Opinion ID: 4569334
Heading Depth: 2
Heading Rank: 2

Heading: Statutory Estoppel

Text: We now turn to HP’s cross-appeal. HP argues that the district court erroneously granted JMOL with respect to the ’930 patent’s validity based on its determination that HP was estopped under 35 U.S.C. § 315(e) from presenting obviousness challenges as a consequence of its joinder to the Avaya IPR. We agree that HP is not estopped. We therefore vacate the district court’s judgment and remand to the district court for proceedings consistent with this opinion.
We review “decisions on motions for JMOL, motions for a new trial, and evidentiary rulings under the law of the regional circuit.” SSL Servs., 769 F.3d at 1082. The Fifth Circuit reviews decisions on motions for JMOL “de novo, reapplying the JMOL standard.” Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283, 1293 (Fed. Cir. 2015) (citing Ford v. Cimarron Ins. Co., 230 F.3d 828, 830 (5th Cir. 2000)). In the Fifth Circuit, a jury verdict may only be reversed by JMOL if substantial evidence does not support the verdict. Versata Software, Inc. v. SAP Am., Inc., 717 F.3d 1255, 1261 (Fed. Cir. 2013). “Thus, a JMOL may only be granted when, ‘viewing the evidence in the light most favorable to the verdict, the evidence points so strongly and overwhelmingly in favor of one party that the court believes that reasonable jurors could not arrive at any contrary conclusion.’” Id. (quoting Dresser–Rand Co. v. Virtual Automation, Inc., 361 F.3d 831, 838 (5th Cir. 2004)).
Following trial, the district court granted Network-1’s motion for JMOL on validity of the ’930 patent. The district court concluded that as a result of HP’s joinder to the Avaya IPR, HP was estopped under 35 U.S.C. § 315(e) from raising obviousness challenges not based on the Fisher Case: 18-2338 Document: 73 Page: 18 Filed: 09/24/2020 18 NETWORK-1 TECHNOLOGIES, INC. v. HEWLETT-PACKARD COMPANY system. J.A. 91. According to the district court, in contrast to the Fisher system, which was not a patent or printed publication that HP “reasonably could have raised” in the IPR, HP could have reasonably raised its remaining invalidity arguments during the IPR—i.e., the Fisher patents, Woodmas, and Chang. J.A. 88–89, 91 (quoting 35 U.S.C. § 315(e)(2)). In reaching this conclusion, the district court specifically rejected HP’s argument that it could not have raised new grounds in the Avaya IPR because it was a joined party. The district court stated that “the fact that HP sought joinder with Avaya’s IPR does not mean that HP could not have reasonably raised different grounds from those raised by Avaya.” J.A. 91. The district court further stated that allowing HP to raise arguments “that it elected not to raise during the IPR would give it a second bite at the apple and allow it to reap the benefits of the IPR without the downside of meaningful estoppel.” J.A. 91 (internal quotations omitted). The district court therefore granted JMOL on validity without considering the merits of HP’s invalidity arguments. J.A. 91 & n.6. HP argues that, in granting Network-1’s motion for JMOL on invalidity, the district court misapplied the estoppel provision under 35 U.S.C. § 315(e)(2). Specifically, HP argues that no validity ground that it raised at trial “reasonably could have [been] raised” through its joinder to the Avaya IPR. See J.A. 88–91. We agree with HP. HP’s joinder to the Avaya IPR and the estoppel consequences of that joinder are governed by the America Invents Act (“AIA”), which established IPR proceedings. According to the AIA, under 35 U.S.C. § 315(c), HP was permitted to join the Avaya IPR “as a party” even though HP was time- barred under § 315(b) from bringing its own petition. But, as we held in Facebook, Inc. v. Windy City Innovations, LLC, the joinder provision does not permit a joining party to bring into the proceeding new grounds that were not already instituted. Facebook, Inc. v. Windy City Innovations, LLC, __ F.3d __, No. 18-1400, 2020 WL 5267975, at –10 Case: 18-2338 Document: 73 Page: 19 Filed: 09/24/2020 NETWORK-1 TECHNOLOGIES, INC. v. HEWLETT-PACKARD 19 COMPANY (Fed. Cir. Sept. 4, 2020). Rather, it may only join the already-instituted proceeding as a party. Id. Following a final written decision in an IPR, the AIA provides for statutory estoppel under 35 U.S.C. § 315(e) to limit the invalidity challenges that an IPR petitioner may bring in a separate action involving the same patent claims. With respect to district court actions, § 315(e)(2) states: CIVIL ACTIONS AND OTHER PROCEEDINGS.—The peti- tioner in an inter partes review of a claim in a pa- tent under this chapter that results in a final written decision under section 318(a) . . . may not assert in . . . a civil action arising in whole or in part under section 1338 of title 28 . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review. 35 U.S.C. § 315(e)(2) (emphases added). Thus, according to the statute, a party is only estopped from challenging claims in the final written decision based on grounds that it “raised or reasonably could have raised” during the IPR. Because a joining party cannot bring with it grounds other than those already instituted, that party is not statutorily estopped from raising other invalidity grounds. In this case, the Board instituted two grounds in the Avaya IPR, which challenged claims 6 and 9 of the ’930 patent based on Matsuno and De Nicolo. HP did not timely petition for IPR but relied on the joinder exception to the time bar under § 315(b). HP first filed a motion to join the Avaya IPR with a petition requesting review based on grounds not already instituted. The Board correctly denied HP’s request. The Board, however, granted HP’s second joinder request, which petitioned for only the two grounds already instituted. When the Board reached a final written decision in the Avaya IPR, because HP was a petitioner in that proceeding, HP was statutorily estopped from raising Case: 18-2338 Document: 73 Page: 20 Filed: 09/24/2020 20 NETWORK-1 TECHNOLOGIES, INC. v. HEWLETT-PACKARD COMPANY invalidity grounds based on Matsuno and De Nicolo against claims 6 and 9 in a district court action. HP, however, was not estopped from raising other invalidity challenges against those claims because, as a joining party, HP could not have raised with its joinder any additional invalidity challenges. Thus, contrary to the district court’s suggestion, permitting HP to challenge the asserted claims of the ’930 patent as obvious over the Fisher patents, Woodmas, and Chang does not give HP a “second bite at the apple” to challenge the ’930 patent, J.A. 91, because HP could not have raised such a challenge in the Avaya IPR. Accordingly, we conclude that HP was not statutorily estopped under § 315(e) from challenging the asserted claims of the ’930 patent based on the Fisher patents, Woodmas, and Chang, which were not raised in the Avaya IPR and which could not have reasonably been raised by HP. We therefore vacate the district court’s JMOL decision on validity with respect to estoppel.
Because we conclude that the district court erred in granting JMOL of validity for Network-1 on the basis that HP was statutorily estopped from raising certain invalidity challenges, we vacate that decision. HP argues that if we vacate the district court’s JMOL on validity, substantial evidence supports the jury’s verdict of invalidity, and thus the jury’s verdict should be reinstated. In response, Network-1 argues that even if we reverse on estoppel, we cannot resolve this case on appeal because there is an outstanding new-trial motion that the district court must decide. Indeed, the district court failed to conditionally rule on Network-1’s motion for a new trial on validity even though it was required to do so by Federal Rule of Civil Procedure 50(c). See J.A. 78–91, 9260–65. We decline to consider Network-1’s motion in the first instance. Case: 18-2338 Document: 73 Page: 21 Filed: 09/24/2020 NETWORK-1 TECHNOLOGIES, INC. v. HEWLETT-PACKARD 21 COMPANY We therefore remand to the district court for further proceedings consistent with this opinion.