On March 3, 2018, Judge Nelson of the District of Minnesota issued an order explaining the scope of estoppel resulting from a Covered Business Method (CBM) review.
Solutran, Inc. filed suit against U.S. Bancorp, Inc. in the District of Minnesota for infringement of U.S. Patent No. 8,311,945 (the "'945 Patent"), which claims a system and method for processing check transactions. In response, Bancorp petitioned the Patent Trial and Appeal Board (PTAB) for CBM review of the '945 Patent, arguing that its claims were invalid as obvious under 35 U.S.C. § 103. Bancorp based its obviousness argument on the combination of admitted prior art in the '945 patent and a patent application publication ("Randle '283"). The PTAB found that the asserted combination did not render the '945 patent obvious, and the Federal Circuit affirmed.
Back in district court after the failed CBM review, Bancorp asserted another obviousness defense based on a different patent application (Randle '717), a sibling application to the Randle '283 application asserted in the PTAB. Solutran filed a motion in limine, arguing that Bancorp was estopped from asserting obviousness arguments in district court. Solutran's estoppel argument was rooted in the estoppel provision of the CBM review statute, which provides that the petitioner in the CBM review "may not assert . . . in a civil action arising in whole or in part under section 1338 of title 28, United States Code . . . that the claim was invalid on any ground that the petitioner raised during [the CBM review]." See Pub. L. 112-27, § 18(a)(1)(D), 125 Stat. 330 (2011). Solutran contended that the word "ground" in the statute was not limited to the specific obviousness arguments asserted in the CBM review. Judge Nelson denied the motion, holding that "the word 'ground' in the CBM estoppel provision refers to a discrete claim of invalidity based upon a prior art or combination of prior art."
Solutran filed a related motion in limine, arguing that Bancorp was estopped from introducing the Randle '717 reference due to its similarity to the Randle '283 reference from the failed CBM review. In opposition, Bancorp argued that estoppel bars obviousness arguments based only on the same set of limitations from the same combination of prior art. Finding merit in Solutran's argument, Judge Nelson stated that, if "Randle '717 does not provide any new disclosures or features that Defendants could not have argued from Randle '283, then it will be estopped." The court deferred the issue and invited Bancorp to attempt to distinguish Randle '717 from Randle '283.
Thus, according to the order, parties cannot avoid CBM estoppel by simply relying on related prior art with the same disclosure as that asserted before the PTAB; rather, the prior art asserted in district court must disclose limitations that were not disclosed in the related prior art asserted at the PTAB.
Solutran, Inc. v. U.S. Bancorp, Inc., No. 0:13-cv-02637-SRN-BRT (D. Minn. Mar. 3, 2018)
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