Agilent Technologies, Inc. v. Waters Technologies Corp.

Addressing the statutory cause of action requirement to appeal a reexamination decision, the U.S. Court of Appeals for the Federal Circuit dismissed an appeal, finding that the appellant was not a third-party requester of the reexamination in issue and failed to show that it was the successor-in-interest of the requester. Agilent Technologies, Inc. v. Waters Technologies Corp., Case No. 15-1280 (Fed. Cir., Jan. 29, 2016) (O’Malley, J.).

Waters Technologies Corporation (Waters) brought suit against Aurora SFC Systems, Inc. (Aurora) for infringement of a patent relating to chromatography systems. Aurora subsequently filed a request for inter partes review (IPR) of the patent resulting in a stay of the infringement suit. About five months after Aurora filed the reexamination request, Agilent acquired “substantially all” of Aurora’s assets. The examiner then rejected all of the claims of the patent as anticipated over the prior art. Waters appealed and Aurora cross-appealed to the Patent Trial and Appeal Board (PTAB or Board). Subsequently, Aurora filed a request to change the real-party-in-interest from Aurora to Agilent. Agilent began participating along with Aurora in the appeal proceedings. The Board reversed all of the examiner’s rejections and listed Aurora as a third-party requester in the decision. Agilent alone appealed to the Federal Circuit.

The initial question on appeal was whether Agilent had a cause of action to bring the appeal. As the party seeking relief, Agilent bore the burden of demonstrating that it had a cause of action. The parties agreed that Agilent’s right to appeal, if any, derives from 35 U.S.C § 141, which states that a “patent owner, or a third party requester” may appeal a final decision of the Board. In its opening brief, Agilent labeled itself as either a “privy” or a “successor-in-interest,” and the Court examined Agilent’s right to a cause of action based on both relationships. With respect to Agilent’s “privy” argument, the Court explained that because Congress explicitly provided for appeals of reexaminations by third-party requesters, but not privies, mere privies lack a cause of action to file an appeal.

Agilent also argued it was Aurora’s successor-in-interest because it acquired substantially all of Aurora’s assets before the reexamination concluded, including all rights relating to the underlying reexamination. The Court noted uncertainty over what was transferred from Aurora to Agilent as it was not disclosed in the RPI change request, except that it was not all of the rights. After the transfer, Aurora remained a distinct, ongoing entity. Aurora also filed third-party comments in the reexamination proceedings several months after the transfer date, which belied Agilent’s claim that it stepped into Aurora’s shoes as a successor-in-interest. Also, it was not until eight months after the asset transfer, and one month after the appeal to the Board, that Aurora filed a request to change the real-party-in-interest to Agilent. Even then, Aurora’s counsel appeared at the Board hearing. Further, Aurora remained a party to the underlying district court litigation. Although not dispositive, Agilent never furnished the court with a copy of the asset transfer agreement so that the extent of the transfer could be verified. Instead, Agilent provided a declaration by Agilent’s general counsel stating that Agilent “succeeded to all of Aurora’s legal claims and liabilities relating to the purchased Business.” The Court found the declaration an “incomplete” account of the agreement, which did not allow the Court to determine the extent of Agilent’s rights. Accordingly, the Court found that Agilent lacked a statutory cause of action to appeal the reexamination decision.

Practice Note: Parties wishing to appeal a reexamination decision by the Board must show they are the patent owner, a third-party requester or at least a successor-in-interest.