IGT v. Zynga Inc., Appeal No. 2023-2262 (Fed. Cir. July 22, 2025)

In this week’s Case of the Week, the Federal Circuit examined the reviewability and merits of the Patent Trial Appeal Board’s decision to institute inter partes review of an online gaming patent owned by appellant IGT.  The IPR challenge was brought by mobile game developer Zynga, who IGT argued was estopped due to patent interference proceedings involving Zynga’s predecessor in 2010.  The Board and USPTO Director each disagreed, and IGT’s challenged claims were ultimately found to be unpatentable as obvious.  On review, the Federal Circuit held that the declination to apply “interference estoppel” was non-appealable under 35 U.S.C. § 314(d), and that there were in any event sound reasons underlying the Board’s decision.  The Court also affirmed the obviousness determination on the merits.

IGT’s U.S. Patent No. 7,168,089, titled “Secured Virtual Network in a Gaming Environment,” was originally filed in 2002 and describes data transfer authorization methods as between gaming devices and servers.  In 2003, a predecessor of Zynga—Legal iGaming, Inc.—copied claims from the then-pending application for the ’089 patent into its own pending application.  Prior to the America Invents Act, this technique was often used to provoke “interference” proceedings in which the USPTO would determine which inventor had priority on the claimed subject matter.  See pre-AIA 35 U.S.C. § 135.  An interference was declared in 2010 after the ’089 patent issued, but was terminated on the “threshold issue” of whether the copied claims had Section 112 written description support in Zynga’s patent’s specification.  The Board of Patent Appeals and Interferences—PTAB’s pre-AIA predecessor—determined that they did not; found that Zynga was thus not a proper party to the interference; and denied Zynga’s motion for judgment of obviousness as moot.

Years later in 2021, IGT sued Zynga for infringement of the ’089 Patent, and Zynga filed an IPR petition alleging obviousness over different prior art than had previously been asserted by its predecessor.  IGT argued that Zynga was estopped from bringing the challenge under 37 C.F.R. § 41.127(a)(1), which provides that in contested cases before the USPTO, “[a] losing party who could have properly moved for relief on an issue, but did not so move, may not take action in the Office that is inconsistent with that party’s failure to move… .”  The PTAB disagreed, finding (1) that the regulation did not apply because the interference had been terminated on a threshold issue before Zynga’s predecessor’s obviousness motion could have been considered, and (2) that it would in any event be unfair to apply the regulation to prior interference proceedings in this IPR “given that Zynga provoked the interference two years prior to promulgation of the post-AIA regulations for IPR… .”  (Cleaned up.)  Accordingly, in its institution decision, the Board stated that “to the extent” that Section 41.127(a)(1) even “applies” in the IPR, it would waive application of the regulation as permitted by 37 C.F.R. § 42.5(b).  The USPTO Director also sua sponte reviewed the decision and affirmed, including the determination that Section 41.127(a)(1) did not apply in IPR proceedings.

On appeal, the Federal Circuit found the question to be within the unreviewability provisions of 35 U.S.C. § 314(d), which provides that decisions “whether to institute an inter partes review… shall be final and unappealable.”  Notwithstanding, the Court also considered IGT’s argument that the Supreme Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. 261 (2016), permits “inquiry into whether the Board engaged in ‘shenanigans’ not in accordance with law.”  The Court found there were no such shenanigans, as the regulations provided PTAB with discretion to waive the estoppel provision in view of the fact that the prior interference had been terminated on a threshold issue that mooted the obviousness challenge.  As these grounds alone were sufficient to support the institution decision, the Federal Circuit did not reach the Board and the Director’s broader determination that “interference estoppel” did not apply in IPR proceedings.

The Court went on to affirm the Board’s obviousness determination in its final written decision, rejecting IGT’s assignments of error and otherwise finding the determination to be supported by substantial evidence.

The full opinion can be found here.

By Jason A. Wrubleski

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Acorda Therapeutics, Inc. v. Alkermes PLC, Appeal No. 2023-2374 (Fed. Cir. Jul. 25, 2025)

In this appeal from the Southern District of New York, Appellant Acorda Therapeutics sought the modification of an arbitration award denying recoupment of certain royalty payments Acorda made to respondent Alkermes under a patent license agreement.   The agreement covered the active ingredient in the drug Ampyra®, which Acorda continued to make and pay royalties on after the expiration of Alkermes’ patent in 2018.  Acorda argued that the arbitration panel manifestly disregarded the law in denying recoupment of post-expiration royalty payments that Acorda made without formal protest. The Federal Circuit concluded that it lacked jurisdiction over the appeal under 28 U.S.C. § 1295(a)(1) and thus transferred the case to the Second Circuit Court of Appeals.

The opinion can be found here.

By Elizabeth Graves

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.