Richards Layton & Finger
 

Chief Judge Stark Rules on Effect of Estoppel Following IPR

May 3, 2017

In Princeton Digital Image Corp. v. Konami Digital Entertainment Inc., C.A. No. 12-1461-LPS-CJB (D. Del. Mar. 30, 2017), Chief Judge Stark overruled objections to Magistrate Judge Burke’s recommendation to deny Princeton Digital Image Corp.’s (“Princeton Digital”) motion to dismiss the defendants’ counterclaim for declaratory judgment of invalidity. Judge Burke had concluded that the defendants, Digital Entertainment Inc., Harmonix Music Systems, Inc., and Electronic Arts, Inc., were not estopped from asserting invalidity based on prior art that was or could have been raised in earlier inter partes review proceedings, since no final written decision as to the challenged claims existed.

Princeton Digital objected to the report and recommendation on the basis that its rationale, contrary to statute, would limit the estoppel only to grounds that were in fact raised, excluding grounds that could have been raised.  Chief Judge Stark found that the report and recommendation did not so state, and that in any event the statutory estoppel applicable to IPR proceedings takes effect only as to claims that are the subject of a final written decision by the Patent Trial & Appeal Board, which was not the case here.

There were no objections to the recommendation to deny without prejudice the defendants’ counterclaim for a declaratory judgment of non-infringement, and Chief Judge Stark accordingly adopted this recommendation without discussion.

Key Points: The statutory estoppel resulting from a final written decision in IPR proceedings is proving to be narrower than may have been expected upon the introduction of the IPR procedure.