CAFC Finds Board Has Power to Vacate Institution Decision Sua Sponte

The Patent Trial & Appeal Board (PTAB) posed the following question to the public last summer in its Request for Comments:

Real Party in Interest:

5. Should a patent owner be able to raise a challenge regarding a real party in interest at any time during a trial?

Since last summer there have been a handful of IPR proceedings vacated on RPI grounds, post-institution. At the same time, the Board expresses a strong preference that motions for additional discovery on RPI be pursued as early as possible. So, while the Board has shown a willingness to vacate post-institution for improper RPI/privity designations, evidence for advancing such a deficiency (i.e., that the petitioner has failed to name a RPI/privy in its petition) is unlikely to come through PTAB discovery—for now.

This month the Board is expected to release a new rule package responsive to the feedback from last summer's Request for Comments. The Rules are expected to provide some enhanced ability to secure additional discovery, especially as it relates to RPI.  Given the expectation of more liberal discovery on RPI in the month's ahead, is RPI a matter of standing that might be raised at any time, even on appeal to the CAFC?

First, the RPI requirement is expressed in a handful of IPR statutes, 35 U.S.C. § 312(a); and 35 U.S.C. § 315(a), (b) and (e).  (The PGR statutes include corresponding provisions, discussed below).  

As to 312(a), this statute spells out the requirements of a petition. That is, a petition may be considered only if:

.       .       .      .

(b) the petition identifies all real parties in interest. 

For a patentee to prevail under this statute, one might argue that the patentee would need to pursue its RPI argument prior to the time of institution. In other words if this statute expresses any concept of standing, it might be limited in time (i.e., preliminary proceeding only). 

315 (a) and (b), on the other hand, do not refer to consideration of the petition, but instead, to institution. For example, 315() provides, "[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." (emphasis added) Thus, 315(b) would seem more in the vein of traditional standing concepts. 315(a) recites a similar prohibition, but prohibits a DJ action for invalidity prior to an IPR petition..

35 U.S.C. § 325(a)(1) is the equivalent of 35 U.S.C. 315(a), but specific to PGR. Last month, the CAFC considered whether or not the Board could invoke 325(a)(1) sua sponte to vacate CBM proceedings in GTNX, Inc. v. INTTRA, Inc. (CAFC 2015). In GTNX, the Board vacated the CBMs upon learning that the petitioner challenged the validity of the same patents via declaratory judgment action prior to its CBM petition filings (prohibited by 325(a)(1)). The Court, while not addressing the issue as one of "standing" held that GTNX lacked a clear and indisputable right to have the proceedings continue in the face of the proscription under § 325(a)(1). The court noted the absence of anything in the statute or regulations precluding the Board from reconsidering the institution decision, invoking § 325(a)(1) on its own, or inviting the patentee to file a motion at any time.  One would expect a corresponding analysis for 315(a) or (b).

Currently, the Board does not have any precedential decisions on RPI, or privity due to the fact specific nature of these cases. As a result, some consider this area subject to highly panel dependent. Given this type of additional discovery may become easier to secure in the months ahead, it is likely that RPI/privity will be the focus of many CAFC appeals going forward, perhaps even for the first time.