Two recent cases show that simply avoiding a post-grant review proceeding at the U.S. Patent Office’s Patent Trial and Appeal Board (PTAB) not only does not preclude a defendant in underlying patent infringement litigation in a federal district court from raising the same invalidity arguments again, it also may not even influence the court’s claim construction. Moreover, the patent owner may not be allowed to make reference to its prior success in avoiding an administrative trial at the Patent Office as well.

Although 35 U.S.C. § 315(e)(2) provides an estoppel binding on a petitioner (or any party in privity with the petitioner) from raising the same issue in federal court patent infringement litigation if they lose in a PTAB final written decision, it is increasingly clear that a PTAB decision not to institute a trial is not likely to carry much weigh in federal court.

In Adidas AG v. Under Armour Inc. et al, C.A. No. 14-130, slip op. (D. Del. Dec. 15, 2015), the District Court of Delaware denied a defendants’ motion to modify the court’s claim construction order based on a PTAB decision denying institution of an inter partes review (IPR). The patent at issue covers “location aware” fitness trackers, which Addidas has alleged are infringed by Under Armour’s fitness and exercise monitoring systems. Even though Under Armour didn’t get a trial initiated on the Addidas patent at the PTAB, it did like the way the board construed the claims and urged Judge Sleet of the Delaware federal district court to adopt the same construction.

The Delaware District Court declined to change its construction of the term “with respect to a route path.”  Judge Sleet noted in a footnote that the “PTAB’s choice not to institute an IPR is not the type of adjudication that leads to issue preclusion.” The order further noted that the PTAB had not reached a final decision on the claim construction and consequently, the Court “is not bound by a preliminary claim construction used by the PTAB for the limited purpose of denying an IPR request.”

Another recent Federal District Court Decision in September 2015 also demonstrates the limited utility of a PTAB decision not to institute a trial. In Wisconsin Alumni Research Foundation v. Apple, Inc. (C.A. No. 14-062, 2015 WL 5704356 (W.D. Wis. Sept. 29, 2015), the Federal District Court for Western District of Wisconsin held that an IPR institution decision was not admissible because allowing the decision into evidence would be overly prejudicial. After being sued by the Wisconsin Alumni Research Foundation (WARF) on a patent covering certain computer processors, Apple initiated an IPR proceeding challenging the patent-in-suit based on two separate prior art references. Apple’s petition was denied by the PTAB. WARF sought to bring this decision to the attention of the jury at trial, arguing that the “PTAB’s decision is highly probative of validity” of the patent. In contrast, Apple argued that the decision was of “minimal probative value,” and its admission would mislead or confuse the jury.

The court agreed with Apple and in response to Apple’s motion in limine prior to trial, ordered WARF not to make any reference to the IPR institution decision during trial because “any probative value of this evidence is substantially outweighed by the risk of unfair prejudice, as well as the risk of jury confusion.” 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.

WARF also filed its own motion in limine and Judge Conley, who presided over the trial, also ruled on several issues raised by WARF. Among other things, Judge Conley instructed Apple not to refer to WARF as a “patent troll,” and only permitted Apple to introduce evidence that WARF was a “non-practicing entity” during the damages phase of the trial.

At the end of trial in October, 2015, WARF succeeded before a hometown Madison, Wisconsin jury in obtaining a judgment of patent infringement against Apple – despite being barred from making any reference to its victories at the PTAB. The amount of damages is still to be decided but WARF is seeking more than $100 million dollars based on Apple’s alleged use of infringing processors in its iPhones.