Two PTAB Decisions Determine Whether A Non-Party Is Real Party- In- Interest

April 16, 2014

John Bird PTAB

Two recent decisions of the Patent Trial and Appeal Board (PTAB) addressed whether a non-party to an Inter Partes Review should be considered a real party-in-interest. Any real party-in-interest must be disclosed by the Petitioner in the Petition and by the Patent Owner within 21 days of service of the petition. See 37 C.F.R. § 42.8(b)(1). Identification of a real party-in-interest by the Petitioner is necessary because “[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.” See 35 U.S.C. §§ 315(b).
As discussed in a previous dated posted March 21, 2014, in Hewlett-Packard Co. v. MCM Portfolio, LLC (IPR2013-00217) the PTAB looked to factors set forth in the 2008 Supreme Court case Taylor v. Sturgell, 553 US 890 (2008) to determine whether a non-party is a real party-in-interest. The PTAB focused their analysis on the factor of control. The two recent decisions also focused on this factor.

ZOLL Lifecor Corp.

On March 20, 2014, in ZOLL Lifecor Corp. v. Philips Electronics North America Corp. (IPR2013-00609, Paper No. 15), the PTAB determined that ZOLL Medical, the 100% owner of Petitioner ZOLL Lifecor, was both a real party-in-interest and a privy of the Petitioner. ZOLL at pages 1 and 13-15.

Factors for determining whether the requisite control exists to make a non-party a real party-in-interest include (1) the “existence of a financially controlling interest,” (2) the “non-party’s relationship with the petitioner,” (3) the “non-party’s relationship to the petition itself, including the nature and/or degree of involvement in the filing,” and (4) the nature of the entity filing the petition. ZOLL at page 10. Facts showing ZOLL Medical’s control of ZOLL Lifecor included the Petitioner being a wholly owned subsidiary (ZOLL at 13), the subsidiary’s product being advertised on the parent company’s website (ZOLL at page 5), the parent authorizing the subsidiary’s budget and plans (ZOLL at page 11), and the parent’s management team attending a court ordered mediation on behalf of the subsidiary (ZOLL at 12).
Because ZOLL Medical was served with a complaint alleging infringement of the patent more than one year before ZOLL Lifecor filed the IPR petition, the petition was denied.

Denso Corp.

On March 14, 2014, in Denso Corp. v. Beacon Navigation BmbH (IPR2013-00026, Paper No. 34), the PTAB determined that all claims of the patent at issue to be unpatentable. The Patent Owner argued that the petition was deficient for a failure to identify Mazda and Nissan, defendants in a litigation involving the patent. The Patent Owner alleged that the fact that Mazda’s attorneys in the related litigation were also co-Petitioner Denso’s inter partes review counsel and Nissan’s attorneys in the related litigation were also co-Petitioner Clarion’s inter partes review counsel was evidence that Mazda and Nissan were real parties-in-interest and in privity with the Petitioners. Denso at pages 10-11. However, the PTAB disagreed, finding that there was no evidence that “the alleged additional real-parties-in-interest have engaged in strategic planning, preparation, and review of the Petition.” Denso at page 11.

Take Away

These decisions provide some guidance regarding how the PTAB is applying the real party-in-interest standard. ZOLL Lifecor is an extreme example where a wholly owned subsidiary is strongly controlled by a parent company. In Denso, even though the same attorneys were working on the litigation and inter partes review, the PTAB found that there was no evidence that the non-party vehicle manufactures engaged in strategic planning with there in the preparation of the Petition. However, under the Garmin standard for determining whether additional discovery is in “interests of justice”, the Patent Owner was unlikely to receive additional discovery that would lead to this information unless the Patent Owner already had some evidence that such strategic planning took place. See Garmin v. Cuozzo, (IPR2012-00001, Paper No. 26 at page 5, March 5, 2013).


John Bird


John M. Bird is a partner in the Washington, DC Office of Sughrue Mion PLLC. His focus is on the ‎protection and enforcement of designs and a wide range of electrical and mechanical technologies, ‎including analytical/measurement systems, medical ‎devices, HVAC systems, printers/copiers, ‎telecommunications systems, ‎data recording mediums, semiconductor fabrication, bearings, ‎welding ‎processes, sports equipment, footwear, and various automobile ‎components, such as tires, ‎transmissions, engines, fuel-injection systems, ‎motors, lamps, steering systems, connectors/wiring, ‎valves, and ‎control/monitoring systems. ‎

See his full biography here.