Locke Lord QuickStudy: Don’t Expect to Rely on Inter Partes Review Institution Decisions by the PTAB

Locke Lord LLP
December 22, 2015

As the number of petitions for inter partes review (IPR) increases, the desire to utilize decisions of the Patent Trial and Appeal Board in litigation has become a topic of interest in the world of patent litigations. Under 35 U.S.C. § 315(e)(2), “[t]he petitioner in an inter partes review of a claim in a patent . . . that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” Accordingly, the effect of a final written decision in an IPR proceeding on a district court litigation is limited to precluding the petition from raising the same arguments in another venue. It should be noted, however, that final written IPR decisions may be considered by district courts, but are not binding authority. See, e.g., Pfizer Inc. v. Apotex Inc., 731 F. Supp. 2d 741, 751 (N.D. Ill. 2010) (“[F]ederal courts treat BPAI decisions as persuasive, non-binding authority. . . . Accordingly, consistent with the apparent weight of authority, the Court will consider the BPAI decision as persuasive authority.”).

Before reaching the point of a final written decision on the merits, the PTAB must decide whether or not to institute the IPR, i.e., to determine whether the petitioner demonstrated that “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” 35 U.S.C. § 314(a). But, can that institution decision be used in the concurrent litigation as persuasive authority? Three years after the America Invents Act introduced IPRs, Courts are thus far generally answering that question with a “no.”

On December 15, 2015, the United States District Court for the District of Delaware issued an order denying defendants’ motion to modify the court’s claim construction order based on a PTAB decision denying institution of an IPR. See Adidas AG v. Under Armour, Inc. et al, C.A. No. 14-130, slip op. (D. Del. Dec. 15, 2015). The court, in a footnote, explained that the “PTAB’s choice not to institute an IPR is not the type of adjudication that leads to issue preclusion.” Id. at 2, n.1. This is because the PTAB had not reached a final decision on the claim construction and did not provide any analysis in its institution decision as to why it adopted a certain claim construction. See id. Indeed, noting that the institution decision is a “preliminary proceeding,” the court stated that it “is not bound by a preliminary claim construction used by the PTAB for the limited purpose of denying an IPR request.” Id.   

The Adidas decision falls in line with the decision in Wisconsin Alumni Research Foundation v. Apple, Inc., C.A. No. 14-062, 2015 WL 5704356 (W.D. Wis. Sept. 29, 2015) where the Western District of Wisconsin determined that an IPR institution decision would not be admissible because allowing the decision into evidence would be overly prejudicial. In Wisconsin Alumni, Apple initiated an IPR proceeding which was denied by the PTAB. Id. at *5. Wisconsin Alumni argued that the “PTAB’s decision is highly probative of validity” of the patent-at-issue while Apple argued that the decision was of “minimal probative value,” would cause unfair prejudice, and possibly mislead or confuse the jury. Id. The Wisconsin Alumni court agreed with Apple and declined to admit the IPR institution decision into evidence because “any probative value of this evidence is substantially outweighed by the risk of unfair prejudice, as well as the risk of jury confusion.” Id. at *7. The court further explained:

The IPR proceeding is subject to different standards, purposes and outcomes than both the original prosecution and this court proceeding. Not only is PTAB’s decision not binding in these proceedings, the law is not even clear on whether and how much the PTAB’s decision denying Apple’s request for review should affect the weight given to the two prior art references presented during the IPR proceedings. . . . [T]here is a great risk that the jury would conclude, incorrectly, that the Patent Office has twice held the ‘752 patent is nonobvious over prior art. Such a conclusion would likely unfairly prejudice the jury against Apple before being asked to decide the same question. 

(emphasis in original).

The Adidas and Wisconsin Alumni decisions are indicative of how courts are viewing the probative value of IPR institution decisions – minimal in comparison to potential prejudice. Parties to litigation seeking to rely on such preliminary findings of the PTAB should be cognizant of decisions such as Adidas and Wisconsin Alumni, as such reliance may quickly become the subject of a motion in limine.