Source: https://patentlyo.com/patent/2019/06/institution-merger-challenge.html
Timestamp: 2019-08-26 05:00:26
Document Index: 300824225

Matched Legal Cases: ['§ 315', '§ 315', '§ 315', '§ 315', '§ 315', '§ 316', '§ 28', '§ 28']

Pre-Institution Merger Foils Inter Partes Review Challenge | Patently-O
June 13, 2019 PatentDennis Crouch
Power Integrations, Inc. v. Semiconductor Components (ON Semiconductor) (Fed. Cir. 2019)
The Federal Circuit has ordered dismissal of On Semiconductor’s IPR petitions against several patents owned by Power Integrations. The basic issue on appeal was interpretation of the time-bar under 35 U.S.C. 315(b)
(b) An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.
The statute here is clearly drafted, with the basic ambiguity questions being (1) what counts as a “real party in interest or privy of the petitioner” and (2) whether “served with a complaint” requires a summons under FRCP R. 4 – and what if service is waived? This case focuses on a third question — (3) real party in interest as of when?
Back in 2009, Power Integrations sued Fairchild Semiconductor for infringing the patents at issue and has won two separate $100+ million jury verdicts (both of which have been rejected). A third trial on damages is now likely for later this year (since the patent claims are no longer cancelled).
In 2015, ON (petitioner here) agreed to purchase Fairchild (in a confidential agreement). Prior to completion of the acquisition, ON filed the IPR petitions. On September 19, 2016, ON Semiconductor completed the acquisition. Then, later that week, September 23, 2016, the USPTO issued its institution decision and ultimately held the challenged claims unpatentable as obvious. [Final Written Decision]
Throughout the institution phase, the patentee challenged institution on time-bar grounds — arguing that Fairchild was served with a complaint more than one-year before the IPR petition filing; and that Fairchild is a Privy of petitioner ON. Q.E.D.
The Board, however, sided with petitioner holding (1) the focal point is the status of the parties at the time the petition was filed (thus the subsequent merger does not deny institution); and (2) that “there was insufficient evidence of record to establish control and therefore insufficient evidence to establish privity between Fairchild and ON at the time the petition was filed.” The Board also denied additional discovery into the admittedly confidential relationship.
On appeal, the Federal Circuit has reversed that decision holding that privy relationships developed post-petition but pre-institution should be considered. Thus, the merger (clearly creating privity and Real Party in Interest (RPI)) pre-institution with a time-barred company prevents the IPR from being instituted. For its decision, the court looked particularly to the language of the statute which focuses on institution – “may not be instituted if . . . ”
The Board’s decision under § 315(b) is whether to institute or not. The condition precedent for this decision is whether a time-barred party (a party that has been served with a complaint alleging infringement of the patent more than one year before the IPR was filed) is the petitioner, real party in interest, or privy of the petitioner. In other words, the statute specifically precludes institution, not filing.
When the Board finds that an IPR is barred under § 315(b), it denies institution. It does not reject the petitioner’s filing. The focus of § 315(b) is on institution. The language of the statute, in our view, makes privity and RPI relationships that may arise after filing but before institution relevant to the § 315(b) time-bar analysis. . . .
In light of the foregoing, we hold that this IPR was time-barred by § 315(b) because Fairchild was an RPI at the time the IPR was instituted, even though it was not an RPI at the time the petition was filed.
Result here is that the claims are no longer cancelled – and so the new trial on damages against Fairchild should move forward (barring a settlement).
*** Save this for another day: the case includes important and interesting discussions of issue preclusion and agency deference.
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78 thoughts on “Pre-Institution Merger Foils Inter Partes Review Challenge”
So, MM, is it your position that a “functional” claim that has a scope of say 1,000 solutions recites no structure because of the 1,000 or that each of the 1,000 solutions have no structure?
Malcolm’s “structure requirement” does not even survive claims that cover a range of solutions with claims that include the word “comprising.”
The moment you have more than one possible structure, you do not have AN “objective physical structure.”
