkswagen and Apple were pending. The relevant portion of the pre-AIA estoppel provision reads:

Once a final decision has been entered against a party in a civil action … that the party has not sustained its burden of proving the invalidity of any patent claim in suit … then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action … and an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office.

35 U.S.C. § 317(b) (pre-AIA).

Applying this statute, the Federal Circuit rejected both of Affinity Labs’s requests for estoppel to trigger. With respect to Volkswagen, estoppel applies claim by claim, from “any patent claim in suit” to “any such patent claim” included in the reexamination. So while estoppel applied to claims 28 and 35 and their dependents, it did not apply to any other claims of that patent. With respect to Apple, a dismissal without prejudice does not count as a “final decision” because the district court has not actually decided anything.

This case highlights differences between the old inter partes reexaminations and the new inter partes reviews. The AIA does not provide any similarly general preclusive effect from a decision of a district court to the Patent Office, but other provisions of the AIA may have applied to the fact pattern of this case. An accused infringer may not file a petition for an inter partes review more than one year after being sued under a patent, which may have barred Volkswagen or Apple. Under the AIA, settling parties have the right to withdraw a petition, so Affinity Labs could have had Apple agree to withdraw a petition rather than attempting to piggyback on the district court’s dismissal.

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