Privy and Real Party in Interest – Joint Defense Groups and Trade Associations

Authored by Michelle Carniaux and Michael E. Sander

In addition to substantively attacking invalidity grounds raised in petitions for inter partes review (“IPR”), patent owners have attempted to prevent the initiation of IPRs based on procedural grounds. One such tactic is to take advantage of the bar against instituting an IPR of a patent if the petition requesting the IPR is filed more than 1 year after the IPR petitioner is served with a complaint alleging infringement of the patent. See 35 U.S.C. § 315(b). The one year bar applies not only to situations in which the petitioner was served with a complaint more than 1 year before filing the petition, but also to situations where the “real party in interest, or privy of the petitioner” was served with a complaint. Id. Thus, in some preliminary responses to petitions for IPR, patent owners have argued that an IPR should not be instituted since a real party interest, or privy to the petitioner (a party not named as a participant in the proceeding) was served with a complaint alleging infringement of the patent in issue more than 1 year before the IPR petition was filed.

The USPTO has commented that determining whether “a party who is not a named participant in a given proceeding nonetheless constitutes a ‘real party-in-interest’ or ‘privy’ to that proceeding is a highly fact-dependent question.” See Fed. Reg. 48759 (Aug. 14, 2012) (citing Taylor v. Sturgell, 553 U.S. 880 (2008)). Relevant factors to consider when determining whether a party is in privy with an IPR petitioner include the party’s “relationship with the petitioner,” the party’s “relationship to the petition itself, including the nature and/or degree of involvement in the filing,” and “the nature of the entity filing the petition.” See Fed. Reg. 48760 (Aug. 14, 2012). According to the USPTO, if two parties are members of a trade association, one party “does not become a ‘real party-in-interest’ or a ‘privy’ of the Association simply based on its membership in the Association.” See id. Similarly, if two parties are part of a joint defense group in a patent infringement lawsuit, and one party files an IPR, the other members are not necessarily the real parties in interest or in privy “based solely on [their] participation in that Group.” See id.

The PTAB recently reiterated these comments, and declined to find that co-defendants to a lawsuit were real parties in interest: “[s]imply because parties have been accused together of separate infringements of a single patent, this does not instantly join such parties together as real parties-in-interest.” See IPR2013-00028, Notice No. 14, 8 (P.T.A.B. Mar. 21, 2013). Considerations for determining whether a party who is not named as a participant in the IPR proceeding (“non-party”) is a real party-in-interest may include whether the non-party exercises control over a petitioner’s participation in the proceeding, and whether the non-party, in conjunction with control, is funding the proceeding and directing the proceeding.” See id. Instead, what is needed is evidence that one party “exercised control or provided funding” to file the instant petition. See id.