Public Use and Estoppel Reexamined: Strategic Lessons from Ingenico

This LawFlash details strategic takeaways and practical lessons from the recent US Court of Appeals for the Federal Circuit case on IPR estoppel, evidence of public use, and jury instructions on specific issues.

On May 7, 2025, the US Court of Appeals for the Federal Circuit in Ingenico Inc. v. IOENGINE, LLC,[1] affirmed a jury verdict that certain apparatus and method claims of IOENGINE’s asserted patents were invalid as anticipated and obvious based on a prior art system known as the DiskOnKey and its associated Firmware Upgrader software. IOENGINE raised three main issues on appeal:

• Whether inter partes review (IPR) estoppel should have precluded Ingenico from introducing an invalidity argument at trial based on the Firm Upgrader where Ingenico used printed publications at trial to argue that the Firm Upgrader was known or used by others, on sale, or in public use
• Whether there was sufficient evidence of a product being “in public use” under 35 USC § 102(b) where, according to IOENGINE, the only evidence was that the product was available for download, not that anyone ever actually downloaded and used it
• Whether the jury instructions on conception and diligence, public use, and on sale bar were legally erroneous with prejudicial effect

Because substantial evidence supported the jury verdict, and because the district court did not abuse its discretion in denying a new trial in connection with these issues, the Federal Circuit affirmed.

BACKGROUND

In March 2018, IOENGINE sued PayPal Holdings Inc. in the US District Court for the District of Delaware for infringement of US Patent Nos. 9,059,969 and 9,774,703.[2] In response, Ingenico—the supplier of PayPal’s accused devices—filed a declaratory judgment action against IOENGINE in June 2018.[3]

Ingenico also filed petitions for IPR, challenging the asserted claims of IOENGINE’s patents.[4] In the Final Written Decisions, most of the challenged claims were found unpatentable, but some survived.[5]

A jury trial was held on the surviving claims in July 2022.[6] At trial, Ingenico presented an invalidity theory based on prior art involving a USB device called the DiskOnKey, and its associated Firmware Upgrader software, which was sold in the early 2000s by M-Systems Flash Disk Pioneers Ltd.[7] Ingenico’s theory was that the FirmWare Upgrader was “in public use” or “on sale” before the critical date under § 102(b) (pre-AIA), or “known or used by others” under § 102(a) (pre-AIA).[8] In support of this theory, Ingenico introduced evidence of a July 2002 email from M-Systems that launched the Firmware Upgrader, a press release announcing its availability, a website download page, and expert testimony supporting how a user would have used the upgrade software.[9]

The jury found that the claims-at-issue were infringed but invalid as anticipated and obvious.[10] The district court then entered judgment for Ingenico, and IOENGINE filed a renewed motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b) or, alternatively, for a new trial under Federal Rule of Civil Procedure 59(a).[11] The district court denied IOENGINE’s motions, and IOENGINE appealed.[12]

FEDERAL CIRCUIT DECISION

IPR Estoppel (35 USC § 315(e)(2))

In perhaps the most doctrinally significant aspect of the decision, the Federal Circuit rejected IOENGINE’s argument that Ingenico should have been estopped under § 315(e)(2) from presenting the Firmware Upgrader at trial because “the Firmware Upgrader was entirely cumulative and substantively identical to the Readme instructions and screenshots—which, according to IOENGINE, are printed publications that reasonably could have been raised during the IPR.”[13]

The Federal Circuit noted that the outcome turns on the meaning of the word “ground” in § 315(e)(2)—a meaning that the Federal Circuit had not previously interpreted and was the subject of a split among district courts.[14]

Faced with this issue, the Federal Circuit interpreted “ground” under § 315(e)(2) to mean a legal theory of invalidity (e.g., anticipation based on a printed publication), not the mere reuse of prior art documents.[15] The Federal Circuit explained that, under 35 USC § 311(b), the scope of an IPR is limited to “a ground that could be raised under section 102 or 103,” which “makes clear that grounds are the theories of invalidity available to challenge a claim under §§ 102 or 103.”[16]

The Federal Circuit also explained that a petitioner is further limited to invalidity challenges based on “prior art consisting of patents or printed publications.”[17] And, “[b]y design, a petitioner has no opportunity to challenge that the claimed invention was known or used by others, on sale, or in public use at IPR.”[18]

The Federal Circuit explained how this interpretation is consistent with its previous decision in Qualcomm Inc. v. Apple Inc., No. 23-1208, 2025 WL 1174161 (Fed. Cir. Apr. 23, 2025) (Qualcomm II).[19] In that case, the Federal Circuit had considered whether the applicant admitted that prior art (AAPA) could form the basis of an IPR ground if it is used in combination with one or more patents or printed publications.[20]

The Federal Circuit had interpreted 311(b) to “mean[] that ‘the basis’ of an IPR ground asserting unpatentability can ‘only’ include ‘prior art consisting of patents or printed publications’” and held that “because the basis can only include prior art consisting of patents or printed publications, and because AAPA is not a prior art patent or printed publication . . . it follows that the plain meaning of § 311(b) does not permit the basis to include AAPA.”[21] However, the Federal Circuit also noted that “an IPR petition may rely on AAPA for certain uses, so long as the AAPA is not the basis of a ground in violation of § 311(b).”[22]

The Federal Circuit determined that the explanation in Qualcomm II supports its “interpretation that grounds are the theories of invalidity available to challenge a claim under 35 U.S.C. §§ 102 and 103, which are limited in an IPR to asserting that the claimed invention was patented or described in a printed publication (or would have been obvious only on the basis of prior art patents or printed publications).”[23] According to the Federal Circuit, “[i]f prior art that is not a patent or printed publication, such as AAPA, was used in combination with patents or printed publications such that the ‘basis’ of the ground included AAPA, the petitioner would no longer be asserting a ground that the claimed invention was patented or described in a printed publication.”[24]

