This document summarizes a presentation on estoppel and privity in post-grant proceedings at the USPTO. It discusses how estoppel applies to petitioners as well as those in privity, including real parties in interest. Privity is a fact-dependent concept evaluated on a case-by-case basis considering control, financial contribution, and other factors. Issues of privity typically arise when the patent owner seeks to prevent a proceeding or assert estoppel, and presenters provided practice tips for evaluating privity and addressing related arguments.

1. IIPI/BNA AIA Post-Grant
Patent Practice Conference
Session V. Estoppel and Privity
in US PTO Post-Grant Proceedings
Jennifer Bailey
David Cavanaugh
February 20, 2013
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2. Estoppel and Privity at the PTO
• Introduction
• Estoppel - Privity
• When does issue arise?
• What factors are important?
• How is the issue resolved
• Practice tips
• Evaluating Privity
• Arguing Estoppel
• Mock Arguments
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3. Estoppel – Privity in IPR
•
IPR must be filed within a Year of service of a
complaint - 35 U.S.C. § 315(b) provides:
An inter partes review may not be instituted 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.
•
An IPR filed outside the year of service is not
permitted by the statute
•
Applies to Petitioner, real party in interest and those in
privity with the petitioner
•
The issue of privity arises when Patent Owner seeks
to prevent an IPR based on the one year rule
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4. Estoppel – Privity in CBM
•
CBM requirement
•
person may not file a petition for a Covered
Business Method Patent Review “unless the
person or the person’s real party in interest or privy
has been sued for infringement of a patent or has
been charged with infringement under that patent.”
(§18 (a)(1)(B) of the AIA).
•
Suit or being “charged with infringement” required
•
The issue of privity arises when Petitioner desires
standing and relies on a privity who was sued or
charged with infringement for standing
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5. Real Party-in-Interest and Privy
• The core functions of the ‘‘real party-in-interest’’ and
‘‘privies’’ requirement to assist members of the Board
in identifying potential conflicts, and to assure proper
application of the statutory estoppel provisions
• Helps protect PO from successive petitions
• Prevents Parties from having a second bite at the
apple
• Protects the integrity of both Federal Courts and
USPTO by assuring all issues vetted
• The USPTO will apply traditional common law
principles with these goals in mind and parties will be
well-served to factor in these considerations when
determining whom to identify
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6. Real Party-in-Interest and Privy
•
Whether a party who is not a named participant in a
given proceeding nonetheless constitutes a ‘‘real
party-in-interest’’ or ‘‘privy’’ to that proceeding is a
highly fact-dependent question. See generally Taylor
v. Sturgell, 553 U.S. 880 (2008)
•
Handled by PTAB on a Case-by-case basis
•
PTAB will take into consideration how Courts have
viewed “privity” and “real party-in-interest”
•
Board provides no definitive list or “taxonomy” for
determining privity
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7. Real Party-in-Interest and Privy
•
Real Party-in-Interest
•
•
•
The spirit of the formulation in the statute as to IPR
and PGR proceedings means that, at a general
level, the ‘‘real party-in-interest’’ is the party that
desires review of the patent
The ‘‘real party-in-interest’’ may be the petitioner
itself, and/or it may be the party or parties at
whose behest the petition has been filed
Somewhat less interesting issues than Privity
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8. Real Party-in-Interest and Privy
•
Privity
•
The notion of ‘‘privity’’ is more expansive,
encompassing parties that do not necessarily need
to be identified in the petition as a ‘‘real party-ininterest’’
•
The Office intends to evaluate what parties
constitute ‘‘privies’’ in a manner consistent with the
flexible and equitable considerations established
under federal caselaw
•
The analysis seeks to determine whether the
relationship between the purported ‘‘privy’’ and the
relevant other party is sufficiently close such that
both should be bound by the trial outcome and
related estoppels
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9. Real Party-in-Interest and Privy
•
Privity
•
PTAB’s approach consistent with legislative history
of AIA in which “Congress included ‘‘privies’’ within
the parties subject to the statutory estoppel
provisions in an effort to capture ‘‘the doctrine’s
practical and equitable nature’’
•
The courts, in the interest of justice and to prevent
expensive litigation, strive to give effect to
judgments by extending ‘‘privies’’ beyond the
classical description
•
Privity is essentially a shorthand statement that
collateral estoppel is to be applied in a given case;
there is no universally applicable definition of
privity
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10. Privity
•
Control
•
•
The concept of control generally means that ‘‘it should be
enough that the nonparty has the actual measure of control
or opportunity to control that might reasonably be expected
between two formal co-parties.’’ Wright & Miller § 4451
•
No ‘‘bright-line test’’ for determining the necessary quantity or
degree of participation to qualify as a ‘‘real party-in-interest’’
or ‘‘privy’’ based on the control concept.
•
•
A common consideration is whether the non-party exercised
or could have exercised control over a party’s participation in
a proceeding.
Many issues of res judicata apply to the considerations of
privity
Financial Contribution
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11. Privity
•
Fact-Combinations generally indicating RPI or Privity
•
•
•
a party that funds and directs and controls an IPR
or PGR petition or proceeding constitutes a ‘‘real
party-in-interest,’’ even if that party is not a ‘‘privy’’
of the petitioner
‘‘real party-in-interest’’ or a ‘‘privy’’ of the petitioner
merely through association with another party in
an unrelated endeavor, slight alterations in the
facts, as well as consideration of other facts, might
result in a different conclusion.
Joint Defense Agreement Participation – alone not
sufficient
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12. When does Privity Arise?
•
Early in proceeding (to prevent Proceeding from
moving forward)
•
Patent Owner’s Preliminary Response
•
Requests for Non-Routine Discovery
•
•
•
PO request for Petitioner Document
Unusual for Petitioner (even in a CBM) to
request discovery on issue
At District Court – when PO wants to say that others
were in privity with the petitioner
•
Petitioners should be aware of this and govern
conduct accordingly
•
Particularly important for privity issues
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13. Practice Tips
•
Evaluate Privity
•
Determine issues as part of pre-filing diligence
•
Look at business relationships between parties
•
•
•
Is there a vertical relationship (e.g., distribution,
supply, etc.)?
Is there an indemnity between parties that
could create privity?
Look at relationships between prior litigigants
•
Did petitioner act in ways that suggest control
litigation?
•
Did petitioner the litigation?
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14. Questions?
THANK YOU!
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15. Contact Information
Jennifer Bailey
Erise IP
6201 College Blvd., Suite 300
Overland Park, KS 66211
Jennifer.bailey@eriseip.com
David L. Cavanaugh
WilmerHale
1875 Pennsylvania Ave. NW
Washington DC 20006
David.Cavanaugh@wilmerhale.com
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