Valve’s Battle Over Discontinued Controller
THE PARTIES
Plaintiff: Ironburg Inventions Ltd.
Plaintiff’s Firm: Manatt, Phelps, & Phillips
Defendant: Valve Corporation
Defendant’s Firm: Shook, Hardy & Bacon
THE BIG PICTURE
IPRs are powerful tools in combatting patent infringement, but they can negatively impact your litigation strategy. Here, Valve was unable to effectively argue invalidity at trial due to IPR estoppel.
BACKGROUND
Ironburg Inventions Ltd. sued Valve for infringing Ironburg’s game controller patent family in December 2015 (initially Ironburg only asserted 2 patents but it amended its complaint as 2 other related patents were issued). At issue was the Steam Controller, which was introduced in November 2015 and discontinued in November 2019.
The Ironburg patents are directed towards additional buttons on the back of a conventional game controller (exemplary image of the buttons is below).
After a 5-day trial, a jury found that Valve had willfully infringed 2 of Ironburg’s patents (U.S. Patent No. 8,641,525 and 9,089,770) and awarded $4,029,533.93 in damages. (The 2 remaining patents, U.S. Patent No. 9,289,688 and 9,352,229 were not included in the trial because judgment of those claims was and still is stayed pending resolution of the IPRs). The court entered partial judgment to that effect on July 19, 2021. Valve is appealing the decision, but there are a couple of interesting notes about this case related to inter partes reviews.
Inter Partes Review
Valve filed IPRs on all four patents, but at different times and with different art presumably due to the addition of the two newer patents while the district court case was pending and the new patents having slightly different scope.
IPR Estoppel
The PTAB instituted IPRs on the first two patents (the ’525 and ’770 patents), but not based on all of the asserted prior art. Ultimately, the PTAB canceled several of the patents’ claims, but some claims remained. This hamstrung Valve in the district court case. The court estopped Valve from asserting that the patents were invalid due to prior art that (1) was presented to the PTAB but the PTAB rejected; and (2) was not previously presented to the PTO. Effectively, Valve was left arguing non-infringement to the jury and lost that argument. This is the main risk of IPRs: losing there severely limits your ability to argue anticipation/obviousness at trial.
Pending IPRs
As for the still-pending IPRs, the Federal Circuit recently reviewed a determination by the PTAB that canceled some claims of the ’688 and ’229 patents, and left some standing. Part of the issue was that Valve submitted an exhibit as prior art that was a printout of an Xbox 360 controller review. Valve asserted that the printout was a version of the same document that was submitted in the prosecution histories of the ’525, ’688, and ’229 patents. The PTAB ultimately didn’t consider the printout because it held that Valve had not established that the printout was identical to the version that was previously submitted during patent prosecution (i.e. Valve failed to authenticate the document). The Federal Circuit didn’t seem to think much of the PTAB’s reasoning since “a simple comparison of the [two] confirms their near identity” and:
A comparison of the ’525 Burns article with the Exhibit is not burdensome. The ’525 Burns article is nine pages long, and the Exhibit is ten pages long. The article in each document is twelve paragraphs long, and has 23 images. The Board had an obligation to make the comparison
While there were some minor differences between the versions, they didn’t affect the information disclosed by the exhibit and the differences were explained by the way they were produced. The Federal Circuit found that the exhibit was substantially the same as the document produced in the patents’ prosecution histories and vacated and remanded the decision so that the PTAB could properly consider the exhibit. In the future, understanding the PTAB’s formality, it would probably be best to submit the exact version of prior art from a patent’s prosecution history rather than a re-downloaded version, if possible.
[Special Thanks to Docket Navigator for access to the various dockets]