I am still waiting for him to supply the “objective physical structure” for the mythical “generic computer.” It appears that Malcolm is fully “ok” with that certain “looseness” when it comes to anything that might be used against those seeking innovation protection (in his oh so typical double standard manner).
a “functional” claim that has a scope of say 1,000 solutions
First of all, if the functionality is at the point of novelty, how do you determine the number of structures capable of imparting that functionality (particularly when the structures are implicitly novel)?
MM>>>The issue is not “does a programmed computer have structure.” The issue is “does the claim — directly or indirectly (via 112f) – recite objective physical structure that distinguishes the claimed device from prior art devices.”
That is nice of you MM to actually attempt to get to the heart of our dispute.
You are wrong in what you say above. Reciting the functional claim must refer to actual solutions or it would not be enabled. There are too many solutions to problems in almost all fields not to use functional terms to refer to solutions (I have quoted from textbooks used at MIT that state expressly this.)
If the claim scope did not refer to actual solutions to the problems, then it would not be enabled.
If the claim scope was less than what was enabled, then it would be trivial to design around the claim.
Ergo, the only claim that cannot be designed around is a claim that has a scope of enablement and if a claim is enabled it recites structure.
Below I remark upon Malcolm’s typical dissembling with his rhetoric.
But it occurs to me that he may be attempting to not only conflate 103 into 101, but also conflate 101 into 103.
It is as if he needs the part of the claim that differentiates in a 102/103 manner to itself (and by itself) BE some type of singular item that passes 101.
Of course, 101 is NOT applied in law in this manner (claims must be taken as a whole).
Not only is this a sign of the incorrectness of his typical 101 mantra, but shows that he is also simply not understanding the distinctiveness in law of 102/103.
No doubt, because in large part he feels that the Act of 1952 somehow cannot be correct on its face.
“If the claim scope was less than what was enabled, then it would be trivial to design around the claim.”
The last time this discussion point came up, Greg attempted to support his view on the proposed modified 112(f) section of law (hopefully, the point in the proposal that is the object of Tillis’s comment about “needing more work), and I pushed back at Greg with this comment:
( link to patentlyo.com )
Down below, Greg attempts to make a point vis a vis several distinct requirements in the law at 35 USC 112.
My reply is far better material to “bump up to the top,” so here it is:
Gregg: “that the full scope of a functional term might well be enabled. That does not mean that the full scope is described, or clear.”
Understanding full well that the requirements are each their own, how exactly is enablement actually met if what is merely purported to provide that enablement is NOT BOTH “described” and “clear?”
Something that is purported to enable, but is not describing, CANNOT enable. Lacking actually describing, what is IT that is being said to be enabled?
Something that is purported to enable, but is not clear, CANNOT enable. Lacking actual clarity, what is IT that is being said to be enabled?
anon, I am not sure that you are exactly addressing Greg’s point.
He is directly referring to the WD requirement and trying to differentiate between enablement and WD. Greg’s attempt is very clever, but fails because the WD has to be viewed in terms of what a anyone skilled in the relevant art would view as the WD of the invention.
I agree with Greg, though, that the WD and enablement are different and that it is possible for a claim to be enabled with a WD in the specification. But I think generic language such as there are many other ways to perform this function in the specification would suffice.
Greg’s point is actually one I’ve seen on other blogs and I think it is one that has been devised by people like Lemley. It is one of those points that they will keep making no matter what as it is subtle and someone that doesn’t understand patents can’t figure it out.
I completely agree with you that the attempted point IS a subtle one, and that it remains true that 35 USC 112 carries with it separate requirements.
I direct admit to these points in my post.
I draw the topic out as I do, though, to (in part) penetrate that subtlety.
It is IN the conflation of the different parts that how you view “enablement” is being cleaved from the notion of Person Having Ordinary Skill In The Art by way of Greg wanting a type of “hyper” explicit written description and “hyper” clarity by saying that ONLY THROUGH extreme explicitness of including (and including clearly) ALL THAT WHICH IS ALREADY KNOWN are any aspects of 35 USC 112 actually met.
This tactic “works” for Greg, because Greg is immersed in the Big Pharma mindset of “being OK with” a highly detailed “picture claim” for which the normal reach of innovation protection (through the legal notion of claims employing the Ladders of Abstraction) is just NOT cared for.
