Lessons for prior art search providers as Federal Circuit again sides with Valve in appeal over game controller patent

Context: In 2015, Ironburg Inventions Ltd sued Valve Corporation in the United States District Court for the Western District of Washington, alleging that Valve’s video game controller featuring rear buttons infringed several claims of its patent.

• In November 2019, the district court granted Ironburg’s motion for estoppel, finding Valve estopped from arguing invalidity on grounds which it had not previously raised in a 2016 petition for inter partes review (IPR) of Ironburg’s patent. A jury subsequently found in Ironburg’s favor, awarding it $4.03 million in damages.
• At first appeal (Ironburg I), the U.S. Court of Appeals for the Federal Circuit affirmed-in-part, vacated-in-part, and remanded, holding that the district court erred by “improperly plac[ing] the burden of proof on Valve, to show that it could not ‘reasonably… have raised’ the [additional grounds] in its [IPR] petition”.
• On remand, the district court again granted Ironburg’s motion for IPR estoppel based on evidence of third-party prior art searches conducted on behalf of both parties which, Ironburg argued, showed that the “additional grounds” had been “reasonably discoverable”. Valve appealed again (Ironburg II).