Westlake Servs., LLC v. Credit Acceptance Corp.

When a covered business method patent review results in a final written decision addressing only the claims on which trial was instituted, estoppel under 35 U.S.C. § 325(e)(1) and 37 C.F.R. § 42.73(d)(1) applies on a claim-by-claim basis, so the Board cannot terminate a later petition as to claims that were challenged but not instituted and not addressed in that final written decision. Those claims are not claims in a patent that "result[] in a final written decision under section 328(a)," and concerns about serial petitions are for the Board's discretion under 35 U.S.C. § 325(d). No prior precedent directly addressed this issue; the Board relied on the statute, the Office's rule, and the Office's responses to comments in the Final Rule, and it noted that Conopco addressed §§ 314(a) and 325(d), not § 325(e). For a petitioner, claims denied institution in an earlier petition are not estopped by a later final written decision on the instituted claims, so a follow-on petition on those claims survives a § 325(e)(1) motion to terminate. For a patent owner, a motion to terminate based on estoppel will not reach non-instituted claims, and the remaining tool against serial petitions is § 325(d), which must be raised in the preliminary response and is discretionary. The decision cites no Federal Circuit, CCPA or Supreme Court authority on the estoppel question, relying on the statutory text and Office rulemaking; the court and Supreme Court cases it mentions concern the underlying § 101 law. LEGAL TEST OR STANDARD: Estoppel is applied on a claim-by-claim basis. By its terms, estoppel is invoked under Section 325(e)(1) as to a claim in a patent that results in a final written decision under 35 U.S.C. § 328(a). 37 C.F.R. § 42.73(d)(1) likewise estops a petitioner as to a claim for which it has obtained a final written decision on patentability, on any ground it raised or reasonably could have raised during the trial. The Board looked to which claims the final written decision actually ruled upon. TRIGGERING FACTS: The earlier CBM petition challenged claims 1-42 of the patent, but trial was instituted only on claims 1-9, 13, and 34-42. The final written decision in the earlier case ruled only on those claims. The petitioner then filed a new petition, which was instituted on claims 10-12 and 14-33, the claims not instituted earlier. The patent owner moved to terminate under § 325(e)(1) after the earlier final written decision issued, arguing that § 328(a), covering any patent claim challenged by the petitioner, sweeps in non-instituted claims. KEY QUOTE: "We agree with Petitioner that estoppel is applied on a claim-by-claim basis." (Paper 28, p. 5) PRIOR PRECEDENT AFFECTED: No prior precedential or informative decision is directly affected. The Board distinguished Conopco, Inc. v. Procter & Gamble Co., Case IPR2014-00628 (PTAB Oct. 20, 2014) (Paper 21), because it addresses the applicability of 35 U.S.C. §§ 314(a) and 325(d), rather than Section 315(e) or 325(e). PRACTICE TIP: Patent owners facing a follow-on petition on claims not instituted earlier should not rely on a § 325(e)(1) motion to terminate. They should raise § 325(d) (same or substantially the same prior art or arguments) in the preliminary response, addressing serial-petition harm and the circumstances of the earlier proceeding. Petitioners should oppose termination by pointing to which claims the earlier final written decision actually decided.