Collaterally Estopped: Do Not Re-Examine the Same Issues
In an appeal from an inter partes re-examination of a patent having both original and newly presented claims, the US Court of Appeals for the Federal Circuit ruled that a decision in earlier inter partes reexaminations of related patents had a preclusive effect that collaterally estopped the Patent Trial and Appeal Board from making new findings on the same issue that was determined in the prior re-examinations. SynQor, Inc. v. Vicor Corp, Case No. 19-1704 (Fed. Cir. Feb. 22, 2021) (Hughes, J.), (Dyk, J., dissenting).
In 2011, SynQor asserted several patents, including the ‘190 patent, the ‘702 patent and the ‘290 patent, against Vicor. Vicor petitioned for reexamination of the ‘190, ‘702 and ‘290 patents, arguing that the claims of the ‘190 patent were unpatentable over two references: Steigerwald and Cobos. SynQor argued that an artisan would not have combined Steigerwald and Cobos because they taught circuits that operated at incompatible frequencies.
Past Appeals of Related Patents
On appeals from the reexaminations of the ‘702 and ‘290 patents, the Board affirmed that the challenged claims of the ‘702 patent were not unpatentable, because “there are incompatibilities in frequency between [Cobos and Steigerwald].” Similarly, after finding SynQor’s evidence that Steigerwald and Cobos operated at incompatible frequencies more credible than Vicor’s opposing evidence, the Board found the challenged claims of the ‘290 patent not unpatentable based on a combination of Steigerwald, Cobos and a third reference.
SynQor and Vicor had previously appealed the Board’s decisions in the reexaminations of the ‘702 and ‘290 patents to the Federal Circuit. As to the ‘290 patent, the Federal Circuit had affirmed the patentability of the challenged claims, holding that substantial evidence supported the Board’s finding that an artisan would not combine Steigerwald and Cobos because of their frequency incompatibility. The Court had also affirmed the Board’s decision finding the ‘702 patent not unpatentable, but did not (and was not asked to) reach the Board’s finding that Steigerwald and Cobos were incompatible.
Board Re-xamination of the ‘190 Patent
As to the ‘190 patent (at issue in this appeal), the Board found that Steigerwald and Cobos were not incompatible. In concluding that the challenged claims of the ‘190 patent were unpatentable over Steigerwald and Cobos, the Board was “not persuaded that the switching frequency differential is sufficient to render the combination unsuitable.” It found a new claim unpatentable based on a new ground of rejection, and SynQor opted to re-open prosecution of the new claim.
The ‘190 patent expired in January 2018. In February 2019, the Board issued its decision regarding the claims in the ‘190 reexamination, again rejecting SynQor’s argument that Steigerwald and Cobos had incompatible frequencies, and concluded that “the evidence points strongly to the lack of a frequency range discrepancy between Cobos and Steigerwald.” SynQor appealed.
Appeal as to the ‘190 Patent
On appeal, SynQor argued that common law issue preclusion arising from the ‘702 and ‘290 patent re-examinations should have collaterally estopped the Board from finding that an artisan would be motivated to combine Steigerwald and Cobos, and that the Board’s decision on newly presented claims was moot since the ‘190 patent expired.
Applicability of Collateral Estoppel Doctrine
Under Supreme Court precedent B & B Hardware, “[t]he determination of a question directly involved in one action is conclusive as to that question in a second suit.” In its MaxLinear decision, the Federal Circuit explained that collateral estoppel can apply in the administrative context, and in its Papst Licensing decision, to inter partes reviews (IPRs). Thus, administrative decisions have preclusive effect “[w]hen an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate.”
In examining the possibility of common law estoppel applying to inter partes re-examination, the Federal Circuit first looked to statutory support and legislative history regarding whether inter partes re-examination estoppel provisions were “broad” codifications of common law preclusion principles. The Court noted that 35 USC § 315(c) prevents third parties that successfully requested inter partes re-examination, when sued for patent infringement, from asserting “the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings”. The Court also noted that 35 USC § 317(b) provides for the converse, estopping “further validity challenges—using inter partes reexamination—to the specific claims the validity of which had been previously resolved against the requester” in district court or in a prior inter partes re-examination.
