Ingenico Inc. v. Ioengine, LLC

Authored by: Jeremy J. Gustrowsky

In a significant decision for patent law, the Federal Circuit affirmed a jury verdict that found several claims of IOENGINE’s patents invalid, providing important guidance on what counts as “public use” and how inter partes review (IPR) estoppel works in district court litigation. The dispute centered on patents related to portable USB devices with network communication capabilities, specifically U.S. Patent No. 9,059,969 and U.S. Patent No. 9,774,703. Ingenico, a supplier of PayPal’s accused products, challenged the validity of these patents by pointing to a prior art USB device called DiskOnKey, which included a software tool known as the Firmware Upgrader.

The court found that substantial circumstantial evidence supported the jury’s conclusion that the Firmware Upgrader was in public use before the patents’ critical dates. Evidence included a 2002 email and press release from M-Systems (the DiskOnKey manufacturer) announcing the Firmware Upgrader’s launch, user guides, and proof that the software was available for public download. Even though IOENGINE argued there was no direct evidence of anyone actually downloading and using the software, the court held that circumstantial evidence—such as widespread promotion and easy access—was enough to establish public use.

Another key issue was whether Ingenico should have been barred (estopped) from raising certain invalidity arguments in court because it had already challenged the patents in IPR proceedings before the Patent Office. The Federal Circuit clarified that IPR estoppel only blocks arguments that the invention was already patented or described in a printed publication, since those are the only grounds that can be raised in an IPR. However, arguments based on public use, on-sale activity, or knowledge by others—grounds that cannot be raised in IPR—are not blocked in district court, even if they rely on the same evidence used in the IPR.