GEA Process Engineering, Inc. v. Steuben Foods, Inc.

Citing the petitioner’s failure to identify all real parties in interest (RPIs), the U.S. Patent and Trademark Office’s (USPTO) Patent Trial and Appeal Board (PTAB or Board) vacated earlier decisions on institution and terminated the inter partes review (IPR) of five related cases. GEA Process Engineering, Inc. v. Steuben Foods, Inc., Case Nos. IPR2014-00041, -00043, -00051, -00054, -00055 (PTAB, Dec. 23, 2014) (Elluru, APJ).

The Board instituted IPR of five patents held by Steuben Foods.  During the initial conference call, the patent owner asked for additional discovery relating to the RPIs of the petitions, alleging that the petitions may have failed to identify Procomac, an Italian sister company of the petitioner, as an RPI that may have funded and controlled the filing of the petitions. The Board gave the patent owner leave to file a motion for additional discovery, but later denied the motion “because the evidence and arguments presented . . . did not convince [the Board] that the requested additional discovery either existed or was likely to uncover information useful to the proceedings.”  The Board noted that, at the time the motion was filed, there was no evidence that the petitioner had accepted monetary compensation from Procomac.

The patent owner continued to seek discovery relating to the RPIs, and two months after the initial conference call, the petitioner admitted that Procomac had been invoiced for the IPR petition expenses.  The Board authorized the patent owner to file a proposed set of discovery requests relating to the RPI issue, and the petitioner subsequently produced invoices issued by the petitioner to Procomac for “all of the IPR expenses that had previously been billed to and paid by” the petitioner.

In light of the invoices, the patent owner challenged the identification of the RPIs, arguing that where not all RPIs have been identified in the petition, there is no jurisdictional basis for the IPR.  The patent owner further argued that failure to disclose an RPI is a substantive defect, and curing the defect would require giving the petition a new filing date. Here, a new filing date would be futile because the petition would be time-barred.

The petitioner argued that the RPI issue had been raised in an untimely manner and contended that Procomac was not an RPI when the petitions were filed and, thus, did not control or fund the petitions.  The petitioner pointed to the PTO’s response to the public’s comments to the Final Rules, where it noted that challenges to RPI identifications “should be” brought before or with the filing of the patent owner’s preliminary response.

The Board agreed with the patent owner, noting that “should be” is not equivalent to “must be,” and that RPI identification is a statutory provision that is “clearly an ongoing requirement that must be complied with during the pendency of the petition.”  Therefore, the patent owner’s challenge was not untimely.

The Board further determined that Procomac was an RPI to the proceedings. Procomac had funded expenses of the instant proceedings.  Importantly, petitioner itself did not distinguish between IPR expenses and non-IPR expenses relating to the district court proceeding.  According to the Board, this shed light on the relationship between the two proceedings.  Though Procomac may not have exercised control over the petitions, it had the opportunity to control them, revealing no discernable boundary between the patent owner and Procomac.

The Board ultimately found the petitioner’s failure to identify Procomac as an RPI to be a failure that could not be corrected without changing the filing date of the petitions. 35 U.S.C. § 312(a)(2) requires that “[a] petition . . . may be considered only if . . . [it] identifies all real parties in interest.”