TRW Automotive v. Magna Electronics (IPR2014-00293): A Proposed Amended Complaint Is Not Service of a Complaint

Under 35 U.S.C. § 315(b), an inter partes review may not be instituted on a petition filed more than one year after the petitioner, its real party in interest or its privy is “served with a complaint” alleging infringement of the patent. TRW Automotive US LLC v. Magna Electronics, Inc., IPR2014-00293 (Paper 18, entered June 27, 2014), asks what counts as a complaint when the patent owner amends its pleading. The same decision was entered in IPR2014-00294, -00296, -00297 and -00298 and also addressed a real-party-in-interest challenge.

Background

Magna sued TRW in the Western District of Michigan in 2012 on related patents. On December 20, 2012, with TRW’s consent, Magna filed a motion for leave to file a second amended complaint adding the two patents at issue, attaching the proposed pleading. The court granted leave on December 26, 2012, and the clerk filed the second amended complaint that day.

TRW filed its petitions on December 24 and 26, 2013. If the one-year period ran from December 20, 2012, the petitions were late; if it ran from December 26, they were timely. Magna argued that the proposed complaint was served electronically on TRW’s counsel on December 20, and that because TRW had consented, leave was not legally required under Federal Rule of Civil Procedure 15(a)(2).

Magna also argued that TRW had not named all real parties in interest. The petitions named TRW Automotive US LLC as the sole real party in interest but noted two related TRW corporations that were co-defendants in the lawsuit.

What the Board decided

Time bar. The Board held that § 315(b) did not bar the petitions.

• On December 20, Magna served a motion asking for permission to file an amended complaint. The attachment was only a proposed complaint, and TRW was not yet a defendant on these patents.
• The Board relied on its earlier statement in Motorola Mobility v. Arnouse that Congress did not intend the period to start before a petitioner is officially a defendant, and on the Supreme Court’s principle in Murphy Bros. v. Michetti Pipe Stringing (1999) that a defendant need not engage in litigation until brought under the court’s authority by formal process.
• Whatever TRW’s prior consent, Magna chose to ask for leave, leaving the matter to the court. The complaint was filed and served electronically only after leave was granted.

The Board limited its holding to these facts, noting that a proposed amended complaint might in other situations never result in service of a complaint.

Real party in interest. Applying the Trial Practice Guide’s considerations of control, funding and direction, the Board found no factual basis for treating the two affiliates as real parties in interest. Identifying them as related co-defendants did not contradict TRW’s certification.

The Board also noted that TRW had served a brief by U.S. mail, which did not comply with 37 C.F.R. § 42.6(e), but declined to expunge it because the error was harmless.

Why it matters

The one-year bar is strict, and petitions filed near the deadline depend on the exact trigger date. TRW treats the operative event as service of a complaint that actually subjects the petitioner to suit on the patent, not service of a proposed pleading. On real parties in interest, it shows that naming affiliates as related entities, without more, is not evidence that they control or fund the petition. See who is the real party in interest in an IPR or PGR and defining privy.

Later developments

In Click-to-Call Technologies, LP v. Ingenio, Inc. (Fed. Cir. 2018) (en banc in relevant part), the Federal Circuit held that service of a complaint triggers § 315(b) even if the suit is later voluntarily dismissed without prejudice. In Thryv, Inc. v. Click-to-Call Technologies, LP (2020), the Supreme Court held that the Board’s § 315(b) rulings at institution cannot be appealed. On real parties in interest, Applications in Internet Time, LLC v. RPX Corp. (Fed. Cir. 2018) adopted a flexible inquiry focused on the relationship between the petitioner and the non-party and who benefits from the petition. Readers should check current Board guidance.

Key takeaways

• Serving a motion for leave with a proposed amended complaint attached did not trigger the § 315(b) one-year bar.
• The period ran from the filing and service of the amended complaint after leave was granted.
• Naming affiliated co-defendants as “related” entities did not show they were unnamed real parties in interest.
• Section 315(b) rulings at institution are now unappealable after Thryv.