On February 10, 2025, the United States Court of Appeals for the Federal Circuit issued a decision in Kroy IP Holdings, LLC v. Groupon, Inc., reversing and remanding a district court ruling that had dismissed Kroy’s patent infringement claims based on collateral estoppel. Kroy IP Holdings, LLC v. Groupon, Inc., No. 23-1359, 2025 U.S. App. LEXIS 2967, at *1 (Fed. Cir. Feb. 10, 2025). The case addressed whether a prior inter partes review (IPR) determination of unpatentability for certain claims of a patent precludes the assertion of different claims from the same patent in district court litigation. The Federal Circuit ruled that because IPR proceedings apply a lower burden of proof than district court invalidity challenges, the district court erred in applying collateral estoppel to Kroy’s newly asserted claims. Id. at *6.
Kroy IP Holdings, LLC (“Kroy”) owns U.S. Patent No. 6,061,660, which covers incentive program systems operated over a computer network. Id. at *1-2. In 2017, Kroy sued Groupon, Inc. (“Groupon”) in the U.S. District Court for the District of Delaware, alleging that Groupon had infringed multiple claims of the ’660 patent. Id. Groupon responded by filing two IPR petitions challenging certain claims of the patent. Id. The Patent Trial and Appeal Board (“PTAB”) found all the challenged claims unpatentable under the preponderance of the evidence* standard. Id. The Federal Circuit affirmed that decision without issuing an opinion under Federal Circuit Rule 36. Id.
Following the Federal Circuit’s affirmance, Kroy filed an amended complaint in district court, asserting new claims from the same patent that had not been adjudicated in the IPR proceedings. Id. Groupon moved to dismiss, arguing that Kroy’s new claims were “immaterially different” from those found unpatentable and were therefore barred by collateral estoppel. The district court agreed, holding that differences between the unadjudicated claims and the adjudicated claims did not materially alter the question of invalidity. Id. at *3. Kroy appealed.
On appeal, the Federal Circuit focused on whether a PTAB finding of unpatentability under the preponderance of the evidence standard precludes a patentee from asserting different, unadjudicated claims in district court, where invalidity must be proven by clear and convincing evidence. Id. at *6-7. The Federal Circuit relied on its prior decision in ParkerVision, Inc. v. Qualcomm Inc., 116 F.4th 1345 (Fed. Cir. 2024), in which the Federal Circuit held that collateral estoppel does not bar a party from asking a court or a jury to reach factual conclusions regarding the validity of unadjudicated method claims that would conflict with the PTAB’s fact findings regarding apparatus claims in the same patent. Id. at *7. The ParkerVision court held that collateral estoppel does not apply due to the differing burden of proof between district court litigation and inter partes review. Id. at *8. Thus, the Federal Circuit held that the same reasoning should apply to the instant case. Id.
The Federal Circuit distinguished Kroy from XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d 1282 (Fed. Cir. 2018), where the Federal Circuit held that once a PTAB decision invalidating a patent claim is affirmed on appeal, that claim can no longer be asserted in district court. Id. at *9. XY, however, did not apply to Kroy because the claims at issue in district court had not been adjudicated
by the PTAB. The Federal Circuit also rejected Groupon’s and the district court’s reliance on Ohio Willow Wood Co. v. Alps S., LLC, 735 F.3d 1333 (Fed. Cir. 2013), explaining that Ohio Willow Wood involved two district court cases applying the same legal standard, rather than a PTAB-to-district-court scenario where different burdens of proof apply. Id. at *10.
Accordingly, the Federal Circuit held that a prior final written decision of the Board of unpatentability on separate patent claims reached under a preponderance of the evidence standard cannot collaterally estop a patentee from asserting other, unadjudicated patent claims in district court litigation. Id. at *11. The Federal Circuit reversed the district court’s dismissal and remanded the case for further proceedings.
The Kroy decision reinforces the limitations of collateral estoppel in the patent context and preserves the rights of patent holders to litigate claims that were not directly invalidated in IPR proceedings. If the district court’s ruling had been upheld, it would have significantly expanded the scope of estoppel, effectively undermining the clear and convincing evidence standard applied in district court patent litigation.
For patent holders, this ruling clarifies that IPR decisions do not automatically foreclose district court litigation of unadjudicated claims. Conversely, accused infringers must carefully assess the scope of estoppel arguments and recognize that prevailing at the PTAB does not necessarily preclude litigation in district court. As courts continue to address the relationship between administrative patent proceedings and district court litigation, Kroy serves as an important precedent ensuring that procedural safeguards, such as differing burdens of proof, are upheld across different judicial proceedings.