IRONBURG INVENTIONS LTD. v. VALVE CORPORATION
Before Chen, Hughes, and Stark. Appeal from the United States District Court for the Western District of Washington.
Summary: The Federal Circuit reversed and remanded an IPR estoppel ruling because the district court relied on insufficient evidence that a “skilled searcher” could have reasonably discovered a reference and failed to account for hindsight concerns.
Ironburg sued Valve for infringement of a patent directed to a video-game controller. Valve filed an IPR petition that resulted in a September 2017 final written decision holding some claims unpatentable. In January 2018, a third party filed an IPR petition challenging Ironburg’s patent, raising new obviousness grounds based on the “Kotkin” reference as well as the “Willner-Koji-Raymond” combination of references. Valve subsequently amended its district-court invalidity contentions to assert the grounds from the third party’s petition. Ironburg argued the new contentions were barred by IPR estoppel under 35 U.S.C. § 315(e)(2). The district court granted the motion, finding Valve was precluded from asserting those new grounds because a “skilled searcher could have reasonably been expected to find all of these references” at the time of Valve’s original IPR. The case proceeded to trial, where a jury found Valve willfully infringed Ironburg’s patent and awarded over $4M in damages. Valve appealed.
On appeal, the Federal Circuit clarified the “skilled searcher” standard used to determine whether prior-art grounds are subject to IPR estoppel. The court explained that estoppel applies only to grounds that a skilled searcher conducting a diligent search reasonably would have been expected to discover when the IPR petition was filed. Applying that standard, the Federal Circuit held the district court erred in finding the Kotkin reference reasonably discoverable. The Federal Circuit noted that while Kotkin appeared in a vendor’s search, it was one of more than 26,000 search results. The Federal Circuit thus held that the mere presence of a reference within an “unreviewably large” number of search results is insufficient, standing alone, to establish discoverability for IPR estoppel purposes.
The Federal Circuit also rejected the district court’s estoppel ruling as to the Willner-Koji-Raymond combination. The Federal Circuit found that the district court failed to adequately account for hindsight bias in the patent owner’s search evidence. One search by the patent owner’s search vendor implicated references that emerged after Valve filed its IPR petition, while another was designed specifically to locate the Raymond reference.
Accordingly, the Federal Circuit reversed the district court’s IPR estoppel ruling and remanded.
Co-author: Ethan Kluesner (Pending NY Bar Admission)
Editor: Sean Murray
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