GEA Process Engineering v. Steuben Foods (IPR2014-00041): An Unnamed Affiliate That Funded the Petitions

GEA Process Engineering, Inc. v. Steuben Foods, Inc. is one of the clearest examples of a real-party-in-interest problem ending an instituted inter partes review. In a single decision entered December 23, 2014 (Paper 135 in IPR2014-00041, and filed in IPR2014-00043, -00051, -00054 and -00055), the Board found that the petitioner’s affiliate should have been named, vacated its institution decisions and terminated all five trials.

Background

GEA and GEA Procomac S.p.A. were sister companies under a common parent. Steuben Foods sued both for infringing the five patents, and GEA was served in 2012. GEA filed its petitions on October 8 and 10, 2013, near the end of the one-year period under 35 U.S.C. § 315(b), naming only itself as real party in interest.

Steuben Foods raised the issue after institution. The Board first denied its motion for additional discovery because, at that point, there was no evidence that Procomac had paid for the IPRs. Then, in a May 2014 conference call, GEA disclosed that it had invoiced Procomac for the IPR expenses after filing, which it called an accounting mistake, and it later refunded Procomac. The Board ordered production of the relevant invoices.

What the Board decided

Timeliness. GEA argued that § 312(a) is a petition-completeness requirement that must be challenged before institution. The Board disagreed. The statute says a petition “may be considered only if” it identifies all real parties in interest, which the Board treated as a continuing requirement. Barring later challenges would also be unfair here, because Steuben Foods obtained the key evidence only after the Board ordered GEA to produce it.

Real party in interest. Relying on the Trial Practice Guide and Taylor v. Sturgell (2008), the Board treated the question as fact-dependent, turning on whether the non-party is the party at whose behest the petition was filed and whether it controlled, or had the opportunity to control, the proceeding. On the totality of the circumstances, it found that Procomac was a real party in interest:

• Procomac paid all IPR expenses until May 2014. The first back-charge came about two weeks after the petitions were filed and covered the cost of preparing them. The Board said a non-party cannot avoid being named by paying after filing.
• The companies shared litigation counsel and in-house legal representatives, and both were defendants on the same patents.
• Before the petitions were filed, GEA and Procomac had jointly entered an indemnity agreement giving them a right to participate in any USPTO action a customer brought against the patents.
• GEA’s own accounting did not distinguish IPR costs from the litigation costs Procomac was meant to bear, which the Board took as evidence that there was no real boundary between the two companies for these proceedings.

GEA’s only evidence, a declaration from a general counsel who joined after the events, did not explain the funding away.

Remedy. The Board held the omission was not a clerical or typographical error that could be fixed while keeping the original filing date under 37 C.F.R. § 42.104(c). Identifying the real party in interest matters for conflicts, the time bar and estoppel. GEA had initially called the omission clerical but still denied that Procomac was a real party in interest, so equity did not favor it. Any corrected petition would receive a new filing date beyond the § 315(b) deadline, so the Board vacated institution and terminated the trials without holding the requested oral hearing.

Why it matters

The decision shows that funding is strong evidence of real-party-in-interest status, especially combined with shared counsel, joint defense and contractual rights over USPTO challenges. It also shows the danger of filing close to the one-year bar: an error that could otherwise be corrected becomes fatal if a new filing date falls outside the window. See who is the real party in interest in an IPR or PGR and defining privy.

Later developments

In Applications in Internet Time, LLC v. RPX Corp. (Fed. Cir. 2018), the Federal Circuit endorsed a flexible real-party-in-interest inquiry that considers the relationship between the non-party and the petitioner and whether the non-party benefits from the petition. In Thryv, Inc. v. Click-to-Call Technologies, LP (2020), the Supreme Court held that § 315(b) time-bar rulings at institution are not appealable. The Board has since addressed when a petitioner may update its real-party-in-interest identification while keeping its filing date; see the note on Proppant Express v. Oren Technologies. Readers should check current Board guidance.

Key takeaways

• A challenge to the petitioner’s real-party-in-interest identification may be raised after institution.
• An affiliate that paid for the petitions, shared counsel and held contractual rights over USPTO challenges was an unnamed real party in interest.
• Paying after filing does not shield a non-party from being named.
• Omitting a real party in interest was not a clerical error; with a new filing date the petitions were time-barred, and the trials were terminated.