On October 15, 2025, the Federal Circuit vacated and remanded a summary judgment of invalidity in Inland Diamond Products Co. v. Cherry Optical Inc., No. 24-1106, holding that the district court improperly applied issue preclusion based on prior PTAB inter partes review decisions. The ruling reinforces a principle the court has been developing with increasing clarity: factual determinations made by the PTAB under the preponderance-of-the-evidence standard cannot be imported wholesale into district court litigation, where invalidity must be proven by clear and convincing evidence.
Background and Procedural History
The case arose from two related patents owned by Inland Diamond Products: U.S. Patent No. 8,636,360 and U.S. Patent No. 9,405,130. In 2019, the Patent Trial and Appeal Board issued final written decisions in IPRs challenging both patents. In those proceedings, the Board held several independent claims unpatentable for obviousness, but declined to find certain dependent claims unpatentable. Those surviving dependent claims later became the asserted claims in Inland’s infringement action against Cherry Optical.
Importantly, Cherry was not the petitioner in the IPRs. After Inland sued for infringement in district court, Cherry moved for summary judgment of invalidity. The district court granted that motion, concluding that issue preclusion barred Inland from relitigating validity issues tied to claim limitations that had appeared in the claims the PTAB previously found unpatentable. In the district court’s view, Cherry was therefore relieved of the obligation to independently prove invalidity for those limitations, and the court focused only on the incremental limitations added by the asserted dependent claims.
That approach proved fatal on appeal.
The Federal Circuit’s Framing of the Issue
The Federal Circuit reviewed the district court’s application of issue preclusion de novo. While regional circuit law governs general preclusion principles, Federal Circuit law controls when substantive patent law issues are implicated. Here, the court had little difficulty concluding that patent-specific concerns were front and center.
Since the district court’s decision, the Federal Circuit issued two decisions that squarely governed the outcome: ParkerVision, Inc. v. Qualcomm Inc. and Kroy IP Holdings, LLC v. Groupon, Inc. The panel explained that these cases compelled reversal.
ParkerVision and the Burden-of-Proof Divide
In ParkerVision, the PTAB had found certain apparatus claims unpatentable in an IPR. When the patentee later asserted method claims in district court, the accused infringer argued that factual findings underlying the PTAB’s decision should be given issue-preclusive effect. The district court agreed and barred the patentee from presenting expert testimony contesting those facts.
The Federal Circuit reversed. Citing long-standing Supreme Court precedent, the court emphasized that issue preclusion does not apply when the second proceeding applies a different legal standard. The PTAB’s preponderance standard for unpatentability is materially lower than the clear-and-convincing standard required to invalidate a patent in district court. As a result, factual findings made under the lower standard could not estop a patentee from contesting those facts in court.
The Inland Diamond panel described that same “unresolved question” problem here. Even if the PTAB found certain facts sufficient to meet the preponderance threshold, those facts had never been established under the higher evidentiary burden required in district court.
Kroy and “Immaterially Different” Claims
Kroy IP Holdings extended this logic further. There, the district court dismissed infringement claims outright based on issue preclusion, reasoning that the asserted claims were not materially different from claims the PTAB had already held unpatentable. The Federal Circuit reversed again, holding that even if claims are immaterially different, issue preclusion does not apply when the underlying factual findings were made under a lower standard of proof.
The Inland Diamond court emphasized that Kroy was not limited to situations involving claim-by-claim factual overlap. Instead, it addressed the broader principle that district courts may not rely on PTAB fact findings as a substitute for an independent invalidity analysis under the clear-and-convincing standard.
Why the District Court’s Approach Failed
Against that backdrop, the error in Inland Diamond was straightforward. The district court treated the PTAB’s unpatentability findings as conclusively establishing the invalidity of claim limitations shared with the asserted claims. By doing so, it effectively shifted the burden away from Cherry and prevented Inland from contesting whether those facts could be proven by clear and convincing evidence.
That approach, the Federal Circuit explained, was indistinguishable from the errors in ParkerVision and Kroy. Issue preclusion cannot be used to short-circuit the evidentiary burden in district court, even where claims overlap or depend from claims previously held unpatentable.
Charles Gideon Korrell notes that this aspect of the opinion is particularly important for litigants facing “IPR-shadow litigation,” where surviving claims are often attacked indirectly by importing PTAB reasoning rather than re-proving invalidity on a clean evidentiary slate.
Claim Construction Adds Another Barrier to Preclusion
The court also addressed claim construction, underscoring an independent reason issue preclusion failed. Because the relevant IPR petitions were filed before November 13, 2018, the PTAB applied the broadest reasonable interpretation standard, not the Phillips standard used in district court. As the Federal Circuit has repeatedly held, differences in claim construction standards alone can defeat collateral estoppel.
Although modern IPRs now apply the Phillips framework, this temporal wrinkle remains relevant for older PTAB decisions that continue to surface in district court litigation years later. Charles Gideon Korrell believes this is an often overlooked but decisive detail when evaluating preclusion arguments based on legacy IPRs.
Survival of IPR Does Not Change the Analysis
The district court appeared to allow Inland to defend validity in part because the asserted claims had survived the IPRs. The Federal Circuit rejected that reasoning as well. Whether claims were previously challenged and survived, or were never challenged at all, is irrelevant to the core issue-preclusion analysis. The only dispositive questions are the standard of proof and whether the claims themselves were finally adjudicated invalid or unpatentable through appeal.
The court distinguished XY, LLC v. Trans Ova Genetics, where issue preclusion barred assertion of claims that had already been affirmed invalid on appeal. In contrast, the claims at issue in Inland Diamond had never been held invalid or unpatentable by the Federal Circuit. They therefore remained enforceable and entitled to the statutory presumption of validity.
What Happens on Remand
The Federal Circuit declined Cherry’s invitation to affirm on alternative grounds. Instead, it remanded with clear instructions. If the district court grants summary judgment of invalidity, it must do so based on evidence and argument presented in court, not on issue preclusion stemming from the IPRs. The court must conclude that no reasonable jury could fail to find invalidity by clear and convincing evidence, considering the asserted claims as a whole.
Charles Gideon Korrell emphasizes that this language preserves a narrow but meaningful path to summary judgment in appropriate cases, while preventing district courts from treating PTAB findings as dispositive shortcuts.
Practical Takeaways
The decision continues a steady line of Federal Circuit authority narrowing the circumstances in which PTAB decisions can bind district courts. Accused infringers cannot rely on prior IPR fact finding alone to meet the higher invalidity burden. Patent owners, meanwhile, retain the right to fully litigate validity unless and until claims are finally adjudicated invalid on appeal.
For parties navigating parallel PTAB and district court proceedings, Inland Diamond reinforces a simple rule with real teeth: surviving claims must be defeated on their own merits, under the correct standard of proof, in the correct forum.