BIO and PhRMA Submit Brief of Amicus Curiae In Re: Verinata Health Inc., Illumina, Inc.
This Petition provides an opportunity for this Court to answer a critical question that is creating mounting confusion about the scope of inter partes review (IPR) estoppel. The Court should grant the writ and clarify that Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016), cert. denied, 137 S. Ct. 374 (2016), did not restrict the scope of § 315(e) estoppel in IPRs to grounds that were both raised in a petition and instituted and bar all other estoppel as to all other grounds. Instead, Shaw stands, at most, for the proposition that estoppel does not apply to grounds that were raised in the petition but that the Patent Trial and Appeal Board (PTAB) declined to institute for non-substantive reasons such as redundancy. Shaw does not stand, as the district court here and courts elsewhere have incorrectly suggested, for the much broader proposition that IPR estoppel does not apply to unraised grounds in the IPR petition. Nor can Shaw be understood to bar estoppel for grounds that were raised and denied institution on their merits—a point on which Shaw was silent.
Congress, in closely scrutinized provisions of the America Invents Act, extended IPR estoppel to “any ground that the petitioner raised or reasonably could have raised during” an IPR. 35 U.S.C. § 315(e). Whether grounds absent from an IPR petition may be subject to “could have raised” estoppel is a question that affects most cases involving patents that have survived IPR. The answer spells the difference between estoppel making IPRs meaningful substitutes for litigation of common patentability issues—consistent with the statutory language, the legislative history, the PTAB’s prior decisions, and the public’s expectations—and a meager estoppel that barely diminishes (let alone substitutes entirely for) subsequent invalidity litigation and perversely encourages piecemeal harassment of patent owners.
The scope of Shaw’s precedential effect has sorely puzzled courts and spurred pleas for this Court’s guidance. See, e.g., Intellectual Ventures I LLC v. Toshiba Corp., 2017 U.S. Dist. LEXIS 3800, at *3-4, 2017 WL 107980 (D. Del. Jan. 11, 2017) (Robinson, J.), (denying reconsideration on question of scope of Shaw, expressing uncertainty about correct answer, and voicing hope that this Court will “clarify the issue for future judges”), reaffirming result in 2016 U.S. Dist. LEXIS 174699 (D. Del. Dec. 19, 2016); Verinata Health, Inc. v. Ariosa Diagnostics, Inc., 2017 U.S. Dist. LEXIS 7728, at *7-8 & n.4 (N.D. Cal. Dec. 19, 2016) (Illston, J.) (holding that “Shaw dictates” that if “the PTAB did not institute on [a] ground . . . , therefore, defendants are not estopped from raising the same invalidity argument in this litigation”).
This confusion also clashes with other tribunals’ views. The PTAB’s pre-Shaw decision in Apotex Inc. v. Wyeth LLC, IPR2015-00873, Paper 8, 2015 Pat. App. LEXIS 12730, 2015 WL 5523393 (P.T.A.B., Sep. 16, 2015), interpreted the same statutory estoppel language the same way as Shaw, as to the same sort of grounds confronted by Shaw—i.e., grounds petitioned, but non-substantively denied as redundant—yet had no difficulty simultaneously holding that such estoppel does apply to grounds that were never raised in the petition, but reasonably could have been. The district court concluded that Shaw’s rationale sweepingly precludes estoppel as to grounds not actually instituted, even though such grounds were not before the Shaw Court. 2017 U.S. Dist. LEXIS 7728, at *7-8; see also Intellectual Ventures I, 2017 U.S. Dist. LEXIS 3800, at *2-3. In Apotex, the PTAB used a similar rationale as Shaw, yet reached the opposite conclusion from the district court; for the PTAB had no difficulty simultaneously also applying estoppel to issues that never were, but reasonably could have been, raised in the IPR.
Even if Shaw’s rationale were truly in tension with estoppel of unpetitioned, uninstituted grounds, Shaw would still not be entitled to the broad effect the district courts suggest. Because Shaw “did not confront and decide the same issue, it is not precedent on the question before us.” See Special Devices, Inc. v. OEA, Inc., 269 F.3d 1340, 1346 (Fed. Cir. 2001). In Shaw, estoppel of unpetitioned grounds was raised by neither the facts nor the parties, and resolution of the question was not necessary for its denial of relief. Indeed, Judge Reyna, on Shaw’s panel, pointedly observed that the estoppel question was not properly before the Court at all.
No matter how courts ultimately resolve the exact contours of § 315(e) estoppel, there is no basis on which to extend Shaw beyond its facts. Yet district courts are doing just that, thereby eviscerating the broad IPR estoppel that Congress provided for and on which the public relied. To dispel this confusion and restore IPR estoppel to its proper scope, the petition for writ of mandamus should be granted.
Amici expresses no view on any matters not expressly addressed herein.