In RPX Corporation v. Applications in Internet Time, LLC, the PTAB awarded attorneys’ fees for the first time in an AIA post-issuance proceeding. The Board had previously granted the Petitioner’s motion for sanctions in response to the Patent Owner’s improper disclosure of confidential information in violation of the Board’s Standing Default Protective Order. IPR2015-01750, Paper 69 (Jul. 1, 2016), citing to Paper 58 (May 6, 2016).
To arrive at its decision, the Board analyzed three factors: “(i) whether a party has performed conduct that warrants sanctions; (ii) whether the moving party has suffered harm from that conduct; and (iii) whether the sanctions requested are proportionate to the harm suffered by the moving party.”
At the time of the Petitioner’s disclosure, a protective order had not been entered in the proceeding. However, the parties had agreed by email that the Standing Default Protective Order set forth in the Board’s Trial Practice Guide applied to the proceeding.
The violation of the Protective Order was discovered by the Petitioner upon receipt of three signed acknowledgements that accompanied the Patent Owner’s Preliminary Response. The Petitioner emailed the Patent Owner requesting the identity of the three individuals that signed the acknowledgments. The Patent Owner responded that the individuals were the Patent Owner’s president, the Patent Owner’s litigation counsel for the challenged patents in a related district court proceeding, and “an advisor to [Patent Owner] regarding the IPRs.”
The Patent Owner categorized its president as a “party” under § 2(A) of the Protective Order, while the others were “other employees of a party” under § 2(E). The Patent Owner conceded that it had not sought prior permission to share the information, notwithstanding the provision in § 2(E) that other employees of a party “shall be extended access to confidential information only upon agreement of the parties or by order of the Board” (emphasis in original). The Board determined that “[t]hose disclosures, therefore, violated § 2(E) of the Protective Order.”
The Patent Owner argued that the disclosure posed no harm to the Petitioner, an argument that the Board did not find persuasive. The Board agreed that the Petitioner’s “core business deals with NPE litigation,” including “assisting its clients in defending themselves against assertions of patent rights by NPEs.” The Board found that the Patent Owner’s disclosure caused harm because it was to individuals that “work on behalf of NPEs.” In particular, Patent’s Owner’s “advisor” is the CFO of “the #3 NPE by volume in 2014 (over 100 litigations filed).”
The Board determined that the request of $13,559 in attorneys’ fees was warranted and reasonable based upon the particular circumstances.