Cherry Picked: CAFC Holds PTAB Findings Don’t Preclude District Court Invalidity Fights
Dependent claims aren't automatic
The relationship between Patent Trial and Appeal Board (PTAB) proceedings and district court litigation continues to be a source of complex legal questions. A recent decision from the U.S. Court of Appeals for the Federal Circuit, Inland Diamond Products Co. v. Cherry Optical Inc., No. 2024-1106 (Fed. Cir. Oct. 15, 2025), provides a clarification, reinforcing a critical distinction between the two forums.
The decision was heard by a panel of Circuit Judges Prost, Reyna, and Chen, with Judge Prost authoring the opinion. The CAFC panel held that a PTAB finding that a patent claim is unpatentable does not have issue-preclusive effect on dependent claims in a subsequent district court case, primarily because of the different standards of proof required. This ruling underscores that a patent’s presumption of validity in district court cannot be eroded by factual findings made under the PTAB’s lower “preponderance of the evidence” standard.
The case addresses a recurring issue for patent practitioners and litigants: what is the downstream impact of a partial loss in an inter partes review (IPR)? The Federal Circuit’s clear guidance confirms that patent challengers cannot use a PTAB victory as a shortcut to invalidating related claims in court; they must re-prove their case from the ground up under the more stringent “clear and convincing evidence” standard.
Background of the Dispute
The case involves Inland Diamond Products Co. (”Inland”), the owner of U.S. Patent Nos. 8,636,360 and 9,405,130. The dispute’s origins lie not in the district court but at the PTAB. In 2019, a third party initiated IPRs against both patents. The PTAB issued final written decisions finding several claims of both patents unpatentable (the “Unpatentable Claims”). However, the IPR petitioner had also challenged a set of dependent claims—claims 2, 4, and 6 of the ‘360 patent and claim 4 of the ‘130 patent (the “Asserted Claims”). The PTAB concluded that the Asserted Claims had not been proven unpatentable, and they therefore survived the IPRs (Slip Op., p. 2).
Following the IPRs, Inland sued Cherry Optical (”Cherry”) in the Eastern District of Wisconsin, alleging infringement of these surviving Asserted Claims. Cherry moved for summary judgment of invalidity.
The district court sided with Cherry, employing a legal analysis centered on issue preclusion. It reasoned that because the Asserted Claims depend from the now-unpatentable claims, the invalidity of the limitations in those independent claims was already decided.
The district court determined that Cherry was “not required to perform an independent invalidity analysis” for the limitations common to both sets of claims (p. 3). This application of issue preclusion led the court to grant summary judgment that the Asserted Claims were invalid for obviousness. Inland appealed this decision to the Federal Circuit.
The Court’s Analysis: Unpacking the Central Legal Issue
The central legal issue on appeal was whether the district court erred in applying issue preclusion to the PTAB’s findings. Specifically, could factual findings underpinning a PTAB unpatentability decision, made under a “preponderance of the evidence” standard, be used to prevent a patentee from defending the validity of different (albeit dependent) claims in district court, where invalidity must be proven by “clear and convincing evidence?”
The Federal Circuit unequivocally answered “no.”
The court vacated the summary judgment and remanded the case, holding that the district court’s application of issue preclusion was a legal error. Citing recent precedents in Parker Vision, Inc. v. Qualcomm Inc. and Kroy IP Holdings, LLC v. Groupon, Inc., the court emphasized that a “well-known exception[]” to issue preclusion arises where “the second action involves application of a different legal standard” (p. 4).
The difference between the PTAB’s preponderance standard and the district court’s clear-and-convincing standard was dispositive. The court articulated its reasoning in a passage that serves as a powerful summary of the law in this area:
“[W]hen a district court would necessarily rely on the Board’s fact findings, and those facts have only been proven in a prior proceeding under a lower [standard] of proof than what is required in district court, collateral estoppel does not apply.” (p. 6).
The Federal Circuit explained that “the Board’s fact findings under a lower standard of proof (preponderance) do not have issue-preclusive effect in district-court invalidity proceedings, where facts must be proven under a higher standard of proof (clear and convincing)” (p. 5).
The district court’s error was that when it was supposed to be “adjudicating the Asserted Claims’ invalidity under the clear-and-convincing standard, the court gave issue-preclusive effect to facts found under the lesser, preponderance standard” (p. 6).
This approach improperly relieved Cherry of its burden and prevented Inland from fully litigating the validity of its claims under the correct legal standard.
Practical Implications
The Inland Diamond decision provides critical guidance for patent owners and accused infringers, shaping litigation strategy in the wake of IPR proceedings.
No Shortcuts for Patent Challengers: Accused infringers cannot treat a PTAB victory on certain claims as a pre-ordained victory on related claims in district court. The Federal Circuit made this point directly: “A fact cannot be deemed established against the patentee in court simply because the Board found it; instead, a patent challenger must still carry its burden of proof, and a patentee may still dispute whether that burden has been met” (p. 8). A defendant must present its invalidity case anew.
Surviving Dependent Claims Retain Full Force: For patent owners, this decision confirms that dependent claims surviving an IPR are not tainted by the invalidation of their corresponding independent claims. They emerge from the PTAB with their statutory presumption of validity fully intact for district court purposes. The Federal Circuit noted that the district court was wrong to suggest it only allowed Inland to defend the claims because they survived the IPR; issue preclusion simply did not apply because of the differing standards of proof and because the claims “have never been determined invalid or unpatentable through any appeals to this court” (p. 7).
Summary Judgment Requires a Full Merits Analysis: The court did not foreclose the possibility of summary judgment, but it set a high bar. A district court granting summary judgment of invalidity “must conclude—on the basis of evidence and argument presented in court, as opposed to issue preclusion stemming from the IPRs—that a reasonable jury could only find, by clear and convincing evidence, facts showing that the prior art disclosed or would have rendered obvious the Asserted Claim as a whole” (p. 8).
Claim Construction Differences Also Bar Preclusion: The court reinforced another barrier to preclusion in a footnote. The IPRs at issue used the older “broadest reasonable interpretation” (BRI) claim construction standard. The court agreed with Inland that any constructions under that standard do not have preclusive effect in district court, which uses the Phillips standard. Quoting a prior case, the court stated, “’a party is not collaterally estopped in district court proceedings by the Board’s constructions during IPR’” when the BRI standard was applied (p. 7).
Conclusion
Inland Diamond Products Co. v. Cherry Optical Inc. solidifies an important bulwark between PTAB proceedings and district court litigation.
By refusing to permit issue preclusion across different standards of proof, the Federal Circuit has protected the integrity of the clear-and-convincing evidence standard and the statutory presumption of patent validity.
The Inland decision implies that facts found at the PTAB stay at the PTAB for preclusion purposes when the invalidity of a different claim is litigated in district court.
Disclaimer: This is provided for informational purposes only and does not constitute legal or financial advice. To the extent there are any opinions in this article, they are the author’s alone and do not represent the beliefs of his firm or clients. The strategies expressed are purely speculation based on publicly available information. The information expressed is subject to change at any time and should be checked for completeness, accuracy and current applicability. For advice, consult a suitably licensed attorney and/or patent professional.