Privity and Real-Party-in-Interest
in Post-Grant Proceedings
June 4, 2015
Judge Michael Tierney, USPTO
Matthew Berkowitz, Kenyon & Kenyon
Eliot Williams, Baker Botts
Why Privity/RPII Matters
• Naming All RPIIs Is A Statutory Requirement
– IPR: 35 U.S.C. § 312(a)(2): "A petition . . . may be
considered only if . . . the petition identifies all
real parties in interest"
– PGR/CBMR: 35 U.S.C. § 322(a)(2)
• No Requirement to Name Privies
– Joe Matal, A Guide to the Legislative History of the America Invents
Act: Part II, 21 Fed. Cir. Bar J. 539, 607 n. 424
• "Both Senator Kyl…and the 2011 Committee Report…described
§312 and 322 as also requiring the petitioner to disclose 'privies.'
The final public law, however, only requires identification of 'all
real parties in interest.'"
2
Why Privity/RPII Matters
• One Year IPR Bar Tied to Privity/RPII:
– 35 U.S.C. § 315(b): "An inter partes review may
not be instituted if the petition . . . is filed more
than 1 year after the date on which the petitioner,
real party in interest, or privy of the petitioner is
served with a complaint alleging infringement of
the patent"
3
Why Privity/RPII Matters
• Declaratory Judgment Bar Tied to RPII (Not
Privity):
– IPR: 35 U.S.C. § 315(a)(1): "An inter partes review
may not be instituted if, before the date on which
the petition . . . is filed, the petitioner or real
party in interest filed a civil action challenging the
validity of a claim of the patent"
– PGR/CBMR: 35 U.S.C. § 325(a)(1)
4
Why Privity/RPII Matters
• IPR -> Civil Action/ITC Estoppel Tied To
RPII/Privity
– 35 U.S.C. § 315(e)(2): "The petitioner in an inter
partes review of a claim . . . that results in a final
written decision . . . or the real party in interest or
privy of the petitioner, may not assert [in
litigation] that the claim is invalid on any ground
that the petitioner raised or reasonably could
have raised during that inter partes review."
5
Why Privity/RPII Matters
• PGR -> Civil Action/ITC Estoppel Tied To
RPII/Privity
– 35 U.S.C. § 325(e)(2): "The petitioner in a postgrant review of a claim … that results in a final
written decision . . . or the real party in interest or
privy of the petitioner, may not assert [in
litigation] that the claim is invalid on any ground
that the petitioner raised or reasonably could
have raised during that post-grant review."
6
Why Privity/RPII Matters
• IPR -> PTAB Estoppel Tied To RPII/Privity
– § 315(e)(1): "The petitioner in an inter partes
review of a claim . . . that results in a final written
decision . . . or the real party in interest or privy
of the petitioner, may not request or maintain a
proceeding before the Office with respect to that
claim on any ground that the petitioner raised or
reasonably could have raised during that inter
partes review."
7
Why Privity/RPII Matters
• PGR/CBMR -> PTAB Estoppel Tied To
RPII/Privity
– § 325(e)(1): "The petitioner in a post-grant
review of a claim . . . that results in a final written
decision . . . or the real party in interest or privy
of the petitioner, may not request or maintain a
proceeding before the Office with respect to that
claim on any ground that the petitioner raised or
reasonably could have raised during that postgrant review."
8
Why Privity/RPII Matters
• CBMR -> Civil Action/ITC Estoppel Tied To RPII
(Not Privity)
– AIA § 18(a)(1)(D): "The petitioner in [CBMR] …
that results in a final written decision . . . or the
petitioner's real party in interest, may not assert
[in litigation] that the claim is invalid on any
ground that the petitioner raised during that
[CBMR]."
9
General Concepts From the
Trial Practice Guide
. “A common consideration is whether the
non-party exercised or could have exercised
control over a party’s participation in a
proceeding.” 77 Fed. Reg. 48,761
. “at a general level, the ‘real party-ininterest’ is the party that desires review of the
patent.” 77 Fed. Reg. 48,759
10
Distinction between Privity and RPI
• “RPI is the relationship between a party and a proceeding; RPI
does not describe the relationship between parties.” Aruze
Gaming Macau, Ltd. v. MGT Gaming, Inc., IPR2014-01288
(Feb. 20, 2015) (emphasis in original).
