Decision by the USPTO puts the spotlight on the “real party in interest”

In AWA Blog, Uncategorized

One of the ways that companies in patent dense industries, such as consumer electronics, try to fend off claims from patent holders is by requesting assistance from patent risk management firms. Patent risk management firms generally assist their clients by acquiring patents, tracking litigation outcome, or by acting to remove questionable patents from the landscape.

Inter partes review* has been introduced in the US as a way of challenging the validity of an issued patent in administrative proceedings before the US Patent and Trademark Office (USPTO). In an effort to find additional means to invalidate patents under dispute, defendants have begun using inter partes review as a tool in patent infringement disputes. A defendant may however only file a petition for inter partes review during a time window of one year after the defendant has been served with a complaint alleging infringement of the patent. This time limitation is one reason why defendants have been turning to the patent risk management firms for assistance, another being the circumvention of the potential estoppel in future disputes that material from the inter partes proceedings may generate.

Consumer electronics corporation Apple has an ongoing patent dispute with the patent assertion entity Virntex concerning security solutions in the communication application FaceTime™. RPX Corporation is a patent risk management firm, with Apple among its clients. In a recent decision**, the USPTO denied RPX Corporation an inter partes review of some of Virntex patents which are part of the dispute with Apple. The denial was based on the ground that Apple is a client of RPX Corporation and, according to the decision, provided funds and instructions to RPX. The USPTO contends that the relationship between Apple and RPX Corporation makes Apple the “real party in interest”, even though RPX argues that it is operating entirely on its own.

The decision makes it clear that one of the requirements for inter parties review, that the petition must list all “real parties in interest”, will be scrutinized by the USPTO and that the use of patent risk management firms or the formation of consortia does not provide sufficient distance for the clients or members to remain anonymous.

One could argue that transparency in patent disputes always is of benefit to the credibility of the system, however, I would argue that sometimes the possibility or remaining anonymous makes it possible to separate the question of whether or not a patent is valid, from sensitive business relations. Ultimately, the quality of issued patents must be the fundamental idea behind systems like inter partes review.

Joacim Lydén, European Patent Attorney

* As of September 16, 2012, with the implementation of the Leahy-Smith America Invents Act, any third party may file a petition for inter partes review provided that the reason for the petition is that the claimed matter is anticipated or obvious in light of prior art in the form of patents or printed publications 35 USC §§ 311 – 319.

** RPX CORPORATION v. VIRNETX Before the patent trial and appeal board, Paper 49, June 5, 2014

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