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December 2024/January 2025: IP Portfolio Management

Navigating the Pitfalls of Parallel Patent Litigation

Mitchell M Feldhake

Summary

  • Early district court decisions, including which prior art to rely on and protective order negotiations, can impact not-yet-filed inter partes review (IPR) proceedings.
  • Practitioners should maintain consistent positions in both forums, avoiding inconsistencies in claim scope or claim construction.
  • Parties should consider the impact of an IPR on a district court trial and whether they want the PTAB findings discussed at trial.
Navigating the Pitfalls of Parallel Patent Litigation
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In 2012, patent litigation in the United States changed forever with the introduction of alternative means to challenge a patent’s validity—inter partes reviews (IPRs) and post-grant reviews (PGRs) before the newly formed Patent Trial and Appeal Board (PTAB). After a period of uncertainty, IPRs and PGRs have cemented their reputations as important components of modern-day patent litigation.

The effects of PTAB litigation extend beyond the United States Patent and Trademark Office’s (USPTO’s) walls and into federal district courts across America. A recent analysis concluded that nearly 80% of the patents challenged in IPR petitions were first asserted in district court actions. Thus, modern patent litigators must recognize and effectively manage the pitfalls often encountered when navigating district court and co-pending PTAB litigation. Litigators facing these challenges should understand the effects that decisions and arguments in one forum can have on the co-pending case.

This article discusses some of the common pitfalls and challenges that practitioners often face when asserting or defending patent infringement allegations and co-pending PTAB litigation.

Early District Court Stage

Defendants often know during the pleadings stage whether they will file a petition for an IPR or PGR. Plaintiffs, alternatively, can only guess if their opposition will file a PTAB petition. Regardless, much happens in the early stages of litigation that can be affected by the later addition of a PTAB proceeding. Here are a few common, early-stage decisions parties to a patent suit should consider if PTAB litigation might become part of the case.

Prior Art Considerations for Defendants/Petitioners

Defendants/would-be petitioners know all too well that they need prior art to support their invalidity position. Yet, 35 U.S.C. § 315(e)(2) prohibits a defendant/petitioner from asserting that a patent claim is “invalid on any ground that the petitioner raised or reasonably could have raised during [an] inter partes review.” So, parties are often left with a difficult decision: In which forum should a party rely on their best prior art?

If a party’s best prior art is not eligible for use in an IPR or PGR, it is an easy decision to advance the best prior art in the district court. However, if their best prior art includes patents or printed publications, parties should give the choice of forum more thought. Opinions differ as to whether the PTAB or a district court is more likely to invalidate a patent. Parties whose best prior art is patents or printed publications should make their own assessment and advance their best prior art in the forum they believe is most likely to invalidate the challenged patent. As part of their assessment, defendants should research their district and judge to determine if that judge has any plaintiff- or defendant-friendly tendencies.

Parties may also choose to rely on the same prior art across both forums. Practitioners considering this approach should start by researching precedent in their district for the application and scope of § 315(e)(2). If the district applies § 315(e)(2) in a relaxed manner and the trial schedule is not an issue, parties may be able to advance the same prior art in both forums. In these relaxed districts, parties may overcome § 315(e)(2) while relying on the same prior art by adding an additional reference to their district court grounds that was not relied on in any IPR ground. Stricter forums and judges might require non-patent or non-printed publication prior art in every ground advanced in the district court. As a general practice tip, it is a good strategy to include product prior art in each district court ground. That way, parties may argue to the court that their grounds could not have been raised during a PTAB proceeding.

Depending on the anticipated trial schedule, it may also be best practice for a defendant/petitioner to rely on product prior art in the district court. Such a distinction permits a party to file a Sotera stipulation with the PTAB and overcome a plaintiff/patent owner’s Fintiv argument. If a party is unable to file a Sotera stipulation, a Sand stipulation is a good alternative.

If the defendant/petitioner is not confident that their prior art will invalidate the asserted patent, another option is to find prior art that closely resembles the accused product. Relying on prior art similar to the accused product may lure patent owners into arguments that disclaim their district court infringement positions. Patent owners should carefully investigate the ownership, application, and product marking histories of any prior art that appears similar to the accused product. Such an investigation can help patent owners to understand the relationship between the prior art and accused products, ideally reducing the risk of relevant disclaimer.

Takeaway: Practitioners must decide in which forum to advance their best prior art. It is good practice to advance different prior art grounds in the two forums, and, depending on the trial schedule, best practice to advance distinct prior art to have the option to file a Sotera stipulation.

Protective Order Negotiations

District court protective orders are usually negotiated during the early stages of a case and can have significant impacts on PTAB proceedings. Both parties should consider the implications that a district court protective order could have on a PTAB proceeding.

