Contributors: Akin Gump Strauss Hauer & Feld LLP
In IPR, No Collateral Estoppel Based on § 101 Ruling in District Court
by Karina J. Moy & Rubén H. Muñoz
Dec. 17, 2021
Patent Trial and Appeal Board, 35 U.S.C. § 101
A panel of the Patent Trial and Appeal Board instituted inter partes review of a patent, rejecting the patent owner’s assertion that the petitioner’s obviousness arguments were collaterally estopped by a district court’s ruling on patentable subject matter.
The patent at issue claims a gaming system network and method for delivering gaming media. In a related patent infringement case, the District of Nevada held the patent invalid as directed to an abstract idea under 35 U.S.C. § 101.
In a parallel IPR proceeding, the petitioner asserted that the challenged claims were invalid as obvious under 35 U.S.C. § 103. In its preliminary response, the patent owner argued that the petitioner was collaterally estopped from commencing IPR because the petitioner had already won a judgment of invalidity in district court. Although an appeal of that decision is pending, the patent owner argued that pendency of an appeal has no bearing on the issue preclusion analysis.
To evaluate the patent owner’s collateral estoppel argument, the PTAB considered whether: (1) the prior action presented an identical issue; (2) the prior action actually litigated and adjudged that issue; (3) judgment in that prior action necessarily required determination of the identical issue; and (4) the prior action featured full representation of the estopped party.
The PTAB agreed with the petitioner that none of the required elements of collateral estoppel were met because the district court’s invalidity holding was based on § 101, whereas only 35 U.S.C. §§ 102 and 103 arguments can be considered in an IPR. The district court action therefore did not present, or require determination of, an identical issue. Accordingly, the district court action did not actually litigate or adjudge the § 103 issues, or feature full representation of the petitioner on its § 103 arguments. The PTAB likened the facts and reasoning here to those in another recent IPR proceeding, in which the PTAB declined to exercise its discretion to deny institution based on a district court’s § 101 ruling in a parallel proceeding.
Upon rejection of the patent owner’s collateral estoppel argument, the PTAB analyzed the petitioner’s obviousness arguments and instituted the IPR.
Practice Tip: Patent challengers who have successfully invalidated a patent in district court should consider raising unaddressed invalidity grounds that are not subject to collateral estoppel in a given PTAB proceeding. This dual-pronged approach could provide patent challengers with alternate, and independently sufficient, bases to invalidate the claims of a target patent.
Playtika Ltd. v. NexRF Corp, IPR2021-00951, Paper 14 (PTAB Dec. 6, 2021).
PTAB Precedential Opinion Panel: Wired Funds Are Paid When Fedwire Transfer Is Complete
by Karina J. Moy & Rubén H. Muñoz
Patent Trial and Appeal Board, Inter Partes Review
Jan. 31, 2022
More than a year after its last precedential designation, the Precedential Opinion Panel (POP) of the Patent Trial and Appeal Board has held that Fedwire confirmation of payment constitutes sufficient evidence that the required fee for a petition for inter partes review has been paid. The POP in this IPR proceeding consisted of the acting Director of the U.S. Patent and Trademark Office (USPTO) (who is also the Commissioner of Patents), the Chief Administrative Patent Judge, and the Deputy Chief Administrative Patent Judge.
On December 16, 2020, one day shy of the one-year statutory bar, the petitioner filed a petition for IPR and initiated a wire payment of the required filing fee to Treasury NYC, the USPTO’s designated bank, using the Federal Reserve Fedwire System. Although the petitioner received immediate confirmation from its bank that the wire transfer was completed, the USPTO informed the petitioner that it had not received the filing fee on either that day or the following. The PTAB’s internal records reflect that the payment was received on December 18, 2020, and the petition was accorded a filing date of the next business day, December 21, 2020. Accordingly, the petition was time-barred, having been filed more than one year after the patent owner served the petitioner with a district court complaint alleging infringement of the challenged patent.
The petitioner filed a motion to correct filing date, and a majority of the three-judge panel of the PTAB denied the motion and denied institution of IPR. The lone dissenting judge observed that the PTAB’s decision penalized the petitioner for the government’s delay in transferring payment.
The petitioner requested rehearing and review by the POP. The POP granted review on the issue of whether Fedwire confirmation of payment constitutes sufficient evidence of payment under 35 U.S.C. § 312(a) and 37 C.F.R. § 42.103(a), which require that a filing fee “accompany” a petition for IPR.
The POP vacated the majority’s denial of the motion to correct filing date, stating that by December 16, 2020, the petitioner had complied with the USPTO’s published instructions for sending a wire payment through Fedwire. The POP observed that federal regulations repeatedly confirm that payment to a beneficiary coincides with receipt and acceptance of the full amount of payment by the beneficiary’s bank. Accordingly, the POP concluded that the filing fee was paid when Treasury NYC received the full amount of the order, and the fee “accompanied” the IPR petition as required by 35 U.S.C. § 312(a) and 37 C.F.R. § 42.103(a). The POP therefore accorded the petition a filing date of December 16, 2020 and vacated the PTAB’s decision denying institution of the IPR as time-barred.
Nonetheless, the POP denied the timely-filed petition because the Federal Circuit in a parallel proceeding had recently affirmed that all challenged claims in the asserted patent were invalid under 35 U.S.C. § 101. The POP considered it highly unlikely that the Federal Circuit’s judgment would be overturned and thus declined to dedicate PTAB resources to assessing additional grounds of unpatentability.
Practice Tip: Among the various forms of payment accepted by the USPTO, wire transfer via Fedwire payment is deemed successful by the PTAB upon Fedwire payment confirmation. Therefore, when planning wire payments for post-grant review proceedings, practitioners using Fedwire payment can rely on the Fedwire system’s confirmation as the USPTO’s formal acceptance of those funds.
Toshiba Am. Elec. Components, Inc. v. Monument Peak Ventures, LLC, IPR2021-00330, Paper 19 (PTAB Jan. 14, 2022).