Medline Industries, Inc. v. C.R. Bard, Inc.
Filing
219
OPINION AND ORDER. Signed by the Honorable Sara L. Ellis on 9/14/2020. Mailed notice(rj, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MEDLINE INDUSTRIES, INC.,
Plaintiff,
v.
C.R. BARD, INC.,
Defendant.
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No. 17 C 7216
Judge Sara L. Ellis
OPINION AND ORDER
Plaintiff Medline Industries, Inc. (“Medline”) brought this lawsuit alleging that
Defendant C.R. Bard, Inc. (“Bard”) infringes U.S. Patent Nos. 9,745,088 (“the ‘088 patent”),
9,795,761 (“the ‘761 patent”), 9,808,400 (“the ‘400 patent”), and 9,808,596 (“the ‘596 patent”)
(collectively, “the patents-in-suit”). Bard thereafter petitioned the Patent Trial and Appeal Board
(“PTAB”) to institute inter partes reviews (“IPRs”) on all the asserted claims in the patents-insuit. The PTAB did so, and the Court stayed this litigation pending the completion of the IPR
proceedings. By June 2020, the PTAB had issued final written decisions in all of the IPRs.
Although the PTAB found that the asserted claims of the ‘400 patent are unpatentable, it found
that Bard had not demonstrated the unpatentability of any of the asserted claims from the ‘088,
‘761, and ‘596 patents. With this case again proceeding, the parties began to quarrel over
whether the IPR decisions that were unfavorable to Bard prevented it from challenging the
validity of the surviving patent claims based on the following products: Bard’s Bardex® I.C.
Catheter Package Assemblies (“Bardex”), Turkel Paracentesis and Thoracentesis Safety Trays
(“Turkel”), and Medline’s ERASE CAUTI Tray (“ERASE CAUTI”). Based on theories of
statutory and judicial estoppel, Medline now moves to strike all of Bard’s prior art invalidity
grounds, which rely upon one or more of these products.
The Court grants in part and denies in part Medline’s motion to strike [207]. Because
Bard withdrew its invalidity ground based on ERASE CAUTI in response to Medline’s motion,
the Court precludes Bard from asserting that ground going forward. But the Court allows Bard
to proceed with its invalidity grounds based on Bardex and Turkel because (1) statutory estoppel
does not apply to these grounds, and (2) the Court does not find it appropriate in these
circumstances to judicially estop Bard from pursuing these grounds.
BACKGROUND
Medline filed this lawsuit in October 2017. Between October 4 and November 7, 2018,
Bard filed five petitions asking the PTAB to institute IPR proceedings on all 115 asserted claims
of the patents-in-suit. Shortly after filing the last petition, Bard moved to stay this litigation
pending the PTAB’s decisions on whether to grant Bard’s IPR petitions. The Court denied
Bard’s motion without prejudice, and it invited Bard to renew its motion if the PTAB did, in fact,
institute IPRs on the petitions.
In April 2019, Bard served its “Narrowing of Prior Art and Identification of Invalidity
Grounds,” see Doc. 209-8 at 2, pursuant to Local Patent Rule 3.1(b), which governs an accused
infringer’s identification of its final invalidity contentions. See N.D. Ill. LPR 3.1(b) (requiring a
party to limit its final invalidity contentions to four “prior art” grounds per asserted claim and
four “non-prior art” grounds). Bard identified four prior art grounds based on either 35 U.S.C.
§ 102 or § 103 for each of Medline’s twenty asserted patent claims. 1 Each prior art ground relies
upon at least one of the Bardex, Turkel, and ERASE CAUTI products as a prior art reference.
1
In February 2019, Medline had narrowed the number of asserted patent claims to twenty in connection
with its final infringement contentions.
2
By June 2019, the PTAB had instituted IPR proceedings on all five of Bard’s petitions.
Consequently, Bard renewed its motion to stay this litigation. Bard argued, among other things,
that even Medline would benefit from a stay because Bard would be estopped from raising “prior
art combinations” that it could have raised in the IPRs. Doc. 176-1 at 14. 2 In September 2019,
the Court granted Bard’s motion and stayed the case “until the conclusion of the PTAB’s IPRs.”