In this manner, this very much is a “Divide and Conquer” approach that just so happens to align with diminishing (or eliminating) any notion of the specification being written so as NOT needing to include that which a PHOSITA may recognize (AND also aligns with those that want the legal document known as a patent to be — instead — some type of exacting engineering document.
And therein is more subtlety – the obfuscation and elimination/diminishing of ALL of enablement/description/possession as related to PHOSITA “sounds” in several of the prongs of those advancing the “112” for “101” bartered “solution.”
THEREIN is the Trojan Horse.
They have found another way to be intellectually dishonest and that is hard for the average judge on the CAFC or Scotus to understand.
Lemley seems to be able to generate an unlimited amount of these.
Nothing in my quoted comment is “wrong” NW (which is taken out of context). Neither you or Bildo have identified anything “wrong” about it.
All I’m doing is addressing your strawman “argument” below. I know that you and Bildo will refuse to discuss the issue and refuse to acknowledge that “do it on a computer” patenting exists only because of the judicially created software exception. And we all know why you will refuse.
It doesn’t change the fact of the matter, however. It just makes you two look like a pair of dissembling, stage-flooding t w – i ts. Which we all knew already.
Can you give one example of a “software” claim that does not recite structure?
Note that the recitation of prior art terms like “computer” or “processor” do not count as “structure”, of course, because … those things weren’t invented by the applicant, who is merely a person writing instructions for the computer or processor to carry out (in the best case scenario; in the typical scenario, no working software whatsoever has ever been developed as of the filing date). All of this discussion is very much related, by the way, to the discussion about functional claiming at the point of novelty. It’s the same legal/logical issue. I suppose I should mention at this stage that referring to this legal/logical relationship as “conflation” is something that only an i-di-0t does (that’s a hint for you).
“for the computer or processor to carry out”
Inte11ectually DIShonest at its core.
Software is merely a design choice of computing wares for those that know the factual basis of innovation in this area.
“ All of this discussion is very much related, by the way, to the discussion about functional claiming at the point of novelty.”
You PON has no statutory basis.
“the same legal/logical issue.”
Utter poppyc0ck.
“I should mention at this stage”
No, you should not. Sorry, but your canards remain canards even if you so not want them mentioned. Even if you attempt to employ an Accuse Others meme in doing so.
Software is merely a design choice of computing wares
That’s nice. Potatoes are a choice of carbohydrates during dinner. Yay!
We’re talking about patent claims. Feel free to claim new hardware, if you like, in objective structural terms (directly; or indirectly, via 112f) which distinguish the hardware from prior art hardware.
You know: how grown-ups have been claiming new manufactures since forever. Oh but wait! That would take more work and your specification would be more than two pages. Boo hoo hoo.
Yet again with your canard of the optional claim format of “objective structural terms” when such is ONLY an option…
You say “We’re talking about patent claims.” and yet you constantly get this point wrong. Apparently, you just don’t know what you are talking about.
You are doing that little dance again. “No structure” is not an “option”. You need to recite the distinguishing structure directly in the claim, or you need to invoke 112f and put it in the spec. Those are the options, at least with regards to describing what is new about your “new computer”.
So what dance are you going to do now, Bildo? Maybe just admit the obvious: software is an exception (and a judicially created one).
Move the goalposts back and try again to reflect on what I actually stated in refuting YOUR “little dance.”
“I know that you and Bildo will refuse to discuss the issue and refuse to acknowledge that “do it on a computer” patenting exists only because of the judicially created software exception.”
I have repeatedly attempted to have you engage with my direct plain English Simple Set Theory explication that entirely debunks your “created for software” mantra.
And that Simple Set Theory is not even for “software” only, which exposes your ongoing duplicity and inte11ectual DIShonesty.
my direct plain English Simple Set Theory explication
“Derp derp derp derpity derp derpderp.”
As could easily been foreseen, Malcolm pulls out his Derp Dance instead of actually engaging on the merits.
This harms only you, Malcolm. (go ahead and [shrug] at that)
10.3.2.1.1.1
News flash, Bildo: chanting “Simple Set Theory so nyah nyah” is not an attempt to “engage”.
So please take some time off this Sunday to go e f f yourself, you sad ridiculous excuse for a human being.
