As we previously noted, in “Uncertainty Regarding The Scope Of “Privy” And “Real Parties-In-Interest” In AIA Proceedings Remains,” patent owners involved in AIA proceedings should raise challenges, where applicable, in their responses submitted to the PTAB based on “privy” and “real parties-in-interest.”  This should be done to preserve their arguments in the event the Federal Circuit interprets these terms more broadly than the PTAB and that petitioners, potential “privies” to petitioners, and potential “real parties-in-interest” should continue to evaluate their respective positions.  The relevant time period for real party-in-interest analysis continues to be evaluated. 

An inter partes review (IPR) cannot be instituted if more than one year has elapsed since either the petitioner, a real party-in-interest, or its privy, was sued for infringement.  35 U.S.C. § 315(b).  To be subject to the one year bar, previous decisions suggested that privity needs to exist at the time of service of the complaint.  However, in VMware, Inc. v. Good Technology Software, Inc., IPR2015-00031, paper 11, the Board provided more insight into privity and denied a petition even though the petitioner and its privy had no relationship at the time of service of the complaint. 

In VMware, Good Technology served a complaint on AirWatch on November 15, 2012.  VMware acquired AirWatch as its wholly owned subsidiary in February 2014, and VMware filed a petition against Good Technology requesting inter partes review on October 6, 2014.  Finding the petition not timely under 35 U.S.C. § 315(b), the PTAB stated that factors in real party-in-interest or privy analysis “involve actions or events that may occur after service of a complaint.” 

This decision seems inconsistent with previous decisions which suggested that a relationship only at the time of the complaint matters.  For example, in ABB Technology, Ltd. v. IPCO, in 2012, the parent company of the petitioner purchased a subsidiary that was served a complaint in 2006; in 2013, the petition was filed.  IPR2013-00482, paper 7.  The Board found that315(b) did not bar the institution, because the patent owner did not provide persuasive evidence to show, at the time of service of the complaint, privy between the two subsidiaries.  IPR2013-00482, paper 8.  In another case, CHI MEI Innolux Corp. (CMI) v. Semiconductor Energy Laboratory Co., Ltd. (SEL), where CMI was formed from the merger of Chi Mei Optoelectronics Corp. (CMO) and other companies, the service of a complaint against CMO more than a year before the filing of the petition by CMI did not run afoul of 35 U.S.C. § 315(b) either.  IPR2013-00028, paper 14, page 6.  The cases do not necessarily conflict with each other, since a privy relationship was admitted in VMware, but in in ABB and CMI, privity, though asserted, was not expressly found.  In ABB and CMI, the Board seemed to rely on the lack of privity on the date of service of the complaint in the prior lawsuit.

These cases further indicate that there is still no bright line test for the real party-in-interest and privy determination, as the panel in VMware emphasized that the analysis under § 315(b) is a “highly fact-dependent question” that is evaluated consistent with “flexible and equitable considerations.”1

Therefore, patent owners should pay attention to actions or events that occur even after service of a complaint for privy and real party-in-interest determination.  If a patent owner believes that additional discovery will be necessary on the question of whether the petitioner has properly named all real parties-in-interest and privies, a motion for additional discovery should be filed as early as possible.2  Under the “interests of justice” standard, it is often difficult for a patent owner to receive additional discovery regarding real party-in-interest and privy, as “[t]he mere possibility of finding something useful, and mere allegation that something useful will be found, are insufficient to demonstrate that the requested discovery is necessary in the interest of justice.”  Garmin International, Inc. v. Cuozzo Speed Technologies LLC, IPR-2012-00001, Paper 26.  Despite this high standard, discovery request may be granted if it is narrowly tailored and fits within the Garmin Factor framework.3  

Parties should continue to vigilantly monitor real party-in-interest status in IPR proceedings.