Doc. 190 at 6.
Between April 8 and June 3, 2020, the PTAB issued final written decisions resolving
Bard’s IPRs. The PTAB determined that Bard had shown that the challenged claims of the ‘400
patent are unpatentable. 3 However, the PTAB found that Bard had not demonstrated that any of
the challenged claims of the ‘088 patent, the ‘761 patent, or the ‘596 patent are unpatentable.
Thus, the asserted claims from these three patents remain in this case.
Meanwhile, the parties were battling over the effect of the PTAB’s decisions on the
litigation. A few weeks after the PTAB issued its April 8 decisions, which found that Bard had
not proven the unpatentability of the ‘088 patent’s claims, Medline requested that Bard
“withdraw all of [the] prior art based invalidity defenses” set forth in its Local Patent Rule 3.1(b)
document. Doc. 199-4 at 2–3. Bard refused. Id. at 2. But after the parties met and conferred,
Bard, “in an attempt to compromise,” dropped three prior art grounds that relied upon the
Solazzo patent, which had been the “the primary reference relied upon by Bard in the IPR
proceedings.” Doc. 199-5 at 2; Doc. 210 at 2. The parties thereafter filed a status report on May
18, in which the parties debated the estoppel effect of the PTAB’s IPR decisions. According to
Medline, estoppel applied to all of Bard’s prior art invalidity grounds; Bard, on the other hand,
2
For all ECF filings, the Court cites to the page number(s) set forth in a document’s ECF header.
3
Given this determination, Medline represents that it “will no longer assert the ‘400 patent” in this
litigation. Doc. 208 at 4, 18.
3
asserted “that IPR estoppel does not apply to obviousness combinations involving prior art
products[.]” Doc. 199 at 8–9.
At a status hearing on July 7, the Court set a schedule for the parties to brief the estoppel
issue. Briefing is now complete.
ANALYSIS
Medline seeks to estop Bard from pursuing any invalidity grounds that rely upon the
Bardex, Turkel, or ERASE CAUTI products. In response to Medline’s motion, Bard withdrew
its invalidity ground based on ERASE CAUTI, so the Court grants Medline’s motion with
respect to that product. The Court, therefore, addresses only Medline’s arguments with respect
to the invalidity grounds that rely upon Bardex or Turkel as a prior art reference, all of which are
based on 35 U.S.C. § 103.
Medline argues estoppel based on a statutory provision, 35 U.S.C. § 315(e)(2), and the
doctrine of judicial estoppel. Because the scope of § 315(e)(2) is a “matter[] unique to patent
law,” Federal Circuit law governs whether Bard is estopped from pursuing certain invalidity
arguments based on that statutory provision. See In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir.
2017). In contrast, whether Bard is judicially estopped is a matter of Seventh Circuit law.
Source Search Techs., LLC v. LendingTree, LLC, 588 F.3d 1063, 1071 (Fed. Cir. 2009).
Medline bears the burden of showing that either theory of estoppel is appropriate. Oil-Dri Corp.
of Am. v. Nestlé Purina Petcare Co., No. 15 C 1067, 2019 WL 861394, at *10 (N.D. Ill. Feb. 22,
2019) (statutory IPR estoppel); Heisler v. Convergent Healthcare Recoveries, Inc., No. 16-CV1344, 2019 WL 2476977, at *3 (E.D. Wis. June 12, 2019) (judicial estoppel).
4
I.
Statutory IPR Estoppel
Medline first argues that Bard is statutorily estopped from asserting any of its remaining
prior art invalidity grounds. The Leahy-Smith America Invents Act (“AIA”) created the IPR
procedure and amended the Patent Act to include the IPR estoppel provision at issue. See Thryv,
Inc. v. Click-to-Call Techs., LP, 590 U.S. ----, 140 S. Ct. 1367, 1370 (2020); Leahy-Smith
America Invents Act, Pub. L. 112-29, 125 Stat. 284, 299–302 (Sept. 16, 2011). This provision
prevents “[t]he petitioner in an inter partes review of a claim in a patent . . . that results in a final
written decision” from asserting, in a civil action, “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). During an IPR, a petitioner can argue that a patent claim is invalid “only on a
ground that could be raised under” 35 U.S.C. § 102 or § 103 “and only on the basis of prior art
consisting of patents or printed publications.” Id. § 311(b); see Milwaukee Elec. Tool Corp. v.
