Defining “Privy” in AIA Trials

The America Invents Act binds more than the named petitioner. Several provisions reach the petitioner’s “real party in interest” and its “privy.” The two terms overlap, but they are not the same, and privity can reach parties that had nothing to do with filing the petition.

This article explains what privity means in inter partes review (IPR) and post-grant review (PGR), and how it compares with the real party in interest.

Where privity appears in the statute

• Time bar, § 315(b). An IPR may not be instituted if the petition is filed more than one year after the petitioner, its real party in interest, or a privy of the petitioner was served with a complaint alleging infringement of the patent.
• IPR estoppel, § 315(e). After a final written decision, the petitioner, its real party in interest and its privies face estoppel in the USPTO and in later court and ITC proceedings.
• PGR estoppel, § 325(e). The same parties are covered after a PGR final written decision.

The statute does not define “privy.” The USPTO and the courts have looked to the common law of preclusion, which uses privity to describe relationships close enough that one party may fairly be bound by a judgment involving another.

The Taylor v. Sturgell framework

The Supreme Court’s decision in Taylor v. Sturgell (2008) is the usual starting point. The Court rejected a broad “virtual representation” theory and held that nonparty preclusion is the exception, not the rule. It then grouped the recognized exceptions into categories. In summary, a nonparty may be bound when:

1. Agreement: the nonparty agreed to be bound by the outcome of the earlier case.
2. Pre-existing substantive legal relationship: for example, preceding and succeeding owners of property, or assignor and assignee.
3. Adequate representation: the nonparty was adequately represented by someone with the same interests, such as in a properly conducted class action or by a trustee.
4. Assumption of control: the nonparty assumed control over the earlier litigation.
5. Proxy: a party relitigates through someone acting as its designated representative or proxy.
6. Special statutory schemes: a statute expressly forecloses later litigation by nonparties, if consistent with due process.

The Board treats these categories as a guide, not a rigid checklist. Privity in AIA trials is a fact-specific, equitable inquiry.

WesternGeco v. ION

In WesternGeco LLC v. ION Geophysical Corp. (Fed. Cir. 2018), the patent owner argued that the petitioner was time-barred because it was in privity with a company that had been sued on the patents more than a year before. The two companies had a commercial customer-supplier relationship.

The Federal Circuit affirmed the Board’s finding that the petitioner was not a privy. It approved a flexible analysis grounded in equity and in the Taylor categories, focusing on whether the relationship was close enough that the petitioner should be bound by the earlier suit. A typical commercial relationship, without more, did not establish privity on that record.

Real party in interest vs privy

	Real party in interest	Privy
Core question	At whose behest was the petition filed?	Is the relationship close enough that one party should be bound by another’s litigation?
Focus	The petition and who is behind it	The relationship between the petitioner and a party to the earlier litigation
Must be named in petition?	Yes, §§ 312(a)(2) and 322(a)(2)	No express naming requirement
Typical facts	Funding, control, direction of the petition	Successive ownership, agreements to be bound, control of the earlier case, proxies
Statutory effect	Time bar and estoppel	Time bar and estoppel
Breadth	Narrower	Generally broader

A party can be both a real party in interest and a privy. The key difference is the frame of reference. RPI looks at the petition; privity looks at relationships, including relationships with parties to an infringement suit that the petitioner never joined.

Common scenarios

• Successors in interest. A company that acquires a sued business, or the relevant product line, may be treated as a privy of the earlier defendant.
• Indemnity and control. An indemnitor that took over the defense of a customer’s lawsuit may be a privy, especially where it controlled the litigation.
• Corporate affiliates. Parents and subsidiaries are often examined under both RPI and privity, depending on how closely they coordinate.

Each case depends on its facts and timing, so check current Board decisions and USPTO guidance.

Key takeaways

• Privity extends the § 315(b) time bar and the §§ 315(e) and 325(e) estoppel beyond the petitioner and its RPIs.
• Taylor v. Sturgell (2008) supplies the main categories of nonparty preclusion that the Board draws on.
• WesternGeco v. ION (Fed. Cir. 2018) confirms that privity is a flexible, equitable inquiry and that ordinary commercial ties may not be enough.
• Privity is generally broader than RPI and focuses on the relationship with a party to the earlier litigation.
• The practical stakes are the same as for RPI: see beware the real party in interest and estoppel arising from PTAB trials.