Federal Circuit Narrows IPR Estoppel in District Court Proceedings

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Federal Circuit Narrows IPR Estoppel in District Court Proceedings

Federal Circuit Narrows IPR Estoppel in District Court Proceedings

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May 13, 2025

On May 7, 2025, the United States Court of Appeals for the Federal Circuit issued a pivotal decision in Ingenico Inc. v. IOENGINE, LLC, Case No. 23-1367 (Federal Circuit Opinion), clarifying the scope of Inter Partes Review (IPR) estoppel under 35 U.S.C. § 315(e)(2). The court held that IPR estoppel only applies to invalidity challenges based on patents or printed publications under 35 U.S.C. §§ 102 or 103. It does not extend to other grounds, such as public use, on-sale, or known or used by others, which cannot be raised in IPR proceedings. This ruling resolves a prior split among district courts and has significant implications for patent litigation strategies.

Background

In Ingenico Inc. v. IOENGINE, LLC, a declaratory judgment action in the District of Delaware, IOENGINE, LLC accused Ingenico Inc. of patent infringement. Ingenico challenged the validity of IOENGINE’s patent in an IPR, asserting invalidity based on prior art patents and printed publications. After the IPR, Ingenico raised additional invalidity arguments in district court, relying on a device in public use (the DiskOnKey System) and its user manual. IOENGINE argued that Ingenico was estopped from raising these arguments, claiming they were essentially duplicative of the prior art presented in the IPR. The Federal Circuit disagreed, holding that IPR estoppel does not apply to grounds that cannot be asserted in an IPR.

The decision addresses a prior split among district courts, as highlighted in Prolitec Inc. v. ScentAir Techs., LLC (Prolitec Case). Some courts applied estoppel to device art (e.g., public use or on-sale) that was materially identical to patents or printed publications, while others did not. The Federal Circuit’s ruling aligns with the latter approach, as seen in cases like Chemours Co. FC, LLC v. Daikin Indus., Ltd. (Chemours Case) and Willis Elec. Co. v. Polygroup Macau Ltd. (Willis Case).

The Court’s Decision

The Federal Circuit’s ruling establishes a clear distinction between invalidity grounds that can be raised in IPR and those that cannot:

Scope of IPR Estoppel: Under 35 U.S.C. § 315(e)(2), IPR estoppel precludes a petitioner from asserting in district court that a claim is invalid under §§ 102 or 103 based solely on patents or printed publications. This is because IPRs are limited to these types of prior art.
Non-IPR Grounds: The estoppel does not apply to grounds such as public use, on-sale, or known or used by others under § 102(a)(1), as these cannot be raised in IPR proceedings. Thus, defendants like Ingenico can use such grounds in district court without being estopped. Even where the asserted basis for invalidity is a § 103 combination based partly on an item in public use, on-sale, or known or used by others and partly on a patent or printed publication, that combination is not estopped because it is not assertable in an IPR.

The court rejected the practice, adopted by some district courts, of applying estoppel to on-sale or public use prior art that is essentially duplicative of patent or publication prior art. This practice was based on the theory that “grounds” in § 315(e)(2) include legal arguments incorporating cumulative device art. Instead, the Federal Circuit adopted the view that “grounds” refer specifically to particular bases for invalidity, such as a specific combination of prior art patents and/or publications—not to the individual items that make up that combination.

Prior District Court Split

The split among district courts on IPR estoppel is well documented:

