Recent Decisions Find Meeting of Statutory Requirement Subject to Agency Discretion
A properly filed AIA trial trial petition must name all real-parties-in-interest (RPI). The RPI requirement is recited by a number of IPR statutes, 35 U.S.C. § 312(a); and 35 U.S.C. § 315(a), (b) and (e). (The PGR statutes include corresponding provisions).
The requirement to name all RPI’s, while seemingly straightforward, has been the subject of numerous disputes at the Patent Trial & Appeal Board (PTAB). Reason being, if the RPI listing is incorrect, the filing date would need to be reset. And since petition timing can run afoul of the 1-year time bar when the filing date is adjusted (315(b)), identifying an improper RPI listing can lead to termination of the petition.
Early on in the PTAB’s existence, this RPI requirement was a “gotcha” of sorts, especially for companies having parent entities or closely controlled affiliates. However, whether the RPI listing was inaccurate based on simple oversight, or by design, the PTAB treated the cases alike. That is, the corrected RPI listing led to a new filing date, which in many cases doomed the petition.
More recent decisions, however, take the position that termination in this regard is discretionary.
The PTAB has taken the position that an improper RPI designation, if made without deceptive intent, can be corrected with an updated mandatory notice. It is argued that the Director has discretion to make this correction without changing the filing date; but does he?
In Proppant Express Investments, LLC et al v. Oren Technologies LLC et al (IPR2017-01917) (here), the Board found that upon supplemental briefing, the RPI designations of the original petition were incorrect. But instead of granting the Motion to Terminate (as the reset filing date would be outside the 315(b) window), the Board held that the RPI listing could be corrected with an updated mandatory notice without changing the filing date. The Board explained:
We disagree with Patent Owner that we cannot allow Petitioner to update its real parties in interest to add allegedly unnamed real parties in interest after institution. The Board may, under 35 U.S.C. § 312(a), accept updated mandatory notices as long as the petition would not have been time-barred under 35 U.S.C. § 315(b) if it had included the real party in interest. As the U.S. Court of Appeals for the Federal Circuit has recognized, it “is incorrect” to “conflate ‘real party in interest’ as used in § 312(a)(2) and § 315(b), and claim that ‘§ 312(a)(2) is part and parcel of the timeliness inquiry under § 315.’” Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364, 1374 n.9 (Fed. Cir. 2018) (en banc). “For example, if a petition fails to identify all real parties in interest under § 312(a)(2), the Director can, and does, allow the petitioner to add a real party in interest.” Id. “In contrast, if a petition is not filed within a year after a real party in interest, or privy of the petitioner is served with a complaint, it is time-barred by § 315(b), and the petition cannot be rectified and in no event can IPR be instituted.” Id.
Seems to me there are a couple of problems with this reasoning (which other cases have also followed on this same issue). First, of course a correction is possible under the rules, not all reset dates will be an issue under 315(b). The passage does not get into those details because it is discussing an entirely different issue. The footnoted dicta in WiFi-One was attempting to parse statutory requirements to determine what is closely related to the AIA and what is not — for appeal purposes after Cuozzo — that appellate jurisdiction debate is completely irrelevant here.
The question that the PTAB needs to ask, is not whether 312(a) is jurisdictional in the sense of the appeal bar after Cuozzo, but instead, is it a statutory requirement or not? If it is, the PTAB simply has no power to treat its requirements as somehow subject to agency discretion.
Clearly, 35 USC 312(a) is a statutory requirement of a petition. 35 U.S.C. § 312(a) states that a petition “may be considered only if . . . (b) the petition identifies all real parties in interest.” (emphasis added). The PTAB has no power to rewrite this statute, no matter how much more sensible that outcome would be compared to the existing statutory framework.
The need to reset the filing date for a corrected RPI designation is also consistent with how the agency interprets similar statutory requirements, as explained in the PTAB’s FAQs:
If the petition complies with all of the statutory requirements (see 35 U.S.C. §§ 135, 312, and 322), the original submission date of the petition will be accorded as the filing date. Conversely, no filing date will be accorded if a statutory requirement is not satisfied. For example, for fee deficiencies, the Office will accord the later submission date when all appropriate fees have been paid because the fees are required by statute. See, e.g., 35 U.S.C. § 312(a)(1).
RPI requirements cannot be distinguished from fees in this statutory context.
Second, it is a bad look for the agency to attempt to do by decree what it represented to Congress it needed done by legislative action. Back in September of 2015, the agency provided a report to Congress, and specifically noted the problems with RPI designations, explaining:
[The AIA] requires a petition for an IPR to identify all real parties in interest. The USPTO recommends that the statute be amended to allow for timely correction of real party in interest identification where an error in identification arose without deceptive intent. Real party in interest determinations are highly fact-dependent. Courts have avoided rigid definitions or recitation of necessary factors and take the facts into account on a case-by case basis. Errors in identifying real parties in interest sometimes occur without deceptive intent and currently are not correctable. A statutory change is necessary to avoid situations where petitions are denied based on good-faith, inadvertent errors in identifying all real parties in interest.
While I would also prefer a system that accounts for simple RPI oversights, such statutory adjustments must be left to Congress.