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PTAB Tracker

April 20, 2021

RPX Corporation v. Applications in Internet Time, LLC, Case IPR2015-01750, Paper 128

The RPX Decision (Paper 128) primarily addresses whether a non-party is a real party in interest for purposes of applying the one-year time bar under 35 U.S.C. 315(b). The fact pattern of the case involved a petitioner, RPX, that petitioned for IPR after a non-party, Salesforce, had unsuccessfully pursued a CBM petition against the same patent. Salesforce was time-barred at the time RPX’s petition was filed. The Board found that Salesforce, a subscriber to RPX’s defensive patent aggregation services, should have been named a real party in interest and terminated the proceeding as initiated beyond the one-year statutory window.

Notably, the Board decided this case on remand from the Federal Circuit, as ordered in Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018) (“AIT”). In AIT, the Federal Circuit found that the original panel “failed to adhere to the expansive formulation of ‘real party in interest’ that is dictated by the language, structure, purpose, and legislative history of § 315(b).” Id. at 1351. The Board responded by repaneling the case with “the most senior administrative patent judges available” and performing a detailed analysis based on the principles espoused in AIT. (Paper 128 at 6.)

The Board’s legal analysis acknowledged that Congress intended the term “real party in interest” to “have its expansive common-law meaning,” which leads the Board to question: (1) who, from a practical and equitable standpoint, will benefit from the IPR; and (2) whether the petitioner can be said to be representing the non-party’s interest in pursuing the IPR. (Paper 128 at 7-8.) The Board’s factual analysis examined a wide range of factors (recited below) “with an eye toward determining whether the non-party is a clear beneficiary that has a preexisting, established relationship with the petitioner.” (Paper 128 at 10-11.)

Factors Considered on Remand

  • RPX’s business model, including the nature of RPX as an entity;
  • RPX’s explanation of its own interest in the IPRs;
  • whether, and under what circumstances, RPX takes a particular client’s interests into account when determining whether to file IPR petitions;
  • Salesforce’s relationship with RPX;
  • Salesforce’s interest in and benefit from the IPRs;
  • whether RPX can be said to be representing that interest;
  • whether Salesforce actually desired review of the patents;
  • the relevance of the fact that Salesforce and RPX had overlapping Board members; and
  • communications between RPX and Salesforce

RPX’s business model includes “patent aggregation, licensing, and filing IPRs . . . to protect is members from the threat of patent litigation,” and the Board resolved at the outset of its analysis that these services suggest RPX pursued IPR “to benefit its member Salesforce.” (Paper 128 at 15.) In the Board’s view, this initial assessment was bolstered by the apparent common interest shared between RPX and its membership as it relates to challenging the validity of patents generally. The Board also focused on the specific relationship between the parties, concluding that RPX represented the strong interests of Salesforce—a time-barred defendant—in challenging the specific patent at issue. The Board viewed communications between RPX and Salesforce about co-pending litigation as further proof that Salesforce was an interested party, even though those communications did not address the IPR petition in question.

In summary of its real-party-in-interest analysis, the Board stated: “Although the facts of this particular relationship are especially compelling given Salesforce’s unsuccessful challenges to the patents at issue, it is the relationship between Salesforce as a member of RPX and the business model of RPX that primarily lead us to the result here.” (Paper 128, 35.)

Other issues addressed in the RPX Decision include the related analyses of (1) whether Salesforce and RPX were in privity; and (2) whether Salesforce and RPX had a “significant relationship” relevant to the General Plastic factors under 35 U.S.C. § 314(a). The Board did not reach a conclusion on the question of privity but issued an affirmative finding on the “significant relationship” issue.

Takeaways

  1. The business model of membership organizations and the nature of the relationship between the organization and its members is highly relevant to the real-party-in-interest analysis.
  2. A non-party member of an organization may be deemed a real-party-in-interest without expressly instructing the organization to petition for review. The relevant inquiry is whether the organization is representing the interests of one or more members who stand to benefit from a challenge to the patent at issue.
  3. There may be a perceived benefit to a non-party member of an organization when the member has been accused of infringing the challenged patent and is time-barred from the PTAB.

Author

Kenneth Darby | Principal | Austin, TX

Kenneth Darby is a principal in the Austin office of Fish & Richardson P.C. Mr. Darby’s practice is largely focused on post-grant proceedings at the Patent Trial and Appeal Board (PTAB), where he has successfully represented both patent owners and petitioners... Read More