Vicor argued that Congress evinced its intent to foreclose common law estoppel in certain exceptions to §§ 315, 317 and 4607 for challenges based on newly discovered prior art or information, and in 35 USC § 312(a) (pre-America Invents Act) that “[t]he existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the [US Patent & Trademark] Office or considered by the Office.”
The Federal Circuit did not see any discord between reexamination and common law estoppel since preclusion would not apply to newly discovered prior art, and preclusion based on prior art previously cited to or considered by the PTO would only be appropriate when “actually litigated”—in which case, such assertion could not raise a “substantial new question of patentability.”
Ability to Present and Rebut Arguments and Evidence
Regarding the “essential elements of adjudication” factors, the Court noted that the re-examination procedures afforded Vicor the opportunity “to present evidence and legal argument in support of [its] contentions and fair opportunity to rebut evidence and argument by [SynQor]” as required by the Restatement (Second) of Judgments. Citing its decision in Affinity Labs, the Court stated that “[i]n contrast to ex parte reexamination, Congress specifically provided the third party reexamination requester the opportunity to fully participate in the inter partes proceeding.”
The Federal Circuit explained that the provisions for the requester to provide both argument and evidence distinguished the “examinational” nature of inter partes re-examination from the initial examination process or ex parte re-examination, such that even if inter partes re-examination is not formally adversarial like IPR, inter partes re-examination still provides adequate adversarial participation for both patent owner and requester, to facilitate a reasoned judgment on the issue before a neutral factfinder.
In contrast to Judge Dyk’s dissent (discussed below), the majority did not find cross-examination a necessary element of administrative adjudication.
Applicability of Issue Preclusion
In In re Freeman, the Federal Circuit explained that “[i]ssue preclusion is appropriate only if: (1) the issue is identical to one decided in the first action; (2) the issue was actually litigated in the first action; (3) resolution of the issue was essential to a final judgment in the first action; and (4) plaintiff had a full and fair opportunity to litigate the issue in the first action.”
The Federal Circuit found that the issue regarding the compatibility of Cobos’ and Steigerwald’s prior art circuits due to their switching frequencies was the same as that decided in the ‘290 and ‘702 patent re-examinations. Under B & B Hardware and the Restatement, an “issue” must be understood broadly enough “to prevent repetitious litigation of what is essentially the same dispute” (emphasis added).
Accordingly, the Court found that the Board was precluded from finding that an artisan would combine Steigerwald and Cobos, even if new or unavailable evidence exists or was presented in the later re-examination proceeding, and vacated the Board’s decision as to those claims.
Mootness of Appeal as to New Claims
The Court also agreed with SynQor that it lacked jurisdiction to consider the Board’s decisions on the new ‘190 claims because the expiration of the ‘190 patent rendered the patentability of those claims moot, and vacated the Board’s decision regarding the new claims.
In his dissenting opinion, Judge Dyk termed inter partes reexamination proceedings as “examinational (or inquisitorial),” and not adjudicatory. Judge Dyk stated that inter partes re-examinations do not include court-like adjudicatory procedures and thus do not satisfy the requirements of B & B Hardware, such that collateral estoppel should apply. For example, in inter partes re-examination, the examiner controls the course of the proceeding, rather than the requester, including being able to search for additional prior art references, formulating new rejections not advanced by the third-party requester, and initiating challenges to new claims. Judge Dyk drew greater comparisons to patent examination than to district court proceedings, and pointed out the typical absence from such proceedings of discovery and cross-examining of (particularly technical) witnesses.
Practice Note: There are very few pending inter partes reexamination proceedings, but this is still a topic to watch. Given the differing opinions at the Federal Circuit, practitioners may consider maintaining arguments, including claim preclusion, available for appeal in AIA cases.