Vidal Affirms PTAB in Sua Sponte Director Review, Clarifies Interference Estoppel Provisions Do Not Apply to Proceedings Before the PTAB

U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal on August 22 issued a decision granting sua sponte Director Review and affirming the Decision on Institution in Zynga Inc. v. IGT, IPR2022-00199, U.S. Patent No. 7,168,089 B2. Vidal determined that the interference estoppel provision of 37 C.F.R. § 41.127(a)(1) does not apply to trial and preliminary proceedings before the Patent Trial and Appeal Board (PTAB) and the PTAB was correct in holding that Petitioner should not be barred from pursuing inter partes review based on interference estoppel.

On June 14, 2022, the PTAB issued an Institution Decision regarding the ‘089 patent.  In the Decision, the PTAB stated “to the extent Section 41.127(a)(1) applies, pursuant to 37 C.F.R. § 42.5(b), we waive the requirements of Section 41.127(a)(1) as applied to Zynga’s unpatentability challenges in this proceeding” in determining that Petitioner, Zynga, was not barred from pursuing inter partes review of the ‘089 patent. The Patent Owner, IGT, filed requests for rehearing and for Precedential Opinion Panel (POP) review, arguing that “the Board improperly waived interference estoppel under 37 C.F.R. § 41.127(a)(1), to the extent it applied,” by deciding that the Petitioner was not barred from pursuing inter partes review.” IGT asked the POP to decide whether the Board may “retroactively waive the scope of a final judgement resulting from a prior interference proceeding.”

Vidal determined that sua sponte Director review of the Board’s Decision was appropriate and the POP request for review was dismissed. She reviewed Title 37, Chapter I, Subchapter A, Part 42 of the Code of Federal Regulations, which governs trial practice, such as preliminary proceedings, before the PTAB, and explained that Part 42 of the Code does not incorporated Part 41, i.e., the interference estoppel provisions of 37 C.F.R. § 41.127(a)(1). Thus, given that § 41.127 does not apply to trial and preliminary proceedings before the PTAB, Vidal affirmed the PTAB’s holding that Petitioner should not be barred from pursuing inter partes review based on interference estoppel.

Vidal did not reach the issue of whether the Board properly waived interference estoppel. However, she noted that even if interference estoppel did apply to trial and preliminary proceedings before the PTAB, “such estoppel would not apply here because the Board terminated the interference based on the threshold issue of written description.” Vidal explained that “interference estoppel would not apply because the Board’s termination based on a threshold issue prevents the judgment from disposing of all issues that were, or by motion could have properly been, raised and decided.”

Image Source: Deposit Photos
Image ID: 103763568
Author: bigfatnapoleon