Snap-On Inc., 271 F. Supp. 3d 990, 1030 (E.D. Wis. 2017) (an IPR “can only be instituted on
narrow grounds—anticipation and obviousness on the basis of prior art consisting of patents or
printed publications”). Stated differently, a petitioner cannot use an IPR to challenge the validity
of a patent claim under §§ 102 or 103 based on prior art products or systems. Zitovault, LLC v.
Int’l Bus. Machs. Corp., No. 3:16-cv-0962-M, 2018 WL 2971178, at *4 (N.D. Tex. Apr. 4,
2018); Clearlamp, LLC v. LKQ Corp., No. 12 C 2533, 2016 WL 4734389, at *9 (N.D. Ill. Mar.
18, 2016).
According to Bard, that is the long and short of it: because its prior art invalidity grounds
all rely upon prior art products, it could not have raised these grounds as part of the IPR
proceedings, and § 315(e)(2)’s estoppel provision therefore does not apply. Doc. 210 at 2
(“Bard’s remaining grounds are not subject to IPR estoppel because they each involve physical
5
prior art products that were on-sale and in public use prior to the claimed inventions. . . . Prior
art products cannot be raised in an IPR. The estoppel inquiry should end there.”). Medline,
however, argues that the statutory IPR estoppel analysis requires more. It contends that the
Court must look to whether the “product is described and disclosed in publications that could
have been raised in the IPR”; if so, Medline continues, estoppel applies. Doc. 208 at 4; see also
Doc. 211 at 4 (asserting that “an unsuccessful petitioner in an IPR is foreclosed from later
relying on a prior art product in district court where the salient features of that product are
described or shown in publications that could have been used in the IPR”).
“The contours of IPR estoppel are hard to define,” Milwaukee Elec. Tool Corp. v. SnapOn Inc., No. 14-CV-1296-JPS, 2017 WL 4570787, at *5 (E.D. Wis. Oct. 12, 2017), “particularly
in circumstances where prior art theories in litigation supposedly involve prior art that is not a
patent or printed publication,” SPEX Techs. Inc v. Kingston Tech. Corp., No. SACV 16-01790
JVS (AGRx), 2020 WL 4342254, at *14 (C.D. Cal. June 16, 2020) (noting that district courts
have “grappled with the appropriate scope of IPR estoppel” in these circumstances). Neither the
Supreme Court nor the Federal Circuit has squarely addressed the issue before the Court, and
district courts that have addressed this issue (or a similar one) have come to various conclusions.
See, e.g., Wasica Fin. GmbH v. Schrader Int’l, Inc., 432 F. Supp. 3d 448, 454 & n.6 (D. Del.
2020) (noting “the division amongst District Courts that have considered” similar issues and
citing cases).
In the absence of binding precedent on the issue, 4 the Court begins by first looking to the
statutory language. See Thryv, 140 S. Ct. at 1372–73 (defining the scope of a different provision
4
Although the Court may (and does) find certain district court decisions persuasive, no district court
decision, even one from another court in this District, binds the Court. See Camreta v. Greene, 563 U.S.
692, 709 n.7 (2011) (“A decision of a federal district court judge is not binding precedent in either a
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under the Patent Act by first looking to the provision’s text); Kingdomware Techs., Inc. v. United
States, 579 U.S. ----, 136 S. Ct. 1969, 1976 (2016) (“In statutory construction, we begin ‘with the
language of the statute.’” (citation omitted)). Under § 315, IPR estoppel applies to any invalidity
“ground that the petitioner raised or reasonably could have raised during” the IPR. 35 U.S.C.
§ 315(e)(2) (emphasis added). Although the Patent Act does not expressly define the term
“ground,” see, e.g., 35 U.S.C. § 100 (defining certain terms without defining “ground”), courts
have interpreted this term in the IPR estoppel context to mean the “specific pieces of prior art”
that are “the basis or bases on which a petitioner challenges a claim.” Pavo Sols. LLC v.
