Who is the “Real Party in Interest” in an IPR or PGR?
By Eugene T. Perez and Kelly E. Rose
For both inter partes review (hereinafter “IPR”) and post-grant review (“PGR”), the petitioner must identify all “real parties in interest”1 (“RPI”). The corresponding estoppel provisions bring to light the significance of this RPI identification: a final written decision by the Patent Trial and Appeal Board (“PTAB”), resulting from an IPR or PGR proceeding, estops the petitioner (or all real parties in interest) or any privy from asserting in a district court proceeding, an International Trade Commission proceeding, or any other USPTO proceeding (e.g., an ex parte reexamination) that the claim is invalid or unpatentable on any ground the petitioner “raised or reasonably could have raised” during the IPR or PGR proceeding.2
Thus, the question of who the RPI is becomes particularly important in the IPR and PGR context. However, defining who is a RPI or privy is not easy.
According to legal definitions such as that from Black’s Law Dictionary, a “real party in interest” is “[a] person entitled under the substantive law to enforce the right sued upon and who generally, but not necessarily, benefits from the action’s final outcome.”3 As the United States Patent & Trademark Office (“USPTO”) has stated, and Black Law Dictionary’s definition suggests, a determination of who constitutes a real party in interest is a “highly fact-dependent question” that cannot be compressed into a bright line rule.4
While the USPTO has been careful to preserve the flexibility of the inquiry, it has plainly stated that the degree of control exercised by a non-party over a party’s participation in the proceeding is a “common consideration.”5 This control concept in establishing who is a RPI is (somewhat) advocated by some major companies.6 Chief Judge James Donald Smith of the BPAI explained that the Proposed Rules from February of 2012 deliberately declined to promulgate particular factors as the future PTAB intends to consider each case on its specific facts.7 This of course avoids any clear definition of what constitutes a RPI or privy.
In addition to the degree of control exercised by the non-party, the USPTO indicated that previous reexamination petition decisions may shed some light on other considerations the PTAB may take into account.8 Specifically, the USPTO cited several reexamination petition decisions that are worth briefly noting.9
Confirming that the factors from “Troll-Busters” are still relevant, the USPTO cited In re Guan Inter Partes Reexamination Proceeding, Control No. 95/001,045 (“Troll-Busters”).10 The Troll-Busters’ business model was one that offered to file reexaminations on behalf of third parties anonymously.11 According to the USPTO Decision, the requester’s website boasted: “Troll Busters invalidates patents, not just any patents but patents being asserted by patent trolls… The patent Troll will never know who or how many are behind the ‘hit.’”12 In response to a show cause order to indicate the real parties in interest, Troll Busters’ evasiveness13 prompted the USPTO to vacate the filing date. The USPTO concluded that the Petitioner could not do any of the following without identifying the other entity as the real party in interest:
1. Accept payment from another group, pay the requester to file the request for inter partes reexamination and have itself named solely as the real party in interest.
2. Obtain money for foundation grants, file a “quid pro quo” request for an inter partes reexamination where the foundation wants reexamination on a specific patent that the foundation deems anti-competitive and name itself solely as the real party in interest.
