Applying Collateral Estoppel between District Courts and the Patent Trial and Appeal Board

1. Parallel Proceedings in Patent Litigation: In modern patent litigation, the validity of a patent is often contested simultaneously in district court infringement suits and before the Patent Trial and Appeal Board (PTAB) in inter partes review (IPR).
   
   
2. Application of Collateral Estoppel: Collateral estoppel can preclude re-litigation of issues already decided by the PTAB, as affirmed by the Federal Circuit, which binds subsequent actions even if the parties differ between district court and PTAB proceedings.
   
   
3. Exceptions to Collateral Estoppel: Certain scenarios, such as the differing burdens of proof between IPRs and district court cases, may prevent the straightforward application of collateral estoppel, allowing unadjudicated patent claims to be asserted in subsequent district court litigation.

In modern patent litigation, the validity of a patent is frequently argued in two parallel proceedings, before a district court as part of a broader infringement suit and before the Patent Trial and Appeal Board (PTAB) in an inter partes review (IPR). Issues of collateral estoppel may arise in such scenarios. Collateral estoppel is designed to protect parties, and the resources of the courts from re-litigating the same issues that have already been litigated and decided in a prior proceeding involving the same parties. It is important for both patent owners and patent challengers to understand the effects of collateral estoppel between district court and PTAB proceedings.

Background

Collateral estoppel is a legal doctrine that applies when “(1) the issue is identical to one decided in the first action; (2) the issue was actually litigated in the first action; (3) resolution of the issue was essential to a final judgment in the first action; and (4) plaintiff had a full and fair opportunity to litigate the issue in the first action.”[1] The goal of collateral estoppel is to promote judicial efficiency and consistency between forums by preventing a party from relitigating the same issues in multiple forums.[2] While collateral estoppel is not a doctrine unique to patent law, it may arise in patent cases involving parallel proceedings before a district court and the PTAB.

Applying Collateral Estoppel in Patent Cases

The Federal Circuit has addressed specific scenarios in which collateral estoppel may apply in patent cases to prevent a party from re-litigating the validity of patent claims.

In XY, LLC v Trans Ova Genetics, L.C.,[3] the court considered the application of collateral estoppel where the Federal Circuit affirmed the PTAB’s finding of invalidity of patent claims. The Federal Circuit held that the affirmance of the PTAB’s finding of invalidity “has an immediate issue-preclusive effect on any pending or co-pending actions involving the patent.”[4] The court further emphasized that such collateral estoppel applies even if the defendant at district court and the petitioner at the PTAB are different parties.[5] The court found collateral estoppel applied in this case because the patentee had the opportunity to exhaust its legal remedies and the defendant should not have to continue defending an infringement suit against an adjudged invalid patent.[6]

Accordingly, collateral estoppel may apply to invalidated claims when the Federal Circuit affirms the PTAB’s finding of unpatentability. In such a situation, the same adjudicated claim cannot be asserted in district court. Collateral estoppel is appropriate in this scenario because “once the claim is ruled unpatentable, it no longer exists” and cannot be reasserted in district court.[7] This is premised on the cancellation of the adjudicated claims as a matter of law and does not rely on the PTAB’s fact-finding under a lower burden of proof.[8]

In Ohio Willow Wood Co. v. Alps South, LLC,[9] the Federal Circuit explained that collateral estoppel may apply to previously unadjudicated claims in certain situations.[10] In this case, the Federal Circuit affirmed a district court’s grant of summary judgment of invalidity of previously unadjudicated claims based on collateral estoppel. However, unlike Kroy IP Holdings, this case applied collateral estoppel when claims of a patent were previously adjudicated and held to be invalid at another district court. In reaching this conclusion, the Federal Circuit emphasized that it is the “identity of the issues that were litigated that determines whether collateral estoppel should apply.”[11] The court noted that “[i]f the differences between the unadjudicated patent claims and adjudicated patent claims do not materially alter the question of invalidity, collateral estoppel applies.”[12]

Collateral Estoppel May Not Apply in Certain Scenarios

A final written decision by the PTAB on the invalidity of a patent may not estop the patentee from asserting similar claims in a parallel or subsequent district court case.

In Kroy IP Holdings, LLC v. Groupon, Inc.,[13] the Federal Circuit held that collateral estoppel does not prevent a patentee from asserting unadjudicated claims of a patent even if other claims of the same patent were held unpatentable in an IPR.[14] The Federal Circuit looked to Supreme Court precedent, noting that collateral estoppel is “subject to certain well-known exceptions.”[15] One such exception is when “‘the second action involves application of a different legal standard,’ such as a different burden of proof.”[16] In an IPR proceeding, the petitioner must prove unpatentability by a preponderance of the evidence, while district courts require a higher burden of clear and convincing evidence to prove unpatentability. Therefore, the Federal Circuit held that “a prior final written decision of the Board of unpatentability on separate patent claims reached under a preponderance of the evidence standard cannot collaterally estop a patentee from asserting other, unadjudicated patent claims in district court litigation.”[17]

Conclusion

The differing burdens of proof between the PTAB and district court prevent a straightforward application of collateral estoppel between forums. As emphasized by the Federal Circuit, the forum in which a patent claim is found invalid may affect whether or not the patentee may be estopped from asserting similar, unadjudicated claims. Accordingly, it is important for both patent owners and petitioners to understand and analyze the effects that a decision at the PTAB may have on parallel or subsequent district court cases. Both patent owners and petitioners should consider sequencing and coordination between forums to understand the preclusive effects of parallel proceedings.

Endnotes

1. In re Freeman, 30 F.3d 1459, 1465 (Fed. Cir. 1994).
2. See id. (“The underlying rationale of the doctrine of issue preclusion is that a party who has litigated an issue and lost should be bound by that decision and cannot demand that the issue be decided over again.”).
3. 890 F.3d 1282 (Fed. Cir. 2018).
4. Id. at 1294.
5. Id. at 1295.
6. Id. at 1294.
7. Kroy IP Holdings, LLC v. Groupon, Inc., 127 F.4th 1376, 1380-81 (Fed. Cir. 2025).
8. Id.
9. 735 F.3d 1333 (Fed. Cir. 2013).
10. Id. at 1342.
11. Id.
12. Id.
13. 127 F.4th 1376 (Fed. Cir. 2025).
14. Id. at 1380-81.
15. Id. (citing B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 148 (2015).
16. Id.
17. Id. at 1381.