10.3.2.1.1.1.1
You are the only one “chanting” here – even as you accuse others (than you) of not engaging, my counterpoint is directly on point that it is you and not others that has refused to engage.
As to go e f f yourself, you sad ridiculous excuse for a human being — your inability to control your emotions is noted.
Maybe you are trying to add to your impressive lead of most posts expunged…?
Seriously, Bildo: get off whatever drugs you are on, get some help for your narcissist personality disorder, and then go e f f yourself repeatedly.
A little off topic, but I’ve noticed now with articles regularly appearing with the word algorithm that people seem to be getting what information processing is. And they seem to get that these are inventions. Information conservation is the most important law of physics. Information processing requires time, space, and energy.
Also, Greg has some argument about 112(f) proposal that he feels supports the new proposal. The correct way of thinking of this is scope of enablement.
Greg is trying to say you need all known solutions to support the WD requirement. This would only be true if the person that is interpreting the specification was not anyone skilled in the relevant art.
Axiomatic —– Again–if you are enabling an embodiment to anyone skilled in the art and your claim scope does not include that embodiment, then it is trivial to design around the claims.
Anyone that goes against the above is not being intellectually honest.
Greg has shown himself to be BOTH an inte11ectual coward and to be inte11ectually DIShonest.
He wants a certain Ends, delves into art fields for which he is absolutely c1ue1ess, and simply ignores the Big Pharma biases that entrench his views (showing unwarranted disdain for all others with views different than — and more informed — than his own).
While he has provided some comments against what the Court has done with legislating from the bench (in regards to 101), thus earning a “one-bucket” denigration level from Malcolm, Greg is NOT in a “one-bucket” of having a strong pro-innovation view of patent law, especially in regards to forms of innovation outside of Greg’s bailiwick.
He is supported by many of the Obama era CAFC judges like Taranto who are trying to remove the anyone skilled in the art. Which case was it where they held that you had to have a full algorithm like a figure to support the method? That completely removes the anyone skilled in the art.
(I was the TA for arguably the hardest class algorithms at one of the top schools in computer science. A person can write one sentence that refers back to an algorithm and someone like me knows what it means.)
The problem is once you get intellectually dishonest ignorant f ilth like Taranto then anything goes.
“Which case was it where they held that you had to have a full algorithm like a figure to support the method? That completely removes the anyone skilled in the art.”
I recall no such case wherein “full algorithm” has actually been held to be required.
Your “like a figure” actually provides against a “full” algorithm, and given that figures are held to support “structure*** sufficiently, and are clearly not FULL algorithms, the current state of controlling law remains such that the presence of Person Having Ordinary Skill In The Art IS the Rule of Law.
*** this is expected to “trigger” Malcolm, but take note as well that Malcolm’s rants also are always divorced from the understanding that “In The Art” controls. Malcolm — much like Greg — are driven by their own desires to see only other art units have any type of meaningful patent protection.
I fully agree with you regarding your last statement and inte11ectual dish0nesty.
There is a case. I will have to look it up.
I know MM continues to try and claim there is no structure to information processing methods. The position is so ludicrous that it is on a par with people that claim the earth is flat. And yet they persist and as long as there is no pain for them I am sure they will continue on with the nonsense.
You have to remember that Lemley has stated software has no structure and he is regularly quoted by the Scotus.
There appears to be no accountability and no need to teether statements to the real world.
True. You don’t try but succeed in your ludicrous assertions despite the science saying there structure and a gazillion scientific papers saying there is structure.
The issue is not “does a programmed computer have structure.” The issue is “does the claim — directly or indirectly (via 112f) – recite objective physical structure that distinguishes the claimed device from prior art devices.”
The answer is “No, it doesn’t.” Only a new functionality is recited. And that functionality isn’t linked to any objectively ascertainable structure (ascertainable through the function). There is no objective structure associated with “investment values”, for example. These are facts. This is “science.” You are not intelligent.
Yet again, with the dissembling of the optional claim structure of “objective physical structure” and the clenching tight of his eyes to the fact that to a Person Having Ordinary Skill In The Art, software is merely a patent-equivalent design choice to the other “wares” in the computing arts…
Malcolm really needs to engage (in an inte11ectually honest manner) with the Grand Hall experiment.