Kingston Tech. Co., No. 8:14-cv-01352-JLS-KES, 2020 WL 1049911, at *2 (C.D. Cal. Feb. 18,
2020) (citation omitted); Clearlamp, 2016 WL 4734389, at *8; see also Solutran, Inc. v. U.S.
Bancorp & Elavon, Inc., No. 13-cv-02637 (SRN/BRT), 2018 WL 1276999, at *4 (D. Minn. Mar.
12, 2018) (defining “ground” in another estoppel provision as “a discrete claim of invalidity
based upon a prior art or a combination of prior art”). This interpretation is consistent with how
the Federal Circuit has referred to “grounds” in the IPR context. See, e.g., Koninklijke Philips
N.V. v. Google LLC, 948 F.3d 1330, 1335–37 (Fed. Cir. 2020) (holding that the PTAB
erroneously instituted an IPR on a ground not advanced in the IPR petition when it did so “based
on a combination of prior art references not advanced in” the petition); Shaw Indus. Grp., Inc. v.
Automated Creel Sys., Inc., 817 F.3d 1293, 1296 (Fed. Cir. 2016) (characterizing different
combinations of prior art references as different grounds in an IPR petition).
The Court therefore reads “ground,” as that term is used in 35 U.S.C. § 315(e)(2), to
mean the specific piece of prior art or combination of prior art that a petitioner raised, or could
have raised, to challenge the validity of a patent claim during an IPR. Based on this reading, the
different judicial district, the same judicial district, or even upon the same judge in a different case.”
(citation omitted)).
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language of § 315(e)(2) does not estop an IPR petitioner’s use in litigation of an invalidity theory
that relies upon a product as a prior art reference because a prior art product cannot be used as a
reference to challenge the validity of a patent claim in an IPR. Therefore, any invalidity theory
relying upon that product as a prior art reference is not a “ground” that reasonably could have
been raised during the IPR. See 35 U.S.C. § 315(e)(2). Section 315(e)(2) similarly does not
preclude an invalidity theory that relies upon a document that is not a “patent” or “printed
publication” as a prior art reference, even if the document is related to a product. Such a theory
also is not a “ground” that could have been used to challenge a patent claim’s validity during an
IPR. See Vaporstream, Inc. v. Snap Inc., No. 2:17-cv-00220-MLH (KSx), 2020 WL 136591, at
*23 (C.D. Cal. Jan. 13, 2020) (“Thus, § 102 and § 103 invalidity grounds that are based on nonpatent/non-printed publication references . . . cannot be raised in IPR proceedings.”). Moreover,
an IPR petitioner generally is not prevented from pursuing an invalidity ground in litigation that
relies upon at least one product or non-patent/non-printed publication as a prior art reference,
even if the theory also relies upon patents or printed publications that could have been raised in
an IPR. See Microchip Tech. Inc. v. Aptiv Servs. US LLC, No. 1:17-cv-01194-JDW, 2020 WL
4335519, at *4 (D. Del. July 28, 2020) (“Section [315] therefore does not estop references based
on physical prior art, whether standing alone or in combination with a printed reference[, and]
. . . nothing estops [the defendant] from raising invalidity arguments based on a combination of
written and physical references.”); SPEX Techs., 2020 WL 4342254, at *15 (“[R]eliance on
some printed publications in an overall collection of documents being used to describe a system
invalidity theory should not lead to estoppel of the overall system invalidity theory itself, nor
piecemeal exclusion of the printed publications underlying that system invalidity theory[.]”).
8
Relying on Oil-Dri and Wasica, Medline urges the Court to more broadly interpret
§ 315(e)(2)’s estoppel provision as precluding an IPR petitioner from relying upon a prior art
product for an invalidity theory in litigation “where the salient features of that product are
described or shown in publications that could have been used in the IPR.” Doc. 211 at 4. The
court in Oil-Dri stated that “[w]here there is evidence that a petitioner has reasonable access to
printed publications corresponding to or describing a product that it could have proffered during
the IPR process, it cannot avoid estoppel simply by pointing to the finished product (rather than
the printed materials) during litigation.” 2019 WL 861394, at *10. And in Wasica, the court
found that the existence of a prior art publication that disclosed the same claim elements as a
physical product precluded the defendant from pursuing obviousness theories that relied upon
that product. 432 F. Supp. 3d at 452, 454–55
To be sure, a court could read Oil-Dri and Wasica as supporting Medline’s or a similar
interpretation of § 315(e)(2). But in the Court’s view, such an interpretation stretches the
meaning of the term “ground” in the IPR estoppel provision too far. Cf. Cal. Inst. of Tech. v.
