In Sony Computer Entertainment America LLC, v. Game Controller Technology LLC, the PTAB was faced with a situation where a patent owner waited until a few weeks before an IPR proceeding was scheduled to end to challenge the petition’s identification of real-parties-in-interest (RPIs) under 35 U.S.C. § 312(a)(2), despite having all relevant information long before the IPR proceeding had started.  IPR2013-00634, Paper 31 (April 2, 2015). The delay caused the challenge to be brought after the one-year litigation bar under 35 U.S.C. § 315(b), thereby depriving the Petitioner of an opportunity to re-file its petition correcting any problems with the identification of all RPIs.

In arguing that the Patent Owner’s RPI challenge should be procedurally barred as untimely raised, the Petitioner noted that allowing a patent owner to use such delay tactics would encourage patent owners to delay an RPI challenge until after the one-year litigation bar, or to delay such a challenge until after an institution decision in the hopes of gaining a favorable non-institution decision while holding an RPI challenge as a trump card to prevent an ultimate adverse decision. The Board agreed that granting a motion to terminate under these circumstances “would create incentives encouraging patent owners to reserve arguments relating to RPIs.” Therefore, the Board found that the Patent Owner’s RPI challenge was untimely at that stage of the proceeding and therefore improper.

Despite its ruling that the RPI challenge was untimely, the Board went on to examine the sufficiency of the evidence for the RPI challenge. In doing so, the Board refused to adopt a “bright-line test” stating that parent entities that can control a child entity are automatically RPIs. The Board reaffirmed that the test for determining whether a party is an RPI is a “highly fact-dependent question.” In the end, the Patent Owner failed to provide evidence showing that certain parent entities had involvement in the IPR filing.

Further, the Board found that mere evidence of a traditional parent/subsidiary business relationship is insufficient to show that the parent entity could have controlled a child entity. Therefore, the Board found that even if the RPI challenge was timely, it would have failed because no factual basis to support the challenge had been offered.

It is unclear what the Board would have done if the RPI challenge would have been found to be meritorious despite being untimely. In order for the Board to have jurisdiction over an IPR, § 312(a)(2) requires that all RPIs be listed in the IPR petition. Perhaps an equitable remedy to repair the RPI listing would have been granted, but the Board has yet to grant such a remedy. Unless such an equitable remedy is provided, the Board’s determination in cases such as this one that an RPI challenge was untimely would be meaningless.

Some takeaways from this case include:

  • RPI challenges by patent owners should be brought as early as possible to ensure consideration. Legitimate RPI challenges can be useful to prevent future petitions and potential harassment.
  • A party cannot rely solely on the corporate relationship of parties to establish RPI status. Further inquiry into the totality of the circumstances is required.
  • The PTAB is aware of potential tactics that can be utilized with RPI challenges and wants to discourage tactics that prevent the “just” resolution of a proceeding. When such tactics are potentially present, parties should make the PTAB aware of the circumstances.
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Photo of Nate Rees (US) Nate Rees (US)

Nate Rees joined Norton Rose Fulbright in 2007 and focuses his practice on intellectual property matters. He has experience in obtaining and enforcing patents in the areas of telecommunications, electronics, computer hardware and software, biomedical devices, computer networking and a variety of mechanical…

Nate Rees joined Norton Rose Fulbright in 2007 and focuses his practice on intellectual property matters. He has experience in obtaining and enforcing patents in the areas of telecommunications, electronics, computer hardware and software, biomedical devices, computer networking and a variety of mechanical arts.

Nate is registered to practice in front of the US Patent and Trademark Office. His patent prosecution experience includes drafting patent applications and responding to office actions from the US Patent Office as well as from foreign patent offices. He has also guided numerous patent applications through the administrative appeals process.  Nate’s intellectual property experience also includes assisting clients with licensing their technology and with due diligence reviews related to intellectual property.

Nate is the co-chair of the firm’s Post-Issuance USPTO Practice Group and is extensively involved in both invalidating and defending patents which have been drawn into post issuance USPTO proceedings.  This experience has included arguing inter partes cases in front of the Patent Trial and Appeal Board.  As many of these cases have been involved in litigation while the USPTO proceeding is pending, Nate has crafted and executed strategies which address various issues that arise from having these cases in parallel.

Prior to attending law school, Nate worked at an engineering firm and conducted masters research, where he primarily focused his attention on the development and improvement of various medical imaging devices. Representative devices include CT, MRI, ultrasound, SQUID’s (magnetoencephalography) and novel handheld RF imaging devices. During this time, Nate gained practical experience working within the many facets of the electrical arts including electromagnetic propagation, signal processing, digital/analog circuit design, antenna design and control system design.