Authored by: Jeremy J. Gustrowsky
In a significant decision for patent litigation and the gaming industry, the Federal Circuit affirmed the unpatentability of several claims in IGT’s U.S. Patent No. 7,168,089, which covers secure software transfers in gaming environments. The case, IGT v. Zynga Inc., centered on whether Zynga was barred by “interference estoppel” from challenging IGT’s patent in an inter partes review (IPR) after a previous interference proceeding between the parties was terminated on a technicality.
IGT argued that Zynga should have been estopped from bringing the IPR because it could have raised its obviousness arguments in the earlier interference. However, the court explained that the earlier interference was terminated on a “threshold issue”—specifically, Zynga’s lack of written description support in its application—which meant the Board never decided the merits of obviousness. Because of this, the court held that the interference estoppel regulation did not apply, and Zynga was not barred from pursuing the IPR.
The Federal Circuit also addressed whether such estoppel decisions by the Patent Office are reviewable by the courts. The court held that decisions about whether to institute an IPR—including whether to apply interference estoppel—are generally not reviewable, except in rare cases of agency misconduct, which were not present here. On the merits, the court found substantial evidence supported the Patent Trial and Appeal Board’s conclusion that the prior art taught all elements of the challenged claims, including the key “software authorization agent” and its functions.
This result highlights the importance of procedural outcomes in patent disputes and clarifies that a party is not estopped from raising new invalidity arguments in an IPR if a prior interference was terminated on a threshold issue rather than a substantive decision. Patent owners and challengers alike should pay close attention to how estoppel will likely be applied and the limits of judicial review in post-grant proceedings.