Oil-Dri Corp. v. Nestlé Purina Petcare Co., 15-cv-1067

Hon. Amy J. St. Eve

MEMORANUM OPINION AND ORDER

AMY J. ST. EVE, District Court Judge:

Plaintiff Oil-Dri Corp. of America ("Oil-Dri") has filed a motion to exclude, by Inter Partes Review ("IPR") estoppel, certain of Defendant Nestlé Purina Petcare Co.'s ("Purina") invalidity contentions. (R. 114.) For the following reasons, the Court grants in part and denies in part Oil-Dri's motion.

I. The Current Litigation

This case concerns U.S. Patent No. 5,975,019 ('019 Patent), entitled "Clumping Animal Litter," filed on August 19, 1997. (R. 77-1, '019 Patent, 1.) The Abstract of the patent describes "[a] clumping animal litter utilizing the interparticle interaction of a swelling clay, such as sodium bentonite, in combination with a non-swelling clay material." (Id.) Additionally, the patent's abstract discloses that "[p]referably, sixty percent (60%) by weight, or less, composition of sodium bentonite is used after the judicious selection of particle size distribution such that the mean particle size of the non-swelling clay material is greater than the mean particle size of the sodium bentonite."

Page 2

The '019 Patent has three independent claims. Claim 1 is:

A clumping animal litter comprising:

a. a particulate non-swelling clay having a predetermined mean particle size no greater than about 4 millimeters; and

b. a particulate swelling clay having a predetermined mean particle size no greater than about 2 millimeters, wherein the mean particle size of the non-swelling clay material is greater than the mean particle size of the swelling clay.

(Id. at col. 9:37-46.) Claim 21 is:

A clumping animal litter comprising:

a. a particulate non-swelling clay material in the amount of at most about 60 percent by weight of the animal litter, the material having a predetermined mean particle size;

b. a particulate swelling clay in the amount of at least about 40 percent by weight of the animal litter, the material having a predetermined mean particle size, and wherein the mean particle size of the non-swelling clay material is greater than the mean particle size of the swelling clay;

c. an organic clumping agent in an amount within the range of about 0.25 percent by weight to about 6 percent by weight of the animal litter; and

d. wherein the ratio of the mean particle size of the non-swelling clay material to the mean particle size of the swelling clay is within the range of more than about 1:1 to about 4:1.

(Id. at col. 10:32-49.) Finally, Claim 30 is:

A method for making a clumping animal litter comprising the steps of:

a. combining a particulate non-swelling clay material with a suitable particulate swelling clay to form a composition wherein the mean particle size of the particulate non-swelling clay is greater than the mean particle size of the particulate swelling clay;

Page 3

b. mixing the composition to effect a substantially uniform distribution of the two materials;

c. packaging a quantity of the mixed composition.

Oil-Dri filed this lawsuit on February 3, 2015, claiming Purina infringed the '019 Patent with its clumping cat litters. (R. 1.) In February 2017, Oil-Dri amended its complaint. (R. 77.) In the Amended Complaint, Oil-Dri claims Purina infringed claims 1-4, 6-7, 9-11, 13, 16, 21-26, 30-32, and 35 of the '019 Patent. (Id. at ¶ 8.) After Purina filed a partial motion to dismiss, Oil-Dri withdrew its claims related to Purina's "lightweight" products, and the Court dismissed Purina's allegations of infringement of any claim including the limitation of an "organic clumping agent." (R. 105 at 5 & n.4, 11.) While the Court gave Oil-Dri the opportunity to file a Second Amended Complaint, it opted not to do so. (See R. 104.)

II. The IPR Proceedings

A. Background on IPR

The Leahy-Smith America Invents Act ("AIA"), Pub. L. No. 112-29, 125 Stat. 284 (2011), created the IPR process in which the parties engaged. See Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2136-38 (2016); Drink Tanks Corp. v. GrowlerWerks, Inc., No. 3:16-cv-410-SI, 2016 WL 3844209, at *1 (D. Or. July 15, 2016); Black & Decker Inc. v. Positec USA, Inc., No. 13 C 3075, 2013 WL 5718460, at *1 (N.D. Ill. Oct. 1, 2013). A party may petition for IPR "to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under [35 U.S.C. §§ 102, 103] and only on the basis of prior art consisting of patents or printed publications." 35 U.S.C. § 311(b). After receiving a petition, the Patent Trial and Appeal Board ("PTAB") must decide whether to institute IPR by determining whether "there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition." § 314(a).