• “In contrast to the RPI inquiry, which focuses on a party’s
relationship to a proceeding, the privity inquiry focuses on the
relationship between parties.” Aruze Gaming Macau, Ltd. v.
MGT Gaming, Inc., IPR2014-01288 (Feb. 20, 2015) (emphasis
in original) (citing Int’l Nutrition Co. v. Horphag Research, Ltd.,
220 F.3d 1325, 1329 (Fed. Cir. 2000).
• “the notion of ‘privity’ is more expansive and encompasses
parties that do not necessarily need to be identified in the
Petition as a real party-in-interest.” Nestle USA, Inc. v.
Steuben Foods, Inc., IPR2014-01235 (Dec. 22, 2014)
11
A Few Instructive PTAB Decisions
12
Intellectual Ventures v. Xilinx, Inc.
IPR2012-00018 (Jan. 24, 2013)
Decision - Real Party In Interest
Background
• Intellectual Ventures ("IV") filed IPRs against four Xilinx
Patents.
• Xilinx relied on Rule 7.1 statement filed by IV in an
unrelated district court litigation that identified 63
entities having a financial interest in that case.
• Xilinx argued that the 63 additional entities were
unnamed real parties in interest, due to their financial
interest in IV.
13
Intellectual Ventures v. Xilinx, Inc.
IPR2012-00018 (Jan. 24, 2013)
Decision - Real Party In Interest
Holding
• Board cites to Trial Practice Guide (TPG) for guidance
regarding factors to consider in determining RPII
• Considerations include:
– whether a non-party exercises control over a petitioner's
participation in a proceeding
– whether a non-party is funding the proceeding
– whether a non-party is directing the proceeding
• Held: Xilinx's evidence insufficient to show the unnamed
parties were RPIIs
14
Aruze Gaming Macau, Ltd. v.
MGT Gaming, Inc.
IPR2014-01288 (Feb. 20, 2015)
Institution Decision
• Website and public
documents suggest
“blurred [] corporate
forms”
• Held: AGA is not an RPII
from available evidence
Mr. Okada
100%
100%
AGM
AGA
(AGA sued for
infringement in
D. Court)
Same law
firm
(AGM files IPR 2
years after suit
against AGA; only
identified RPII)
15
Aruze Gaming Macau, Ltd. v. MGT Gaming, Inc.
• AGA’s acts in District Court
– “Whether or not AGM is an RPII to the District Court action [] is
not determinative of the question of whether AGA is an RPII to
this inter partes review. ”
• Sister companies owned by one person
– “common ownership of the companies does not prove that AGA
… can exercise control over AGM”
• Blurred corporate forms
– Documents fail to “establish anything more than that the
companies are sister corporations.”
– Unchallenged declaration of AGM’s assistant GM (Mr. Yu)
• No argument by Patent Owner that Mr. Okada was an unnamed
RPII
16
Synopsys, Inc. v. Mentor Graphics Corp.
IPR2012-00042 (Feb. 22, 2013)
Institution Decision
•
•
•
•
May 2006: EVE served with complaint
Sep. 26, 2012: Synopsys files IPR
Sep. 27, 2012: Synopsys acquires EVE
Held: EVE is not in privy with Synopsys
– Privy determined at time of IPR filing date , not Institution Dec.
– “[A]ny privity created by successive interests in EVE’s products,
does not apply here”; “The only property right at issue in this
proceeding is that of the [] patent”
17
Common Fact Patterns Raising
RPII/Privity Issues
• Trade Associations and Joint Defense Groups
• Supplier-Customer Relationships and Indemnities
• Related Companies
• M&A
• Same Counsel
18
Trade Associations and JDGs
19
Trade Associations:
RPX Corp v. Virnetx, Inc.
IPR2014-00171 through – 00177 (June 5, 2014)
Apple
loses 1st
jury verdict
Apple
sued
Aug.
2010
•
•
•
Apple Files
IPRs
Apple
sued again
(additional
products)
Nov. Dec.
2012 2012
RPX files
IPRs
Apple’s
own
petitions
are denied
Apple
coordinates
with RPX
July
2013
Aug. Oct. 2013
Nov.
