Kroy IP Holdings, LLC v. Groupon, Inc., No. 2023-1359 (Fed. Cir. (D. Del.) Feb. 10, 2025). Opinion by Reyna, joined by Prost and Taranto.
Kroy sued Groupon for patent infringement, asserting thirteen claims. Groupon responded by filing two IPR petitions challenging twenty-one claims in the patent, including the thirteen asserted claims. The Patent Trial and Appeal Board found all challenged claims unpatentable, and the Federal Circuit affirmed in an earlier appeal.
Kroy then filed an amended complaint asserting fourteen claims in the patent, none of which were at issue in the IPR proceedings. Groupon moved to dismiss the amended complaint, arguing that the Board’s prior IPR rulings collaterally estopped Kroy from asserting the new claims. The district court found the newly asserted claims immaterially different from the claims the Board found unpatentable and, with that in mind, granted Groupon’s motion. Kroy appealed.
The Federal Circuit reversed and remanded. The Federal Circuit explained that collateral estoppel “is subject to certain well-known exceptions” including when “the second action involves application of a different legal standard, such as a different burden of proof.” Before the Board, Groupon had proved the unpatentability of the claims by a preponderance of the evidence. Before the district court, by comparison, Groupon’s burden to prove the newly asserted claims are invalid was clear and convincing evidence. The Federal Circuit held that, “as such, collateral estoppel should not apply.” “To hold otherwise would deprive patent owners of their property right without first requiring proof of patent invalidity that satisfies the statutorily prescribed clear and convincing evidence standard.”
US Synthetic Corp. v. ITC, No. 2023-1217 (Fed. Cir. (ITC) Feb. 13, 2025). Opinion by Chen, joined by Dyk and Stoll.
US Synthetic (USS) filed a complaint with the ITC alleging patent infringement by various entities. As pertinent here, one of the asserted patents claims a type of composition known as a polycrystalline diamond compact (PDC). The ALJ found the asserted claims infringed and not invalid, but the ALJ also found the claims patent ineligible under 35 U.S.C. § 101.
USS petitioned for review, and a divided Commission affirmed with modified reasoning. Addressing eligibility, at Alice step one, the Commission determined that “the claims are directed to the abstract idea of PDCs that achieve … desired magnetic … results.” The Commission rejected USS’s argument that the magnetic properties are structural or indicative of structure. At Alice step two, the Commission found that no inventive concept exists. USS appealed the § 101 ruling, and the Respondents (the Intervenors on appeal) argued in the alternative that the claims are invalid as not enabled under § 112.
The Federal Circuit reversed the Commission’s conclusion that the claims are ineligible under § 101, affirmed the Commission’s enablement ruling under § 112, and remanded.
The court explained that the eligibility dispute “centers around the recited magnetic properties and their relationship to the claimed PDC.” The court noted, however, that “the specification explains how the claimed magnetic properties correlate to structural aspects of the claimed PDC.”
Upon “reading the claims as a whole and in light of the specification,” the Federal Circuit concluded at Alice step one that the claims are not directed to an abstract idea. “Rather, the claims are directed to a specific, non-abstract composition of matter—a PDC—that is defined by its constituent elements …, particular dimensional information …, and quantified material properties …, whereby the material properties correlate to the diamond table’s structure and thereby further inform a skilled artisan about what the claimed PDC is.”
The Federal Circuit disagreed with the Commission’s characterization of the claims and specification because “the Commission’s apparent expectations for precision between the recited properties and structural details of the claimed composition is too exacting for § 101 purposes.”
Because the Federal Circuit concluded that the claims are not directed to an abstract idea, it did not reach Alice step two.
As to enablement, the Intervenors argued that the claims were not enabled because undue experimentation is required. The Federal Circuit disagreed and thus affirmed the Commission’s conclusion. “The Commission adhered to … long-standing [legal] principles” and “dutifully considered the evidence and arguments before it.” Also, the Supreme Court’s reasoning in Amgen v. Sanofi reinforced “that a specification may call for a reasonable amount of experimentation to make and use a patented invention, and what is reasonable in any case will depend on the nature of the invention and the underlying art.”