Broadcom Ltd., No. CV 16-3714-GW(AGRx), 2019 WL 8192255, at *7 (C.D. Cal. Aug. 9,
2019) (“[T]he Court declines to adopt a ‘superior and separate reference’ standard or any other
higher standard that would require, for instance, that certain claim limitations be independently
satisfied by prior art in a way that is different from an associated prior art patent or printed
publication. The statute does not include such requirements, and they would likely extend the
reach of statutory IPR estoppel beyond its intended scope.”). If Congress had wanted to estop an
IPR petitioner from pursuing invalidity grounds that relied upon a physical product in a
particular situation, such as where a patent or printed publication discloses the same claim
limitations as the product, it could have provided language to that effect. Congress did not do so,
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and this failure indicates that Congress did not intend for the IPR estoppel provision to be that
broad. See Smith v. United States, 508 U.S. 223, 229 (1993) (“Had Congress intended the
narrow construction petitioner urges, it could have so indicated. It did not, and we decline to
introduce that additional requirement on our own.”); see also Advocate Health Care Network v.
Stapleton, 581 U.S. ----, 137 S. Ct. 1652, 1659 (2017) (Congress’ failure to adopt readily
available language that would have supported a party’s statutory interpretation indicated that
Congress did not intend for that interpretation).
Nonetheless, an IPR petitioner avoids statutory IPR estoppel only if the invalidity ground
it pursues in litigation actually relies upon a product or some other product-related evidence that
could not have been introduced in an IPR proceeding as a prior art reference. See Milwaukee
Elec., 271 F. Supp. 3d at 1032 (“Snap-On cannot skirt [IPR estoppel] by purporting to rely on a
device without actually relying on the device itself.”). That is, the petitioner cannot put forth
invalidity arguments in litigation that rely solely upon patents or printed publications that could
have been raised in the IPR, and then claim that IPR estoppel does not apply because these
printed materials reflect or represent a prior art product. The IPR petitioner in that situation is
improperly attempting to disguise a ground that could have been raised during the IPR as one
that could not have been raised. See, e.g., Vaporstream, 2020 WL 136591, at *23 (“[S]everal
district courts have held that if a patent challenge is simply swapping labels for what is otherwise
a patent or printed publication invalidity ground in order to cloak its prior art ground and skirt
estoppel, then § 315(e)(2) estoppel still applies.” (citations omitted) (internal quotation marks
omitted)); Clearlamp, 2016 WL 4734389, at *9 (“While LKQ seeks to cloak its reliance upon
UVHC3000 as a product, so as to avoid § 315(e)(2) estoppel, such an argument is disingenuous
as it is the UVHC3000 datasheet upon which LKQ relies to invalidate the asserted claims.”); see
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also SPEX Techs., 2020 WL 4342254, at *15 (reliance on some printed publications to support a
prior art system invalidity theory is not precluded “absent a showing that the system invalidity
theory is a patent or printed publication theory in disguise”).
The question now is whether Bard is estopped from pursuing any of its prior art invalidity
grounds in this litigation based on the Court’s interpretation of the statutory IPR estoppel
provision. For each prior art invalidity ground, Bard contends that Bardex, Turkel, or both are
prior art that, when combined with other prior art references, render the asserted claims of the
‘088, ‘761, and ‘596 patents obvious under 35 U.S.C. § 103. Medline has provided all the claim
charts for Bard’s prior art invalidity grounds that rely upon Turkel and the claim charts for
Bard’s prior art invalidity grounds that rely upon Bardex as the primary prior art reference.
