In a significant development for patent litigants, the Federal Circuit in Ingenico Inc. v. IOENGINE, LLC, affirmed an important limitation on the scope of IPR estoppel under 35 U.S.C. § 315(e)(2). Specifically, the court held that estoppel stemming from inter partes reviews (IPR) applies only to grounds based on patents and printed publications—not to patents or printed publications evidencing other grounds that could not have been raised during the IPR.
This ruling upholds a Delaware jury verdict that invalidated IOENGINE’s flash drive patents based on device prior art, despite Ingenico having previously pursued IPR on the patent claims. The decision resolves a split among district courts about IPR estoppel and the proper interpretation of the term “ground” in the estoppel provisions of the Patent Act. The decision reinforces statutory boundaries and offers clarity on how estoppel provisions interact with district court litigation strategies.
The Statutory Framework: What § 315(e)(2) and § 311(b) Say
35 U.S.C. § 315(e)(2) estops a petitioner from asserting in district court “any ground that the petitioner raised or reasonably could have raised during that inter partes review.” The statutory aim is to prevent piecemeal litigation and encourage efficient resolution of patent validity through the PTAB.
But 35 U.S.C. § 311(b) limits what art can be raised in an IPR: “only on the basis of prior art consisting of patents or printed publications.” This limitation, along with the meaning of “ground,” became central in Ingenico.
The Case: Ingenico v. IOENGINE
Ingenico filed a declaratory judgment action against IOENGINE and filed IPR petitions challenging IOENGINE’s patents related to secure portable devices (e.g., USB flash drives). The IPRs resulted in a finding that certain of the challenged claims were unpatentable. In the district court litigation, Ingenico ultimately prevailed at trial by invalidating the remaining claims based on prior art that included sale or public use of physical devices—evidence that could not have been raised in an IPR.
IOENGINE argued that such invalidity grounds were barred by IPR estoppel because the device evidence was entirely cumulative and substantively identical to accompanying instructions and screenshots, which IOENGINE argued are printed publications that reasonably could have been raised during the IPR. The district court rejected this argument, and the Federal Circuit affirmed.
The Federal Circuit’s Ruling: Estoppel Stops at Grounds Based on Printed Publications
The Federal Circuit focused on the meaning of “ground” in § 315(e)(2), noting that § 315(e)(2) must be read in conjunction with § 311(b), which defines the universe of permissible IPR grounds. The panel emphasized that under 35 U.S.C. § 311(b), Congress intentionally limited an IPR’s scope to invalidity challenges based on “prior art consisting of patents or printed publications.” Accordingly, grounds not based on patents or printed publications (e.g., grounds based on device art and the like) are not within the scope of IPR estoppel.
But what about patents and printed publications relating to the device used to challenge the claims in the district court? The panel addressed this, noting that a “ground” is not the prior art asserted, and Congress under § 315(e)(2) only precluded petitioners from asserting invalidity in district court based on a “ground” that could have been asserted in the IPR. The Federal Circuit concluded that Congress did not preclude a petitioner from using the same prior art raised in an IPR. Indeed, the Federal Circuit stated: “IPR estoppel does not preclude a petitioner from relying on the same patents and printed publications as evidence in asserting a ground that could not be raised during the IPR, such as that the claimed invention was known or used by others, on sale, or in public use.” (emphasis added)
Thus, the Federal Circuit’s opinion expressly limits IPR estoppel to grounds, not prior art, that could have been raised in an IPR. The court made clear that IPR estoppel does not extend to:
- System prior art,
- Physical devices,
- Patents and printed publications as evidence in asserting grounds not eligible for IPR trials, or
- Any other prior art outside the statutory scope of the IPR.
Practical Implications for Patent Litigation
Ingenico reaffirms that device and system prior art are available as a basis for challenges in the district court. Ingenico also confirms that patents and printed publications are fair game in court, at least as evidence supporting other grounds that could not be raised during the IPR. And nothing in this decision upsets the other statutory requirements that must be met for IPR estoppel to apply, including that the IPR must have resulted in a final written decision.
Ingenico is consistent with the Federal Circuit’s treatment of applicant admitted prior art (AAPA), which the Federal Circuit previously noted may be used to support an IPR petition provided it is not the basis of a ground in the petition.
District courts and litigants are now on firmer ground when assessing the limits of IPR estoppel. As before, practitioners should determine which arguments are IPR-eligible and which must be reserved for litigation, ensuring they don’t unintentionally overcommit—or underplay—their hand in either forum. But now Practitioners will have more confidence when relying on patents and printed publications to support their invalidity positions around on sale, public use and other grounds not permissibly raised in an IPR proceeding.