On May 7, 2025, the Federal Circuit issued its decision in Ingenico Inc. v. IOENGINE, LLC,[1] holding IPR estoppel does not preclude relying on materials used in IPR as evidence in asserting in district court litigation invalidity grounds not available during IPR.

Since the America Invents Act was enacted over a decade ago, district courts have taken different approaches to applying IPR estoppel to device or system prior art. Some district courts held that IPR estoppel precluded introducing in the district court device or system prior art that relied on materials—such as patents or printed publications—that were raised or could have been raised in IPR. Other district courts adopted a narrower application of IPR estoppel that allowed using materials that were raised or could have been raised in IPR to support in district court invalidity theories not available in an IPR. The Ingenico decision makes the latter approach Federal Circuit law.

While patentees and patent challengers alike now have more predictability with regard to the scope of IPR estoppel under Federal Circuit law, there may be more uncertainty about IPR institution, and patent challengers may seek to waive the benefits of Ingenico in augmented Sotera stipulations.

Background: D. Del. and PTAB Litigation

Ingenico, a supplier of products to an accused infringer, PayPal, brought a declaratory judgment action against patent owner IOENGINE. Ingenico also filed IPR petitions, which resulted in final written decisions that held most of the challenged claims of the patents-at-issue in the appeal unpatentable. However, some claims survived IPR to be litigated in the district court.

In the district court proceeding, IOENGINE moved for summary judgment to preclude Ingenico under 35 U.S.C. § 315(e)(2) (“Section 315(e)(2)”)[2] from relying on documentation related to a prior art system, DiskOnKey Upgrade software, because Ingenico reasonably could have been expected to raise it during the IPR proceedings.

Consistent with the line of district court cases applying a narrower version of estoppel, the district court (Judge William C. Bryson sitting by designation in the District of Delaware) ruled that Ingenico would be estopped from “relying on those documents [to prove invalidity] except to the extent … that they form part of a substantively different combination of references that could not reasonably have been raised in the IPRs.”[3] Ingenico was subsequently permitted to present to the jury the DiskOnKey prior art system supported by evidence that IOENGINE argued was “entirely cumulative and substantively identical” to materials that reasonably could have been raised during the IPR.[4]

Following a jury verdict finding the claims-at-issue in the appeal infringed, but invalid, and an unsuccessful renewed motion for judgment as a matter of law of no invalidity or a new trial, IOENGINE appealed to the Federal Circuit.

The Federal Circuit Decision

On appeal, IOENGINE argued that under Section 315(e)(2), Ingenico should have been estopped from presenting the prior art system at trial because the system was entirely cumulative and substantively identical to Readme materials that were printed publications that reasonably could have been raised during IPR.[5], [6] In essence, IOENGINE urged the Federal Circuit to adopt the broader interpretation of IPR estoppel followed by some district courts.

Circuit Judge Hughes, writing for the Federal Circuit panel[7], rejected IOENGINE’s argument, relying largely on statutory analysis. First, the Federal Circuit explained that “[w]hether Ingenico should be estopped depends on the proper interpretation of the term ‘ground’ used in 35 U.S.C. § 315(e)(2).”[8] Examining other sections of the Patent Act, the Court held that grounds are “the theories of invalidity available to challenge a claim under §§ 102 and 103,” “not the prior art asserted during an IPR.”[9] 

Thus, the Federal Circuit held that estoppel under 35 U.S.C. § 315(e)(2) “applies only to a petitioner’s assertions in district court that the claimed invention is invalid under 35 U.S.C. §§ 102 or 103 because it was patented or described in a printed publication (or would have been obvious only on the basis of prior art patents or printed publications).”[10] Stated a bit differently, “IPR estoppel does not preclude a petitioner from asserting the same prior art raised in an IPR in district court, but rather precludes a petitioner from asserting grounds that were raised or reasonably could have been raised during an IPR.”[11]

The Court further explained that “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.”[12] Accordingly, the Federal Court concluded that the defendant was permitted to rely on paper prior art as evidence in support of its system art defense and a new trial was not warranted.[13]

Takeaways

More prior art available in district court litigation. Patent challengers in district court will be able to use paper prior art to assert grounds that could not have been raised in an IPR, such as use or sale of a prior art system, even if that paper prior art was or could have been raised in an IPR.

More predictability across district courts. As described above, district courts have struggled with the scope of IPR estoppel, with some districts applying estoppel more broadly, and others taking a narrower approach. The Ingenico decision provides clear guidance and district courts will now be required to follow this Federal Circuit precedent that narrows the scope of IPR estoppel, and permits the use of paper prior art to support invalidity theories not available in IPR. Thus, litigants can expect more uniformity in the enforcement of IPR estoppel across district courts.