He also needs to stop dissembling and trying to portray “new functionality” as if that were the aimed at “statutory category.” That’s a vapid strawman that just does not f001 anyone.
“There is a case. I will have to look it up.”
It’s not that I doubt that you think that you have seen this (given how wildly out of control the CAFC is on panel to panel variability and lack of control due in part to the lack of leadership of Chief Judge Prost), but I would love to see that case.
“I’ve noticed now with articles regularly appearing with the word algorithm that people seem to be getting what information processing is.”
Not that Malcolm would actually bother, but some might, do you have any links?
Rather surprised that the only reflection on this blog (yet) pertaining to the State Sovereign Immunity case is Greg’s post at 6 below.
Be that as it may, I have to reflect that the Tillis hearings appear to be on the minds of the CAFC judges, as “eligibility” makes its way into the IPR decision at least at page 17 with this miswriting (emphasis added):
“During the proceeding the patent owner may also seek leave to amend the original patent claims to resolve the problem of patent eligibility, as the applicant can do in initial examination though the proposed amendments may also be challenged by the petitioner. 35 U.S.C. § 316(d).”
In an IPR (as opposed to a different post-grant mechanism), there is no “problem” of patent eligibility, leastwise as a focus of why the IPR procedures are underway.
Re the Fed. Cir. decision in UNM v. LSI holding no sovereign immunity from IPRs against states:
While that per se may well be Sup. Ct. vulnerable, Gene’s blog author article indicted that the PTAB decision below additionally held that the Patent Owner has waived its Eleventh Amendment immunity by filing a federal court infringement suit on the patent being challenged in the IPR. Since the Federal Circuit found that state sovereign immunity does not apply to IPR proceedings, it did not address the issue of whether immunity was waived by UMN’s district court filing.
That state affirmative action waiver of a normal defense by defendants is a more likely winning argument at the Sup. Ct. It could save most such IPR petitioners, since the vast majority of IPRs petitions are filed by such lawsuit defendants.
I do not think that the waiver argument was either fully developed (preclusive), nor that persuasive.
Waiver of one set of rights for actions provided as a right in a different context is a far more slippery slope than what has been “discussed” so far.
“I do not think that the waiver argument was either fully developed (preclusive), nor that persuasive.”
Quite possible, and that was not a legal issue decided in this case by this Fed. Cir. panel. But there is certainly enough of record below and there to preserve that vital question for the Sup. Ct. if cert is granted, which of course is the point.
I agree that a path forward on that point is preserved.
But much like the comment below at 6.1.1.1.1, the Court (so far) has been reticent to clarify rather important points in patent law.
I see no difference here, as the effects of denying sovereign immunity (BE that immunity by State or by the already denied cert on Indian variety of sovereign immunity) are largely (and apparently) constrained to be “merely” patent-effects.
Your modern day Re pu k k ke party. This guy is from Montana and may be the governor someday.
Your non-patent law rant is noted.
Remind me which party is in control of the Senate and currently accepting bribes from a pack of notoriously dishonest scxumbags for the purpose of expanding patent eligibility into the State Street stratosphere (where it will be immediately dialed back unless they can bribe the Supreme Court too)?
“for the purpose of expanding patent eligibility”
Put the tinfoil hat away, son.
How old was Noah when he built the ark? 600. He wasn’t like, cashing Social Security checks, he wasn’t hanging out, he was working.
Did he patent anything?
Because the Repu-k-k-k-e Party is the party that truly understands “how innovation and technology work.” Riiiiiiiiiiight.
Cue up Night Wiper here to complain about “returning to the iron age.”
Your attempted insertion of “did he patent anything? into your poli-rant has nothing to do with innovation, how innovation works, how innovation protection works, or that innovation protection (per the US Sovereign choice) is for the Useful Arts and not just for the technological arts.
At least 5 misses in one post from you, Malcolm.
All because you cannot control your feelings.
UNM v. LSI is up. No sovereign immunity from IPRs for states.
The right result, for sure.
A result I predicted – let’s see if this plays out to the Supremes.
I noticed in LAW360 earlier this week that UNM had mentioned that the Supreme Court’s decision in Return Mail actually strengthened the view FOR sovereign immunity. I had not bothered reading that article to see exactly what that “strengthening” argument was (and apparently was not entertained by the CAFC).
