Lack of Severability Could Doom IPR Petition
When considering Inter Partes Review (IPR) as an alternative to a recently initiated patent litigation, a threshold consideration for defendants is the timing and notice requirements of the IPR statutes: 35 U.S.C. §§ 312(a)(2); 315(B). The former is familiar to most, that is, to be timely filed with the Patent Trial & Appeal Board (PTAB), the IPR petition must occur within the 1-year window of 35 U.S.C. §315(b). (within 1 year of the service of a complaint for infringement of the subject patent on the petitioner, real party in interest, or privy of the petitioner).
The latter notice requirement of 312(a)(2) is easily overlooked, and complicated by modern corporate structures. See ZOLL v. Philips, IPR2013-00609, Paper 15 (March 20, 2014) (here)
Given the proliferation of non-practicing entities (NPEs) lodging patent lawsuits against entire industries, it is not uncommon for groups of defendants to contemplate joint IPR filings. The goal is to present a united front to the district court (for motion to stay purposes) by pursuing a singular IPR petition as co-petitioners. When doing so, the complexities of corporate structures, litigation history of privies, indemnification obligations, and common interest agreements are compounded—creating petition vulnerability.
In such situations it may be that one co-petitioner of a given group could doom the petition for all involved.
Let’s take a simple case of co-petitioners A and B, which are usually competitors that are wary of each other, but, cooperating for the limited purpose of the IPR. Petitioner B is within their window and has named all necessary RPIs. Petitioner A also names all RPIs. Petitioner A is facially within the same window as a co-defendant (i.e., sued the same day), but has had previous litigation exposure to the patent via a customer suit.
Patentee’s preliminary response raises the fact that petitioner A was in privity with the customer and their window actually closed before the IPR was filed—making the petition untimely. Meanwhile, by the time of the patentee’s preliminary response, Petitioner B’s window has closed by the passage of time. Thereafter, the PTAB denies the petition as untimely solely on the circumstances surrounding Petitioner A’s privy.
What of petitioner B that timely filed? Can petitioner B simply divorce petitioner A and move forward unaffected?
No. The plain “petition” language of 315(b) would preclude such severability. See Also Agilysys, Inc. v. Ameranth, Inc., CBM2014-00016, Paper 11 (Feb. 11, 2014) (here)(Multiple parties stand in the shoes of a single petitioner. Citing 37 C.F.R. § 42.2 as using singular “petitioner.”) Also, given the joint filing of the IPR, Petitioner A became an RPI/privy with respect to B for purposes of the petition.
Had Petitioner B decided to go it alone from the start the IPR would have moved into trial phase (assuming viable art positions). At that time, petitioner A could have sought joinder by filing their own “copycat” petition (1 year bar is excused in the case of joinder. 35 U.S.C. § 315(c)). Should a similar standing issue be raised later in the trial, the separate, but joined, proceedings wuld seemingly insulate from collateral damage to other parties to the IPR.
Co-defendants considering a joint IPR effort should consider both joinder and co-petitioner options. There may be minimal value in presenting a unified front to the district court at the time of IPR filing as many courts defer stay determinations until the time of IPR institution. Given that, joinder provides less short term risk with the added benefit of seeing the institution decision before signing up for the trial result.