Estoppel Principles in Patent Office Proceedings

On July 26, 2024, in a precedential decision, the U.S. Court of Appeals for the Federal Circuit (CAFC) upheld and expounded on the estoppel provision set forth in 37 C.F.R. § 42.73(d)(3)(i). The CAFC confirmed that the Patent and Trademark Office (PTO) had the authority to promulgate such a regulation while limiting the application to new claims or amended claims, but not to previously issued claims. 

What you need to know:

• This decision highlights the significance of protecting a valuable technology by numerous patentably-distinct claims in one or more applications. 
• When possible, patent owners should consider maintaining pendency of a patent family through continuation/divisional applications. 
• Further, in a nod to the recent ruling in Loper Bright Enters. v. Raimondo, the CAFC noted that the U.S. Patent and Trademark Office’s authority in promulgating regulations is not unbounded and that the task of defining such bounds will need to be addressed in the future. 

Generally speaking, the doctrine of collateral estoppel prevents a party from re-litigating any issue that has been validly, finally and actually determined on the merits in a previous case. Along the same lines, the PTO promulgated 37 C.F.R. § 42.73(d)(3)(i) to prevent a patent owner from “taking action inconsistent with the adverse judgement” in various PTO proceedings, including inter partes review (IPR) proceedings.  The regulation prohibits a patent owner from “obtaining in any patent . . . [a] claim that is not patentably distinct from a finally refused or canceled claim.”

Leading up to the decision, the Appellant Softview LLC, was granted U.S. Patent No. 7,461,353. The ‘353 patent was subject to numerous validity challenges by various phone manufacturers. During an Inter Partes Review (IPR) proceeding, the Patent Trial and Appeal Board (PTAB) found all 18 challenged claims unpatentable. In co-pending reexamination proceedings, Softview amended a subset of the remaining claims. On Appeal, the Board considered the amendments merely combined limitations from multiple claims found unpatentable in the IPR proceeding. Accordingly, the Board rejected all remaining claims based on 37 C.F.R. § 42.73(d)(3)(i). That is, the Board found that the claims were not patentably distinct from those that had been invalidated in the IPR proceeding, and were therefore invalid under the regulation. 

However, the Board applied the regulation to both the amended claims and to the issued claims. SoftView challenged the Board’s application of the regulation to issued claims, and the CAFC agreed. The CAFC reasoned that the regulation applies to “obtaining” a claim – not maintaining an existing claim. More specifically, the CAFC explained “[i]t is reasonable to characterize ‘obtaining’ a new claim that is not patentably distinct from a finally refused or canceled claim as an ‘action inconsistent with the adverse judgement’ under 37 C.F.R. § 42.73(d)(3), because such an action can fairly be viewed as an effort to circumvent the prior adverse judgment. By contrast, seeking to maintain an already issued claim cannot be viewed as circumventing a subsequent decision on related claims.” SoftView LLC, v. Apple Inc., 2023-1005 at 14 (Fed. Cir. July 26, 2024).

We will be closely monitoring how this decision impacts areas of patent prosecution, such as continuation application strategies and, as always, will continue to advise our clients on any new developments.