Having reviewed the claim charts, and given Medline’s burden to prove the propriety of
estoppel, the Court concludes that Bard’s prior art invalidity grounds are not estopped by 35
U.S.C. § 315(e)(2). Medline does not contend that these grounds are patent- or printed
publication-based invalidity theories in disguise, and nothing in Bard’s invalidity claim charts for
either Bardex or Turkel suggests that this is the case. To the contrary, these charts are replete
with photographs of the Bardex and Turkel products themselves, as Medline repeatedly
acknowledges in its motion. See, e.g., Doc. 208 at 8 (“Bard’s July 2018 invalidity contentions
present high-level photos of [the] products as allegedly disclosing or suggesting the claim
limitations.”); id. (“Bard uses two photos of Bardex dozens of times throughout its contentions as
allegedly suggesting limitations of claims concerning the tray and syringes[.]”); id. at 9 (“Bard’s
citations to Turkel in its contentions consist largely of high-level, overhead views of the lower
tray of the two-layer Turkel kit[.]”); id. at 15 (“[A]s with Bardex, Bard’s invalidity contentions
involving Turkel rely on photographs of the tray showing the structure and components[.]”).
11
Bard’s substantive reliance on photographs of the physical products themselves indicates that it
intends to argue that the actual products—as opposed to documents describing the products—
disclose certain limitations of the asserted claims. Indeed, Medline concedes that Bard is
“relying on two real world products, Bardex and Turkel[,]” for its prior art invalidity grounds.
Doc. 211 at 4 (emphasis added). This puts Bard’s prior art invalidity grounds outside the reach
of IPR estoppel under 35 U.S.C. § 315(e)(2).
II.
Judicial Estoppel
Medline next argues that Bard made representations in its renewed motion to stay the
litigation that judicially estop it from pursuing any invalidity ground based on a prior art product.
Judicial estoppel “is an equitable doctrine invoked by a court at its discretion.” New Hampshire
v. Maine, 532 U.S. 742, 750 (2001) (citation omitted). It “generally prevents a party from
prevailing in one phase of a case on an argument and then relying on a contradictory argument to
prevail in another phase.” Id. at 749 (citation omitted). In applying judicial estoppel, courts
typically consider the following three factors: “(1) whether the party’s later position was ‘clearly
inconsistent’ with its earlier position; (2) whether the party against whom estoppel is asserted in
a later proceeding has succeeded in persuading the court in the earlier proceeding; and
(3) whether the party ‘seeking to assert an inconsistent position would derive an unfair advantage
or impose an unfair detriment on the opposing party if not estopped.’” In re Airadigm
Commc’ns, Inc., 616 F.3d 642, 661 (7th Cir. 2010) (quoting New Hampshire, 532 U.S. at 750–
51). These factors, however, are neither exhaustive nor “inflexible prerequisites.” New
Hampshire, 532 U.S. at 751. They are “general guideposts that must be considered in the
context of all the relevant equities in any given case.” Grochocinski v. Mayer Brown Rowe &
12
Maw, LLP, 719 F.3d 785, 795 (7th Cir. 2013). “To protect the integrity of the judicial process, a
court needs freedom to consider the equities of an entire case.” Id. at 796.
Medline argues that the aforementioned factors all support applying judicial estoppel.
First, Medline contends that Bard’s position that the unsuccessful IPRs do not impact its prior art
invalidity defenses “is clearly inconsistent with its earlier position that ‘no matter the outcome,’
the IPRs ‘will significantly simplify the issues in this case,’ because IPR estoppel ‘will
significantly limit Bard’s invalidity arguments.’” Doc. 208 at 17 (quoting Bard’s renewed
motion to stay, Doc. 176-1). Second, Medline asserts that “Bard succeeded in persuading the
Court based on this argument” because the Court granted Bard’s renewed motion to stay,
“finding that if Medline’s claims survived, ‘the litigation will be simplified and less burdensome
because Bard will not be able to assert invalidity as a defense.’” Id. at 17–18 (quoting Doc. 190
at 5). Third, Medline claims that not estopping Bard will allow Bard to “derive an unfair
advantage” and “impose an unfair detriment on Medline.” Id. at 18.