For example, district court protective orders may contain prosecution bars that qualify IPRs and PGRs as prosecution. Such a protective order could create challenges for a law firm that wishes to represent its client in both forums. There are potential pros (continuity in team, efficiencies in time spent learning issues, etc.) and cons (missing the benefit of a fresh set of eyes, cost depending on the firm, etc.) to having the same law firm handle the two proceedings. District court counsel should consider whether they want the option to represent their client before the PTAB and advocate for a protective order that reflects their decision.

As another example, district court protective orders may include provisions governing how district court discovery can be used in PTAB (or other) proceedings. District court discovery usually reveals much more than PTAB discovery, and parties should consider how to leverage this information. Documents produced during district court discovery could help a patent owner argue objective indicia of nonobviousness (such as failure by others or industry recognition) or aid a petitioner when describing the state of the art or knowledge in the industry at the time of the invention. Further, district court inventor depositions could help either party, depending on the testimony elicited during the deposition. Although it is often unknown during protective order negotiations whether discovery will reveal helpful or harmful information, parties should consider the anticipated effects of such discovery and advocate for protective order provisions that will best serve their client.

Takeaway: District court protective orders can influence counsel’s ability to represent their clients before the PTAB. Counsel should advocate for district court protective order provisions that will allow for the best representation of their client’s interests.

Markman through Summary Judgment Stages

District court claim construction arguments, contentions, and expert reports are some common stages of district court litigation where parties may take positions that contradict their PTAB positions. Consistency is key to avoid an argument by an opponent that a party is advocating for conflicting positions.

Markman/Claim Construction

In recent years, the PTAB has steadily followed Federal Circuit precedent that the PTAB need not construe a claim term if the construction is not material to the parties’ disputes. Thus, for terms related to district court specific disputes, parties can usually persuade the PTAB that terms at issue in the district court do not need to be construed by the PTAB. Some claim construction disputes can arise in district court but not before the PTAB due to the PTAB’s ability to only hear validity issues (and not infringement issues).

However, successfully navigating claim construction before the PTAB does not mean a party is in the clear in district court. Persuading a district court that a term construed by the PTAB has no impact on proceedings may prove more difficult. Parties often face this difficulty because of the similarities among the validity issues before the PTAB and the district court. Additionally, a term construed by the PTAB might affect the scope of the claims from an infringement perspective. Practitioners should research their court’s and judge’s tendencies, as some courts, depending on the facts, do not feel bound by PTAB constructions.

Takeaway: Pursuing a claim construction in one forum but not another is not always problematic. However, parties should be prepared to explain any differences in terms offered for claim construction.

Expert Reports

As a plaintiff works with its expert to describe its trial-ready infringement theories, the plaintiff should keep in mind any disclaimer that may have occurred during a PTAB proceeding. Advancing inconsistent positions before two separate forums is not a good look, so it is best practice for a plaintiff/patent owner to maintain the same claim scope across the district court and PTAB proceedings.

Plaintiffs should expect a savvy defendant to argue to a district court that the plaintiff disclaimed infringement positions before the PTAB. Defendants will likely make this argument regardless of whether, in the plaintiff’s view, PTAB arguments actually rose to the level of disclaimer. Thus, when drafting PTAB arguments, plaintiffs/patent owners should avoid any statements that could be taken out of context. Plaintiffs should be prepared to clearly articulate to a district court why their arguments do not disclaim any infringement theories.

One way defendants can make things difficult for a plaintiff is by choosing prior art similar to the accused products. Doing so can force patent owners to make distinctions that defendants can argue constitute disclaimer. Another way is to carefully review the plaintiff/patent owner’s PTAB submissions for statements that can be argued as inconsistent in the district court proceedings. This will force a plaintiff to explain why their positions are not inconsistent, and potentially persuade the judge that plaintiffs are being inconsistent.

Takeaway: Parties usually provide their detailed infringement/noninfringement and invalidity/noninvalidity theories in expert reports. Plaintiffs should be careful to not create any disclaimer issues while drafting arguments supported by expert reports, and defendants should be on the lookout for such disclaimers.

Expert Depositions

Expert depositions in district court proceedings often require different approaches than expert depositions in PTAB proceedings.

PTAB depositions normally focus on tailored, cross-examination style questions since the expert does not usually have the opportunity to further elaborate on their report in front of a fact finder. Targeted cross-examination style questions limit the opportunities for the expert to fill a blank space in the record or clarify any lacking opinions in their report. If applicable to the arguments, it is also useful to “box out” a petitioner’s expert during the patent owner response stage deposition to preclude the expert from injecting new opinions into their reply declaration.

In contrast, district court depositions often have a broader scope. District court deposition questions frequently seek admissions for summary judgment, material for an effective cross-examination for trial, and/or a better understanding of the expert’s opinions. Questions targeting summary judgment admissions can be framed similarly to PTAB deposition questions, while the other two question categories are regularly framed differently. For example, lines of questions seeking to clarify the expert’s opinions might start with open-ended questions and transition to more targeted questions. As another example, parties might spend more time probing an expert’s qualifications in district court than in the PTAB—just because an expert passes Kyocera’s requirements does not necessarily mean a jury will be persuaded by the applicability of an expert’s prior experience.

