Network-1 Technologies, Inc v. Hewlett-Packard Co., No. 18-2338 (Fed. Cir. Sep. 24, 2020)
In Network-1, the Federal Circuit held that a joined party to an IPR proceeding is not statutorily estopped from challenging the validity of a patent in district court on grounds that an original IPR petitioner could have raised, since a joined party cannot bring new grounds to the IPR proceeding.
Network-1 alleged HP infringed on a patent relating to electronic devices accepting remote power over ethernet. A second accused party, Avaya, filed an IPR petition challenging Network-1’s patent. HP filed its own IPR petition with a motion to join Avaya’s partially-instituted IPR. The HP petition and motion to join were denied for having additional grounds not included in the Avaya IPR. But thereafter, HP filed a new petition on the same grounds as the Avaya IPR, and HP’s renewed motion to join was granted. The PTAB issued a final written decision finding that none of the challenged claims were invalid, and Network-1 continued with the district court suit against HP.
The Patent Act contains an estoppel provision to prevent petitioners in inter partes review from relitigating in district court matters that were finally decided by the Board. A petitioner in IPR is barred from later challenging any claim in court on grounds that were raised in IPR, or reasonably could have been raised during that IPR.
In the district court, HP argued that the asserted claims were rendered obvious by the public use of common power over ethernet systems and several other patents that were not raised in the IPR proceeding. The case was tried before a jury, which found Network-1’s claims to be invalid. In response, Network-1 moved for judgment as a matter of law. The district court granted Network-1’s motion, concluding that because of HP’s joinder to the Avaya IPR, HP should have been estopped from raising new invalidity grounds. HP appealed to the Federal Circuit.
The Federal Circuit agreed with HP, and vacated the district court’s grant of JMOL. Because the Patent Act’s joinder provision for IPR does not permit the joining party to bring new grounds into the proceeding, the new grounds that HP later asserted in district court could not reasonably have been raised in the IPR in which it participated. The court determined that HP was only estopped from raising the grounds instituted in the Avaya IPR.
Key Takeaway:
Statutory estoppel bars an IPR petitioner from later challenging a patent on grounds it previously raised, or reasonably could have raised, in IPR. However, because parties that join IPR proceedings filed by another cannot present new grounds of invalidity, the joined party is only estopped from relitigating the specific grounds of invalidity raised during the proceedings.
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