Potentially more IPR denials. The PTAB could increase discretionary denials citing a high likelihood of overlapping issues between an IPR and parallel district court litigation, as the Ingenico decision could, in theory, result in litigating the same materials before the PTAB and in district court, reducing an IPR’s potential to streamline patent litigation.

The PTAB considers the potential for overlapping issues between a requested IPR and parallel district court litigation when deciding whether to institute an IPR. This decision clarifies that—absent a stipulation to the contrary—the same prior art used in an IPR could be used as evidence to support potentially similar invalidity arguments in a district court case. This potential for overlap may well lead to additional discretionary denials of IPR petitions by the PTAB.

Potential impacts on Sotera stipulations? While in theory Ingenico makes more prior art available in a district court litigation, in practice, petitioners may have to broaden the scope of Sotera[14] stipulations to disclaim the art that would otherwise be available under the Ingenico decision, reducing the prior art available in a district court litigation.

The persuasive power of a Sotera stipulation has changed over time and Acting USPTO Director Coke Morgan Stewart’s recent order in Motorola indicates that Sotera stipulations may be less determinative for the overall discretionary denial analysis going forward.[15] The PTAB’s current guidance on Sotera stipulations specifically notes that such a stipulation “may not be particularly meaningful” “[w]here the petitioner is relying on corresponding system art in a co-pending proceeding.”[16] This comment may indicate that the PTAB already discounts Sotera stipulations that do not disclaim corresponding system art in district court litigation. A Sotera stipulation that does not disclaim system prior art, in light of Ingenico’s allowance of related system prior art in a district court proceeding, may not serve to streamline litigation in the PTAB’s eyes, and thus IPR petitioners may be incentivized to disclaim use of some (or even all) system prior art in more robust Sotera-type stipulations to help decrease the chance of a discretionary denial.

[1] Ingenico Inc. v. IOENGINE, LLC, No. 2023-1367, 2025 WL 1318188 (Fed. Cir. May 7, 2025).

[2] The estoppel statute, Section 315(e)(2), reads as follows:

Civil actions and other proceedings.—The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

35 U.S.C. § 315(e)(2) (emphasis added).

[3] Ingenico, 2025 WL 1318188, at *1 (alteration in original).

[4] Id. at *5.

[5] Ingenico, 2025 WL 1318188, at *5.

[6] IOENGINE also appealed on other grounds not discussed here.

[7] The panel was composed of Judges Dyk, Prost, and Hughes.

[8] Id. at *5.

[9] Id. at *6-7 (emphasis added).

[10] Id. at *7.

[11] Id. at *7.

[12] Id.

[13] Id. at *8.

[14] For background, a Sotera stipulation is a document that an IPR petitioner files in the parallel district court case agreeing that if its IPR petition is instituted, the petitioner will not pursue in the district court the specific asserted grounds or any other ground that could have reasonably been raised in the petition.[14] Sotera stipulations essentially cause IPR estoppel to attach at the time an IPR is instituted rather than when a Final Written Decision is issued.

While Sotera stipulations are filed in the district court, the PTAB considers these stipulations when considering whether to exercise its discretion to deny institution due to an “early trial date” in related litigation under the Fintiv factors. The PTAB considers Sotera stipulations under the fourth Fintiv factor (overlap between issues raised in the petition and in the parallel proceeding) and has found that sufficiently broad stipulations that waive any ground raised or that could have been raised mitigate concerns of duplicative efforts or potentially conflicting decisions. As described in the Sotera decision, “Petitioner’s broad stipulation ensures that an inter partes review is a ‘true alternative’ to the district court proceeding.” Sotera Wireless, Inc. v. Masimo Corp., Case IPR2020-0109, Paper 12, 19 (PTAB Dec. 1, 2020).

[15] Motorola Solutions, Inc. v. Stellar, LLC, IPR2024-01205, IPR2024-01206, IPR2024-01207 & IPR2024-01208, Paper 19, 2 (Acting Director Stewart March 28, 2025) (vacating decision granting institution where “[t]he Board did not give enough weight to the investment in the parallel proceeding and gave too much weight to Petitioner’s Sotera stipulation (i.e., a stipulation that Petitioner will not pursue in district court any ground it raised or reasonably could have raised in the inter partes review (IPR)) and its potential to reduce overlap with the issues raised in the parallel proceeding”).

[16] See https://www.uspto.gov/patents/ptab/faqs/interim-processes-workload-management, at FAQ No. 14.