Position	Courts	Cases
Applied Estoppel	Courts that estopped device art materially identical to IPR prior art	Wasica Fin. GmbH v. Schrader Int'l, Inc. (1:13-cv-01353, DE 2020) (Judge Stark), Boston Sci. Corp. v. Cook Grp. Inc. (1:17-cv-03448), IN-S 2023) (Judge Sweeney II), Oil-Dri Corp. of Am. v. Nestlé Purina Petcare Co. (1:15-cv-01067, IL-N 2019) (Judge Kennelly); Biscotti v. Microsoft (4:17-mc-80010, EDTX 2017) (Judge Gilstrap)
Did Not Apply Estoppel	Courts that allowed device art, even if cumulative	Chemours Co. FC, LLC v. Daikin Indus., Ltd. (1:17-cv-01612, DE 2022) (Judge Noreika), Willis Elec. Co. v. Polygroup Macau Ltd. (0:15-cv-03443, MN 2023) (Judge Wright), EIS, Inc. v. IntiHealth Ger GmbH 1:19-cv-01227, DE 2023) (Judge Williams), Singular Computing LLC v. Google LLC (1:19-cv-12551, MA 2023) (Judge Saylor IV), Pavo Solutions v. Kingston Technology (8:14-cv-01352, CA-C 2020) (Judge Staton), Prolitec v. ScentAir (1:20-cv-00984, DE 2023) (Judge Bryson), Clearlamp v. LKQ (0:13-cv-02637, IL-N 2016) (Judge Lefkow)

The Federal Circuit’s decision aligns with the Chemours line of cases, providing clarity and uniformity to the application of IPR estoppel.

Implications

The Ingenico decision has far-reaching implications for patent litigation:

Dual Invalidity Challenges: Defendants can now challenge a patent’s validity in two forums:

In IPR, using patents and printed publications under §§ 102 or 103.
In district court, using other grounds like public use or on-sale activities under § 102(a)(1). For example, a defendant could assert an obviousness combination in district court consisting of a patent plus a device in public use, while asserting obviousness in the PTAB based on the same patent combined with the device’s published user manual. This effectively gives defendants “two bites at the apple” to invalidate a patent in many scenarios.

Impact on Pending IPRs: The ruling is particularly significant for cases where IPRs are already pending or have been instituted. Defendants can strategically maintain invalidity arguments based on public use or on-sale prior art for district court, potentially increasing their chances of success.
Future PTAB Practices: The Patent Trial and Appeal Board (PTAB) may respond by requiring IPR petitioners to stipulate that they will not use in district court any on-sale or public use prior art that corresponds to publications or patents used in the IPR. Such stipulations could mitigate the ruling’s impact by preventing defendants from leveraging duplicative prior art in district court. This potential shift in PTAB practice could reduce the strategic advantage provided to defendants by the Federal Circuit’s decision.

Strategic Considerations

For Patent Owners

Comprehensive Prior Art Search: Patent owners should conduct thorough investigations of all potential prior art, including public use and on-sale activities, during the IPR process. This preparation can help anticipate and counter arguments that may be raised in district court.
Advocate for Stipulations: In future IPRs, patent owners should push for PTAB stipulations that limit defendants’ ability to raise duplicative prior art in district court. This could help neutralize the impact of the Ingenico ruling.
Litigation Preparedness: Surviving an IPR does not guarantee safety from further invalidity challenges. Patent owners should prepare for district court arguments based on non-IPR grounds and consider the strength of their patent portfolio in light of this ruling.

For Defendants

Strategic Division of Arguments: Defendants should consider dividing their invalidity theories between IPR and district court to maximize their chances of invalidating a patent. For example, preserve public use or on-sale arguments in district court even if similar patents and publications are raised in an IPR.
Monitor PTAB Developments: Be aware of potential PTAB requirements for stipulations that could limit the use of certain prior art in district court. Defendants should weigh the benefits of pursuing IPR against the possibility of such restrictions.
Evaluate IPR Strategy: The inability to raise certain grounds in IPR may lead to strategic disadvantages if PTAB stipulations become standard. Defendants should carefully assess whether to pursue IPR or focus on district court litigation.

Conclusion

The Federal Circuit’s decision in Ingenico Inc. v. IOENGINE, LLC marks a significant shift in the application of IPR estoppel in district court proceedings. By narrowing the scope of estoppel, the court has expanded the opportunities for defendants to challenge patent validity, potentially altering the dynamics of patent litigation. While the ruling provides clarity by resolving a prior split among district courts, it also raises strategic considerations for both patent owners and defendants. The potential for PTAB stipulations to limit the ruling’s impact adds further complexity to litigation planning. Patent practitioners should adjust their strategies to navigate this evolving legal landscape effectively.

If you have any questions or need assistance with your patent matters, please contact Victor Johnson, Michael Franzinger, or Forrest Gothia or any of our Intellectual Property team.