2013
Dec.
2013
Pursuant to agreement, Apple paid RPX 500k to “file” challenges for “patents
of questionable quality”;
Evidence that RPX and Apple considered Virnetx patents to be of
questionable quality;
Specific discussions of IPRs vs. Virnetx patents between Apple and RPX
20
RPX Corp v. Virnetx, Inc.
• Held: RPX’s petitions are barred under Section 315(b)
since Apple was an unnamed RPI
• Reasons:
– Apple at least suggested that RPX file challenges to the
specific Virnetx Patents
– Evidence suggests that Apple implicitly authorized RPX to
represent Apple
•
•
•
•
$500k payment
Agreement related to post-grant challenges
Discussion about 3rd Party (New Bay) challenges to Virnetx patents
Apple’s demonstrated interest in challenging Virnetx patents
21
Trade Associations (cont’d):
Unified Patents v. Dragon Intellectual Property
IPR2014-01252 (Feb. 12, 2015)
• Unified Patents:
– Companies sign up for “technology specific deterrence”;
– Unified Patents then performs “NPE-deterrent activities”
including sometimes filing post-grant challenges
• Held: Petition not barred (on available evidentiary record) for
failing to name members as RPIIs
• Reasons:
– Even assuming Unified Patents does nothing other than
file IPRs for its members, this does not demonstrate that
any particular member paid for this IPR
– Different than RPX v. Virnetx, where RPX was paid money
potentially tied to the proceeding and received
22
suggestions
Joint Defense Groups
• Trial Practice Guide (77 Fed. Reg. 48,760)
“[I]f Part A is part of a Joint Defense Group with Party B in a
patent infringement suit, and Party B files a PGR petition,
Party A is not a “real party-in-interest” or a “privy” for the
purposes of the PGR petition based solely on its participation
in that Group.”
“That is not to say that Party A’s membership in . . . the Joint
Defense Group . . . Is irrelevant to the determination; deeper
consideration of the facts in the particular case is necessary .
. .”
23
Joint Defense Groups (cont’d)
• JDG’s collective reference to “their” Petition in a district court
motion to stay does not, by itself, demonstrate the requisite
control by an RPII.
– Chimei Innolux Corp. v. Semiconductor Energy Lab. Co., Ltd., IPR2013-00038
(March 21, 2013)
• Co-defendants are not necessarily RPIIs just because Petitioner
uses the same expert as in litigation or because challenges in
petition are similar to defendants’ invalidity contentions.
– Brinkmann Corp. v. A&J Mfg., LLC, IPR2015-00056 (March 23, 2015)
• Assertion of common-interest privilege over communications
with 3rd party does not, by itself, lead to RPI finding.
– Petroleum GEO-Services Inc. v. Westerngeco LLC, IPR2014-00687 (Dec. 15,
2014)
24
Supplier/Customer Relationships &
Infringement Indemnification
25
Customer/Supplier
HP Co. v. MCM Portfolio, LLC, IPR2013-00217,
Paper 10 & 19 (Sep. 10, 2013 & Oct. 10, 2013)
• Background:
– HP resells accused products supplied by Pandigital
– Pandigital was served with complaint more than 1 year
before HP's petition was filed
• Holding: Petition not barred as untimely
– Accused products irrelevant to privity
• "MCM bases its privity argument solely on its assertion that HP
and Pandigital are successive owners of the same allegedly
infringing property. Prelim. Resp. 7 (citing Taylor v. Sturgell, 553
U.S. 880, 894 (2008)). We are not persuaded that this allegation
alone is enough to confer privity for purposes of § 315(b). "
