In a recent Order, the Board authorized patent owner, Motion Games, LLC, to file a motion to terminate the proceedings because petitioner, Nintendo of America, Inc, allegedly failed to list all real parties-in-interest in three inter partes review (“IPR”) petitions.
35 USC 312(a)(2) requires a petitioner to identify all real parties-in-interest (“RPIs”) in an inter partes review proceeding. In Nintendo of America, Inc. v. Motion Games LLC. (IPR2014-00164-66), Nintendo filed three IPRs against three different patents on November 19, 2013. The three patents are concurrently being asserted against Nintendo in a district court litigation in the Eastern District of Texas, in Motion Games, LLC v. Nintendo Co., LTD; Nintendo of America Inc.; Retro Studios, Inc.; Rent-A-Center, Inc.; and Gamestop Corp. (Case No. 6:12-cv-878) (E.D. TX). In the district court litigation, Nintendo of America, Inc., along with Nintendo Co., LTD, Retro Studios, Inc., Rent-A-Center, Inc., and Gamestop Corp. are named defendants. In the IPRs, Nintendo Co., Ltd. and Nintendo of America Inc. are the only named real parties-in-interest.
Initially, patent owner sought the Board’s permission to file a motion for additional discovery regarding agreements between petitioner and two co-defendants in the related district court proceeding for indemnification and defense costs. In addition, patent owner sought permission to file a motion to terminate the IPR for failing to state the real parties-in-interest on the petition, specifically for not naming Rent-A-Center as a real party-in-interest. In an Order entered June 9, 2014, the Board did not allow patent owner to file a Motion for Additional Discovery, but instead requested that the parties confer on the additional discovery requests. See IPR2014-00164, Paper No. 19. Consequently, the Board did not permit patent owner to file a Motion to Terminate because it patent owner indicated that it was related to the additional discovery request. Id.
On November 24, 2014, almost a year after filing the IPR petitions, the Board conducted a conference call at the request of the patent owner to seek permission to file a Motion to Terminate among other issues. The patent owner argued that the petition failed to name Rent-A-Center as a real party-in-interest in the three IPR petitions. During the conference call, the presiding judge asked patent owner if there was any new evidence that would change the Board’s previous decision. The patent owner responded that they now have possession of an agreement between Nintendo and Rent-A-Center “which discusses several issues related to the defense of Rent-A-Center and an indemnification provision providing for the same counsel for Center.” See IPR2014-00164, Ex. 2034. In response, petitioner argued “Rent-A-Center is somebody who sells products of Nintendo” and there is a “typical indemnification agreement,” but the agreement does not give “Rent-A-Center the ability to control anything that Nintendo is doing, much less it doesn’t even mention the IPR.” Id. Petitioner further argued that “it would be a large waste of time and effort . . ., and the law has made clear that the existence of an indemnification [sic] agreement by itself, particularly in this type of situation, does not rise to the level of being a real party-in-interest.” Id.
When determining whether a party should be named as a real party-in-interest to a proceeding, typically the Board has not placed too much emphasis on defining the parties’ specific relationship(s), but instead has looked at the contribution of each party, in terms of substance and funding, to the IPR. See e.g., RPX Corp. v. VirnetX Inc., IPR2014-00171 (Paper 57) (denying institution of IPR because Petitioner failed to name Apple Inc. as real-party-in-interest which was served with a Complaint more than one year prior to the filing date of the instant petition).
However, despite the petitioner’s argument that Rent-A-Center did not control the substance of the IPR petition, did not even know about the IPR prior to its filing, and that the Motion to Terminate would be a waste of time and effort, the Board authorized the patent owner to file a Motion to Terminate. See IPR2014-00164 (Paper 29). The Board granted patent owner one week to file a five page motion. The Board also allowed the petitioner a five page opposition motion to be filed no more than one week after patents owner’s Motion.
In this case, patent owner ended up deciding not to file the Motion to Terminate after it was authorized by the Board. However, practitioner should still be cautioned that a petitioner that has failed to name a real party-in-interest is left with little options to correct this oversight if the one-year statutory bar period under 35 USC 315(b) has past as it had in this case. The statute states that petitions which do not include all real parties-in-interest will not be accorded a filing date. Thus, a petitioner’s error cannot be corrected by filing a new or corrected petition. Further, petitioners should pay extra close attention to this issue as it appears it may be raised or resurfaced throughout the IPR proceeding.
Practitioners would also be wise to have a motion prepared that can be filed shortly after the conference call takes place. In this case, the conference call was held on the Wednesday before Thanksgiving and the motion was due just one week after the conference call, the Wednesday after Thanksgiving.
Margaret M. Welsh is an associate in the firm’s Electrical/Mechanical Group. Ms. Welsh’s practice focuses on the preparation and prosecution of domestic and foreign patent applications as well as counseling clients on intellectual property matters. She has experience in a wide range of mechanical and electrical technologies, including semiconductor and nanotechnologies and technologies in various automobile components, such as tires, transmissions, engines, fuel-injectors, motors, lamps, steering systems, connectors/wiring, valves, and control/monitoring systems.
Ms. Welsh previously has worked as an energy consultant where she provided various entities with technical, regulatory, and strategic support for many of their energy initiatives. She was also the Managing Editor of Volume XXI of Fordham’s Intellectual Property, Media and Entertainment Law Journal.