3. Allow another entity to direct or control the content (e.g., provide the prior patents/printed publications on which the reexam is to be based) of the request whether such is termed “technical review” or some other phrase.14
Although confirmed by the USPTO to be still relevant, these factors have had a limited application. In the In re Schlecht Inter Partes Reexamination Proceeding, Control No. 95/001,206, also cited by the USPTO’s Proposed Rules, the Patent Owner challenged the accuracy of the RPI certification.15 The Patent Owner couched the challenge in terms of the Troll-Busters factors arguing that “if a joint defense group allocates fee payments, work load, etc., between defendants, especially by using a single law firm, then it runs afoul of the first test. If a joint defense group prepares a common pool of prior art, but then provides that information to another entity . . . this violates the third test.”16 Without expressly distinguishing the Troll-Busters case, the USPTO declined to expand the test to anything broader than the circumstances in Troll-Busters.17
Two more recent petition decisions cited by the USPTO confirm this application. In the in re Arviv Reexamination Proceeding, Control No. 95/001,526 the USPTO emphasized that the burden of presenting objective evidence that the unnamed party either: (1) participated in the request for reexamination, or (2) in the reexamination proceeding after the request was filed is on the patent owner.18 The mere fact that the unnamed party participated in a joint defense or utilized the same counsel as the party requesting the reexamination is insufficient to show that that unnamed party is a RPI.19 Neither does the fact that the unnamed party may benefit from the reexamination proceeding make them a RPI.20 In the in re Beierbach Reexamination Proceedings, Control No. 95/000,407, the USPTO explained that even where the product of activity conducted by a joint defense group is later used in a reexamination, all parties of the joint defense group are not necessarily real parties in interest in the reexamination.21 These litigation activities do not amount to participation in the reexamination proceeding provided that the intent of the activity was to defend the litigation in suit.22
Interestingly, Congress did not provide the USPTO with a mechanism to police the real parties in interest and had no intention of doing so,23 and thus, in its proposed rules, the USPTO has held fast to its requirement that the patent owner bear the burden of showing that the unnamed party actually participated in the reexamination proceeding to be named a real party in interest. This burden is substantial and the degree of control exercised by the unnamed party over the party will be particularly relevant. A joint defense agreement and even work product produced by an unnamed co-defendant is insufficient to cause that co-defendant’s status to rise to the level of a real party in interest (provided that the work product was intended for the litigation, and not the reexamination proceeding). In the absence of circumstances like those in Troll-Busters, it must be shown that the unnamed party in fact participated in the preparation for the post-grant petition or in the proceeding itself.
Thus, any guidance in properly defining a RPI and privy may lie in future USPTO IPR and PGR decisions, or from the courts themselves.
- Leahy-Smith America Invents Act, Pub. L. No. 112-29 (“AIA”), § 312(a)(2) and § 322 (a)(2) (2011).
- AIA, § 315(e) and § 325(e) (2011).
- Black’s Law Dictionary 1232 (9th ed. 2009).
- Explanation of Real Party in Interest Requirement provided by Chief Judge James Donald Smith, Board of Patent and Appeals and interferences (“BPAI”). Available at http://www.uspto.gov/aia_implementation/smith-blog-extravaganza.jsp#heading-2 (last visited June 18, 2012)
- Practice Guide for Proposed Trial Rules, 77 Fed. Reg. 6868, 6870 (February 9, 2012) (citing Taylor v. Sturgell, 553 U.S. 880, 895 (2008)).
- See “Comments of Verizon Communications et al.” to the USPTO dated April 9, 2012, pp. 8-13.
- Supra FN. 4
- 77 Fed. Reg. at 6870-71 listing four inter partes reexamination proceedings.
- Id. at 6871. In re Guan Inter Partes Reexamination Proceeding, Control No. 95/001,045, Decision Vacating Filing Date, at 8 (Aug. 25, 2008).
- In re Guan Inter Partes Reexamination Proceeding, Control No. 95/001,045, Decision Vacating Filing Date, at 1-2.
- The Petitioner did not identify any additional real parties in interest and did not state who paid for the reexamination request. In re Guan Inter Partes Reexamination Proceeding, Control No. 95/001,045, Decision Vacating Filing Date, at 2.
- In re Guan Inter Partes Reexamination Proceeding, Control No. 95/001,045, Decision Vacating Filing Date, at 8.
- In In re Sclecht Inter Partes Reexamination Proceeding, Control No. 95/001,206, Petition at 6-7, ( June 10, 2010).
- In re Schlect Inter Partes Reexamination Proceeding, Control No. 95/001,206, Decision Dismissing Petition, at 5 (June 22, 2010).
- In re Arviv Reexamination Proceeding, Control No. 95,001,526, Decision Dismissing §§ 1.182 and 1.183 Petitions, at 5-6 (Apr. 18, 2011). See also In re Schlect Inter Partes Reexamination Proceeding, Control No. 95/001,206, Decision Dismissing Petition, at 5 (June 22, 2010).
- In re Beierbach Reexamination Proceeding, Control No. 95/000,407, Petition Decision on §§ 1.182 and 1.183 Petitions at 6, (July 26, 2010).
- See 112 Cong. Rec. S1375 (daily ed. March 8, 2011)(Senator Kyl Remarks)(“The Office anticipates that patent owners will take the initiative in determining whether a petition is the real party in interest or privy of a party that is barred from instituting a proceeding with respect to a patent.”)