Thus, the Federal Circuit held that “IPR estoppel does not preclude a petitioner from asserting that a claimed invention was known or used by others, on sale, or in public use in district court” because “[t]hese are different grounds that could not be raised during an IPR.”[25]

Applying this holding to the case on appeal, the Federal Circuit determined that IPR estoppel did not preclude Ingenico from relying on the DiskOnKey System with related printed publications at trial to prove the claimed invention was known or used by others, on sale, or in public use because those grounds were not available in IPR.[26]

Public Use and Substantial Evidence

The Federal Circuit upheld the jury’s verdict that the Firmware Upgrader was in public use before the critical date.[27] The Federal Circuit explained that public use under pre-AIA § 102(b) requires that the invention be accessible to the public or commercially exploited, but direct evidence of actual use is not necessary.[28] Instead, circumstantial evidence—such as the press release, internal email encouraging broad dissemination, and the public website with a download option—can suffice to establish public use.[29] Although there was no evidence that a user actually used the Firmware Upgrader, the Federal Circuit concluded that a reasonable jury could infer public use based on download availability and public promotion.[30]

Because the jury returned a general verdict finding the claims invalid as anticipated and obvious, the Federal Circuit did not reach whether substantial evidence also supported a jury verdict that the Firmware Upgrader was “on sale” under pre-AIA § 102(b) or “known or used by others…before the invention” under pre-AIA § 102(a).[31]

Jury Instructions

The Federal Circuit reviewed four aspects of the district court’s jury instructions:

• Conception and diligence: The Federal Circuit rejected IOENGINE’s argument that the district court’s instruction on conception and diligence “incorrectly flipped the legal burden.”[32] The district court’s instruction was based on a prior Federal Circuit decision, which stated that the patent challenger “must persuade the trier of fact by clear and convincing evidence that the [purported prior art item] was published prior to [the inventor’s] invention date.” Because the district court “clearly and consistently communicated to the jury that Ingenico had the burden of proving the prior art predated the claimed invention,” the Federal Circuit saw no error.[33]
• Public use: IOENGINE argued that the public use instruction was legally erroneous because it did not distinguish between prior use by the inventor and prior use by an unrelated third party. According to IOENGINE, the district court should have instructed that “public use may be found when the claimed features of the invention are discernible from a prior art product that is accessible to the public.” However, the Federal Circuit rejected the argument, explaining that “an invention is in public use if it is shown to or used by an individual other than the inventor under no limitation, restriction, or obligation of confidentiality.”[34] Because that is what the district court instructed, the Federal Circuit saw no error.[35]
• On-sale: IOENGINE argued that the district court should have instructed the jury that “only an offer that the other party could make into a binding contract simply by accepting it constitutes an offer for sale” or should have instructed the jury that “an advertisement is not an offer for sale.”[36] The Federal Circuit found no error in the district court’s rejection of the proposed instructions where the district court concluded that (1) “the issue of validity turned not on whether particular conduct constituted an offer for sale, but instead on whether the DiskOnKey Devices sold in the United States contained the [F]irmware [U]pgrade[r] and the SDK capabilities,” and (2) the proposed instructions were more likely to confuse the jury than help it.[37]
• Presumption of validity: The Federal Circuit rejected IOENGINE’s argument that the district court erred in refusing to instruct the jury on the presumption of validity.[38] The Federal Circuit explained, “a district court does not reversibly err by not instructing the jury on the presumption of validity if the jury has otherwise been properly instructed on the clear and convincing evidentiary standard required to prove invalidity.”[39] Because the district court “properly and repeatedly instructed the jury on the clear and convincing evidence standard,” the Federal Circuit found no error.[40]

STRATEGIC TAKEAWAYS AND PRACTICAL IMPLICATIONS

Takeaways and practical implications include the following:

IPR Estoppel – Scope Clarified

• Takeaway: Estoppel under 35 USC § 315(e)(2) applies to grounds of invalidity (e.g., anticipation or obviousness based on patents or printed publications). It does not bar use of the same references to support other invalidity theories such as public use or on-sale activity.
• Practical implication: Parties defending against patents post-IPR can still assert § 102(a) or (b) public use or on-sale grounds—even if they involve the same references used in IPR—as long as the legal theory differs. This allows broader flexibility in litigation and underscores the need to clearly differentiate legal grounds from supporting evidence.

Circumstantial Evidence of Public Use Is Viable

• Takeaway: The Federal Circuit reaffirmed that circumstantial evidence—such as internal emails, website archives, and press releases—can be sufficient to establish “public use” under § 102(b).
• Practical implication: Patent challengers should not shy away from asserting public use simply because direct evidence of user interaction is lacking. A well-documented marketing launch or public availability of software may suffice. Practitioners should thoroughly investigate public disclosures and documentation related to use.

Jury Instructions Must Be Carefully Preserved and Substantiated

• Takeaway: The Federal Circuit may give broad deference to the district court’s jury instructions where emphasizing that clear conveyance of the burden of proof and legal standards is often sufficient.
• Practical implication: When contesting jury instructions, practitioners should be specific, propose alternatives clearly grounded in Federal Circuit precedent, and demonstrate how the alleged error caused prejudice. Failure to do so limits the chances of reversal.

General Verdict Form for Multiple Theories

• Takeaway: Where a jury returns a general verdict on multiple invalidity theories (e.g., anticipation and obviousness), the verdict will be upheld if any one theory is supported by substantial evidence.
• Practical implication: Even if multiple invalidity arguments fail on appeal, a single valid ground can sustain the verdict. Jury instructions and verdict forms should be crafted carefully to preserve this flexibility or avoid it, depending on the party.