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IPRs Terminated by PTAB After Petitioner Failed to Name Client as RPI

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By Anne Bolamperti and David G. Barker

In RPX Corp. v. Applications in Internet Time LLC, the Patent Trial and Appeal Board (“PTAB”) held in a precedential opinion that three inter partes reviews (“IPRs”) were time-barred under 35 U.S.C. § 315(b) because the petitioner, RPX Corp. (“RPX”), failed to name its client (“Salesforce”) as a real party in interest (“RPI”) in the proceedings. One of RPX’s business solutions is “to file IPRs where its clients have been sued by non-practicing entities.”

RPX filed the IPRs against Applications in Internet Time LLC’s (“AIT’s”) regulatory monitoring patents (US 8,484,111 B2 and US 7,356,482 B2). AIT argued that the IPRs should have been time-barred, because Salesforce had not been named as an RPI, even though Salesforce—one of RPX’s clients—had been served with a complaint alleging infringement of the same patents challenged in the IPRs more than one year before RPX’s petitions. But the PTAB instituted the IPRs and issued final written decisions that all challenged claims were unpatentable.

On appeal, the Federal Circuit held that the PTAB had “applied an unduly restrictive test for determining whether a person or entity is a ‘real party in interest’ within the meaning of § 315(b)” and also “failed to consider the entirety of the evidentiary record in assessing whether § 315(b) barred institution of these IPRs.” The court vacated the PTAB’s final written decisions, and remanded for further proceedings.

The Federal Circuit stated that an RPI inquiry’s focus should be based on who “will benefit from the redress that the chosen tribunal might provide.” The Federal Circuit also reasoned that the common law of RPI was meant to protect parties from multiple lawsuits. Similarly, it held the purpose of the RPI provision was to protect patent owners from multiple petitions.

After post-remand briefing and discovery, the PTAB analyzed RPX’s business model, among other factors, to decide whether the RPI and privity requirements argued by AIT would “preclude [RPX] from getting ‘two bites at the apple’….” Despite RPX’s claim that its relationship with Salesforce was unrelated to the IPRs, the PTAB determined that Salesforce relied on RPX to obtain and clear patent rights. The PTAB held that this reliance put RPX on notice of which patents were a risk to its clients. The evidence also showed that RPX and Salesforce regularly discussed the challenged patents up until the date that RPX filed the IPRs and that filing IPRs to protect Salesforce’s work was a major part of RPX’s subscription business.  The PTAB concluded that RPX filed the IPRs to benefit and represent Salesforce. Therefore, the PTAB held that Salesforce was indeed an RPI in the IPR proceedings, and it terminated the time-barred IPRs pursuant to § 315(b).