Federal Circuit Clarifies Scope of PTAB Review – estoppel decisions appealable under § 314(d)
The Federal Circuit has further clarified the scope of what types of PTAB decisions are appealable under 35 U.S.C. § 314(d).1 In Uniloc 2017 v. Facebook, issued March 9, 2021, the court concluded that § 314(d) does not preclude appellate review of the PTAB’s post-institution decision that a party is not estopped from maintaining a petition for inter partes review under 35 U.S.C. § 315(e)(1).2
On May 11, 2017, Facebook filed a petition for inter partes review challenging Claims 1-8 of U.S. Patent No. 8,995,433, owned by Uniloc (“the ’1427 proceeding”). One month later, Facebook filed a separate petition challenging Claims 1-6 and 8 of the ’433 patent, which raised the identical arguments from an instituted petition previously filed by Apple. Facebook moved to join the Apple IPR proceeding, and the Board granted the motion. On September 11, 2017, LG filed a petition identical to Facebook’s ’1427 petition and moved for joinder. In December, the Board instituted the ’1427 petition challenging claims 1-8, where LG’s motion for joinder was still pending. On March 6, 2018, the Board granted LG’s motion to join the ’1427 proceeding.
On May 23, 2018, five months after instituting review in the ’1427 proceeding and more than two months after joining LG, the Board issued a final decision in the Apple IPR proceeding (which Facebook had joined) upholding the patentability of Claims 1-6 and 8 of the ’433 patent. This decision triggered estoppel under § 315(e)(1), and a week later the Board dismissed Facebook from the ’1427 proceeding with respect to Claims 1-6 and 8. The Board concluded that 1) Facebook was not estopped with respect to Claim 7, and 2) LG was not estopped from challenging all eight claims. On November 20, 2018, the Board issued a final written decision in the ’1427 proceeding finding Claims 1-8 unpatentable. Uniloc appealed, arguing that the ’1427 proceeding should have been dismissed when the Board issued its final decision in the Apple IPR proceeding, and the Board erred in its conclusion that estoppel did not preclude Facebook from challenging claim 7 and LG from challenging all eight claims.
The Federal Circuit first addressed the question of whether it had the authority to review the PTAB’s estoppel decision. Facebook and LG argued that § 314(d) barred review of estoppel decisions because they are part of the PTAB’s decision to institute proceedings. Under the Supreme Court’s decision in Cuozzo, the issue before the court was whether the question of estoppel under § 315(e)(1) is “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.”3 The court reviewed Supreme Court and Federal Circuit cases where the Cuozzo decision had been applied in the context of other statutory provisions4, and concluded that § 315(e)(1) is not sufficiently tied to the Board’s decision to institute IPR proceedings, and therefore review is not barred by § 314(d). The court relied on its previous decision in Credit Acceptance, where it was presented with nearly the same issue, but in the context of CBM review.5 In Credit Acceptance, the court decided that 35 U.S.C. § 325(e)(1), the estoppel provision which applies to CBM review proceedings,6 is reviewable because it “is not limited to the institution stage” and “could operate to terminate even where there existed no cause for termination at the time the petition was instituted.”7
It is important to note that in both Credit Acceptance and Uniloc 2017, the estoppel triggering event occurred after institution. The court noted this procedural similarity between the two cases as support for its finding that estoppel is separate from institution for reviewability purposes. However, the court did not indicate whether an estoppel decision would be reviewable where the estoppel-triggering event occurred before institution.
Finding Uniloc’s estoppel challenge reviewable, the court then considered the merits of Uniloc’s estoppel arguments. The court disagreed with Uniloc’s estoppel arguments and affirmed the Board. With regard to Facebook, the court pointed to the language of the estoppel statute, which explicitly frames estoppel in terms of claims of a patent, instead of the patent as a whole.8 Therefore, the prior decision in the Apple IPR proceeding upholding claims 1-6 and 8, to which Facebook was a party, does not effect Facebook’s ability to challenge claim 7. As to LG, the court stated that without more evidence indicating that Facebook controlled LG, or that LG was acting as a proxy for Facebook, the mere fact that LG had joined Facebook in the ’1427 proceeding did not amount to LG being a real party in interest or privy of Facebook.
There are several notable aspects of this decision. First, allowing appellate review of estoppel under § 315(e)(1) opens the door for future Federal Circuit decisions to define the nuances of the real party in interest and/or privity issue. Further development of this body of law had seemed unlikely at the appellate level after the Federal Circuit’s decision in ESIP.9 Second, the court’s ruling that LG was not an RPI or privy of Facebook explicitly noted Uniloc’s lack of evidence showing any such relationship between the two petitioners. Future patent owners arguing for estoppel will likely need discovery from the petitioner to obtain this kind of evidence. Patent Owners may want to consider whether and to what extent such discovery is allowed by the Board, what type of limited discovery to conduct, and whether to request such discovery before or after institution.