Use of Prior Art Previously Before the Patent Office Can Open the Door to Evidence of Prior Patent Office Proceedings

Courts have often excluded evidence of prior post-grant proceedings filed by third parties because of its potential to cause unfair prejudice, confuse the issues, or mis- lead the jury. In Delaware, for example, Judge Andrews in Nox Med. Ehf v. Natus Neurology Inc. held that “[f]ailure to institute an IPR has little or no probative value, and, to the extent there is any probative value, it is greatly outweighed by the risk of jury confusion and the time it would take to put the failure to institute in an appropriate context.”[1] And in ART+COM Innovationpool GmbH v. Google Inc., the Delaware district court noted that post-grant proceedings are “reached on a record that was less than complete and without the benefit of a full adversarial proceeding,” raising a further reason to preclude such evidence before the jury.[2] Other trial courts around the country have held similarly when facing the question.[3] But there is some contrary case law emerging in certain circumstances.[4]

Summary of Memorandum Order in IBM v. Zynga

Recently, in IBM v. Zynga Judge Williams of the District of Delaware found that evidence of a USPTO decision denying institution may be relevant where the defendant is relying on the same prior art relied on by the unsuccessful third-party IPR petitioner.

Plaintiff IBM intended to introduce evidence about a non-instituted IPR brought by a different party to argue to the jury “that [its] patent has been battle-tested.”[5] Zynga filed a motion in limine seeking to “exclude argu- ment, evidence, or testimony regarding post-grant Patent Office Proceedings,”[6] contending that they are not relevant and unduly prejudicial.

Judge Williams granted-in-part and denied-in-part Zynga’s motion.[7] He recognized that the courts in Nox and ART+COM refused to allow evidence of prior IPR proceedings.[8] But he also noted that, in this case, some of the prior art Zynga was relying on for its invalidity defense had also been considered by the USPTO when it declined to institute the third-party IPR. This overlap in prior art, reasoned Judge Williams, distinguished this case from Nox and ART+Com.[9] Accordingly, Judge Williams held that, although the evidence of the non- instituted IPR would normally not be allowed, if Zynga decides to rely on that same prior art, then IBM would be allowed to bring in evidence of the non-instituted IPR.[10]

In reaching his conclusion, Judge Williams cited Willis Elec. Co., Ltd. v. Polygroup Ltd. and L.C. Eldridge Sales Co. v. Azen Mfg. Pte., Ltd., for the proposition that certain circumstances justify permitting a jury to hear such evidence from earlier post-grant proceedings.[11] Willis held that the patentee could introduce evidence of a prior IPR where the defendant relied on a combination of prior art that “closely tracks what was considered and rejected by the PTAB.”[12] The Willis court found that similarity of invalidity theories “provides a legally meaningful basis for the jury to weigh against [the defendant’s] invalidity case.”[13] The Eldridge court determined that the “risk of confusion is minimal” in showing the jury evidence of a prior unsuccessful IPR “because a lower threshold of proof is required to show invalidity before the USPTO than is required by the Defendants in [district court].”[14] That is, because the USPTO applies a preponderance of the evidence standard for unpatentability, which is lower than the clear and convincing evidence standard that district courts require to demonstrate invalidity. In other words, if a patent survives an IPR proceeding and remains valid under the lower evidentiary standard, the risk of confusion to a jury should be minimal when validity of the same patent is considered under a higher standard at the district court. Accordingly, Judge Williams held that “if Zynga opens the door by introducing prior art raised before the Patent Office, IBM may respond by introducing- ing evidence related to the post-grant proceedings.”[15]

Analysis

It will be interesting to see the effect of the District of Delaware’s ruling in Zynga, as there is some ambiguity as to how far the order was intended to reach. On the one hand, there is precedent for finding that a defendant’s use of a combination previously rejected by the PTAB may render evidence of the prior post-grant proceeding relevant.16 On the other, a broad reading of the Zynga decision could mean that a defendant’s use at trial of any prior art presented to the Patent Office in any context renders any prior proceeding involving that art relevant, which has the potential to significantly complicate future patent infringement defendants’ decision-making as to what prior art to present at trial. Other courts will likely have to draw these lines if the Zynga case is cited by litigants for the broadest possible application in future disputes.

Endnotes

1. No. CV 15-709-RGA, 2018 WL 6629704, at *1 (D. Del. Apr. 12, 2018); see also Interdigital Comms. Inc. v. Nokia Corp., 2014 WL 8104167, at *1 (D. Del. 2014) (excluding PTO’s denial of an inter partes review petition under FRE 403 because “the probative value is greatly outweighed by the expenditure of time that would be required to give the jury the full context necessary to fairly evaluate the evidence”).
2. No. 1:14-217-TBD, 2016 WL 11531119, at *2 (D. Del. May 16, 2016).
3. See Milwaukee Electric Tool , Metco Battery Techs. LLC, AC v. Snap-On Inc., 2017 WL 4570787, at *5-*7 (E.D. Wis. 2017) (“admitting evidence of the IPRs is likely to mislead the jury into believing that because the patents-in-suit have survived many attacks, they must be valid against the present attacks”); see also Nichia Corp. v. VIZIO, Inc., No. CV8160545SJOMRWX, 2019 WL 1966665 (C.D. Cal. Mar. 25, 2019) (“The conclusions of the PTAB in declining to institute an IPR have minimal, if any, bearing on the factual determinations that the jury must make. Allowing the jury to review these decisions creates a substantial risk that they may choose to simply adopt those conclusions”).
4. See, g., Willis Elec. Co., Ltd. v. Polygroup Ltd., C.A. No. 15-cv-3443, 2024 WL 118443, at *9-*11 (D. Minn. Jan. 9, 2024) (“On balance, the risk of confusion or misleading the jury does not substantially outweigh the highly probative nature of the IPR evidence.”); L.C. Eldridge Sales Co. v. Azen Mfg. Pte., Ltd., No. 6:11CV599, 2013 WL 7964028, at *3 (E.D. Tex. Nov. 14, 2013) (“risk of confusion is minimal because a lower threshold of proof is required to show invalidity before the USPTO”).
5. See IBM Zynga, No. 22-590-GBW, D.I. 503 (D. Del. Aug. 29, 2024).
6. D.I. 485, Ex. L, Zynga’s MIL #3.
7. D.I. 503, slip op. at 8.
8. Id. at 7.
9. Id.
10. Id. (reliance on prior art raised before the Patent Office opens the door).
11. Id. (citing Willis, 2024 WL 118443 at *9-*11 and Eldridge, 2013 WL 7964028).
12. Willis, 2024 WL 118443 at 10.
13. Id. at 8.
14. Eldridge, 2013 WL 7964028 at 3.
15. D.I. 503, slip op. at 8.
16. See supra 11.