PTAB Denies Request for Party to Remove Itself from Multi-Party Petition

Authored by A. Antony Pfeffer

In a cautionary note to parties considering filing joint petitions for a post grant review, on March 24, 2014, APJ’s Lee, Petravick, Rice and White, denied a motion to reconstitute the petitioner in CBM2014-00013 to remove Apple.

On October 15, 2013, Apple (along with Open Table, Fandango, and Domino’s Pizza, Inc. and Domino’s Pizza, LLC) filed a petition for a CBM review of U.S. Patent 6,982,733. In the petition they described themselves as “petitioners”. In this petition, they also set forth that they would be represented by three separate teams of lead and backup counsels. A preliminary response was filed by the patent owner, Ameranth, Inc., on January 13, 2014.

On February 7, 2014, the Board initiated a conference call with the parties to discuss the issue where for one CBM, multiple lead counsel were identified. As set forth in an Order on the Conduct of Proceedings, the petitioners, through Richard Zembek, explained that:

with regard to paper filings, the five companies would always file a single paper, sharing the allotted pages among themselves, and that in the event of differences in the positions of different companies, there would be one or more separate sections within the same paper to articulate the differences. Mr. Zembek further explained that in case of telephone conference calls, he is authorized to speak on behalf of all the listed companies, subject, however, to any objection that may be advanced by a company that may have a different position on any issue.

Counsel for Ameranth, the patent owner, objected to this procedure. The Board concurred, stating that, “because the five companies constitute, collectively, a single party, they must speak with a single voice, both in writing and oral representation.” The Board ordered the identification of a single lead counsel for petitioners as a group.

On February 18, 2014, the non-Apple petitioners filed a paper identifying a single lead counsel. This paper stated that:

For the purposes of this Notice and future actions in this case, Petitioner consists of the following companies listed in the Amended Petition: Domino’s Pizza, Inc.; Domino’s Pizza, LLC; Fandango, LLC (formerly known as Fandango, Inc.); and OpenTable, Inc.

The paper was silent as to Apple’s status as a petitioner.

On March 7, 2014 the Board initiated a conference call to discuss the outstanding issue with respect to Apple. In an Order on the Conduct of Proceedings regarding this call, the Board noted, with respect to the failure to address the status of Apple:

The conference call began with the Board stating the impropriety of Petitioner’s actions in responding to the Board’s Order of February 11, 2014. Had the Board not noticed the non-compliance, this proceeding would have continued indefinitely without a clear picture of the constitution of Petitioner or a clear designation of lead and backup counsel.

The Board reiterated that until the Board excuses Apple from the CBM, it remains a party to the CBM, and is a petitioner. The Board allowed Apple to delay identifying a lead counsel identical to the other petitioners until the Board ruled on a request from Apple to withdraw from the proceedings.

On March 12, 2014, Apple requested to be terminated from the proceedings, without the consent of Ameranth. Also it requested a ruling that there would be no estoppel applied to it regarding the CBM proceeding, and for permission to file a separate CBM petition and move to join it with the present proceedings.

On March 24, 2014, the Board denied the request for a ruling on estoppel, saying that determination is for any future tribunal to make. Also, it stated that it did not need to give, and would not give preapproval to, any future motion for CBM that Apple might file, or associated motions for joinder.

Finally, the Board denied the request for Apple to be terminated from the proceedings without the consent of the patent owner (who opposed this request). According to the Board, Apple’s options are to request adverse judgment, or to settle with the patent owner and jointly request termination. Apple has now been given five days to comply with the earlier February 11, 2014 order.