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PTAB Finds that Allowing IPR Petitioner to Avoid a Statutory Bar by Retroactively Adding Missing Real Party in Interest Is “In the Interest of Justice”

Recently, in ZTE (USA) Inc. v. Fundamental Innovation Int’l LLC, IPR2018-00425, Paper No. 34 (Feb. 6, 2019), the Patent Trial and Appeal Board (“PTAB”) allowed Petitioner’s motion to retroactively correct its defective IPR petition to identify a previously undisclosed real party in interest and thereby avoid a mandatory statutory bar.   

In May, 2017, Fundamental Innovation International LLC, served a complaint on ZTE Corporation, ZTE (USA) Inc., and ZTE (TX) Inc., asserting that each infringed Fundamental Innovation’s U.S. Patent No. 7,893,655 (“the ’655 Patent”).  On January 5, 2018, ZTE (USA) Inc. filed a petition for inter partes review of the ’655 Patent.

To understand Fundamental Innovation’s response to ZTE (USA)’s IPR Petition, two IPR concepts are important: real parties in interest and statutory bars.  As to real parties in interest, PTAB may not consider an IPR petition unless, among other things, “the petition identifies all real parties in interest.”  35 U.S.C. § 312(a)(2).  Although the IPR statues do not define a “real party in interest,” a recent Federal Circuit decision suggests that a real party in interest is one who has a sufficiently close relationship with the petitioner and who will benefit from the requested IPR.  See Applications In Internet Time, LLC v. RPX Corp, 897 F.3d 1336 (Fed. Cir. 2018).

As to statutory bars, a petitioner must file a petition for an IPR of a patent within a year after it or a real party in interest was served with a complaint asserting infringement of that patent.  A petition filed more than a year after service of such a complaint is statutorily barred because the relevant IPR statute prohibits PTAB from instituting an IPR “if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”  35 U.S.C. § 315(b).  

ZTE (USA) Inc. indisputably filed its IPR Petition less than a year after it was served with Fundamental Innovation’s patent infringement complaint.  However, the Petition also indisputably failed to identify a real party in interest, ZTE (TX), meaning that it could not be considered by the PTAB. 

Accordingly, Fundamental Innovation asserted that ZTE (USA) Inc.’s requested IPR must be terminated under 35 U.S.C. § 312(a)(2) because the Petition failed to identify all real parties in interest.  And when ZTE (USA) sought leave to correct its Petition to add the missing real party in interest, Fundamental Innovation opposed, arguing that amending the defective Petition in this manner would result in a new Petition having a new filing date.  This new filing date would be more than a year after the service of Fundamental Innovation’s complaint and, therefore, the Petition would be statutorily barred under 35 U.S.C. § 315(b).

PTAB disagreed and allowed ZTE (USA) to retroactively amend its defective Petition without affecting the original effective filing date.  Finding that there was no evidence of intentional concealment, bad faith, or an attempt to circumvent estoppel rules, PTAB claimed it has the discretion to accept an updated Petition as long as the Petition would not have been time-barred under 35 U.S.C. § 313(a) had it originally included the omitted real party in interest.  

PTAB further stated that allowing the Petitioner’s motion to update its Mandatory Notice was “in the interest of justice,” rejecting Fundamental Innovation’s claims of prejudice.  According to PTAB, “[n]aming ZTE (TX) Inc. as a real party in interest in an updated notice under § 312(a)(2) promotes the core functions of the real party-in-interest requirement—identifying potential conflicts of interest and estoppel—and serves the interest of justice.”  IPR2018-00425, Paper No. 34 at 6. 

Although the PTAB here found that allowing the Petitioner to update its Mandatory Notice was in the interest of justice, practitioners of PTAB should be aware that the consequences of incomplete, incorrect, or late filings can be dire, as noted in a recent insight here

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About this Author

William A. Meunier, Mintz Levin, Patent Litigation Lawyer, Biotech Attorney

Bill focuses his practice on all aspects of intellectual property litigation, with a particular emphasis on patent infringement matters and other disputes related to the enforcement of intellectual property rights. He has litigated intellectual property cases in District Courts throughout the United States, including the Eastern District of Virginia, Northern and Southern Districts of California, Eastern District of Texas, District of Massachusetts, District of Delaware, Northern District of Ohio, and Middle District of North Carolina.

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Daniel Weinger, Mintz Levin Law Firm, Boston, Intellectual Property Litigation Attorney

Daniel's practice in intellectual property focuses on patent litigation, both at the International Trade Commission and the Federal District Courts. Daniel has participated in all phases of patent litigation, including active engagement in multiple evidentiary hearings at the International Trade Commission. He has done work in a variety of technology areas, including computer software, software architecture, GPS, network devices, semiconductors, converged devices, and LED lighting.

Prior to joining Mintz Levin, Daniel worked with Pepper Hamilton LLP and as a database programmer with InterSystems, Corp., where he specialized in programming solutions for database development with a focus primarily on integration engines.

While on leave from Mintz Levin, from 2014 - 2015, Daniel practiced as a Special Assistant District Attorney in the Middlesex County (MA) District Attorney's Office, based in the Framingham, MA, district court.  During that time, Daniel prosecuted and tried numerous drug, larceny, breaking and entering, and motor vehicle cases in bench and jury sessions.  He also argued bail hearings, motions to suppress, and motions to dismiss.

Courtney Herndon, intellectual property lawyer, Mintz Levin,Patent Litigation International Trade Commission Federal District Court Strategic IP Monetization & Licensing

Courtney is an Associate in the intellectual property section. Before joining Mintz Levin, Courtney clerked for Associate Justice Geraldine Hines of the Massachusetts Supreme Judicial Court and Associate Justice Vickie L. Henry of the Massachusetts Appeals Court. 

During law school, Courtney served as a judicial intern to Judge William G. Young of the United States District Court, District of Massachusetts, and to Justice Hines (then an Associate Justice of the Massachusetts Appeals Court), conducting legal research, preparing bench memoranda,...