In Kroy IP Holdings, LLC v. Groupon, Inc., 127 F.4th 1376 (Fed. Cir. 2025), the Federal Circuit held that patentees in district court are not collaterally estopped from asserting claims that were not immaterially different from other claims of the same patent that the US Patent Trial and Appeal Board (PTAB) already held to be unpatentable.
The Federal Circuit’s ruling significantly impacts practitioners involved on both sides of parallel patent litigation, offering patentees a strategic advantage in district courts while requiring petitioners to reevaluate their approach to challenging claims at the PTAB.
Background
Kroy IP Holdings, LLC filed suit against Groupon, Inc., alleging infringement of 13 exemplary claims of US Patent No. 6,061,660. Groupon timely filed two inter partes reviews (IPRs), successfully invalidating 21 claims of the ’660 Patent. After Groupon’s deadline to file additional IPRs had passed, Kroy amended its complaint to allege infringement of newly asserted claims of the ’660 Patent that were not at issue in the prior IPR proceedings. Groupon moved to dismiss this complaint on grounds that Kroy was collaterally estopped from asserting these newly asserted claims based on the PTAB’s unpatentability rulings. The district court granted Groupon’s motion, dismissing Kroy’s case with prejudice after determining that the new claims were “immaterially different” from the invalidated claims. Kroy appealed.
The issue before the Federal Circuit was whether a prior decision by the PTAB declaring certain claims unpatentable can prevent a patentee from asserting other immaterially different claims from the same patent in district court.
As recently as September 2024, the Federal Circuit revisited the doctrine of collateral estoppel and considered the effect that prior final written decisions at the PTAB may have on subsequent district court litigation. The court concluded that a finding of unpatentability of apparatus claims in an IPR does not bar a patentee from contesting the validity of separate but related method claims of the same patent in district court. The Federal Circuit reasoned that collateral estoppel does not apply when different legal standards, such as burdens of proof, are involved across the two actions. Indeed, a petitioner in an IPR proceeding need only prove invalidity under the preponderance of the evidence standard, whereas in district courts, a defendant must meet the higher and more exacting clear and convincing evidence standard. Otherwise, the application of collateral estoppel in separate actions involving differing burdens of proof “would deprive patent owners of their property right.” Kroy IP Holdings, LLC, 127 F.4th at 1380-81.
Relying on this rationale, the Federal Circuit in Kroy IP Holdings, LLC v. Groupon, Inc. found that the patent owner was not barred from asserting previously unadjudicated claims that were immaterially different from claims that the PTAB had declared were unpatentable. Indeed, the PTAB’s unpatentable rulings under the preponderance of the evidence standard cannot estop a patentee from asserting other new but immaterially different claims in district court, which require the higher clear and convincing evidence standard. In holding that collateral estoppel did not apply, the Federal Circuit reversed the district court’s dismissal.
Practical Considerations
The Federal Circuit’s ruling in Kroy has significant implications for practitioners involved in parallel patent litigation at the PTAB and district courts.
For patent owners, the Federal Circuit’s ruling offers a strategic advantage by limiting the scope of collateral estoppel to only those claims that were actually challenged and adjudicated in IPR proceedings. Further, this allows patentees to pursue claims in district court that were not at issue in the IPRs, even if they are similar to the already invalidated claims. Patentees should consider strategically selecting which claims to include or exclude in enforcement actions based on the strength of their validity arguments and the likelihood of success at both the PTAB and in district courts.
For petitioners, the Kroy ruling necessitates a reevaluation of challenging claims at the PTAB, as reliance on successful IPR outcomes may not be sufficient to invalidate patent claims in district court. Petitioners should be prepared to meet the higher burden of proof required in district courts and plan for the possibility of patentees asserting unadjudicated claims in later-amended complaints or in future infringement actions.
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