• "The allegedly infringing products referred to by MCM are not at
issue in this proceeding. "
26
Customer/Supplier (cont’d)
BEA Sys Inf. v. Cheetah Omni, LLC, IPR2013-00175,
Paper 15 (July 3, 2013)
• Background:
–
–
–
–
BEA supplied US government with accused technology
US served in Court of Federal Claims on 4/22/2011
BEA served on 3/19/2012
BEA filed petition on 3/4/2013
• Holding: No bar
– No privity between US and BEA, because "any privity stemming from
interests in BAE Systems’ allegedly infringing products does not apply
to this patentability proceeding"
– "[PO] neither alleges nor presents sufficient and credible evidence
that the United States exercises control over BAE Systems’
participation in this matter or that the United States is responsible for
funding and directing the proceeding. "
27
Indemnification
Atlanta Gas Light Co. v. Bennett Regulator Guards,
Inc., IPR2013-00453, Paper 31 (Jan 22, 2014)
Complaint served
7/18/12
Complaint served 7/11/12
Added in amended complaint
Petition filed 7/18/13
28
Indemnification
Atlanta Gas Light Co. v. Bennett Regulator Guards,
IPR2013-00453, Paper 31 (Jan 22, 2014)
Customer
Supply agreement
with indemnity clause
"MRMC is required to
defend any
infringement
claim against AGLR
and its subsidiaries"
Supplier
29
Indemnification
Atlanta Gas Light Co. v. Bennett Regulator Guards,
IPR2013-00453, Paper 31 (Jan 22, 2014)
Salient facts:
•"Supplier" served first
•Customer filed IPR petition
•Indemnification had not
been agreed upon at time
of IPR filing
• Disputed application of
the indemnity obligation in
the supply agreement
30
Indemnification
Atlanta Gas Light Co. v. Bennett Regulator Guards,
IPR2013-00453, Paper 31 (Jan 22, 2014)
• Real Party In Interest (312(a)):
– Board relies on declaration from petitioner that "MRMC has not
indemnified AGLC - nor has it directed, controlled, or funded AGLC in
connection with the [district court litigation] or this IPR proceeding"
– "Patent Owner provides insufficient evidence to support its
speculative contention that any party other than Petitioner, in fact, is
funding or controlling Petitioner’s involvement in this proceeding, or
that the Petition was filed “at the behest” of any party other than
Petitioner."
– "institution . . . is not barred . . .
under these facts"
31
Indemnification
Atlanta Gas Light Co. v. Bennett Regulator Guards,
IPR2013-00453, Paper 31 (Jan 22, 2014)
Complaint served
7/11/12
• One year bar (315(b)):
– PO argues that because of supply agreement, MRMC is privy of AGLC
and service on MRCG started the clock.
– "Service upon [supplier], prior to service upon [petitioner/customer],
creates no clear obligation or opportunity for control of Petitioner by
[supplier] in this proceeding"
32
Indemnification
Atlanta Gas Light Co. v. Bennett Regulator Guards,
IPR2013-00453, Paper 88 (Jan. 6, 2015)
• BUT, this is not the end of the story as we will see later
33
Indemnification (cont’d)
Broadcom Corp. v. Ericsson, IPR2013-00601,
Paper 23 & 66 (Jan. 24, 2014 & Mar. 6, 2015)
• Background:
– Jury found Broadcom's customers liable for infringement
– Broadcom thereafter filed IPR petition
• Holding: No privity, no unnamed RPII
– "To show privity requires a showing that Broadcom would be bound to
the outcome of the Texas Litigation. To be bound, in normal situations,
Broadcom must have had control over the Texas Litigation."
