Judge Cheney of the United States International Trade Commission held that ITC Investigative Staff are not estopped from asserting invalidity of a patent based upon prior art that was previously asserted by a respondent in an IPR. See In the Matter of Certain Magnetic Tape Cartridges and Components Thereof, Inv. No. 337-TA-1058 at *106-107. While this is an initial determination that has not been adopted by the Commission, this determination creates a huge loophole limiting the effect of estoppel before the ITC.
In April, 2017, various Sony entities filed an ITC complaint alleging violations of section 337 of the Tariff Act of 1930, based on importation and sale of products alleged to infringe three Sony patents. Fujifilm entities were named as respondents. With respect to one of those patents, U.S. 6,979,501, Fujifilm filed an IPR that was instituted in May of 2017 and for which a Final Written Decision was entered on May 16, 2018, rejecting Fujifilm's challenge to the patent.
The patent statute provides that IPR petitioners are estopped from asserting, either in district court or ITC proceedings, that a claim is invalid on any ground that the petitioner raised or reasonably could have raised during the IPR. 35 U.S.C. § 315(e)(2).
Sony argued that Fujifilm was estopped from relying upon prior art references in the ITC because it could have raised them in the IPR. While the ITC Commission Investigative Staff ("Staff") is a party to the investigation, the Staff argued that it was not a party to the IPR proceeding and therefore could rely on prior art that was at issue in the IPR. ALJ Cheney agreed, concluding that the references identified by the Staff invalidate the '501 Patent.
While it is correct that IPR estoppel applies only to the petitioner and those in privity, this decision severely limits the effect of estoppel in ITC proceedings. For patent owners, estoppel is unlikely to prevent challenges based on the same prior art before both the PTAB and the ITC. And respondents will need to hope that ITC Staff find the art cited in the IPR convincing.
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