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PTAB Institutes Unified Patents IPR Petition Despite Patent Owner’s RPI and General Plastic Challenges

February 01, 2019
Patent Office Trials Blog

PTAB Institutes Unified Patents IPR Petition Despire Patent Owner’s RPI and General Plastic Challenges:

On December 20, 2018, the Patent Trial and Appeal Board (PTAB) instituted Unified Patents’ petition for Inter Partes Review (IPR) of Patent No. 9,253,239, assigned to Bradium Technologies LLC. Bradium asserted that was deficient for failure to name all real parties-in-interest (RPIs) and also urged the PTAB to use its discretion to deny institution. The PTAB requested additional briefing regarding the RPI issued and, after considering the evidence, instituted review.

Real Party-in-Interest

An IPR Petitioner must identify “each real party-in-interest for the party.” 37 CFR 42.8(b)The Petitioner is barred from filing an IPR if the IPR 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.” 35 U.S.C. § 315(b).

Unified Patents’ business model is to file IPRs for the benefit the “technology zones” of its members. The PTAB found that this relationship does not make Unified’s members RPIs. Unified v. Bradium, IPR2018-00952, Paper 31 at 9.

This is the third time that the PTAB has found that Unified’s members are not RPIs following the Federal Circuit decision in AIT v. RPX, 897 F.3d 1336 (Fed. Cir. 2018). Unified v. Bradium, IPR2018-00952, Paper 31 at 5 (Institution Decision). In AIT, the Federal Circuit held that the PTAB’s RPI analysis, which almost exclusively focused on whether the non-party had control or the potential to control the IPR, was “unduly restrictive.” AIT, 897 F.3d at 1351. The Federal Circuit found that the PTAB should also have also considered “whether the non-party is a clear beneficiary that has a preexisting, established relationship with the petitioner.” Unified v. Bradium, IPR2018-00952, Paper 31 at 4, quoting AIT, 897 F.3d at 1351. The PTAB distinguished Unified’s activities from those of RPX, emphasizing that (1) Salesforce, the alleged RPI in the AIT case, “made a payment to RPX shortly before filing the IPR,” (2) Salesforce “discussed the patent and related litigation with RPX and a shared board member,” (3) RPX “negotiated a license on behalf of Salesforce,” and (4) “more importantly,” Salesforce “was time barred from filing its own IPR.” Unified v. Bradium, IPR2018-00952, Paper 31 at 10.  In contrast, there is no evidence that Unified communicated with its members regarding the IPR or the litigations involving the ‘239 patent, there is no evidence that Unified and its members share officers or  board members, and “most significantly,” there is no evidence that any of Unified’s members were time-barred from filing an IPR. Unified v. Bradium, IPR2018-00952, Paper 31 at 11.

The Board has consistently found that Unified Patents’ members are not RPIs and need not be listed on Unified’s IPR petitions. The Federal Circuit has not yet decided this issue.

Discretion Under 35 U.S.C. § 314(a)

If a previous IPR petition has been filed, the PTAB has discretion whether to institute a subsequent petition filed against the same claims of the same patent. The PTAB considers the following non-exhaustive Gen. Plastic factors when determining whether to institute the subsequent petition:

  1. whether the same petitioner previously filed a petition directed to the same claims of the same patent;
  2. whether at the time of filing of the first petition the petitioner knew of the prior art asserted in the second petition or should have known of it;
  3. whether at the time of filing of the second petition the petitioner already received the patent owner’s preliminary response to the first petition or received the Board’s decision on whether to institute review in the first petition;
  4. the length of time that elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition;
  5. whether the petitioner provides adequate explanation for the time elapsed between the filings of multiple petitions directed to the same claims of the same patent;
  6. the finite resources of the Board; and
  7. the requirement under 35 U.S.C. § 316(a)(11) to issue a final determination not later than 1 year after the date on which the Director notices institution of review.

Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha, Case IPR2016-01357, slip op. 15–16 (PTAB Sept. 6, 2017) (Paper 19) (precedential).

In the Unified v. Bradium proceeding, two judges of the PTAB panel decided to institute the IPR, while a third judge dissented, arguing that the PTAB should have used their discretion to deny institution. The main differences between the analysis of the majority and that of the dissent was with respect to Factor 1 (whether the same petitioner previously filed a petition) and Factor 3 (whether at the time of filing of the second petition the petitioner already received the patent owner’s preliminary response to the first petition or received the Board’s decision on whether to institute review in the first petition).

With respect to Factor 1, both the majority and the dissent agreed that the fact that a new petitioner has challenged the ‘239 patent weighs against denying institution. However, the majority found that the fact that a new Petitioner has challenged the petition weighs “overwhelmingly against a discretionary denial in this proceeding,” and that the “majority does not, under our discretion, impute the actions of an unrelated petitioner on this petitioner.” See Unified v. Bradium, IPR2018-00952, Paper 31 at 20.  The dissent found that the fact that there is a new petitioner merely “weighs against [exercising] our discretion to deny institution,” but did not find this factor to be “overwhelming.” See Unified v. Bradium, IPR2018-00952, Paper 31 at 46.

With respect to Factor 3, the majority found the fact that the new petitioner had access to both the preliminary response from the previous IPR and the decision whether to institute weighs against institution. Unified v. Bradium, IPR2018-00952, Paper 31 at 21. The dissent found that the timing of Unified’s filing “raises the potential for abuse” and that “petitioner indeed took advantage of ‘the opportunity to strategically stage their prior art and arguments.” Unified v. Bradium, IPR2018-00952, Paper 31 at 47-48.

Because the decision is highly discretionary, PTAB panels have reached inconsistent conclusions regarding whether a subsequent petition filed by a new petitioner should be instituted when the new petitioner is aware of the preliminary response and/or decision whether to institute. Companies considering whether to file an IPR petition when another company has already filed a petition should be aware that their petition could be denied.

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John Bird

Email: jbird sughrue.com

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. ‎

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