– "indemnity payments and minor participation in a trial are not
sufficient to establish privity between the non-party manufacturer of
the accused device and the defendant parties"
– "Control of the litigation, or some sort of representation, constitutes a
'crucial' factor. "
– "Paying for trial expenses pursuant to indemnity normally does not
establish privity or control. "
34
Indemnification (cont’d)
GE Corp. v. Transdata, Inc. IPR2014-01559
Paper 23 (Apr. 15, 2015)
• Background:
– OG&E served with complaint 9/21/2011
– GE filed petition on 9/26/2011
– GE agreed to indemnify OG&E, stating that GE "would 'direct and
control the litigation'" but would "solicit OG&E’s input and assent on
all material decisions in the case "
• Holding: Petition barred under 315(b), not instituted
– Opportunity to control prior litigation enough
• "the presence or absence of actual control is immaterial to the privity
determination "
• "if Petitioner had the opportunity to exercise control over OG&E’s defense in the
Oklahoma lawsuit, then it is in privity with OG&E with respect to that litigation "
• "courts have found privity where an entity’s control over the litigation was
substantial, even though not complete "
35
Indemnification (cont’d)
First Data Corp. v. Cardsoft LLC. IPR2014-00715
Paper 9 (Oct. 17, 2014)
• Background:
– VeriFone served with complaint in 2008 (2008 Litigation)
– First Data served with complaint 5/2/2013 (2013 Litigation)
– VeriFone indemnifying First Data in 2013 Litigation
• VeriFone can choose counsel to defend First Data
• Same counsel in 2008 and 2013 Litigation
–
–
–
–
VeriFone funded the IPR
VeriFone discussed with First Data what art to assert in IPR
FDR given exclusive control over IPR by agreement dated 4/28/2014
Petition filed 4/30/2014
• Holding: Petition barred under 315(b) and denied under
312(a)
• VeriFone "has controlled and/or has had an opportunity to control" the petition
• 4/28/2014 agreement came too late ("after all of the work has been done")
36
Related Companies /
Corporate "Blurring"
37
Related Companies
Atlanta Gas Light Co. v. Bennett Regulator Guards,
IPR2013-00453, Paper 88 (Jan. 6, 2015)
• "Rather than maintaining well-defined corporate boundaries,
AGLR, Petitioner, and AGLS are so intertwined that it is
difficult for both insiders and outsiders to determine precisely
where one ends and another begins"
• "Although parent-subsidiary relationships are not among
those expressly identified by the Supreme Court in the second
Taylor factor, this factor weighs heavily in favor of finding
AGLR to be a real party in interest in this proceeding."
38
Related Companies
Atlanta Gas Light Co. v. Bennett Regulator Guards,
IPR2013-00453, Paper 88 (Jan. 6, 2015)
• "We conclude that at least AGLR is a real party in interest that
Petitioner failed to identify in its Petition"
• Result: Petition terminated, institution vacated.
39
Related Companies (cont’d)
Zoll Lifecor v. Philips Elec., IPR2013-00609, Paper 15
(Mar. 20, 2014)
• Background:
– Zoll Medical (Petitioner's parent) served with complaint in 2010
– Petition filed more than 1 year after parent was served
– "ZOLL Medical controls 100% of Petitioner and authorizes its budget
and plans. "
– Parent and petitioner shared in-house counsel
• Holding: Petition barred under 315(b) and denied under
312(a)
• "Petitioner’s actions have blurred sufficiently the lines of corporate separation
with its parent, ZOLL Medical, such that ZOLL Medical has had control, or could
have controlled Petitioner, in all aspects of its business "
• "We are persuaded that the evidence presented by Patent Owner shows sufficiently
that ZOLL Medical has exercised consistent control over Petitioner’s business since
2006. The relationship is one that has been very close with aligned interests and
sufficient opportunities for ZOLL Medical to control all aspects of Petitioner’s
40
business, including controlling this inter partes review. "
Related Companies (cont’d)
Commerce Bancshares, Inc. v. IV II LLC, IPR2014-00801,
Paper 7 (Dec. 1, 2014)
• Background:
–
–
–
–
Compass Bank was named petitioner
BBVA Compass named as RPII
BBVA, S.A. (unnamed) owns and controls BBVA Compass
"BBVA serves as a source of strength and capital to BBVA Compass."
• Holding: Petition not barred
• "Patent Owner’s evidence does not demonstrate sufficiently that
BBVA . . . exercised, or could have exercised, control over the
filing of this Petition."
• "Patent Owner’s evidence does not demonstrate sufficiently that
BBVA . . . funded, directed, and controlled the filing of this
Petition"
41
Related Companies (cont’d)
Galderma S.A. v. Allergan Industrie, SAS, IPR201401422, Paper 14 (Mar. 5, 2015)
• Background:
–
–
–
–
–
Galderma SA and Q-Med AB named as petitioners and only RPII
Q-Med AB a wholly-owned subsidiary of Galderma SA
Galderma a wholly-owned sub of Nestle Skin Health and Nestle SA.
Q-Med manufactured products accused in District Court litigation
Products were distributed by another sub, Galderma Labs
42
Related Companies
Galderma S.A. v. Allergan Industrie, SAS, IPR201401422, Paper 14 (Mar. 5, 2015)
• Holding: Petition is denied for failure to name RPII
– Board finds "pattern of intertwined control"
– Concludes Nestle "operate[d] Galderma 'as the pharmaceutical arm of
Nestlé Skin Health S.A.'"
