On remand from the US Court of Appeals for the Federal Circuit en banc decision in Wi-Fi One, LLC v. Broadcom Corp., Case Nos. 15-1944; -1945; -1946 (Fed. Cir., Jan. 8, 2018), the Federal Circuit reaffirmed the portions of its prior decision that were unaffected by the en banc decision. Wi-Fi One, LLC v. Broadcom Corp., Case No. 15-1944 (Fed. Cir., Apr. 20, 2018) (Bryson, J) (Reyna, J, dissenting). Specifically, the Federal Circuit reaffirmed that the time bar does not apply to the inter partes review (IPR) petitioner, because the evidence did not show (1) that the petitioner was in privy with the district court defendants or (2) that the district court defendants were real parties-in-interest in the IPR proceeding.
Wi-Fi’s predecessor, Ericsson, filed a patent infringement action against D-Link Systems and several other defendants in the US District Court for the Eastern District of Texas. Although Broadcom was not a defendant in this district court litigation, it was the manufacturer of two chips that formed the basis for some of the infringement allegations in the litigation. This case resulted in a jury trial finding infringement of three patents.
Shortly after judgment was entered in the district court action, which was about three years after the complaint was filed, Broadcom requested IPR of the three patents that were found to be infringed in the district court action. Wi-Fi argued that Broadcom’s petition was time barred under 35 USC § 315(b) because Broadcom was in privity with the district court defendants, or that the district court defendants were the real parties-in-interest in the IPR proceeding. The Patent Trial and Appeal Board (PTAB) found that privity and real party-in-interest status could be established not only by Broadcom’s exercise of control over the district court proceedings, but also by the district court defendants’ exercise of control over the IPR proceeding. However, the PTAB concluded that Broadcom’s petition was not time barred because Broadcom did not exercise control over the district court proceeding and the district court defendants did not exercise control over the IPR. Thus, the IPR proceeding continued, and the PTAB ultimately found the patents invalid.
Wi-Fi appealed, arguing that the decision to institute was incorrect because Broadcom’s petition was time barred (IP Update, Vol. 19, No. 10). The Federal Circuit panel refused to review the PTAB’s institution decision, citing the Federal Circuit’s prior decision in Achates v. Apple (IP Update, Vol. 18, No. 10). Wi-Fi sought en banc review, and the en banc Federal Circuit later remanded the appeal to the panel, finding that the PTAB’s time-bar decisions at the time of initiation could be appealed (IP Update, Vol. 21, No. 2).
On remand, Wi-Fi argued that the PTAB applied the wrong legal standard when it determined that no district court defendant was either a privy of Broadcom or a real party-in-interest in the IPR proceeding. The Federal Circuit rejected Wi-Fi’s argument, concluding that although Broadcom’s interests were aligned with the defendants, the evidence did not show that Broadcom had the right to control the litigation. Additionally, the evidence did not suggest that the district court defendants were real parties-in-interest in Broadcom’s IPR.
Wi-Fi also argued that the PTAB abused its discretion by refusing Wi-Fi additional discovery, such as its request for discovery of evidence related to the indemnity agreements between Broadcom and two of the district court defendants. The Federal Circuit again rejected Wi-Fi’s argument, finding that the PTAB had not abused its discretion by denying Wi-Fi additional discovery because Wi-Fi had not been able to show that the requested discovery would be likely to produce favorable evidence. The Court also agreed with the PTAB’s finding that the discovery Wi-Fi requested would likely not have established control, as paying for trial expenses pursuant to indemnity normally does not establish privity or control.
Judge Reyna dissented, finding that the Court applied an erroneous standard for establishing privity. He argued that indemnity agreements evidenced privity and that Wi-Fi should have been entitled to additional discovery related to the indemnity agreements.