See link to cafc.uscourts.gov
let’s see if this plays out to the Supremes.
You may well be correct there Malcolm.
How many denied certs from the Supremes on their being asked to clean up their own 101 mess were presented to the Tillis proceedings? 84?
ROTFLMAO About 80 of those cert petitions related to the junkiest patent claims ever presented to any patent office in the history of the universe, or related to Constitutional “arguments” that would be mortally embarrassing to normal lawyers.
You and Big Jeans might as well brag about how many women you “turned down” last time you cruised the cantinas in Tijuana. Most people aren’t as abjectly d-u-m-b as you two mental defects.
What is that 0bsess10n you have for Quinn?
Wait, no, I do not want to know.
MM keeps at least one old white daddy in his abode at all times.
While not called for directly from the holding of the case, I wonder if that holding will give the PTAB folks any pause as to actions such as:
“The Board also denied additional discovery into the admittedly confidential relationship.”
Denying discovery seems like a heavy thumb on the scales towards the petitioner. Again, the holding here does not dictate a change in regards to this “thumb,” but will the PTAB recognize that maybe (just maybe) this type of discovery can only help as opposed to hurt the development of the record?
Good point, since the time frame for discovering RPI’s and privies has now been expanded. But attorneys requesting discovery in IPRs need to break their “fishing expedition” discovery scope habits from D.C. litigation, and learn to ask specific, tailored, document and admissions requests that do not subvert the statutory intent of IPRs to reduce discover time and costs.
That seems like a decent enough trade-off.
Sounds fair in the abstract; yet in this particular case, how much more “specific, tailored, document and admissions requests” could PI have been given that the purchase agreement was confidential?
How could PI know what they didn’t know?
Asking for “in camera” disclosure of agreements changing infringement suit liability under the IPR petitioned patent?
Hmmm … has the PTAB ever allowed in camera? Do they even have the legal authority to compel such?
The nearest direct answer that I could find after a quick search is the following comment in Federal Register Vol. 77, No. 157 published Tuesday, August 14, 2012 at page 48758:
“Admissibility of evidence is generally governed by the Federal Rules of Evidence.“
Some additional searching across patent law blogs provides the following paragraph (emphasis added):
“Parties to patent interference proceedings have opposed motions for additional discovery based on privilege, e.g., attorney- client privilege or work product privilege, or that trade secret information would be improperly divulged. The Board has handled these privilege issues by determining whether an attorney or just a registered patent agent who was not an attorney was claiming the privilege, and whether the work involved was just limited to preparation of the application and, presumably not privileged. Similarly, if the alleged trade secret information was disclosed in the patent, then it clearly was not a trade secret. The Board also, occasionally, has held in camera hearings to examine the claims of privilege and trade secrets. These policies would appear to apply without change to similar requests for additional discovery in post-grant review proceedings”
at: link to postgrantproceedings.com
This would appear to directly flow from the governing by the Federal Rules of Evidence.
5.1.2.1.1.2.2
Instead of the deal with ON, Fairchild should have merged with Honeywell.
They could have called the new company:
The discussion on the incentive to litigate is way off. A Little bit of background: In Blonder-Tongue the Court mentioned that collateral estoppel should NOT be applied in the second action unless the litigant opposing estoppel had substantial incentive to litigate in the first action. 402 U.S. at 332-33. There the Court in Blonder-Tongue identified two factors that might have general application in nonmutual collateral estoppel analysis: disincentive to litigate the first action and procedural disadvantages in the first action. Later in Parklane, however, the Court noted that in defensive collateral estoppel the “incentive to litigate” problem usually would not arise. 439 U.S. at 329-30. Of the four factors identified in Parklane, two had been mentioned already in Blonder-Tongue: the potential absence of “substantial incentive to litigate” the first action, and the possibility of some procedural disadvantage to a party in the first suit. Most important: in the Parklane the Court was sensitive to the risk that offensive collateral estoppel could unfairly preclude relitigation of an issue that a defendant had insufficient incentive to litigate in a prior action. The Parklane Court hypothesized a suit involving a relatively trivial sum followed by an unforeseen and more consequential suit involving the same issue. The Parklane Court found three facts, however, demonstrating that the defendant in Parklane had sufficient incentive to litigate: the first suit involved serious charges; second, the trial lasted four days and was followed by an appeal, which indicated that the defendant had in fact litigated vigorously; and finally third, the plaintiff began his suit before the action on which the defendant claimed estoppel was filed.
