IGT vs. Zynga: CAFC Rejects Interference Estoppel in IPR Appeal

IGT vs. Zynga: CAFC Rejects Interference Estoppel in IPR Appeal

International Game Technology (IGT) owned a patent for secure gaming networks (U.S. Patent No. 7168089). In 2003, Zynga filed a patent application with claims copied from IGT’s application, triggering an interference in 2010—an old process to resolve who first invented a disputed technology. The BPAI (PTAB’s predecessor) ended the interference early because Zynga’s claims lacked written description support, leaving IGT’s patent intact.

Zynga Reopens Battle with IPR

In 2021, Zynga launched an Inter Partes Review (IPR) to challenge IGT’s patent for obviousness—an IPR is a modern PTAB proceeding to reassess patents using prior art. IGT argued interference estoppel barred Zynga’s challenge under 37 CFR § 41.127(a)(1) because obviousness could have been raised in the interference. The PTAB rejected this, finding the interference ended on a threshold issue and it was unfair to impose estoppel from a rule created years later under the AIA. The PTAB’s Director review upheld that decision.

Federal Circuit: No ‘Shenanigans’ to Permit Appeal

IGT appealed but the Federal Circuit held that under 35 U.S.C. § 314(d), institution decisions are unreviewable except for “shenanigans” like blatant legal error (Cuozzo Speed Technologies v. Lee). The court found no misconduct. Because the estoppel argument directly targeted whether the IPR should have been instituted, review was barred. The fact that interference estoppel stems from agency regulations, not statute, did not remove this bar.

PTAB Properly Applied Estoppel Rules

The Federal Circuit agreed with the PTAB that Section 41.127(a)(1) estops actions on issues “raised and decided” by judgment, but Zynga’s obviousness challenge was never decided—it was mooted. This matches general claim preclusion principles. The PTAB also reasonably exercised discretion under 37 CFR § 42.5(b) to suspend Section 41’s estoppel where appropriate.

Obviousness Challenge Also Rejected

The Federal Circuit upheld the PTAB’s ruling that IGT’s patent was obvious in light of the Goldberg and Olden patents. IGT argued it didn’t get fair notice of a new theory, but the CAFC found the Board merely responded to IGT’s own points about Goldberg. Zynga’s unrebutted expert declaration supported that a skilled artisan would combine Goldberg’s database with Olden’s server to meet the claims. IGT’s monitoring arguments failed too, as its patent did not limit what data type must be tracked.

Outcome

With no “shenanigans” or error found, the Federal Circuit affirmed the PTAB’s final decision—invalidating IGT’s claims and closing a long battle over gaming network tech.