Opinion ID: 6215967
Heading Depth: 2
Heading Rank: 3

Heading: Validity and IPR Estoppel

Text: Apple and Broadcom contend that the district court erred in granting summary judgment of no invalidity, barring them from presenting an invalidity case at trial on the ground of statutory estoppel. In the district court proceedings, the parties challenged the patents’ invalidity, relying on grounds the PTAB did not address in its earlier instituted IPR decisions. The district court nonetheless held that these challenges were barred by estoppel because Apple and Broadcom were aware of the prior art references at the time they filed their IPR petitions and reasonably could have raised them in those petitions even if they could not have been raised in the proceedings post-institution. Before the district court, Broadcom and Apple brought counterclaims seeking declaratory judgment of invalidity under § 103. The district court’s summary judgment orders disposed of the parties’ affirmative defenses as well as their counterclaims. We therefore consider whether this ruling was erroneous and review the grant of summary judgment de novo. Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1146 (Fed. Cir. 2016). When IPR proceedings result in a final written decision, 35 U.S.C. § 315(e)(2) precludes petitioners from raising invalidity grounds in a civil action that they “raised or reasonably could have raised during that inter partes review.” Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293, 1300 (Fed. Cir. 2016) (emphasis added). In Shaw, this court held that IPR “does not begin until it is instituted.” Id. If IPR “does not begin until it is instituted,” grounds raised in a petition (or that reasonably could have been raised in a petition) were necessarily not raised “during the IPR.” Id. Only the grounds actually at issue in the IPR were raised, or reasonably could have been raised in the IPR. Thus, estoppel did not bar the petitioner in Shaw from presenting a petitionedCase: 20-2222 Document: 63 Page: 21 Filed: 02/04/2022 THE CALIFORNIA INSTITUTE v. BROADCOM LIMITED 21 for, non-instituted ground in future proceedings because the petitioner could not reasonably have raised the ground during IPR. Id. Shaw was followed in HP Inc. v. MPHJ Technology Investments, LLC, 817 F.3d 1339, 1347–48 (Fed. Cir. 2016). At the time Shaw was decided, the PTAB often instituted review on less than all the grounds raised in a petition, which left some grounds unadjudicated on the merits. Before Shaw, we had held in Synopsys, Inc v. Mentor Graphics Corp., 814 F.3d 1309, 1314–15 (Fed. Cir. 2016), that the PTAB’s final decision need not address every claim raised in a petition. Under such circumstances, we concluded that Congress could not have intended to bar later litigation of the issues that the PTAB declined to consider. After Shaw, several district courts concluded that Shaw does not allow a petitioner to avoid estoppel as to all arguments that could have been raised in the petition. See, e.g., SiOnyx, LLC v. Hamamatsu Photonics K.K., 330 F. Supp. 3d 574, 602 (D. Mass. 2018) (determining that estoppel applies to grounds not included in a petition that the petitioner reasonably could have raised); Cobalt Boats, LLC v. Sea Ray Boats, Inc., Case No. 15-cv-21, 2017 WL 2605977, at  (E.D. Va. June 5, 2017) (same); Biscotti Inc. v. Microsoft Corp., Case No. 13-cv-1015, 2017 WL 2526231, at  (E.D. Tex. May 11, 2017) (same); Douglas Dynamics, LLC v. Meyer Prods. LLC, Case No. 14-cv-886, 2017 WL 1382556, at  (W.D. Wis. Apr. 18, 2017) (same); Parallel Networks Licensing, LLC v. IBM Corp., Case No. 13-cv2072, 2017 WL 1045912, at  (D. Del. Feb. 22, 2017) (same); Oil-Dri Corp. of Am. v. Nestle Purina Petcare Co., Case No. 15-cv-1067, 2017 WL 3278915, at  (N.D. Ill. Aug. 2, 2017) (“[W]hile it makes sense that noninstituted grounds do not give rise to estoppel because a petitioner cannot—to no fault of its own—raise those grounds after the institution decision, when a petitioner simply does not Case: 20-2222 Document: 63 Page: 22 Filed: 02/04/2022 22 THE CALIFORNIA INSTITUTE v. BROADCOM LIMITED raise invalidity grounds it reasonably could have raised in an IPR petition, the situation is different.”). Other district courts read Shaw differently, focusing on Shaw’s discussion of the “during the IPR” language in § 315(e)(2). See, e.g., Koninklijke Philips N.V. v. Wangs All. Corp., Case No. 