Because the circuits have agreed that insufficient incentive to appeal is tantamount to insufficient incentive to litigate, the absence of a good motive or opportunity to appeal the first decision will bar subsequent application of offensive collateral estoppel. Hicks v. Quaker Oats Co., 140. 622 F.2d 1158 (5th Cir. 1981) (no collateral estoppel because defendant lacked incentive to appeal first decision) illustrates particularly well how the incentive to appeal differs from the incentive to litigate at trial. See also Mancuso v. Harris, 677 F.2d 206 (2d Cir.), cert. denied, 459 U.S. 1019 (1982) (no collateral estoppel because, inter alia, state did not have sufficient incentive to appeal adverse decision).
Since Parklane, the circuit courts have significantly differed concerning which factors should be considered in determining whether a party had an adequate incentive to appeal. The circuit split is particular obvious in the context of use of offensive collateral estoppel. This case would be a good vehicle to ask the USSC to provide a test for when collateral estoppel should NOT be applied on appeal from a prior agency adjudication.
? Does not the Court point out in this case that the prior PTO proceeding on this same issue that was not appealed by the party was about another patent that had already been judicially held not infringed, and therefor there was no good reason for that party to appeal in that other case? I.e., this is even less than a “trivial sum” of concern to preclude requiring “collateral estoppel.”
Paul, A lack of incentive to litigate may render the collateral estoppel doctrine inoperative, see Parklane Hosiery Co. v. Shore, 439 U.S. 322, 330 (1979) (defendant’s lack of incentive to defend vigorously may make offensive use of collateral estoppel unfair); lack of incentive to appeal does not have the same effect. But one could argue that the failure to appeal an adverse judgment negates the preclusive effect of that judgment only when review was unobtainable “as a matter of law.” Restatement (Second) of Judgments § 28(1) (1982). Where review is available but is not sought, estoppel applies. Id. § 28(1) comment a., unless, however, there are objective motives or reasons sufficient do disincentive to litigate the issue in the appellate court. There is not clear test for it and every circuit approaches this issue different. This case would give a very nice cert petition.
As the Court itself points out in a footnote, this non collateral estoppel decision is only on this specific fact situation.
As the Court also suggests, it would make no sense [and lead to many irate clients and a great waste of appellate court resources] to require all parties in all cases to file expensive appeals in cases no longer of any concern to those parties to avoid collateral estoppel on every appealable legal issue.
And of course collateral estoppel is not the same as estoppel.
This is mostly a result of being sued way back in 2009, in the pre-AIA regime.
In any case, can I as an individual not file an IPR tomorrow using the same art and arguments? Would Power Integrations not have a really really strong incentive to settle with me quickly, for, say, $100,000 or so?
Interesting thought, but not a good business plan even in this unusual situation of previously decided but retroactively-time-barred IPRs, if the IPR settlement payment is less than the total PTO fees and attorney costs someone would have to put up to get the granting of a successful IPR petition.
Also, now that you have pointed out that this apparent IPR decision revival opportunity is available to anyone not in privy with the patent owner here, why would PI bother to pay off just one petitioner to go away and just encourage others?
Sounds like a rational decision, in that otherwise would not losing defendants with large damages exposures who had failed to file IPRs in time have an incentive to arrange a sale to another entity who would file an IPR as part of the deal? With the purchasing entity also having an incentive, of hoping to acquire the defendant without acquiring its damages exposures by disposing of them with IPRs?
As Dennis notes for another blog, other aspects of this decision are interesting. The Court did its own de novo interpretation of the IPR time bar statute, expressly denying application of the Chevron Doctrine to the prior non-presidential decisions of the Board interpreting the statute differently, Especially as to terms in the statute taken taken from the common law like “real party in interest” or “privies.”
[P.S. As D.C. denizens, the Fed. Cir. judges are undoubtedly aware of the plans of conservatives to get rid of the Chevron Doctrine altogether.]