926 F.3d 1306
Fed. Cir.2019Background
- Power Integrations owns U.S. Patent No. 6,212,079 (switched-mode power-supply technology). Fairchild litigated that patent and was found to infringe; large jury damages awards followed (later partially vacated on damages issues).
- Fairchild was served with an infringement complaint in November 2009; subsequent proceedings produced final judgments and appeals, and a bond was posted and later released.
- ON Semiconductor (ON) entered into a merger agreement to acquire Fairchild (agreement executed Nov. 18, 2015; merger closed Sept. 19, 2016). ON filed an IPR petition challenging claims of the ’079 patent on March 29, 2016 (filed after the one‑year mark from Fairchild’s service). The PTAB instituted the IPR on Sept. 23, 2016 (after the merger closed).
- Power Integrations argued § 315(b) time-bar: because Fairchild had been served more than one year before ON’s petition and later became an RPI/privity through the merger, the IPR was time‑barred. The Board rejected privity/proxy/RPI arguments and denied additional discovery; it reached the merits and found claims unpatentable.
- On appeal the Federal Circuit considered (1) whether privity/RPI relationships arising after petition filing but before institution can trigger the § 315(b) one‑year bar, and (2) whether issue preclusion barred Power Integrations from relitigating the § 315(b) question.
Issues
| Issue | Plaintiff's Argument (Power Integrations) | Defendant's Argument (ON) | Held |
|---|---|---|---|
| Whether privity or RPI relationships arising after filing but before institution can trigger § 315(b) | Post‑filing but pre‑institution changes (e.g., merger creating RPI/privity) are relevant and can time‑bar institution | § 315(b) should be assessed only at the filing date; only relationships existing at filing matter | The court held post‑filing/pre‑institution privity/RPI relationships are relevant; IPR was time‑barred because Fairchild was an RPI at institution |
| Whether issue preclusion (collateral estoppel) bars Power Integrations from raising the § 315(b) challenge here because it did not appeal the same issue in another IPR | Exception applies: Power Integrations lacked adequate incentive to appeal the prior IPR; preclusion would be unfair | ON argued the earlier unappealed adverse § 315(b) ruling should preclude relitigation | Court rejected preclusion based on the lack‑of‑incentive exception and allowed the § 315(b) challenge to proceed |
| Whether PTAB’s regulation or prior Board panels interpreting § 315(b) merit Chevron/Auer deference | N/A (ON sought deference) | The Board’s nonprecedential decisions interpreting § 315(b) and the parroting regulation deserve deference | Court declined Chevron/Auer deference to the PTO regulation or nonprecedential Board rulings and construed § 315(b) de novo |
| Practicality/moving‑target concerns about assessing privity at institution rather than filing | N/A (ON raised practical concerns) | Assessing relationships at filing is administrable and provides certainty | Court held practical concerns do not overcome statutory text, common‑law preclusion principles, and continuing disclosure obligations; assessing at institution is appropriate |
Key Cases Cited
- B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138 (2015) (issue‑preclusion principles and recognized exceptions, including lack‑of‑incentive to litigate)
- Wi‑Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018) (describing § 315(b) as a statutory limit on the Director’s authority to institute IPR)
- Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018) (statutory purpose of § 315(b) and who benefits from cancellation of claims)
- Click‑To‑Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321 (Fed. Cir. 2018) (interpreting the timing language of § 315(b))
- Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 1565 (Fed. Cir. 1986) (common‑law privity can arise after suit begins where assets/rights are acquired)
- WesternGeco LLC v. ION Geophysical Corp., 889 F.3d 1308 (Fed. Cir. 2018) (recognizing use of common‑law meaning for privity/real‑party‑in‑interest in AIA context)