Court Opinion

ID: 3202927
Source: CourtListenerOpinion
Date Created: 2016-05-12 15:01:26.295668+00
Date Added: 2024-06-11T12:05:37.628144
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

                         IGT,
      Plaintiff/Counterclaim Defendant-Appellant

                           v.

       ARISTOCRAT TECHNOLOGIES, INC.,
         Defendant/Counterclaimant-Appellee

 ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY
 LIMITED, ARISTOCRAT INTERNATIONAL PTY.
                     LTD.,
           Counterclaimants-Appellees
            ______________________

                      2015-2083
                ______________________

    Appeal from the United States District Court for the
District of Nevada in No. 2:15-cv-00473-GMN-GWF,
Judge Gloria M. Navarro.
                ______________________

                Decided: May 12, 2016
                ______________________

    ADAM MORTARA, Bartlit Beck Herman Palenchar &
Scott LLP, Chicago, IL, argued for plaintiff/counterclaim
defendant-appellant. Also represented by REID M.
BOLTON, JASON LLOYD PELTZ, BRIAN SWANSON; DANIEL
CHARLES TAYLOR, Denver, CO.
2                       IGT   v. ARISTOCRAT TECHNOLOGIES, INC.

   ROBERT T. HASLAM, Covington & Burling LLP, Red-
wood Shores, CA, argued for defendant/counterclaimant-
appellee and counterclaimants-appellees. Also represent-
ed by AUSTIN KEILLER HAMPTON, GARY RUBMAN, PETER
ANDREW SWANSON, Washington, DC.
                ______________________

Before PROST, Chief Judge, NEWMAN and LOURIE, Circuit
                       Judges.
PROST, Chief Judge.
     IGT appeals the district court’s denial of its motion for
a preliminary injunction to prohibit Aristocrat from
challenging the validity of IGT’s patents at the U.S.
Patent and Trademark Office (“PTO”). IGT argues that
the doctrine of assignor estoppel precludes invalidity
challenges by Aristocrat, and that IGT would suffer
irreparable harm if Aristocrat were to file a petition for
inter partes review and succeed in cancelling IGT’s patent
claims. The district court denied IGT’s motion. IGT v.
Aristocrat Techs., Inc., No. 2:15-cv-473 (D. Nev. Sept. 18,
2015) (“District Court Decision”). While we agree with the
district court that the circumstances existing at the time
of its decision were too speculative to justify a preliminary
injunction, we vacate and remand for the court to consider
recent updates in events.
                                I
    This suit began in March of 2015, when IGT filed a
complaint alleging that Aristocrat’s slot machines in-
fringed ten of IGT’s patents. In July of 2015, IGT moved
to preliminarily enjoin Aristocrat from challenging the
validity of four of IGT’s patents at the PTO on the basis of
assignor estoppel. IGT alleged that Joseph Kaminkow,
the named inventor on the four patents, worked for IGT
from 1999 to 2012; that he assigned these patents to IGT
during his employment there; that he later joined Aristo-
IGT   v. ARISTOCRAT TECHNOLOGIES, INC.                         3

crat in 2013; and that he was involved in Aristocrat’s
development of the accused slot machines. IGT argued
that Mr. Kaminkow, having assigned the patents for
value, was precluded from challenging their validity
under the doctrine of assignor estoppel. Diamond Scien-
tific Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed. Cir.
1988) (“Assignor estoppel is an equitable doctrine that
prevents one who has assigned the rights to a patent (or
patent application) from later contending that what was
assigned is a nullity.”). And IGT argued that Aristocrat
was precluded from doing so as well, as assignor estoppel
applies not only to the assignor himself, but also to other
parties in privity with the assignor when the assignor
bears a sufficiently close relationship to the party’s in-
fringing activity. See Intel Corp. v. U.S. Int’l Trade
Comm’n, 946 F.2d 821, 839 (Fed. Cir. 1991) (“What is
significant is whether the ultimate infringer availed itself
of the inventor’s ‘knowledge and assistance’ to conduct
infringement.” (citations omitted)).
     To satisfy the four-factor preliminary injunction test,
IGT argued that: (1) IGT was likely to succeed in estab-
lishing applicability of the assignor estoppel doctrine; (2)
IGT would suffer irreparable harm if Aristocrat were to
file a petition for inter partes review and succeed in
cancelling IGT’s claims; (3) the balance of equities favored
IGT; and (4) enjoining Aristocrat from filing a petition for
inter partes review served the public interest.
    The district court denied IGT’s motion for failure to
establish the second factor, likelihood of irreparable
harm. The court explained:
      Multiple contingencies must occur before Defend-
      ant’s petition would injure Plaintiff. Specifically,
      the United States Patent Office would have to in-
      stitute the proceedings and reach a finding of inva-
      lidity before Plaintiff would actually suffer injuries
      from Defendant’s petition. Since, at this time, the
4                       IGT   v. ARISTOCRAT TECHNOLOGIES, INC.