– CEO of Galderma was also CEO and Board member of Nestlé Skin
Health S.A., whose "presence at the helm of both Galderma and its
parent, Nestlé Skin Health S.A., strongly implies 'an involved and
controlling parent corporation representing the unified interests of
itself and Petitioner.'"
– "At a minimum, Petitioner’s failure to identify Nestlé Skin Health S.A.
violates the statutory and regulatory requirements that the Petition
identify all real parties-in-interest. 35 U.S.C. § 312(a)"
43
Mergers & Acquisitions Activity
44
M&A Activity
Synopsys, Inc. v. Mentor Graphics Corp., IPR201200042, Paper 16 (Feb. 22, 2013)
• (Facts discussed previously)
• Holding: Petition is timely
– "any privity created by successive interests in EVE’s products, does not
apply here."
– Relevant timing is the service of the complaint that triggered the bar
date, well before Synopsis acquired EVE
• "Petitioner provides no persuasive evidence that at the time of service of the 2006
complaint Synopsis could have exercised control over EVE’s participation in the
proceeding, or vice versa."
45
M&A Activity
Chi Mei Innolux Corp. v. SEL Co, Ltd., IPR2013-00028,
Paper 14 (Mar. 21, 2013)
• Background:
– CMO served with complaint in 2004
– Petitioner formed from merger of CMO and other entities in March
2010
– PO relied on petitioner's SEC filings “admitting that CMO and
[Petitioner] are the same party”
• Holding: Petition is timely
– "[PO] does not show that [Petitioner] and [CMO] were the same entity when
the CMO case was filed in November of 2004"
– "We find the SEC filings insufficient to show that the Chi Mei Optoelectronics
and [petitioner] are the same party"
46
Same Counsel
47
Same Counsel
RPX Corp. v. Virnetx, IPR2014-00171,
Paper 49 (June 5, 2014)
• Background:
– Apple served with complaint August 2010
– Apple (via Firm A) filed IPR on 6/12/2013, denied as time-barred
– RPX subsequently filed its own petition, using different outside
counsel (Firm B).
– Virnetx noticed that metadata embedded in petition showed author
of petition was attorney with Firm A (Apple's prior counsel)
• [Ex. 1075 at 71:11-22]
– Discovery ensued
48
Same Counsel
RPX Corp. v. Virnetx, IPR2014-00171,
Paper 49 (June 5, 2014)
• Additional Facts Uncovered
– In October 2013, Apple paid RPX $500,000, inter alia to file IPRs, giving
RPX "complete control" over the IPRs
– RPX requested Apple's consent to hire Apple's counsel that had
prepared the previously-filed time-barred petitions; one month later,
RPX filed new petitions
– "RPX does not dispute that Apple and RPX discussed 'VirnetX and the
filing of IPRs with RPX,' or that RPX and Apple shared counsel and
Apple’s expert. "
• Holding: Apple was unnamed RPII; therefore petition denied
49
Discovery Related to RPI Issues
50
Basic Discovery Concepts
• Discovery is less than what is normally available in district
court litigation. See 37 C.F.R.§§42.51-53
• Party seeking “additional” discovery “must show that such
additional discovery is in the interests of justice.” 37 C.F.R. §
42.51(b)(2)(i)
– “good cause” standard in PGRs and CBMs. See C.F.R.§42.224
• Must be more than a “mere possibility” or “mere allegation
that something useful [to the proceeding] will be found.”
– Garmin Int’l, Inc. et al., v. Cuozzo Speed Technologies LLC, IPR201200001 (Feb. 14, 2003) (consider Garmin factors)
51
Discovery:
Broadcom Corp. v. [] Ericsson
IPR 2013-00601, -602, -636 (Jan. 24, 2014)
• Ericsson sought additional discovery regarding
possible privity between Broadcom and Defendants
in a related litigation (“Texas Litigation”) and relied
upon:
– known indemnity agreements between Broadcom and some
defendants;
– Broadcom’s amicus brief in the Texas Litigation;
– SEC filings (describing indemnity);
– communications with Acer, a Texas litigation;
– Broadcom’s use of Ericsson’s litigation expert report in the IPR
petition; and
– Other email correspondence about indemnity.