Page 4

If the PTAB institutes IPR, it must issue a final determination within a year—or 18 months "for good cause shown"—of the date when the PTAB notices the institution of IPR. 35 U.S.C. § 316(a)(11). When the PTAB issues a final decision, the IPR petitioner is estopped from arguing in a civil action that a "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).

If a party is dissatisfied with the PTAB's decision, it may request rehearing within 30 days. 37 C.F.R. § 42.71(d). Additionally, a party may appeal the PTAB's final written decision to the Federal Circuit. 35 U.S.C. § 319.

B. The IPR at Issue

Less than two weeks after Oil-Dri filed the current lawsuit, Purina filed an IPR petition before the PTAB. IPR Pet., Nestlé Purina Petcare Co. v. Oil-Dri Corp. of Am., IPR No. 2015-00737, Paper No. 1 (PTAB Feb. 13, 2015).¹ Purina challenged claims 1-13, 30, and 32 of the '019 Patent. Decision on Institution of IPR, Purina IPR, Paper No. 12 at 2. Purina relied on two patents as prior art in support of its IPR petition: U.S. Patent No. 5,386,803 ("Hughes") and U.S. Patent No. 5,458,091 ("Pattengill"). Id. at 3. Specifically, Purina challenged the claims as follows:

Page 5

Id. at 4.

The PTAB instituted IPR only on the ground of "[w]hether claims 1-13, 30, and 32 are unpatentable under 35 U.S.C. § 103(a) as obvious over the combination of Hughes and Pattengill." Id. at 15. On June 20, 2015, the PTAB issued a final written decision in which it concluded that Purina had failed to show by a preponderance of the evidence that any of the claims in question were invalid. (R. 52-1 at 2.) Purina filed a request for rehearing, which the PTAB denied in February 2017. (R. 69-3.) Purina appealed the PTAB's decision to the Federal Circuit, where the case is currently pending. Nestlé Purina Petcare Co. v. Oil-Dri Corp. of Am., No. 17-1744 (Fed. Cir. 2017).

Oil-Dri seeks to preclude Purina from raising certain prior art references in the current litigation based on § 315(e)(2), the IPR estoppel provision. See Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293, 1299-30 (Fed. Cir. 2016), cert. denied, 137 S. Ct. 374 (2016). Specifically, Oil-Dri argues that Purina is estopped from asserting (1) invalidity grounds raised in its IPR petition but not instituted by the PTAB under § 314 ("noninstituted grounds"), and (2) grounds not raised in Purina's petition that Purina could have reasonably raised ("nonpetitioned grounds").

I. Noninstituted Grounds

A. IPR Estoppel Does Not Apply to Noninstituted Grounds

With respect to the first group of invalidity grounds—the noninstituted grounds—Oil-Dri concedes that Federal Circuit precedent "holds that non-instituted prior art (prior art cited in an IPR petition, but not made part of the IPR) is not estopped in a [PTAB] proceeding, under 35 U.S.C. § 315(e)(1)." (R. 122 at 1 (citing Credit Acceptance Corp. v. Westlake Servs., 859 F.3d

Page 6

1044 (Fed. Cir. 2017).) Section 315(e)(1) is the IPR estoppel provision applying to proceedings before the Patent and Trademark Office that has the same relevant language as § 315(e)(2), the IPR estoppel provision applying to civil actions. Section 315(e)(1) reads:

The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

Section 315(e)(2) provides:

The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert . . . in a civil action arising in whole or in part under section 1338 of title 28 . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

Despite Oil-Dri's concession based on Credit Acceptance, it does not appear to have admitted that Purina is free to raise noninstituted prior art in this action. Oil-Dri, however, does not offer any reason to distinguish the two identically worded subsections of § 315(e), nor can the Court discern one. See Henson v. Santander Consumer Corp. USA Inc., 137 S. Ct. 1718, 1723 (2017) (explaining that the petitioners failed to offer a persuasive reason to "abandon [the Supreme Court's] usual presumption that 'identical words used in different parts of the same statute' carry 'the same meaning.'" (quoting IBP, Inc. v. Alvarez, 546 U.S. 21, 34 (2005))); Hall v. ...