Reflectix, Inc. v. Promethian Insulation Technology LLC


Paper No. 18, April 24, 2015

IPR2015-00039 (Patent 7,935,410 B2)

IPR2015-00042 (Patent 7,935,411 B2)

IPR2015-00044 (Patent 8,327,601 B2)

IPR2015-00045 (Patent 8,343,614 B2)

IPR2015-00047 (Patent 8,221,871 B2)

[Payment of legal fees, provision of legal support, and blurring of the lines of corporate separation are all factors that may lead to the determination that a party is a real party in interest in an IPR]

FACTS

The petitioner Reflectix requested further briefing on the issue of the real party in interest from Promethian Insulation Technology LLC (‘PIT’) (Paper 13). Briefing revealed that Reflectix is a wholly owned subsidiary of Sealed Air Corporation (US) (‘SAC-US’), that several individuals are employed by both companies, and that SAC-US provided in-house counsel and paid for the preparation of the petitions filed by Reflectix (Reply 2, Ex. 4002). SAC-US was not identified by Reflectix as a real party in interest in its petition for inter partes review.

HOLDING

The Board found that because corporate identities of Reflectix and SAC were so intertwined and because SAC could exert control over the proceedings, SAC was a real party in interest (‘RPI’). Therefore, the Board held that Reflectix failed to identify all RPIs in its petition pursuant to 35 U.S.C. § 312(a)(2) and that correction would be futile as it would lead to the assignment of a new filing date falling outside of the one-year period defined by 35 U.S.C. § 315(b). For these reasons, the Board denied Reflectix’ petition for inter partes review.

The Board noted that it did not reach a determination whether in some cases good cause may excuse late identification of RPIs because it found that Reflectix failed to show any such good cause in this case. The Board pointed out that while determination of privity between parties focuses on the relationship between said parties, determination of RPI status focuses, in addition, on control that a party may exert over the proceedings (as SAC-US had the ability to do  here). The Board found that Reflectix failed to show that its incorrect RPI identification was objectively reasonable.

The Board rejected Reflectix’ contention that permitting it to correct RPI identification without changing the filing date (and thus barring the petition) would serve the interests of justice. Reflectix argued that inequity results when petitioner loses its possibly only chance to challenge a patent because of the incorrect identification of RPIs, while no such sanction is invoked against the respondent. The Board countered that even if there is such an inequity, there is no indication that Congress did not intend it when it adopted the clear language of 35 U.S.C. § 312(a)(2) stating that a petition may not be considered if petitioner fails to identify all RPIs. The Board also noted that while FRCP 17(a)(3) states that an action in District Court may not be terminated for failure to include an RPI until there is a chance to correct the omission, this fact is not persuasive in inter partes review as the Board has not adopted the FRCP.

TAKEAWAY

Petition for inter partes review may be denied if petitioner fails to identify all RPIs pursuant to 35 U.S.C. § 312(a)(2). Correction to the identification of RPIs results in the loss of the filing date and will bar the petition if the new date falls outside of the one-year period defined in 35 U.S.C. § 315(b). In determining RPI status, the amount of control that a party may exert over the proceeding must be considered. Paying of legal fees, provision of legal support, and blurring of the lines of corporate separation between entities are all factors that may lead to the determination that a party is an RPI for the purposes of inter partes review.

 

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