On January 24, 2014, the USPTO published proposed rules for patent assignment recordation that would require applicants to also include attributable owner information. The proposal would include a “ultimate parent entity” that owns 50 % or more of the titleholder. See Federal Register at 79 FR 4105 (2014). While discussion of the proposal continues, there would be potential concerns if the proposed attributable ownership rules were applied to findings of privity in an Inter Partes Review (IPR) proceeding.
The proposed rules would require identification of 1) titleholders and 2) enforcement entities, 3) ultimate parent entities (i.e., owns 50 % or more of the titleholder), and 4) any entity that creates or uses any type of arrangement or device with the purpose or effect of temporarily divesting such entity of attributable ownership or preventing the vesting of such attributable ownership. Under the proposal, failure to comply would result in abandonment of the patent.
With regard to IPR proceedings, 35 U.S.C. §§ 315(b) states that “[a]n inter partes review may not be instituted if the petition requesting the proceeding 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.” The Patent Trial and Appeal Board (PTAB) has determined whether privity exists using a six factor test set forth in the 2008 Supreme Court case of Taylor v. Sturgell, 553 US 890 (2008). See Hewlett-Packard Co. v. MCM Portfolio, LLC (IPR2013-00217, Paper No. 10, page 7-8). The PTAB looked to the six Taylor factors of:
1) the existence of an agreement that the non-party be bound by a determination of issues in an action between the parties,
2) the existence of a pre-existing substantive legal relationship between the non-party and a party,
3) representation in an action by someone with the same interests as the non-party,
4) the assumption of control over an action by the non-party,
5) re-litigation of issues through a proxy, and
6) the existence of a special statutory scheme.
The PTAB has focused on the fourth factor, requiring the presence of asserting control. However, the USPTO’s ruling is currently on petition for writ of mandamus to the Federal Circuit in In Re MCM Portfolio LLC.
Even so, the proposed attributable owner rules raise concerns as to whether the PTAB might change the way the PTAB views the Taylor factors. For example, referring to the second and fifth Taylor factors, could the fact that the titleholder and enforcement entity and are both listed as “attributable owners” on a patent that is not involved in the IPR mean that they have a sufficient “pre-existing substantive legal relationship”?
At this point, the USPTO’s proposal is still being debated. There is a public hearing March 26 in San Francisco, and the period for comment has been extended until April 24, 2014. But the strict proposal to list all “attributable owners” has the potential to affect more than just the patents in which the entities are listed.
Allard C Chu is an associate in the firm’s Electrical/Mechanical Group. His practice focuses on the prosecution of patent applications before the U.S. Patent and Trademark Office. He has experience across a range of mechanical and electromechanical technologies.
Allard received his J.D. from The George Washington University Law School, where he served as a notes editor on the Federal Communications Law Journal. Allard earned his B.S. in Mechanical Engineering from the University of California, Berkeley. As part of his dual-degree engineering program, Allard also received a B.A. in Business Management Economics from the University of California, Santa Cruz.
Allard speaks fluent Cantonese Chinese.