RPI Determination Under 315(b) Focuses on Litigation Control

In determining whether a party is a real party-in-interest subject to the one-year statutory bar of 35 U.S.C. § 315(b), the focus of the Patent Trial & Appeal Board (PTAB) to date has been honing in on the exercise of control over the earlier filed patent infringement lawsuit. The PTAB recently considered whether control of the allegedly infringing is enough to transform a party not named in the original complaint to an RPI for 315(b) purposes in Department of Justice v. IRIS Corporation Berhad, Case IPR2016-00497, slip op. at 7-9 (PTAB Jul. 25, 2016) (Paper 7).

In November, 2006, IRIS sued Japan Airlines Corporation (JAL) for infringing U.S. Patent No. 6,111,506 relating to a security system using an improved security identification document such as a passport. The patented technology covered JAL’s examination of electronic passports as required by U.S. federal law, which prompted the Department of Justice (DOJ) to intervene in the suit. JAL sought and obtained a dismissal on the basis that the federal legal requirement to examine passports conflicts with the patent laws, thus exempting JAL from infringement liability and leaving IRIS’s exclusive remedy as an action against the United States. In 2014, the Federal Circuit affirmed the dismissal on an appeal in which the DOJ also participated.

IRIS subsequently filed suit against the United States in the Court of Federal Claims on February 24, 2015, alleging infringement of the ‘506 patent. Less than one year later, the DOJ filed a Petition for Inter Partes Review (IPR) of the ‘506 patent on January 22, 2016. In its Preliminary Response, IRIS sought to terminate the IPR as time-barred by 35 U.S.C. § 315(b), which states that:

An 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

According to IRIS, the DOJ qualified as a real party-in-interest to the 2006 JAL lawsuit because the U.S. government had directed and controlled the allegedly infringing activity forming the basis of the JAL lawsuit, had filed a notice of appearance in the district court, and had participated in the appeal to the Federal Circuit.

The Board disagreed with IRIS’s argument. According to the Board, the “mere participation in litigation and assumption of liability do not, without more, make a real party in interest.” The U.S. government’s direction and control of the allegedly infringing activity did not relate directly to the factors considered in determining whether a third party is a real party-in-interest. In particular, the Board faulted IRIS as failing to provide any evidence that the DOJ had exercised or could have exercised “control over the proceeding,” i.e., over the 2006 JAL lawsuit. IRIS focused on the DOJ being a real party-in-interest to the 2006 JAL litigation by virtue of its control of the allegedly infringing activity.

Going forward it may be that patentees seeking to challenge intervenor defendants under 315(b) should instead outline the status of such defendants under Rule 24 of the F.R.C.P. Such as the ability to introduce pleadings, or control the litigation apart from other defendants. Alternatively, evidence can be adduced that shows a level of cooperation with other named parties to control the litigation.