Petitions in post-grant proceedings before the Patent Trial and Appeal Board (PTAB) are considered by the PTAB only if the petitioner identifies all of the real parties-in-interest. See, e.g., 35 U.S.C. § 312(a)(2). Three recent precedential decisions by the PTAB provide guidance on when a petitioner’s mandatory notices can be updated without assigning a new filing date to the petition, and when failure to name a real party-in-interest is deemed improper and can doom a petition.
The PTAB permitted petitioners to update their mandatory notices by adding a previously unidentified real party-in-interest without altering the filing date of the petition. Adello Biologics LLC v. Amgen Inc., PGR2019-00001 (PTAB Feb. 14, 2019) (Paper 11) at 2. The PTAB determined that, upon being notified by the patent owner that the unnamed entity should have been named, petitioners “promptly investigated the issue.” Id at 2. The PTAB also noted petitioners’ assertion that “there was no intentional concealment or bad faith [in the] inadvertent omission” of the entity. Id. The PTAB explained that USPTO procedures allow parties to rectify noncompliance. Id at 3. The PTAB highlighted the intended purpose of identifying real parties-in-interest, namely “to assist members of the Board in identifying potential conflicts, . . . to assure proper application of the statutory estoppel provisions,” to protect patent owners from potential harassment associated with multiple successive petitions by the same or related parties, and to prevent parties from taking a “second bite at the apple.” Id. at 4 (citing Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48759 (Aug. 14, 2012)). The PTAB determined allowing rectification served these purposes in the instant case. Id. at 4. Importantly, in view of the parties’ duty of candor and good faith to the USPTO, the PTAB accepted the petitioners’ express representations that the omission may have been due to human error rather than bad faith or gamesmanship, and noted petitioners’ showing of diligence in updating the record. Id. at 4-5.
The Board reached a similar conclusion in Proppant Express Investments, LLC v. Oren Technologies, LLC, IPR2017-01917, Paper 86 (PTAB Feb. 13, 2019). This decision identifies the following factors considered by the PTAB in permitting petitioners to amend their identification of real parties-in-interest while maintaining the original filing date of the petition: “(1) attempts to circumvent the § 315(b) bar or estoppel rules, (2) bad faith by the petitioner, (3) prejudice to the patent owner caused by the delay, or (4) gamesmanship by the petitioner.” Id. at 6-7 (citing Aerospace Communications Holdings Co. v. Armor All/Step Products Col., IPR2016-00441, Paper 12, at 3 (PTAB June 28, 2016)). The PTAB determined that no allegation had been made that petitioners were attempting to evade estoppel rules. Id. at 9. The PTAB disagreed with the patent owner’s position that it had suffered prejudice caused by having “to devote significant time and resources to briefing the real-party-in-interest issue.” Id. at 9-10. According to the Board, no allegations of bad faith were advanced. Id. at 12. The Board also determined that there was no gamesmanship on the part of the petitioners, and that the petitioners had instead acted in response to a change of law and to the Board’s interpretation of that law. Id. at 12-14 (referring to Applications in Internet Time v. RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018) (noting that determining whether a non-party is an RPI demands a flexible approach taking account equitable and practical considerations of whether the non-party is a clear beneficiary having a preexisting and established relationship with the petitioner) and Worlds Inc. v. Bungie, Inc., 903 F.3d 1237 (Fed. Cir. 2018) (finding that the PTAB had improperly placed the burden of persuasion on patent owners in RPI disputes)). Notably, the PTAB allowed the petitioners to identify an entity as a real party-in-interest while expressly not admitting that the party is in fact a real party-in-interest. Id. at 5, 14-15.
In sharp contrast, the Board in Ventex Co., Ltd. v. Columbia Sportswear North America, Inc. determined that the petitioner was time-barred under 35 U.S.C. § 315(b), dismissed the petition, vacated institution and terminating an inter partes review proceeding for failure to name a real party-in-interest that would have been time-barred if named in the original petition. Ventex Co., Ltd. v. Columbia Sportswear North America, Inc., IPR2017-00651, Paper 152 (PTAB Jan. 24, 2019). The PTAB noted that Worlds sets forth that the petitioner bears the burden of persuasion to show that the petition is not time-barred under § 315(b). Id. at 4 (citing Worlds Inc. v. Bungie, Inc., 903 F.3d 1237, 1242 (Fed. Cir. 2018)). In the instant case, the PTAB determined that non-party Seirus would have received a “direct benefit” of an invalidity finding on patents which patent owner Columbia had asserted against Seirus. Id. at 10. Indemnification and exclusivity arrangements between Seirus and petitioner Ventex indicated a well-established preexisting business relationship. Id. In its consideration of privity, the PTAB also noted that Seirus may have been covertly funding Ventex’ IPR against Columbia, and thus implied potential misconduct on the part of the petitioner. Id. at 13-15.
The above cases demonstrate the PTAB’s willingness to follow a “flexible approach,” as prescribed in Applications in Internet Time v. RPX Corp., allowing petitioners to rectify inadvertent omissions in their mandatory notices without prejudice. However, the PTAB may scutinize real parties-in-interest designations in situations where the unnamed entity would have been time-barred as of the original filing date of the petition.