PTAB Issues Three New Precedential Opinions On RPI

April 17, 2019 – Article

The PTAB designated three decisions as precedential yesterday (in addition to several in previous weeks). These cases illustrate that the PTO is in the process of designating precedential opinions on a number of issues, in line with revised Standard Operating Procedure 2 for designating precedential and informative decisions. See my previous post on other recent precedential decisions.

All three decisions address the rule that patent challengers must identify all real parties in interest (“RPI”) in their petitions. Determining whether or not a party qualifies as an RPI has been a litigious issue to date, and the new precedential opinions should help clarify some issues. 

In Ventex Co. Ltd. v. Columbia Sportswear North America, Inc., the PTAB terminated the IPR, finding that petitioner Ventex failed to name another company, Seirus Innovative Accessories, as an RPI. Seirus is a winter accessories company that purchased fabric from Ventex. Notably, Seirus had been sued by Columbia more than one year before Ventex filed its petition, and the Board found that Ventex was effectively serving as Seirus’ proxy in an effort to undermine the one-year petition time limit. Based on the Board’s finding that Seirus should have been named in the petition, the Board determined that the petition was time-barred and vacated the institution decision and terminated the review. IPR2017-00651, Paper 148 (PTAB Jan. 24, 2019).

In two other cases with arguably less egregious facts, the Board held that an improper RPI designation can be corrected by filing an updated mandatory notice, and the Board has discretion as to whether to change the filing date of the petition correspondingly. In Adello Biologics LLC v. Amgen, Inc., Adello was allowed to update its list of RPIs after filing a PGR listing several generic companies as RPIs, but failing to name a subsidiary of one of those companies. In that case, the Board accepted Adello’s explanation that the omission was accidental rather than gamesmanship or bad faith, despite Amgen’s arguments to the contrary. And, because the case had not yet been instituted, the Board noted that there would be no prejudice to Amgen, and there would not be any need to update the petition’s filing date. Thus, the Board granted Adello’s motion to update its mandatory notice. PGR2019-00001, Paper 11 (PTAB Feb. 14, 2019).

Similarly, in Proppant Express Investments, LLC v. Oren Techs., LLC, the Board denied Oren’s motion to terminate based on improperly-named RPIs after trial was instituted. When Oren raised concerns regarding RPI, Proppant Express filed an updated mandatory notice listing two other companies as RPIs. Oren then filed a motion to terminate, arguing that the filing date of the petition should be changed to the date of the amended mandatory notice, and in that case, the petition should be denied as time-barred. The Board disagreed, holding that whether or not the petition’s filing date is changed based on adding RPIs is a discretionary issue and the Board should consider several factors when deciding whether a petition will lose its original filing date or not. These factors include whether the amendment is an attempt to circumvent the timing requirements, prejudice to the patent owner, bad faith, and gamesmanship. Here, the Board said determining whether the other parties should have been named as RPIs was complex and Proppant Express’s amendment was not made in bad faith. The Federal Circuit’s decision broadening RPI status was also an intervening factor the Board considered (referring to Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018)). IPR2017-01917, Paper 86 (PTAB Feb. 13, 2019).  

While petitioners should take care that the correct RPIs are named at the time of filing a petition, these cases lend some flexibility for amendments, particularly with respect amendments to correct RPIs that can be considered simple oversights. On the other hand, patent owners should still carefully evaluate whether or not the proper RPIs are named, as failing to name all relevant parties can be significant, particularly if parties are left off in a bad faith attempt to game the system.