In a recent mandamus petition filed in the U.S. Court of Appeals for the Federal Circuit, a patent owner challenges the institution of an inter partes review based, in part, on the Patent Trial and Appeal Board’s conclusion that a supplier of accused products is not a “privy” to the petitioner, a reseller of the accused product. Under 35 U.S.C. § 315(b), an IPR “may not be instituted if the petition requesting the proceeding is filed more than one 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.” By clarifying the scope of “privy,” the court’s ruling could impact the availability of IPRs to serially accused infringers related via supply chains.
The patent owner, MCM Portfolio LLC, asserted U.S. Patent No. 7,162,549 against the supplier, Pandigital, Inc., in a district court action filed on August 24, 2011. Months later, MCM asserted the same patent in a different district court action, filed on March 28, 2012, alleging infringement by Hewlett-Packard Company, which purchases the accused products from Pandigital and resells them under the HP brand. On March 27, 2013—just one day before the one-year bar date based on the second complaint—HP filed a petition for inter partesreview of MCM’s patent.
In its preliminary response, MCM argued that the Board should deny HP’s petition as time-barred because MCM filed its complaint against Pandigital—a privy of HP—more than one year before HP filed its request. The Board rejected that argument and instituted the IPR, concluding that, because of a lack of “persuasive evidence that HP could have exercised control over Pandigital’s participation” in litigation, § 315(b) does not apply.
In its mandamus petition, MCM asserts that the Federal Circuit should terminate the IPR because, by requiring HP to exercise “control over Pandigital’s participation” in litigation, the Board interpreted “privy” too narrowly. In the alternative, MCM argues that the Board’s institution of the IPR represents a “usurpation of judicial power” that the court can only remedy with a writ. Further, MCM asserts that only a writ can provide the relief desired (i.e., avoiding the parallel district court proceedings and IPR) because, under 35 U.S.C. §314(d), a party cannot appeal the decision of whether or not to institute an IPR. The Federal Circuit’s order on the petition should issue in the next few months.