Board Designates Three Precedential Decisions for Instituting, Including Real Party in Interest

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The U.S. Patent and Trademark Office (Patent Office) designated new Patent Trial and Appeal Board (Board) precedents protecting patent owners from multiple inter partes review (IPR) challenges. The Board decisions included one that concerned the identification of a real party in interest (RPI) and when multiple petitions challenging the same patent are not permitted.

In RPX Corp. v. Applications in Internet Time, LLC,1 the Board held that the petitioner, RPX, was time-barred because its client Salesforce was an unnamed RPI that was served with an infringement complaint more than one year before RPX filed the petition.

The Board cited the Federal Circuit from which the case was remanded regarding who should be considered an RPI:

Determining whether a non-party is a “real party in interest” demands a flexible approach that takes into account both equitable and practical considerations, with an eye toward determining whether the non-party is a clear beneficiary that has a preexisting, established relationship with the petitioner. Indeed, the Trial Practice Guide . . . suggests that the agency understands the “fact-dependent” nature of this inquiry, explaining that the two questions lying at its heart are whether a non-party “desires review of the patent” and whether a petition has been filed at a nonparty’s “behest.”2

The Board observed that RPX states that its goal is to reform the patent market by being the intermediary between patent owners and operating companies. RPX’s main service is defensive patent aggregation and sells it as a subscription-based service. According to the Board:

At bottom, the evidence demonstrates that patent aggregation, licensing, and filing IPRs to protect its clients work together to protect its members from the threat of patent litigation and are all important components of RPX’s core subscription business. We therefore find that RPX filed these IPRs to benefit its member Salesforce, supporting a conclusion that Salesforce is an RPI in these proceedings.3

The Board recapped its considerations as follows:

In sum, evidence indicates that, from a “‘practical and equitable’ standpoint,” . . . Salesforce’s relationship with RPX was based, at least in part, on efforts to address the same patents asserted against Salesforce by AIT in litigation and also challenged by RPX in these IPRs, to the benefit of Salesforce, supporting a conclusion that Salesforce is an RPI in these proceedings.4

The Board reasoned:

As noted above, we also recognize that a nonparty to an IPR can be a real party in interest even without entering into an express or implied agreement with the petitioner to file an IPR petition. . . . The evidence strongly suggests that RPX was representing Salesforce’s interests in filing these IPR proceedings. Most critically, Salesforce paid RPX to reduce Salesforce’s patent litigation exposure, and RPX filed these IPRs despite having no apparent risk of infringement liability itself. In such circumstances, “equitable and practical considerations” point clearly towards RPX and its members sharing a common interest in these proceedings. To find otherwise would effectively give IPR petitioners additional chances to challenge a patent through a member organization such as RPX, which is paid with the expectation that it might initiate an IPR against a patent that poses a threat to a member, without regard to statutory bars or estoppels. That is not to say that arrangements in which an entity would benefit from having another entity file a petition on its behalf—or on the behalf of it and other similarly situated entities—is impermissible. But all such entities should be named as RPIs to ensure that pertinent statutory time bars and estoppels apply.5

Accordingly, the Board determined that RPX has not shown, by a preponderance of the evidence, that Salesforce was not an RPI and denied IPR under 35 U.S.C. Sec. 315(b).

In SharkNinja Operating LLC v. iRobot Corp.,6 the Board held that, while a petitioner must identify any RPIs, the Board is not required to decide a dispute regarding a possible RPI if it would not affect the Board’s decision on institution. The Board held:

On this record, we determine that we need not address whether JS Global is an unnamed RPI because, even if it were, it would not create a time bar or estoppel under 35 U.S.C. § 315. . . . [O]ur jurisdiction to consider a petition does not require a “correct” identification of all RPIs in a petition. . . . There is, however, no allegation that Petitioner’s failure to name JS Global as an RPI should result in termination of the proceeding or denial of institution of review for any reason other than for the alleged failure of a procedural requirement that can be corrected under our precedent. Additionally, there is no allegation or evidence that JS Global is barred or estopped from this proceeding, or that Petitioner purposefully omitted JS Global to gain some advantage.7

In Apple Inc. v. Uniloc 2017 LLC,8 the Board denied institution and the petitioner’s joinder motion for a copycat petition that the petitioner filed against the challenged patent after its first petition was denied institution, even though the petition presented a reasonable likelihood of prevailing on at least one claim.

The patent owner argued that the Board should exercise its discretion to deny institution under 35 U.S.C. Sec. 314(a) and also deny joinder. The statutory provision concerning joinder in IPR proceedings is 35 U.S.C. Sec. 315(c), which states:

If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.9

The Board explained that:

[T]he discretion of the Director to join a party to an ongoing IPR is premised on the Director’s determination that the petition warrants institution. That determination is not limited to determining whether the merits of the petition meet the reasonable likelihood threshold for at least one challenged claim.10

Even though the petition was a “me-too petition,” the Board observed that it must determine whether application of the General Plastic factors warrants the exercise of discretion to deny the petition under 35 U.S.C. Sec. 314(a). In particular, these factors are:

  1. Whether the same petitioner previously filed a petition directed to the same claims of the same patent;
  2. Whether at the time of filing of the first petition the petitioner knew of the prior art asserted in the second petition or should have known of it;
  3. Whether at the time of filing of the second petition the petitioner already received the patent owner’s preliminary response to the first petition or received the Board’s decision on whether to institute review in the first petition;
  4. The length of time that elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition;
  5. Whether the petitioner provides adequate explanation for the time elapsed between the filings of multiple petitions directed to the same claims of the same patent;
  6. The finite resources of the Board; and
  7. The requirement under 35 U.S.C. § 316(a)(11) to issue a final determination not later than 1 year after the date on which the Director notices institution of review.11

After a review of the factors, the Board concluded that the majority of the factors weighed in favor of denying institution.

Key Takeaways

The Patent Office designated new Board precedents protecting patent owners from multiple IPR challenges. The Board precedents provide additional protections for patent owners from being inappropriately targeted by multiple parties and/or multiple petitions. The precedential decisions correspond with the larger effort of the Patent Office under Director Andrei Iancu to try to level the playing field for patent owners in view of the assertions of critics who argued IPRs heavily favored the petitioners over patent owners.

In view of the imminent administration under President-elect Joseph Biden, it is unclear whether these protections will continue to evolve or even whether there will be a retreat. Practitioners are advised to closely monitor developments at the Board, particularly over the next six to 12 months.


 

1 RPX Corp. v. Applications in Internet Time, LLC, IPR2015-01750, 2020 WL 7121702, Paper 128 (PTAB Oct. 2, 2020) (precedential).

2 Id., slip op. at 7–8 (quoting Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1351, 128 USPQ2d
1252 (Fed. Cir. 2018), and Trial Practice Guide, 48,756, 48,759 (Aug. 14, 2012)).

3 Id., slip op. at 15.

4 Id., slip op. at 23.

5 Id., slip op. at 31–32 (quotation marks omitted).

6 SharkNinja Operating LLC v. iRobot Corp., IPR2020-00734, 2020 WL 5938681, Paper 11 (PTAB Oct. 6, 2020) (precedential).

7 Id., slip op. at 18–19.

8 Apple Inc. v. Uniloc, 2017 LLC, IPR2020-00854, 2020 WL 6323533, Paper 9 (PTAB Oct. 28, 2020) (precedential).

9 Id., slip op. at 5.

10 Id., slip op. at 5.

11 Id., slip op. at 7 (quoting General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 at 9–10 (PTAB Sept. 6, 2017) (precedential as to Sec. II.B.4.i)).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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