Dual Attacks Permitted: How the Federal Circuit's Ingenico Decision Undermines Patent Protection and IPR Estoppel

The United States Court of Appeals for the Federal Circuit recently issued a decision in Ingenico Inc. v. IOENGINE, LLC that warrants careful analysis by patent owners and practitioners. This May 7, 2025 opinion addresses important questions regarding prior art invalidity grounds and the scope of Inter Partes Review (IPR) estoppel under 35 U.S.C. § 315(e)(2). The decision has significant implications for patent enforcement strategies, particularly regarding how patent owners defend against invalidity challenges following IPR proceedings.

The Ingenico case concerned patents directed to portable devices, such as USB thumb drives, with processors that facilitate communications between a terminal and a network server. After IOENGINE asserted these patents against PayPal, Ingenico (a supplier of accused products to PayPal) filed a declaratory judgment action and subsequently challenged IOENGINE's patents through both IPR petitions and district court litigation. The Federal Circuit's decision upholds a jury verdict invalidating IOENGINE's patent claims based on prior art that was not raised in the IPR proceedings, interpreting the IPR estoppel provision in a manner that may significantly disadvantage patent owners.

This decision merits attention because it appears to create additional avenues for accused infringers to challenge patent validity, even after participating in IPR proceedings, by drawing fine distinctions between "grounds" that could have been raised in an IPR and those reserved for district court litigation. The court's interpretation of "ground" in the IPR estoppel statute potentially weakens the intended protective effect of estoppel provisions, which were designed to prevent patent owners from having to repeatedly defend their patents against similar invalidity challenges in different forums.