Kroy IP Holdings, LLC v. Groupon, Inc

Authored by: Jeremy J. Gustrowsky

In a significant decision for patent owners, the Federal Circuit recently clarified when a prior Patent Trial and Appeal Board (PTAB) decision can prevent a patentee from asserting related patent claims in district court. The case, Kroy IP Holdings, LLC v. Groupon, Inc., centered on whether Kroy could continue to assert certain claims from U.S. Patent No. 6,061,660 against Groupon after the PTAB had previously found other claims of the same patent unpatentable.

The district court had ruled that Kroy was barred from asserting these new claims, reasoning that since the PTAB had already found similar claims unpatentable, Kroy was collaterally estopped (i.e., legally prevented) from pursuing the remaining claims. However, the Federal Circuit reversed this decision, holding that because the PTAB uses a lower burden of proof (“preponderance of the evidence”) than district courts (“clear and convincing evidence”), the PTAB’s findings on some claims do not automatically block a patentee from asserting other, unadjudicated claims in court.

The Federal Circuit emphasized that collateral estoppel generally does not apply when the two proceedings use different legal standards or burdens of proof. The only exception is when the exact same claim has already been found unpatentable by the PTAB and that decision has been affirmed on appeal—in that case, the claim is considered canceled and cannot be asserted again. But for different claims, even if they are similar, patent owners retain the right to have their day in court under the higher standard of proof.

This decision is a welcome clarification for patent holders, ensuring that PTAB decisions do not automatically wipe out all related claims in district court litigation. Patent owners can continue to assert claims that were not directly ruled unpatentable by the PTAB, and defendants must still meet the higher standard required in court to prove invalidity.