RPX Business Dealings With Salesforce Result in RPI Snafu
Earlier this month, the PTAB issued its remand decision in RPX Corp. v. Applications In Internet Time, LLC (here). As a reminder, the Federal Circuit (pre-Thryv) instructed the PTAB to further analyze under a more “flexible approach” whether Salesforce was a real party-in-interest (RPI) to two RPX-filed IPR petitions. On remand, the Board held that Salesforce was an RPI, and that the petitions at issue were therefore time-barred under § 315(b).
The outcome is hardly surprising given the bad facts of RPX, but has anything really changed for RPI/privy analyses?
To reach its conclusion, the Board (the panel was composed of Chief APJ Boalick, Deputy CAPJ Bonilla, and Vice CAPJ Weidenfeller), examined:
- 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 of directors members; and
- Communications between RPX and Salesforce.
The Board analyzed each factor individually—no single factor was dispositive. But seemingly the most important to the Board’s decision were (1) RPX’s business model, (4) RPX’s relationship with Salesforce, and (5) Salesforce’s direct benefit from the particular IPRs. The Board’s analysis lead to, inter alia, a finding that:
RPX was representing Salesforce’s interests in filing these IPR proceedings. Most critically, Salesforce paid RPX to reduce Salesforce’s patent litigation exposure, and RPX filed these IPRs despite having no apparent risk of infringement liability itself. In such circumstances, “equitable and practical considerations” point clearly towards RPX and its members sharing a common interest in these proceedings. To find otherwise would effectively give IPR petitioners additional chances to challenge a patent through a member organization such as RPX, which is paid with the expectation that it might initiate an IPR against a patent that poses a threat to a member, without regard to statutory bars or estoppels. That is not to say that arrangements in which an entity would benefit from having another entity file a petition on its behalf—or on the behalf of it and other similarly situated entities—is impermissible. But all such entities should be named as RPIs to ensure that pertinent statutory time bars and estoppels apply.
While member organizations may be argued to establish a common interest on some level, RPI requires far more. “Far more” was evident in RPX when you look at some of the particular facts of this case (timing of payments to RPX, legal communications, leadership overlap between the companies, etc.), so while the lack of the RPI designation here doomed the RPX filing under 315(b), this decision should not be read beyond the unique facts of this case. That is, even if argued that other member organizations are somehow in privity with their members, there is no requirement to name privies in an IPR filing. Likewise, if there is no existing lawsuit filing against a member, or none that would be outside of the 315(b) at the time of the organization filing, privies are simply irrelevant to the PTAB’s work.
While the Board may view future RPX petitions with suspicion, assuming this decision will suddenly thwart member organizations from filing PTAB challenges is incorrect.