    Court cannot predict whether the Patent Office will
    decide to institute inter partes review, the circum-
    stances Plaintiff offers show a possibility of injury,
    but are too contingent to satisfy the likelihood of
    irreparable harm standard.
District Court Decision at 7. In addition to finding a lack
of a likelihood of irreparable harm, the court also noted
that inter partes review is “a statutorily permitted proce-
dure” and that Aristocrat “would not infringe on any of
[IGT’s] legal rights by pursuing such action.” Id. at 7-8.
    We have jurisdiction pursuant to 28 U.S.C.
§§ 1292(c)(1) and 1295(a)(1). We review a denial of pre-
liminary injunction for abuse of discretion.    Takeda
Pharm. U.S.A., Inc. v. W.-Ward Pharm. Corp., 785 F.3d
625, 629 (Fed. Cir. 2015).
                                II
    IGT’s request for a preliminary injunction is premised
on its observation that the PTO does not recognize as-
signor estoppel as a defense in inter partes review or
reexamination proceedings. 1 Given this state of affairs,
IGT argues that a preliminary injunction is its best
recourse to prevent Aristocrat, a party whom it argues is
estopped from challenging validity in the district court,
from making an end-run around the doctrine by invalidat-
ing IGT’s patents at the PTO instead.

    1   See Redline Detection, LLC v. Start Environtech,
Inc., No. IPR2013-00106, 2013 WL 5970197, at *2
(P.T.A.B. Aug. 27, 2013) (refusing to apply assignor
estoppel in inter partes review proceeding); Inter partes
reexamination No. 95/000,120, at 12-14 (July 19, 2006)
(refusing to apply assignor estoppel in inter partes reex-
amination proceeding).
IGT   v. ARISTOCRAT TECHNOLOGIES, INC.                     5

    We begin by clarifying what we are not deciding in
this case. Although both parties brief the question of
whether or not the doctrine of assignor estoppel should
apply in PTO proceedings, they both conclude that we
need not answer that question in this case. We agree.
That question is not properly before us and we therefore
render no opinion on it. 2 Rather, we address in this case
only the narrow question that has been appealed: wheth-
er or not the district court was correct in denying IGT’s
motion for preliminary injunction.
    We answer that question in the affirmative. A mo-
vant seeking a preliminary injunction must show that
“irreparable injury is likely in the absence of an injunc-
tion.” Winter v. Natural Res. Def. Council, Inc., 555 U.S.
7, 22 (2008). It is not enough to show a “possibility” of
harm, as “a possibility of irreparable harm is inconsistent
with [the] characterization of injunctive relief as an
extraordinary remedy that may only be awarded upon a
clear showing that plaintiff is entitled to such relief.” Id.
     Here, the district court was correct that IGT failed to
show a likelihood of irreparable harm. At the time IGT
filed its motion, Aristocrat had not even filed petitions
seeking inter partes review. There were therefore multi-
ple events yet to occur before IGT would potentially
experience cancellation of its claims: Aristocrat would
need to file a petition seeking inter partes review; the
PTO would need to conclude that there was a reasonable
likelihood that Aristocrat would prevail in its invalidity
challenge and actually institute inter partes review
proceedings; the PTO would need to conduct an adminis-

      2 Accordingly, we express no opinion on the district
court’s comment that, “[b]ecause inter partes review is a
statutorily permitted procedure, Defendant would not
infringe on any of Plaintiff’s legal rights by pursuing such
action.” District Court Decision at 7-8.
6                       IGT   v. ARISTOCRAT TECHNOLOGIES, INC.

trative trial to evaluate the merits of Aristocrat’s position;
and, ultimately, the PTO would need to conclude that
Aristocrat had succeeded in proving IGT’s claims invalid.
As the district court correctly noted, these circumstances
are far “too contingent to satisfy the likelihood of irrepa-
rable harm standard.” District Court Decision at 7.
    Since the district court’s decision, however, Aristocrat
has filed petitions seeking inter partes review on all four
of IGT’s patents, and the PTO has thus far instituted two
of the four. While IGT asks us to consider these changed
circumstances in evaluating the propriety of a prelimi-
nary injunction, we decline to do so. It is up to the district
court, in the first instance, to determine whether and how
the filing and institution of Aristocrat’s petitions weigh in
the preliminary injunction analysis. The proper course of
action, therefore, is to vacate and remand to allow the
parties to argue the impact of the changed circumstances
to the district court.
   For the reasons expressed herein, we vacate and
remand.
             VACATED AND REMANDED