In Medtronic, Inc. v. Robert Bosch Healthcare Systems,
Inc., the Federal Circuit discussed the non-appealable
decision-making authority of the Patent Trial and Appeals Board
(PTAB). On October 20, 2016, the Federal Circuit held to be final
and non-appealable the PTAB's decisions about whether the
proper real parties-in-interest have been named in an Inter Partes
Review (IPR).
Cardiocom, a subsidiary of Medtronic, petitioned for an IPR of
patents owned by Robert Bosch Healthcare Systems (Bosch). The
petition was initially denied by the PTAB because Cardiocom failed
to show a reasonable likelihood of success. Subsequently, Medtronic
filed an additional petition for IPR naming Medtronic as the real
party-in-interest. The PTAB granted the petition, despite
Bosch's challenge to the real parties-in-interest identified in
the petition. However, the PTAB subsequently granted
Bosch's request for additional discovery on the issue.
Ultimately, the PTAB granted Bosch's motions to terminate the
proceedings, finding that Medtronic had failed to name all of the
real parties-in-interest, namely Cardiocom. Medtronic appealed to
the Federal Circuit.
According to 35 U.S.C. §314(d), decisions by the PTAB on
whether to institute an IPR are final and non-appealable.
However, exactly what qualifies as instituting an IPR has been
debated. In Cuozzo Speed Technologies, LLC v. Lee,
136 S. Ct. 2131 (2016), the Supreme Court determined that questions
regarding the application and interpretation of statutes which
"closely relate" to the decision to institute an IPR are
non-appealable. Relying on Cuozzo, the Federal Circuit
held in Medtronic that a dismissal in an IPR based on
failure to properly name the real parties-in-interest is not
appealable. The Federal Circuit reasoned that determining the real
parties-in-interest is an issue that closely relates to the
decision to institute an IPR. Thus, the Federal Circuit ruled
against Medtronic.
Naming the Real Parties-In-Interest
The requirement to name the real parties-in-interest in an IPR
is a protective measure for patent owners. Real parties-in-interest
to an IPR are estopped from bringing a claim in subsequent
proceedings in the USPTO, district court, or the International
Trade Commission when the claim could have been raised during the
original IPR. Moreover, the AIA includes timing rules for
initiating an IPR that further protect the patent owner. Under 35
U.S.C. §314(b), a petitioner is barred from filing an IPR more
than one year after the petitioner, a real party-in-interest, or
one in privitiy with the petitioner is served with an infringement
complaint.
There is not a clear-cut definition for a real party-in-interest,
though the PTAB has offered some guidance. In Atlanta Gas Light
Co. v. Bennett Regulator Guards Inc. (IPR2013-00453), the PTAB
cited the Supreme Court's common law factors used to determine
a real party-in-interest. These factors, cited from Taylor
v. Sturgell, 5353 U.S. 880 (2008), include:
(1) whether the third party agrees to be bound by the determination
of issues in the proceeding;
(2) whether a pre-existing substantive legal relationship with the
party named in the proceeding justifies binding the third
party;
(3) in certain limited circumstances, whether the third party is
adequately represented by someone with the same interests;
(4) whether the third party exercised or could have exercised
control over the proceeding;
(5) whether the third party is bound by a prior decision and is
attempting to rehear the matter through a proxy; and
(6) whether a statutory scheme forecloses successive hearing by
third parties.
Implications
The Medtronic decision confirms that the Board's determination of the real parties-in-interest in an IPR proceeding is final and non-appealable, even if the PTAB has agreed to initiate the proceedings. Thus, it is extremely important to properly name all of the real parties-in-interest. For large conglomerate companies, consider including subsidiaries and affiliates which may qualify as real parties-in-interest under the factors discussed above. In this regard, petitions should be inclusive in naming real parties-in-interest. Further, companies should file petitions for IPRs as soon as possible to ensure that any problems regarding the naming of the real parties-in-interest can be resolved before the one-year deadline.
This article is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. Brinks Gilson & Lione does not intend to create an attorney-client relationship by offering this information and review of the information shall not be deemed to create such a relationship. You should consult a lawyer if you have a legal matter requiring attention. For further information, please contact a Brinks Gilson & Lione lawyer.