52
Broadcom Corp. v. [] Ericsson
• Held: Discovery denied.
– Indemnity payments and minor trial participation
are insufficient to establish privity
– JDG agreement is insufficient to establish privity
– Amicus brief only showed “potential future
control as a non-party over the appeal of an issue
of damages.”
53
Discovery (cont’d):
John’s Lone Star Distribution, Inc., v. Thermolife Int’l
IPR2014-01201 (May 13, 2015)
• Shared Board of Directors
Purus
CEO:
John Hoffman
CFO:
Charles Letchman
Director:
Frank Fenimore
John’s Lone Star
President:
Brandon Smith
Director:
John Hoffman
Director:
Charles Letchman
“Partner”:
Frank Fenimore, Sr.
• A Shared Business Address
• Shared Lawyers
54
John’s Lone Star Distribution, Inc., v. Thermolife Int’l
• Discovery Granted as to:
1. Non-redundant documents that describe:
1. the corporate structure;
2. duties and responsibilities of the President and Directors of Purus, as of
the Petition filing.
2. A list from Petitioner identifying persons who provided direction to, or had
the authority to provide direction to, Petitioner or its counsel in relation to
this proceeding, including persons who reviewed, or were given the
opportunity to review, papers filed in this proceeding.
3. Communications between Petitioner (or its counsel) and Purus (other than
as between the shared board members) regarding the current proceeding.
• No Deposition:
The Board did, however, note that Mr. Hoffman submitted a declaration that
was subsequently struck because of his refusal to be deposed.
55
Burden of Proof Issues
56
RPI Burden of Proof Issues:
Zerto, Inc. v. EMC Corp., IPR2014-01254
(March 3, 2015)
• “We generally accept the petitioner’s identification
of real parties-in-interest at the time of filing the
petition.”
• This “acts as a rebuttable presumption that benefits
the petitioner.”
• Where a “patent owner provides sufficient rebuttal
evidence that reasonably brings into question the
accuracy of a petitioner’s identification of real
parties-in-interest, the burden remains with the
petitioner to establish that it ahs complied with the
statutory requirement to identify all real parties-in57
interest.”
Timing of RPII/Privity Challenges
58
Timing
77 Fed. Reg. 48,680, 48,695 (Aug. 14, 2012) cmt. 8
• Challenges to RPII "should be" brought before or
with the patent owner preliminary response
• But, the Office did not say such a challenge "must"
be brought with the preliminary response
59
Timing (cont’d)
GEA Process Eng'g Inc. v. Steuben Foods, Inc., IPR201400041, Paper 135 (Dec. 23. 2014)
• Background:
– GEA filed petitions October 2013
– IPRs instituted March 10, 2013
– PO sought discovery related to RPII on March 31,2014, suggesting
Procomac might be unnamed RPII
– Discovery was originally denied
– PO reiterated its discovery request, which was granted.
– Discovery revealed Procomac reimbursed GEA for its IPR expenses
• Holding: GEA failed to identify all RPII; trial terminated;
institution decision vacated
– "[312(a)] is clearly an ongoing requirement that must be complied
with during the pendency of the petition"
– "Requiring such challenges muse be made before institution would be
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prejudicial to patent owners as exemplified by the cases"
Timing (cont’d)
Askeladden LLV v. iSourceloans, LLC., IPR2015-00129,
Paper 7 (Apr. 9, 2015)
• Background:
– Petition filed 10/23/2014
– PO did not file preliminary response (was due Feb 6, 2015)
– On April 6, 2014, PO seeks leave to file motion to terminate for failure
to name all RPII
– Institution decision deadline was May 6, 2015
• Holding: Request to file motion denied, merits not reached
– Board "concerned with the timing of Patent Owner's request"
– Insufficient time to receive Petitioner's opposition and consider before
May 6 institution deadline
– "Should the Petition be granted and a trial instituted in any of these
cases, Patent Owner may ask the Board to reconsider its request by
first requesting a call with the panel."
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