14-cv-12298, 2018 WL 283893, at  (D. Mass. Jan. 2, 2018) (“It would seem, then, that the phrase “inter partes review” . . . refers only to the period of time after review is instituted, and, therefore, the estoppel provision does not apply to arguments that the petitioner only ‘raised or reasonably could have raised’ in its petition rather than after institution of review.”); Verinata Health, Inc. v. Ariosa Diagnostics, Inc., Case No. 12-cv-5501, 2017 WL 235048, at  (N.D. Cal. Jan 19, 2017) (“The [Shaw] court chose instead to interpret the IPR estoppel language literally, plainly stating that only arguments raised or that reasonably could have been raised during IPR are subject to estoppel.”); Intellectual Ventures I LLC v. Toshiba Corp., 221 F. Supp. 3d 534, 553–54 (D. Del. 2016) (holding that although exempting nonpetitioned grounds from estoppel “confounds the very purpose of this parallel administrative proceeding, the court cannot divine a reasoned way around the Federal Circuit’s interpretation in Shaw”). After Shaw, in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), the Supreme Court made clear both that there is no partial institution authority conferred on the Board by the America Invents Act and that it is the petition, not the institution decision, that defines the scope of the IPR. See id. at 1357–58 (“[T]he statute tells us that the petitioner’s contentions, not the Director’s discretion, define the scope of the litigation . . . There is no room in this scheme for a wholly unmentioned ‘partial institution’ power that lets the Director select only some challenged claims for decision.”). Given the statutory interpretation in SAS, any ground that could have been raised in a petition is a ground that could have been reasonably raised Case: 20-2222 Document: 63 Page: 23 Filed: 02/04/2022 THE CALIFORNIA INSTITUTE v. BROADCOM LIMITED 23 “during inter partes review.” Thus, the Supreme Court’s later decision in SAS makes clear that Shaw, while perhaps correct at the time in light of our pre-SAS interpretation of the statute cannot be sustained under the Supreme Court’s interpretation of related statutory provisions in SAS. The panel here has the authority to overrule Shaw in light of SAS, without en banc action. To be sure, SAS did not explicitly overrule Shaw or address the scope of statutory estoppel under § 315(e)(2). But the reasoning of Shaw rests on the assumption that the Board need not institute on all grounds, an assumption that SAS rejected. Even in the Ninth Circuit, which has one of the stricter approaches to panel overruling, see Henry J. Dickman, Conflicts of Precedent, 106 Va. L. Rev. 1345, 1350–51 (2020), “the issues decided by the higher court need not be identical in order to be controlling. Rather, the relevant court of last resort must have undercut the theory or reasoning underlying the prior circuit precedent in such a way that the cases are clearly irreconcilable,” Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 2003) (en banc). We approved that higher standard in Troy v. Samson Manufacturing Corp., 758 F.3d 1322, 1326 (Fed. Cir. 2014), and conclude that that standard is satisfied in this case. Accordingly, we take this opportunity to overrule Shaw and clarify that estoppel applies not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all claims and grounds not in the IPR but which reasonably could have been included in the petition. 5 In a regime in which the Board must 5 In this case, SAS was decided while IPR proceed- ings remained pending before the Board. Accordingly, we need not decide the scope of preclusion in cases in which Case: 20-2222 Document: 63 Page: 24 Filed: 02/04/2022 24 THE CALIFORNIA INSTITUTE v. BROADCOM LIMITED institute on all grounds asserted and the petition defines the IPR litigation, this interpretation is the only plausible reading of “reasonably could have been raised” and “in the IPR” that gives any meaning to those words. It is undisputed that Apple and Broadcom were aware of the prior art references that they sought to raise in the district court when Apple filed its IPR petitions. Despite not being included in any of Apple’s IPR petitions, the contested grounds reasonably could have been included in the petitions, and thus in the IPR. We affirm the district court’s decision barring Apple and Broadcom from raising invalidity challenges based on these prior art references.