Dismissing Petitioner Due to the Board Finding Estoppel under Section 325(e)(1) CBM2015-00015


Takeaway: For purposes of estoppel under Section 325(e)(1), a ground of unpatentability still reasonably could have been raised in an earlier proceeding even if intervening case law clarifying jurisprudence becomes available.

In its Order, the Board addressed the question of whether Petitioner Apple “is estopped from arguing the unpatentability of claim 1 of the ’221 patent and claim 1 of the ’458 patent pursuant to 35 U.S.C. § 101 at the November 9th hearing,” ultimately concluding that estoppel was applicable. The Board had previously found both claims to be unpatentable under 35 U.S.C. § 103 in final written decisions issued in related proceedings.

Pursuant to 35 U.S.C. § 325(e)(1):

[t]he petitioner in a post-grant review of a claim in a patent under this chapter that results in a final written decision under section 328(a) or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that post-grant review.

Petitioner argued that estoppel does not apply because the instant unpatentability grounds based on Section 101 could not have been “reasonably” raised because the seminal Alice Supreme Court case did not exist at the time of the earlier CBM Petitions. Moreover, Petitioner asserted that the Board treated CBM proceedings differently pre and post the Alice decision. Patent Owner disagreed and argued that estoppel should apply despite Alice not having been decided.

The Board agreed with Patent Owner. In particular, the Board stressed that Section 325(e)(1) prohibits “any ground” raised or that reasonably could have been raised. “This statutory provision does not make exceptions for intervening case law that merely clarifies jurisprudence.” The Board also noted that although Alice had not been decided, several Supreme Court and Federal Circuit decisions had already been decided regarding patent eligibility of computer-based methods. Thus, the Board concluded that Petitioner reasonably could have raised Section 101 challenges in the previous CBM proceedings.

Petitioner further argued that the statutory language “maintain a proceeding” requires active participation “while the evidentiary record remains open.” Because the evidentiary records of the instant proceedings were closed, Petitioner asserted that it would not be maintaining a proceeding by merely participating in oral argument. The Board was not persuaded, holding that “presenting argument at the hearing with respect to the claims at issue” constitutes maintaining a proceeding according to the statute.

Thus, the Board held that Petitioner Apple could not present arguments with respect to the patentability of claim 1 of the ’221 patent and claim 1 of the ’458 patent at the oral hearing, and dismissed Apple as a petitioner from CBM2015-00015 and CBM2015-00016 with respect to claim 1 of the ’458 patent. In a footnote, the Board addressed Apple’s request to be terminated from the current proceeding to make clear that litigation estoppel does not apply. The Board noted that because Apple was being dismissed from CBM2015-00015 and CBM2015-00016, it would “no longer be a petitioner in these cases.”

Finally, the Board denied Patent Owner’s request to file a Motion to Terminate two proceedings in light of the estoppel findings. In particular, the Board noted that while Section 325(e)(1) addresses actions that may be taken by a petition, the section “does not proscribe actions that [the Board] may take.” Moreover, the Board noted that the record was fully developed and that “[a]dministrative resources will be conserved by resolving all the similar issues at once.”

Apple Inc. v. Smartflash LLC, CBM2015-00015 (Paper 49), CBM2015-00016 (Paper 50), CBM2015-00018 (Paper 37), CBM2014-00194 (Paper 46)
Order on Conduct of the Proceedings Dated: November 4, 2015
Patents: 8,118,221 B2; 8,033,458 B2; 7,942,317 B2
Before: Jennifer S. Bisk, Rama G. Elluru, Jeremy M. Plenzler, and Matthew R. Clements
Written by: Elluru
Related Proceedings: Re-examination Control No. 90/013,385