An important case being argued next week is Network-1 Technologies, Inc. v. Hewlett-Packard Company. This case involves an appeal and a cross appeal. While the appeal presents run-of-the-mill claim construction disputes, the cross-appeal presents the question of whether the district court erred in concluding that HP was estopped from presenting an obviousness challenge because HP could have but did not raise that challenge during a prior inter partes review. This is an important question, because its resolution requires interpretation of 35 U.S.C. § 315(e)(2), which bars any assertion “that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”
In its opening appeal brief, Network-1 argues that “[i]f the district court’s construction of either ‘low level current’ or ‘main power source’ is erroneous, then the judgment should be reversed and the case remanded for further proceedings based on the proper constructions.” Predictably, Network-1 argues both constructions are incorrect.
In its principal brief, HP argues that “[t]he verdict of non-infringement is supported by conclusive evidence irrespective of the correctness of the constructions challenged by Network-1” and “[t]he challenged claim constructions are in any event correct.” But HP also presents arguments in support of its cross-appeal. For example, HP argues that “[t]he district court erroneously concluded that HP ‘reasonably could have raised’ the invalidity ground before the PTAB.” In support of its position, HP points out that, “[a]fter instituting review on a limited number of grounds, the PTAB exercised its discretion not to institute on any other grounds” and “rejected HP’s efforts to raise additional grounds without reaching the substance of those grounds.”
An amicus brief highlights the importance of the cross-appeal. Filing its amicus brief in support of HP, T-Mobile USA, Inc. makes two arguments. First, T-Mobile argues that more guidance is needed as to the “reasonably could have raised” standard of § 315(e). It also argues that the PTAB and district courts “should apply a holistic test that accounts for the various factors that dictate whether a ground ‘reasonably could have [been] raised.’” One of these factors is whether the petitioner “had the ability and reasonable motivation to develop and assert in the IPR th[e] unasserted ground.” On this factor, T-Mobile argues that, “[b]ecause HP effectively was barred from asserting additional grounds for procedural reasons . . . , it should not have been estopped from asserting the additional grounds in litigation.”
Network-1’s response and reply brief makes many arguments in response to HP’s cross-appeal. On the merits of the district court’s application of § 315(e)(2), Network-1 argues that “if a petitioner makes the tactical choice to limit the grounds raised in its petition to only those likely to succeed before the PTAB, this does not avoid estoppel on any ground that was withheld from the petition.” Moreover, Network-1 rejects HP’s argument “that because HP’s IPR Petition included a request that its Petition be joined with Avaya’s previously instituted petition, HP’s Petition could not have reasonably raised grounds that were not already part of the instituted IPR.” According to Network-1, “[n]o statute or rule limits a petition with a request for joinder to only the identical grounds already asserted in an existing proceeding.” Moreover, Network-1 contends that HP waived any argument that IPR estoppel violates due process to the extent it bars matters a party did not have a full and fair opportunity to litigate.
HP’s reply brief in support of its cross-appeal argues, among other things, that “[t]he PTAB made abundantly clear that it would not grant joinder and institution for any petitions filed after the one-year bar had expired if they included grounds not already pending in the Avaya IPR, and thus HP could not reasonably have raised the Fisher Patents Ground.” In short, HP’s position is that “where the PTAB limits joinder parties to grounds previously instituted, estoppel cannot bar litigation of other grounds.”
The Federal Circuit’s resolution of this dispute regarding the estoppel effect of § 315(e) may of course have broad ramifications in future cases where parties raise similar disputes. Perhaps more importantly, however, the decision in this case may also impact parties’ decisions whether and how to file petitions for inter partes review, particularly follow-on petitions where motions will be filed to join prior inter partes review proceedings. The broader the estoppel, the less likely parties will file inter partes review petitions. But, if they do file, the broader the estoppel the more likely their petitions will include more invalidity theories, even in follow-on petitions where motions will be filed to join prior inter partes review proceedings. A narrower estoppel would presumably generate contrary implications.