Takeaway: Expert depositions in district courts and the PTAB require different approaches. Parties should tailor the scope of their questions to best serve the arguments for the deposition’s forum.

Summary Judgment and Other Dispositive Motions

Dispositive motions, such as summary judgment, afford both parties the opportunity to limit the district court case with positions taken and arguments made before the PTAB.

Plaintiff/patent owner disclaimers likely arise during the patent owner response stage, potentially leaving the defendant/petitioner time to raise these issues on summary judgment. Since district courts have the freedom to construe claim terms during this stage, disclaimer and claim construction positions previously taken before the PTAB are ripe for summary judgment. Summary judgment is an opportune time for defendants to argue disclaimer to persuade the judge that defendants cannot infringe as a matter of law.

Plaintiffs, on the other hand, should consider whether they can knock out any of a defendant’s district court invalidity grounds by moving for summary judgment on § 315(e)(2) issues. If a defendant advanced a ground through the expert discovery stage that relied on only patents and/or printed publications, that ground could be worth moving on.

Takeaway: It is important to remain consistent before the district court and PTAB while developing an infringement/invalidity case. At summary judgment, defendants might frame PTAB arguments as infringement scope disclaimers, while plaintiffs might eliminate the invalidity grounds available at trial through § 315(e)(2) arguments.

District Court Trial

If the case has made it to trial, earlier decisions will now affect the shape of the trial, and parties must grapple with whether they want the jury to hear about the existence (and/or outcome) of a PTAB proceeding.

Expert Testimony at Trial

If a case reaches this stage, the expert’s testimony in front of a jury might be the most important assignment the expert undertakes. Thus, parties must decide whether they wish to use the same expert in both forums, and parties should know the two forums often reward different expert skill sets.

There are many benefits to using the same expert in both forums: reduced cost by spending less time educating the expert on issues, consistency in opinions across forums, and the possibility of telling a jury that the PTAB agrees with the expert’s conclusions. However, there are also drawbacks to using the same expert: subjecting the expert to at least 14 hours of deposition time, exposing the expert to deposition and cross-examination about any difference in opinions or prior art, and subjecting the expert to awkward cross-examination and deposition questions if the PTAB disagrees with or does not credit the expert.

Further, parties should consider the different characteristics that make an ideal district court expert as compared to an ideal PTAB expert. PTAB proceedings typically have a more limited record, and experts usually do not appear before a fact finder. Therefore, creating a clean transcript based on a limited record with few to no admissions is critical in PTAB depositions.

District court proceedings, to the contrary, often have sprawling records that sometimes are injected into validity arguments (witness testimony about state of the art, inventor stories, jury-appealing narratives, etc.). A district court expert must also appear before a jury and be able to tell an engaging story, meaning a different skill set (though not mutually exclusive from the PTAB skill set) is required.

Takeaway: Different skills are required to be the ideal expert before the PTAB or a district court. Parties should decide early, and at least before their first expert report is due, whether they will use the same expert in both proceedings.

Admissibility of PTAB Findings at Trial

District courts have broad discretion as to the admissibility of evidence offered at trial, and districts have varying approaches to the admissibility of PTAB findings. Parties should consider whether it serves their clients’ best interests to have PTAB findings excluded. If a party seeks to exclude discussions of PTAB proceedings, that party should consider filing motions in limine on the topic.

If the PTAB maintained validity of all challenged claims, a defendant/petitioner may want to move to exclude discussions of PTAB proceedings. Successfully excluding such evidence would bar the plaintiff from telling a jury that the USPTO reviewed the patent twice and found it valid twice.

To the contrary, if the PTAB found the majority of claims invalid, a plaintiff/patent owner may move to exclude all discussions of PTAB proceedings. This could prevent a defendant from arguing that the USPTO determined that similar claims and/or claims from the same patent were invalid, so the jury should reach the same conclusion in light of additional evidence that was not permitted at the PTAB (e.g., product prior art).

And from both parties’ perspective, there may be a benefit to not being sidetracked by discussions about parallel proceedings. If either party believes their case is straightforward and wishes to keep the jury narrowly focused on specific issues, it could harm that party’s trial presentation if they must respond to discussions about the relevance (or lack thereof) of PTAB proceedings.

Takeaways: Motions in limine can limit whether evidence regarding PTAB proceedings is admissible at trial. If parties make it to the pretrial stage, they should consider whether they want the jury to learn about the existence and outcome of relevant PTAB proceedings.

Conclusion

Every case that involves co-pending PTAB proceedings presents its own unique challenges and stumbling blocks. The above tips address only a few of the issues parties should be aware of when navigating a district court case and co-pending PTAB litigation. Equipped with these tools, parties can favorably shape the outcomes of their co-pending litigation.

©2024. Published in Landslide, Vol. 17, No. 2, December 2024/January 2025, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

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