October 17, 2013
Authored and Edited by Abhay A. Watwe, Ph.D.; Jeffrey A. Berkowitz
The inter partes review (IPR) statute includes an estoppel provision that precludes an IPR requester from asserting any ground of invalidity that the requester raised or reasonably could have raised during the IPR, in a subsequent civil action, or ITC proceeding. 35 U.S.C. § 315(e)(2). Consequently, courts routinely grant stays of litigation when the defendant/movant is subject to the full extent of estoppel mandated by § 315. But the landscape of decisions on stay motions is less clear when the movant relies on an IPR petition filed by another who is not a party to the same litigation.
Pi-Net International, Inc. asserted two patents against three banks in three separate cases:
While these cases were pending, SAP America, Inc. filed IPR petitions challenging almost all the claims of the two patents involved in the Pi-Net litigations. The court granted the bank defendants’ motion to stay the litigations conditioned on each defendant’s consent to be estopped from asserting any ground of invalidity that SAP had raised or reasonably could have raised during its IPR proceeding.
Defendants, however, refused to consent to the full estoppel applicable to an IPR requester under § 315. Instead, defendants proposed a more limited estoppel, which would bar them only from asserting the invalidity grounds that SAP actually raised in its IPR petition. Defendants argued that they had no role in preparing SAP’s IPR petitions and further that they would have no ability to control the IPR proceedings or to influence the arguments that SAP may raise during the IPR proceedings. Defendants, therefore, declined to forego any grounds of rejection that SAP reasonably could have raised during the IPR. Agreeing with the defendants, the court revised its stay order conditioning it on the defendants’ agreement to be estopped only with respect to the grounds and references actually presented by SAP in its IPR request, including the grounds on which the PTO declined to institute review.
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