A district court has denied a patent owner's motion to strike wholesale a defendant's affirmative defense of invalidity. The key issue in the motion to strike was the application of the estoppel provision of 35 U.S.C. § 325(e)(2), which estops a post-grant review (PGR) petitioner from asserting in district court litigation that a claim is invalid on any ground that the petitioner raised or reasonably could have raised during [the] post-grant review.
The defendant first challenged the patent by filing a PGR petition approximately eight months after the issuance of the patent. In its petition, the defendant only raised 35 U.S.C. Section 101 unpatentability grounds. The PGR proceeding concluded in a final written decision in which seven of the 20 challenged claims survived. Shortly afterwards, the patent owner filed the patent infringement action. The defendant's answer included invalidity as an affirmative defense, and the patent owner moved to strike under Rule 12(f), arguing that the defendant was statutorily estopped from raising that defense by Section 325(e)(2).
The court first explained that Rule 12(f) allows for considerable discretion, but that when a defense raises a question of fact, the court must deny a motion to strike.
The court began its analysis by setting out the framework for the scope of the reasonably could have raised provision. First, the court explained that prior questions about instituted versus non-instituted grounds were effectively mooted by the Supreme Court's decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), and the Federal Circuit's post-SAS decisions. Under current Patent Trial and Appeal Board (PTAB) practice, a petition must be either fully instituted or fully denied, and therefore any defense that is included as a ground in an instituted petition will qualify as having been raised during PGR review.
Next, the court turned to whether non-petitioned grounds are subject to estoppel. After surveying the differing rulings by various district courts, the court rejected the view that a petitioner was allowed to raise defenses that had not been included in a petition. The court reasoned that in order for'reasonably could have raised' to have any meaning at all, [those words] must refer to the grounds that were not actually raised in the PGR petition, but reasonably could have been...