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ALJ Cheney Holds that IPR Estoppel Does Not Apply to ITC Investigative Staff

In an Initial Determination finding that Fujifilm violated Section 337 by infringing two patents held by Sony, ALJ Cheney found another patent invalid after ruling that inter partes review (“IPR”) estoppel does not apply to the International Trade Commission’s (“ITC”) Office of Unfair Imports Investigations (“OUII”) Staff.  In Magnetic Tape Cartridges and Components Thereof, Investigation 337-TA-1058, ALJ Cheney remarked that even if IPR estoppel prevents a respondent from raising certain references during an investigation before the ITC, IPR estoppel does not prevent Staff from raising those same references to invalidate a patent where Staff was not a party to the IPR.  Id. at 106-07.

By way of background, Fujifilm filed an IPR against Sony’s U.S. Patent No. 6,979,501 (“the ’501 Patent”), which instituted in May of 2017.  In April of 2017, Sony filed a complaint at the ITC alleging that Fujifilm infringed three of Sony’s patents claiming certain magnetic tape recording technology, including the ’501 Patent.  While the investigation was pending, the Patent Trial and Appeal Board issued a Final Written Decision (“FWD”) rejecting Fujifilm’s challenge to the ’501 Patent.  Because Fujifilm challenged the ’501 Patent in an IPR and received a FWD, it became subject to the estoppel provision of 35 U.S.C. § 315(e)(2), which states that a “petitioner in an inter partes review of a claim in a patent … may not assert … in a proceeding before the [ITC] that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”

While Sony argued that Fujifilm was estopped from using several references to invalidate the ’501 Patent at the ITC because Fujifilm reasonably could have raised those references when it filed the IPR, Staff argued that only a “petitioner in an inter partes review” was subject to estoppel.  Because Staff was not a petitioner or a party to Fujifilm’s IPR, Staff argued that it could assert in the ITC prior art advanced by Fujifilm in the IPR.  ALJ Cheney agreed, stating that regardless of whether Fujifilm is estopped from raising certain references in the investigation, the statute “does not prevent Staff from raising the references in this investigation, which it did.”  As a result, he concluded both that Sony was required to respond to Staff’s contentions that the references invalidate ’501 Patent and that these references invalidated the ’501 Patent.

This initial determination from the ITC is a reminder to patent practitioners of the unique rules of the ITC and the role Staff plays at the forum, and provides further guidance regarding the limits of IPR estoppel.  Although ALJ Cheney’s conclusion has yet to be adopted by the Commission and is therefore not binding on other ALJs, in the future respondents that are otherwise estopped from challenging validity of a patent may find a friend in Staff.           

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Andrew DeVoogd

Daniel Weinger