Bard, for its part, argues that judicial estoppel does not apply because it did not make any
“clearly inconsistent” statements. Doc. 210 at 15–16. Bard claims that it “never stated in its
motion to stay that estoppel would apply beyond the scope of Section 315” or “that it would be
estopped from raising invalidity grounds based on prior art products that Bard could not have
raised during the IPRs.” Id. at 16. Rather, Bard continues, it “merely quoted the estoppel
provision of Section 315 in its motion to stay[.]” Id.
But Bard did much more than “merely quote[]” § 315(e)(2)’s estoppel provision—it
made several statements about how it would be estopped once the IPR proceedings were over:
Bard would be estopped from raising in expert reports, summary
judgment, or at trial any prior art that it could have raised in the
inter partes review. Therefore, no matter the outcome, the inter
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partes review proceedings will significantly simplify the issues in
this case.
***
Medline gains at least one tactical advantage from a stay—Bard
will be estopped from raising prior art in this case that it could
have raised in the inter partes review.”
***
[S]taying the case until the PTAB issues its final decision on the
inter partes review will result in a simplification of this case
regardless of the outcome. Either every asserted claim will be
canceled, extinguishing any cause of action based on the claims, or
Bard will be estopped from asserting invalidity based on the
grounds raised but rejected during inter partes review.
***
If claims are canceled, there will be no need to address those
claims in expert discovery, summary judgment, or pretrial filings.
The same would be true of invalidity arguments for which Bard
would be estopped from asserting following a final decision in the
inter partes review.
***
Medline will benefit from the stay because, to the extent any
claims survive inter partes review, Bard will be estopped from
asserting prior art combinations that it could have raised before the
PTAB. This will significantly limit Bard’s invalidity arguments at
summary judgment and trial.
Doc. 176-1 at 2–3, 10, 12–14. Of particular significance are Bard’s assertions about the scenario
where patent claims survive the IPRs, which is what happened with the claims of the ‘088, ‘761,
and ‘596 patents. If this happened (and it did), Bard’s “invalidity arguments at summary
judgment and trial” would be “significantly limit[ed].” Doc. 176-1 at 14. Bard similarly stated
that “no matter the outcome”—i.e., even if all the patent claims emerged from the IPRs
unscathed— the IPRs would “significantly simplify the issues in this case.” Id. at 2.
14
When Bard made these statements, though, it had already narrowed its final prior art
invalidity grounds (by way of its April 2019 Local Patent Rule 3.1(b) submission) to grounds
that all relied upon a product as a prior art reference. As Medline puts it, “Bard obtained a stay
by representing to [the] Court that the IPRs would necessarily narrow the case, knowing full well
that the only prior art combinations that it was then asserting included the real world Bardex and
Turkel products.” Doc. 211 at 5. If statutory IPR estoppel did not apply to grounds that rely
upon a physical product as a prior art reference—which is precisely the position Bard now
takes—Bard would not have had to narrow its prior art invalidity grounds in any way following
the completion of the IPRs. In other words, based on Bard’s interpretation of statutory IPR
estoppel and the prior art invalidity grounds it is actually pursuing in this case, Bard’s promise
that completion of the IPR proceedings would significantly limit its invalidity arguments moving
forward was illusory. Therefore, Bard’s earlier position that the IPR proceedings would
significantly limit its invalidity arguments is “clearly inconsistent” with its later (and current)
position that the IPR proceedings do not limit the prior art invalidity arguments it can pursue.
Furthermore, Bard does not dispute that its earlier position helped persuade the Court to
stay the litigation. Nor could it. In granting a stay, the Court pointed out that even if the PTAB
did not cancel any claims, Bard would be “estopped from arguing that [a patent] claim is invalid”
and would be unable “to assert invalidity as a defense.” 5 Doc. 190 at 4–5 (citation omitted).
Thus, the first two judicial estoppel factors are satisfied.
