ARRIS v. C-Cation (IPR2015-00635, Paper 10): Additional Discovery on Privity and the Time Bar

The one-year bar in 35 U.S.C. § 315(b) applies not only to a petitioner that has been sued, but also to its real parties in interest and privies. Suppliers who indemnify sued customers can face the argument that they are in privity with those customers. ARRIS Group, Inc. v. C-Cation Technologies, LLC, IPR2015-00635, Paper 10 (entered May 1, 2015), is an order granting the patent owner limited discovery to develop that argument.

Background

C-Cation had sued Comcast for infringement in the Eastern District of Texas in January 2011. ARRIS, a supplier to Comcast, later petitioned for inter partes review of C-Cation’s patent.

The parties had been through this before. In an earlier proceeding on the same patent, IPR2014-00746, the Board ordered production of the same kind of indemnification agreements. It then instituted review of claim 14, finding that the evidence at that stage did not show ARRIS controlled or could have controlled the Comcast litigation. C-Cation disclaimed claim 14, and the Board entered adverse judgment.

ARRIS’s new petition challenged claims 1, 3 and 4 on different grounds. C-Cation moved for the same discovery, saying it had new information that, with the agreements, would show privity and therefore a time bar.

What the Board decided

The Board granted the motion. ARRIS argued that something useful could not be found, the first factor in Garmin v. Cuozzo, because C-Cation was precluded from raising privity again. The Board rejected both preclusion theories.

1. 37 C.F.R. § 42.73(a). The rule says a judgment disposes of all issues that were, or reasonably could have been, raised and decided. The Board read it as defining the scope of a judgment within a proceeding, not as giving that judgment preclusive effect in other proceedings, and ARRIS cited no authority to the contrary.
2. Claim preclusion. Claim preclusion requires, among other things, that the second claim rest on the same transactional facts as the first. Following Foster v. Hallco Manufacturing Co. (Fed. Cir. 1991), the Board explained that a defense such as privity is not itself the “claim.” The claim was ARRIS’s challenge to particular patent claims. Because this petition challenged different claims on different grounds, it was not the same claim as the earlier proceeding.

With preclusion out of the way, ARRIS contested no other Garmin factor. As in the earlier case, the Board found that C-Cation had shown enough to make its narrow request necessary in the interest of justice under 37 C.F.R. § 42.51(b)(2) and 35 U.S.C. § 316(a)(5). It ordered production of agreements under which Comcast sought indemnification for the Texas litigation that referenced, or were contingent on, ARRIS’s ability to control that litigation, and authorized ARRIS to move for a protective order.

Why it matters

Indemnification alone does not make a supplier a privy of its customer, but an agreement giving the supplier control, or the opportunity to control, the customer’s defense is the kind of evidence the privity inquiry looks for. A narrow request aimed at that specific feature is more likely to be granted than a general request for all agreements. The order also confirms that a time-bar issue can be raised again in a later petition challenging different claims. See defining privy and discovery and the one-year time period in AIA proceedings.

Later developments

In Applications in Internet Time, LLC v. RPX Corp. (Fed. Cir. 2018), the Federal Circuit adopted a flexible approach to real party in interest that looks at the relationship between the petitioner and the non-party and who benefits from the petition. In Thryv, Inc. v. Click-to-Call Technologies, LP (2020), the Supreme Court held that the Board’s § 315(b) time-bar rulings at institution cannot be appealed, which makes the evidence developed before the Board all the more important. Readers should check current Board guidance on discovery and on time-bar disputes.

Key takeaways

• The Board ordered production of indemnity agreements that referenced the petitioner’s ability to control its customer’s litigation.
• Section 42.73(a) defines the scope of a judgment within a proceeding; it did not bar raising privity in a new petition.
• Claim preclusion did not apply because the new petition challenged different claims on different grounds.
• Narrow requests aimed at control are well suited to the interest of justice standard.