IPR Institution Decision Precluded as Evidence in Litigation, Again

No precedential Federal Circuit decision addresses the effect of an IPR institution decision on parallel litigation triedbefore a jury. As a result, some district courts have allowed IPR institution decisions regarding a patent-in-suit to be presented as evidence in a pending litigation (see Evidence of Denial of IPR Institution Allowed in District Court Infringement Action), while many have not. On September 29, 2015, the District Court for the Western District of Wisconsin granted a defendant’s motion in liminerequesting the court exclude from the jury’s consideration evidence that the PTAB had denied its petition for inter partes review, adding yet another decision to the growing list of denials of such evidence. Wisconsin Alumni Research Foundation v. Apple, Inc., No. 14-cv-062-wmc (W.D. Wisc.).

Defendant Apple previously filed an IPR Petition against WARF’s U.S. Patent No. 5,781,752 (“Table based data speculation circuit for parallel processing computer”), alleging the claims were obvious in view of two prior art references. The PTAB denied the petition, and later denied Apple’s request for rehearing, effectively terminating the IPR without a final written decision on the merits of the petitioned grounds. In the parallel litigation, Apple moved to preclude WARF from offering evidence or argument regarding the PTAB’s refusal to institute IPR. WARF opposed the motion, arguing that the PTAB’s refusal to institute IPR is highly probative of the validity of the ’752 patent claims, particularly because Apple sought in the litigation to invalidate the same claims using the same expert (whose testimony it submitted to support the denied IPR petition), and many of the same arguments regarding same the prior art.

it would be difficult for a jury to understand, much less apply, the nuanced differences between the various proceedings and to determine how much weight should be given to PTAB’s decision [denying the IPR petition]

The court granted Apple’s motion, focusing on the risk of unfair prejudice and jury confusion if it admitted such evidence into the court record. The court reasoned that IPR proceedings are subject to different standards, purposes, and outcomes than litigation, and the PTAB’s institution decisions are not binding on district court litigation. Further, denial of an IPR petition or institution of an IPR does not provide an explicit or implicit decision as to the validity of the challenged claims. Any probative value of the IPR institution decision would be substantially outweighed by the risk of unfair prejudice and jury confusion. The court expressed doubt that jury instructions could alleviate the risk of confusion because “it would be difficult for a jury to understand, much less apply, the nuanced differences between the various proceedings and to determine how much weight should be given to PTAB’s decision.” Continuing, the court concluded that “there is a great risk that the jury would conclude, incorrectly, that the Patent Office has twice held the ‘752 patent is nonobvious over prior art.”

Despite prevailing on its motion in limine, the jury returned a verdict that Apple infringed the ‘752 patent, exposing the company to a potential damages award of nearly $400 million.

Plaintiffs and Defendants should take care not to rely heavily on IPR institution decisions in litigation strategy. While some district courts have allowed evidence and arguments relating to IPR institution decisions, a growing number have granted motions seeking to exclude such evidence for risk of prejudice and jury confusion.