In a decision to institute an IPR proceeding, a Patent Trial and Appeal Board (PTAB) panel has determined that a parent-subsidiary relationship is insufficient, alone, to trigger the disclosure requirements of 35 U.S.C. § 312(a)(2) with respect to the parent company. In prior decisions, the board has determined that failure to disclose a real party-in-interest is fatal to the IPR petition. In this case, the petitioner identified itself—but it did not disclose its corporate parent—as a real party-in-interest. The patent owner argued in its preliminary response that the unnamed party “is the ultimate parent company” of the petitioner and “exhibits a significant measure of control over its wholly-owned subsidiary.” According to the patent owner, evidence that the parent was a real party-in-interest included the fact that the same law firm represented the petitioner in the instant IPR as well as the parent company in a related litigation. In analyzing the issue, the board explained that to determine whether a party is a real party-in-interest, it considers factors such as the non-party’s relationship with the petitioner and the non-party’s relationship with the petition itself—including the nature and degree of involvement in the filing, and the nature of the entity filing the petition. The board further noted that a party does not become a real party-in-interest solely because it is a joint defendant with the petitioner in a patent infringement suit or is part of a defense group with the petitioner in the suit. According to the board, a “real party-in-interest” determination is “highly fact-dependent,” and the evidence as a whole must show that the non-party “possessed effective control over the petitioner” with respect to the IPR.  In this case, the board concluded that generic references to the existence of a parent/subsidiary business relationship in SEC documents and statements in press releases on which the patent owner relied were insufficient to establish that the parent funded, directed, or controlled the IPR proceeding, or that the subsidiary was a proxy for the parent. As a result, the board rejected the patent owner’s challenge and instituted the IPR.

TRW Automotive US LLC  v. Magna Electronics Inc., IPR2014-01497, Paper No. 7 (PTAB Mar. 19, 2015)