Attacking a Patent at the PTO? Beware the Real Party in Interest

Most disputes over the real party in interest (RPI) arise because the petitioner is not acting alone. Accused infringers coordinate defenses, customers ask suppliers to step in, and industry groups file challenges for their members. Each of these arrangements can be legitimate, but each also raises the question of who must be named in the petition.

The legal test is covered in Who is the real party in interest in an IPR or PGR?. This article focuses on what goes wrong and the facts that tend to matter.

What happens when the disclosure is wrong

Under 35 U.S.C. § 312(a)(2) (IPR) and § 322(a)(2) (PGR), a petition must identify all real parties in interest. A flawed disclosure can have several consequences:

• Institution denied. If the Board concludes an RPI was omitted, it may decline to institute trial or, in some cases, terminate a proceeding already underway.
• Time bar triggered through an unnamed party. Under § 315(b), an IPR cannot be instituted on a petition filed more than one year after the petitioner, its RPI or a privy was served with an infringement complaint. A petitioner that was never sued may still be barred if an unnamed RPI was sued long ago.
• Estoppel attaching to unnamed parties. After a final written decision, § 315(e) estoppel reaches the petitioner’s real parties in interest and privies whether or not they were named. A party that thought it was staying in the background may find its later invalidity defenses limited. See estoppel arising from PTAB trials.

Because the Board’s time-bar decisions at institution are generally not appealable after Thryv, Inc. v. Click-To-Call Technologies, LP (2020), the Board’s ruling on these issues is often the last word.

Relationships that draw scrutiny

Accused infringers and joint defense groups

Co-defendants often share prior art, experts and strategy. Sharing alone has not usually made every co-defendant an RPI of every petition. Facts suggesting one party is directing or paying for another’s petition, or that the petition was filed to serve a time-barred co-defendant, draw closer attention.

Customers, suppliers and indemnitors

A supplier may file a petition after its customers are sued. If the supplier has agreed to indemnify those customers, the Board may ask whether the customers are clear beneficiaries with a preexisting relationship to the petitioner, which is the framing used in Applications in Internet Time, LLC v. RPX Corp. (Fed. Cir. 2018). An indemnity agreement is not automatically decisive, but it is a fact the Board considers.

Membership organizations

Some organizations file petitions on behalf of an industry or a fee-paying membership. The questions are whether particular members asked for, funded or directed the specific petition, and whether the organization’s business model is to file challenges that serve identifiable members’ interests.

Corporate families

Parents, subsidiaries and affiliates are commonly named together. Corporate changes during a proceeding, such as an acquisition, may require an updated mandatory notice under 37 C.F.R. § 42.8.

Discovery into the real party in interest

A patent owner who suspects a hidden RPI may seek additional discovery. Discovery in IPR is narrow, and the Board generally requires more than speculation. The patent owner usually must point to some evidence tending to show that the requested documents will reveal an unnamed party’s control, funding or direction. The factors the Board uses for additional discovery are discussed in inter partes review and limited discovery.

Because discovery is limited, the Board often decides RPI questions on the record the parties put forward, including declarations and agreements that the petitioner chooses to file.

A considerations checklist

Questions that typically bear on the RPI analysis include:

• Funding: who is paying for the petition, the experts and the trial?
• Control: who chose the patent, the claims and the prior art, and who can approve or veto filings or settlement?
• Indemnity agreements: does the petitioner owe defense or indemnity obligations to anyone accused of infringing the patent?
• Communications: what did the petitioner and the non-party say to each other about the patent or the petition?
• Litigation history: has any related party been served with a complaint on this patent, and when?
• Business model: does the petitioner file challenges for clients or members?
• Changes over time: have mergers, acquisitions or new agreements altered the relationships since filing?

These are factors the Board and courts have examined, not a recommendation for any particular filing.

Key takeaways

• An incomplete RPI disclosure can lead to denial of institution, a time bar triggered through an unnamed party, or estoppel binding parties who never appeared.
• Joint defense groups, indemnitors, customers, suppliers and membership organizations are the most common sources of disputes.
• Funding, control, indemnity obligations and communications are the facts that tend to matter most.
• RPI discovery is limited, and patent owners usually must show more than speculation to obtain it.
• The closely related concept of privity can reach even further than RPI.