The Implications of SAS for Post-Grant Estoppel

The Supreme Court's April 24th, 2018 decision in SAS Institute, Inc. v. Iancu, et al., 584 U.S. ___ (2018) established that 35 U.S.C. 318(a) requires the Patent Trial and Appeal Board (PTAB) to institute inter partes review (IPR) proceedings on either all of a petitioner's challenged claims or none of the petitioner's challenged claims. This decision effectively ends the PTAB's former practice of partial institution, in which it used its discretion to institute IPR proceedings only on those claims in which the board felt that there was a reasonable likelihood that the petitioner would prevail. While SAS has the potential to significantly increase the PTAB's workload and put the statutory 12-month time limit for IPR decisions in jeopardy, it also has estoppel implications in post-grant proceedings.

Estoppel prohibits petitioners in post-grant proceedings from asserting any ground that the petitioner raised or reasonably could have raised during the post-grant proceeding in a later proceeding, including proceedings at the USPTO, civil actions, and actions before the International Trade Commission (ITC). The justification for imposing estoppel is to prevent the petitioner from getting more than one chance to make its case. It also prevents petitioners from harassing patent owners with repetitive challenges.

Pre-SAS, the Federal Circuit repeatedly held that the scope of estoppel in post-grant proceedings extended only to claims covered in a final written decision by the PTAB. Under that framework, estoppel would not extend to any claims for which the PTAB denied institution, since such claims would not be part of any final written decision. See Shaw Industries Group v. Automated Creel Systems, No. 2015-1116 (Fed. Cir. 2016); HP Inc. v. MPHJ Technology Investments, LLC, No. 2015-1427 (Fed. Cir. 2016). This gave the parties and the PTAB a degree of flexibility it allowed petitioners in some scenarios to escape estoppel on claims for which the PTAB denied institution and patent owners to try to narrow the asserted grounds in their Patent Owner Preliminary Responses ("POPRs") in order to reduce the number of claims at risk. Because the PTAB now lacks the authority to institute IPR proceedings on some claims but not others due to the SAS decision, the scope of post-grant estoppel is significantly broadened. In a post-SAS world, petitioners should now expect estoppel on all grounds presented in post-grant petitions, while there is less opportunity for patent owners to limit the grounds for institution through their POPR.

For more information about SAS and its impact on post-grant estoppel, please see our webinar The Two Sides of the Coin in Post-Grant Practice: Petitioner and Patent Owner Estoppel.