5
In hindsight, the Court’s statements could be read to suggest that Bard would be estopped from asserting
any invalidity defenses. This is not the case; Bard did not contend that the IPRs would affect its
invalidity defenses under 35 U.S.C. §§ 101 and 112, and statutory IPR estoppel does not preclude these
defenses. See Neptune Generics, LLC v. Eli Lilly & Co., 921 F.3d 1372, 1378 (Fed. Cir. 2019)
(“Congress expressly limited the scope of inter partes review to a subset of grounds that can be raised
under 35 U.S.C. §§ 102 & 103.”); 35 U.S.C. § 315(e)(2) (estopping only invalidity grounds “that the
petitioner raised or reasonably could have raised during [the] inter partes review”). As such, the scope of
15
That brings the Court to the final factor: whether it is unfair to allow Bard to proceed
with its prior art invalidity arguments given the statements it made in renewing its motion to
stay. See Airadigm Commc’ns, 616 F.3d at 661. Considering the equities of the entire case,
Grochocinski, 719 F.3d at 796, the Court concludes that it is not.
First, although certain assertions by Bard in its renewed motion to stay were misleading,
they were not so egregious or manipulative as to warrant wholesale preclusion of its prior art
invalidity theories. Cf. id. (noting that “judicial estoppel is concerned more generally with
protecting the integrity of the courts from the appearance and reality of manipulative litigation
conduct”); see also Slater v. U.S. Steel Corp., 871 F.3d 1174, 1187 (11th Cir. 2017) (en banc)
(“[J]udicial estoppel should apply only when the [party’s] conduct is egregious enough that the
situation ‘demand[s] equitable intervention.’” (citation omitted)). Second, the Court did not
grant Bard’s request for a stay based solely on its statements regarding estoppel. The Court
found that other factors also weighed in favor of a stay, such as the fact that “Medline would not
suffer undue prejudice or tactical disadvantage from a stay” and the fact that “if the IPRs result
in cancellation of all or some of Medline’s claims, those claims would no longer be at issue, and
would no longer require expert discovery.” Doc. 190 at 4–5. Indeed, the Court recognized that
an IPR decision canceling even one patent claim “would simplify the case and would render
unnecessary at least some of the expert discovery that would take place in the interim.” Id. at 6.
Here, the PTAB did more than cancel one patent claim; it found every asserted claim from the
‘400 patent unpatentable, thereby simplifying the case with respect to that patent. Finally,
Medline has had more than a year to prepare responses to Bard’s prior art invalidity theories.
And to the extent the IPRs for the ‘088, ‘761, and ‘596 patents involved arguments similar to
any estoppel (statutory or judicial) would not affect Bard’s ability to pursue these defenses against the
remaining asserted patent claims.
16
Bard’s litigation arguments, Medline can use—at least as a starting point—any counterarguments
it developed in successfully opposing these IPRs. For instance, if Bard, “in effect, did raise
Bardex” in the IPR petitions, as Medline contends, Doc. 208 at 14, then Medline should be able
to rely upon the work it did in the IPR proceedings to defend against Bard’s Bardex-related
invalidity grounds in this litigation. In these circumstances, the Court does not find it unfairly
detrimental to require Medline to respond on the merits to all of Bard’s invalidity challenges. Cf.
Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986) (“Cases should be decided upon their
merits whenever reasonably possible.”); Holmes v. W. Side Veterans Admin. V.A. Hosp., No. 04
C 2287, 2007 WL 9813407, at *4 (N.D. Ill. Feb. 2, 2007) (“As a general rule, it is preferable to
decide cases on the merits rather than on what are arguably technicalities.”).
Ultimately, whether to apply judicial estoppel is a matter entrusted to the “equitable
judgment and discretion” of the Court. In re Knight-Celotex, LLC, 695 F.3d 714, 721 (7th Cir.
2012). Here, it is the Court’s judgment that, despite Bard’s inconsistent positions, Medline is not
entitled to a knockout blow on Bard’s prior art invalidity arguments. As such, the Court declines
to judicially estop Bard from pursuing these arguments.
CONCLUSION
For the foregoing reasons, the Court grants in part and denies in part Medline’s motion to
strike [207]. The Court precludes Bard from asserting its invalidity ground based on ERASE
CAUTI, but it allows Bard to proceed with its invalidity grounds based on Bardex and Turkel.
Dated: September 14, 2020
______________________
SARA L. ELLIS
United States District Judge
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