Earlier this month, in the precedential decision Uniloc 2017 LLC v. Facebook Inc., the Court of Appeals for the Federal Circuit (“the CAFC”) upheld the Patent Trial and Appeal Board (“the Board”) on the issue of estoppel (or lack thereof) when multiple parties file multiple, substantially similar petitions challenging a patent’s patentability.
1) The Proceedings Before the Board
The prosecution history is tangled:
First, in November 2016, Apple filed a petition for inter parties review (IPR) of U.S. Patent No. 8,995,433 (“the ’433 patent”) assigned to Uniloc, challenging claims 1-6 and 8.
Second, in May and June 2017, Facebook filed two petitions (“Facebook’s ’1427 and ’1428 petitions”) for inter partes review of the ’433 patent. The ’1428 petition was substantially identical to the Apple IPR, and was filed along with a motion to join Apple’s IPR. The ’1427 petition challenged claims 1-8 of the ’433 patent on new grounds.
Third, in September 2017, LG filed IPR petitions substantially identical to Facebook’s ’1427 and ’1428 petitions, along with a motion to join Facebook’s ’1427 and ’1428 petitions.
Fourth, in October 2017, the Board instituted Apple’s IPR and granted Facebook’s motion to join Apple’s IPR. Then, a few months later, the Board instituted Facebook’s ’1427 and ’1428 petitions. Additionally, the Board instituted IPRs based on LG’s petitions and granted LG’s motion to join Facebook’s ’1427 and ’1428 petitions. At this point, Facebook was party to its own ’1427 and ’1428 petitions and Apple’s IPR challenging claims of the ’433 patent, and LG was party to Facebook’s ’1427 and ’1428 petitions.
Fifth, in May 2018, the Board issued a final written decision in the Apple IPR upholding the patentability of all challenged claims. Later that month, the Board dismissed Facebook in part from the ’1427 petition (with respect to all but claim 7), finding Facebook estopped from maintaining the proceeding with respect to the claims that had been challenged (and upheld) in the Apple IPR. However, LG was not similarly estopped.
Finally, in the Board’s final written decision in the consolidated IPRs for Facebook’s ’1427 and ’1428 petitions, the Board found all challenged claims unpatentable. Uniloc sought rehearing, which was denied. Uniloc then appealed on several grounds, including that 1) the Board erred in not finding LG estopped from challenging claims 1-8 of the ’433 patent and 2) in finding Facebook not estopped from challenging claim 7 of the ’433 patent.
2) Whether the Board Could Review Uniloc’s Estoppel Arguments
On appeal, the CAFC first addressed whether it could review Uniloc’s estoppel argument. Uniloc contended that because Facebook was estopped by the Apple IPR decision from maintaining a challenge to those claims, LG (by virtue of having joined Facebook, who had joined Apple) was an alleged “real party in interest [RPI] or privy of the petitioner” and should have been estopped as Facebook was. This argument was legally complicated because while 35 U.S.C. § 314(d) dictates that the “determination by the Director [of the Patent Office] whether to institute an inter partes review under this section shall be final and nonappealable,” the CAFC’s case history was mixed when it came to reviewability.
The CAFC ultimately found that it was not precluded from reviewing the Board’s decision, citing to the “strong presumption of reviewability of agency action” and its holding in Credit Acceptance Corp. v. Westlake Services, 859 F.3d 1044 (Fed. Cir. 2017). “Critically, the particular circumstances in Credit Acceptance, i.e., one in which no cause for termination at the time of petition existed and the basis for termination developed while the proceeding was ongoing, is exactly that which happened here.” (Emphasis added).
3) Affirmance of Finding that LG Not Estopped from Challenging Claims 1-8 of the ’433 Patent – Serial Joinder Doesn’t Require Finding of Real Party in Interest or Privity
On the merits regarding whether LG was estopped from challenging claims 1-8 of the ’433 patent on the same grounds that Apple and Facebook had, the CAFC stated that the determinations as to whether a party is a real party in interest or in privity with another are highly fact-dependent. Regarding real party in interest, the test includes “whether a party exercises [or could exercise] control over a petitioner’s participation in a proceeding, or whether a party is funding the proceeding or directing the proceeding.” Regarding privity, “it is important to determine whether the petitioner and the prior litigant’s relationship . . . is sufficiently close that it can be fairly said that the petitioner [already] had a fully and fair opportunity to litigation the issues it now seeks to assert.”
The CAFC agreed with the Board that the evidence did not establish “control” for the real party in interest analysis. “[J]ust because LG expressed an interest in challenging the ’433 patent’s patentability . . . does not by itself make LG an RPI to Facebook’s IPR.” Additionally, the CAFC found the record insufficient to establish any sort of “preexisting, established relationship” that would indicate “coordination.” “The mere fact that the Board procedurally required LG and Facebook to consolidate their arguments and evidence in combined filings in this proceeding does not, without more, make them privies . . .”
4) Affirmance of Finding that Facebook Not Estopped from Challenging Dependent Claim 7 of the ’433 Patent, Notwithstanding Estoppel With Respect to Independent Claim 1
Similarly, the Board found that Facebook was not estopped from challenging claim 7 of the ’433 patent. Uniloc asserted that because the Board found Facebook estopped from challenging claims 1-6 and 8, the estoppel should apply to claim 7 because claim 7 depends on claim 1. The CAFC disagreed with Uniloc, finding the plain language of the statute rebutted an estoppel argument.
The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a) . . . may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review. 35 U.S.C. § 315(e)(1)(emphasis added).
The CAFC also found its case law on the issue supported the Board’s decision, and found against Uniloc.
Uniloc also challenged the obviousness determinations, but the CAFC affirmed the Board, finding the decision supported by substantial evidence. The CAFC’s review of the Board’s institution decision, despite an occasionally confusing case history, may indicate an increased likelihood of reviewing estoppel-related decisions in the future. Further, although here there was a lack of evidence regarding a relationship (either as a real party in interest or in privity) between LG and Facebook, which may distinguish this case from future cases, the precedential nature of this decision may indicate the CAFC’s reluctance to reverse the Board on findings of estoppel, generally. Petitioners should take note of the potential advantages of filing substantially similar petitions when challenging patents facing simultaneous challenges from other petitioners. However, the possibility of being estopped based on another petition also means that petitioners should exercise discretion.