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In MCM Portfolio LLC v. Hewlett-Packard Co., the Federal Circuit affirmed the constitutionality of inter partes review (IPR) proceedings.  812 F.3d 1284, 1291-92 (Fed. Cir. 2015).  In doing so, the Federal Circuit explained that Congress created IPRs to serve “an important public purpose—to correct the agency’s own errors in issuing patents in the first place.”  Id. at 1290.

Under 35 U.S.C. § 325(d), however, the Patent Trial and Appeal Board (PTAB) may decline to institute review if the Patent Office already considered the prior art or arguments presented in a petition.  The statute provides that the PTAB, in determining whether to institute review, “may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office.”  Therefore, § 325(d) may create an unofficial form of Patent Office “estoppel” for petitioners, leading to the situation where some perceived errors by the Patent Office may not be correctable.

Panels of the PTAB have applied their discretion under § 325(d) differently when addressing petitions that rely on prior art or arguments considered during ex parte reexamination of a patent.  In ex parte reexamination proceedings, after the filing of the initial request, only the patent owner can interact with the examiner to discuss the patentability of the claims in view of the applied prior art references.  A third party requester may not comment on the patentability of the claims in an ex parte reexamination proceeding once substantive examination has begun.  See 37 C.F.R. § 1.535.  Despite the limited interaction afforded to third party requesters, the PTAB has used prior ex parte reexamination proceedings as a basis for exercising its discretion under § 325(d) to deny institution.

For example, in Front Row Techs., LLC v. MLB Advanced Media, L.P., IPR2015-01932, Paper 7 (PTAB Mar. 25, 2016), the panel exercised its discretion under §325(d) to deny institution for an unpatentability challenge on the basis that the petitioner asserted the same combination of references that was considered during an ex parte reexamination of the patent requested by the petitioner.  During the reexamination, however, the patent owner amended the claims on two different occasions in order to overcome the combination of references asserted in the IPR petition.  Id. at 8-9.  In its IPR petition, the petitioner requested the PTAB to take a second look, arguing that the reexamination Examiner overlooked relevant teachings of the references in determining the patentability of the claims.  The panel, however, indicated that the “Petitioner effectively has asked us to reconsider the Office’s decision to issue a Reexamination certificate including revisiting the Examiner’s analysis and findings that are supported, upon our review, by sound reasoning and related evidentiary underpinnings.”  Id. at 15.  The panel declined to take a second look at the petitioner’s new arguments in the IPR petition, notwithstanding the fact that the claims were amended twice during reexamination.  The panel indicated that “given the relative clarity of the already-considered difference in scope” between the challenged claims and asserted references, the panel “need not re-analyze those references and reconsider unpatentability issues presented previously to and considered by the Office.”  Id.

Another PTAB panel similarly denied institution for claims that were involved in an ex parte reexamination requested by the IPR petitioner.  In Volkswagen Grp. of Am., Inc., v. Joao Control & Monitoring Sys., LLC, IPR2015-01612, Paper 7 (PTAB Jan. 29, 2016), the panel exercised its discretion under § 325(d) to deny institution for seven of thirteen claims challenged in the IPR petition, because the petitioner had relied on the same prior art and substantially similar arguments that were presented in the prior reexamination of the patent.  Id. at 9-10. The panel noted that, relative to the reexamination, one challenge in the petition relied on the same combination of prior art presented in the reexamination, except that the order of the primary and secondary references was switched.  In the petition, the petitioner applied the prior art differently in the combination than was asserted in the reexamination request.  However, the panel indicated that the reexamination examiner “explicitly considered the same argument that [the challenged claims] would have been obvious over that same combination of prior art.”  Id.

On the other hand, in Cisco Sys., Inc. v. SSL Servs. LLC, IPR2015-01754, Paper 9 (PTAB Feb. 23, 2016), the PTAB panel declined to exercise its discretion under § 325(d) to deny institution for a challenge involving a combination of references for which the reexamination examiner denied reexamination.  Id. at 9.  The panel emphasized that “[t]he Examiner’s finding in the…reexamination is not binding on us.”  Id.  Further, the panel noted that the IPR petitioner did not file the reexamination request, and the petitioner challenged additional claims that were not challenged in the reexamination request.

Since § 325(d) authorizes the PTAB to deny institution of an IPR if the same or substantially the same prior art or arguments were previously considered by the Patent Office, IPR petitioners may be faced with an unofficial form of “estoppel” based on previously considered prior art or arguments.  The exercise of discretion under § 325(d) may be exacerbated given the limited circumstances under which judicial review of institution decisions may be available.  Cuozzo Speed Techs., LLC v. Lee, 579 U.S. ___ (2016).  Therefore, if an IPR petitioner believes that the Patent Office erred in determining the patentability of claims in prosecution or reexamination, the petitioner should account for the PTAB’s possible application of § 325(d) if the petitioner intends to challenge the claims with prior art or arguments that were previously considered by the Patent Office.  The petitioner may wish to consider providing an explanation as to why the Patent Office erred in allowing the claims over the previously considered prior art or arguments.