On June 2, 2014, the Patent Trial and Appeal Board denied the patent owner’s request to dismiss a petition for inter partes review as time-barred under 35 U.S.C. §315(b). Under 35 U.S.C §315(b), a petition for inter partes review is time-barred if “filed more than 1 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.” The patent owner asserted the petitioner was a “privy” of its co-defendant who was served with a complaint alleging patent infringement more than one year before the filing date of the petition. In support of its “privy” argument, the patent owner pointed to the co-defendant’s agreement to indemnify the petitioner for claims of patent infringement of “the same accused functionality.” The patent owner argued that the co-defendant and petitioner had a pre-existing legal relationship and thus were “privies.” The Board rejected the patent owner’s arguments for primarily three reasons. First, relying on the Patent Office Trial Practice Guide, the court noted there was no evidence that the co-defendant “exercised or could have exercised control over a party’s participation in a proceeding,” or that the co-defendant was responsible for funding or directing the IPR. Second, the Board determined that the indemnity agreement did not provide the co-defendant any right to intervene or control petitioner’s defense to patent infringement. Third, the Board followed Supreme Court precedent that indemnification is not a “substantive legal relationship” justifying preclusion based on privy. Based on these facts, the Board determined the petitioner and co-defendant were not “privies” and held the petition was not time-barred.

Apple Inc. v. Achates Reference Publishing, Inc., IPR2013-00080 (PTAB June 2, 2014) [Arbes (opinion); Blankenship; Anderson]