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The CAFC Holds That IPR Estoppel Does Not Shield Patentees From System Prior Art
05/13/2025On May 7, 2025, the U.S. Court of Appeals for the Federal Circuit (“CAFC”) affirmed a decision by the U.S. District Court for the District of Delaware (“district court”) that found claims of two IOENGINE, LLC (“IOENGINE”) patents related to USB thumb drives—U.S. Patent Nos. 9,059,969 and 9,774,703 (collectively, “asserted patents”)—invalid as anticipated and rendered obvious by the prior art. Ingenico Inc. v. IOENGINE, LLC, No. 2023-1367, ---F.4th---, 2025 WL 1318188, at *1 (Fed. Cir. May 7, 2025) (hereafter, “Ingenico”). The case resolves a divided line of district-court authority and clarifies that 35 U.S.C. § 315(e)(2) IPR estoppel does not bar an accused infringer from asserting in district court that the claimed invention was “known or used by others,” “in public use,” or “on sale,” even when the same physical system prior art is described in patents or printed publications that were or could have been raised during an earlier IPR brought by the accused infringer.
IOENGINE sued for infringement in district court and Ingenico petitioned for IPR, resulting in partial invalidation. The claims of the asserted patents that survived IPR were brought before a Delaware jury, which found them anticipated and obvious in view of a prior-art M-Systems “DiskOnKey” USB device and its firmware upgrader (collectively, the “DiskOnKey System”). IOENGINE appealed, arguing that § 315(e)(2) estoppel should have barred Ingenico from asserting the DiskOnKey System, as it was evidenced in part by patents and publications, including Readme instructions and screenshots, that reasonably could have been raised during the IPR.
The CAFC affirmed the district court’s judgment in full, sustaining the invalidity verdict and denying a new trial, emphasizing that a “ground” precluded under § 315(e)(2) is distinct from “prior art”:
Congress could have precluded petitioners from asserting in district court that the claim is invalid on any prior art that the petitioner raised or reasonably could have raised during that inter partes review, but Congress chose not to. Instead, Congress precluded petitioners from asserting grounds in district court. . . . IPR estoppel does not preclude a petitioner from relying on the same patents and printed publications as evidence in asserting a ground that could not be raised during the IPR, such as that the claimed invention was known or used by others, on sale, or in public use.
Prior to Ingenico, district courts had diverged on whether system prior art—often proven via user manuals, brochures, and related patents—falls within IPR estoppel. Ingenico ends that divergence, confirming that such defenses remain available post-IPR, and that the same patents and printed publications that were or could have been used in the IPR may still be asserted in district court to invalidate a patent on the basis the claimed invention was “known or used by others,” “in public use,” or “on sale.”
