Vol. 77
`No. 157
`
`Tuesday,
`August 14, 2012
`
`Part V
`
`Department of Commerce
`
`Patent and Trademark Office
`37 CFR Part 42
`Office Patent Trial Practice Guide; Rule
`
`VerDate Mar<15>2010 17:26 Aug 13, 2012 Jkt 226001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\14AUR5.SGM 14AUR5
`
`sroberts on DSK5SPTVN1PROD with RULES
`
`

`

`48756
`
`Federal Register / Vol. 77, No. 157 / Tuesday, August 14, 2012 / Rules and Regulations
`
`DEPARTMENT OF COMMERCE
`
`Patent and Trademark Office
`
`37 CFR Part 42
`[Docket No. PTO–P–2011–0094]
`
`Office Patent Trial Practice Guide
`AGENCY: United States Patent and
`Trademark Office, Commerce.
`ACTION: Notice of practice guide.
`
`SUMMARY: The Leahy-Smith America
`Invents Act (AIA) establishes several
`new trial proceedings to be conducted
`by the Patent Trial and Appeal Board
`(Board) including inter partes review,
`post-grant review, the transitional
`program for covered business method
`patents, and derivation proceedings. In
`separate rulemakings, the United States
`Patent and Trademark Office (Office or
`USPTO) is revising the rules of practice
`to implement these provisions of the
`AIA that provide for the trial
`proceedings before the Board. The
`Office publishes in this notice a practice
`guide for the trial final rules to advise
`the public on the general framework of
`the regulations, including the structure
`and times for taking action in each of
`the new proceedings.
`DATES: Effective Date: This practice
`guide applies to inter partes review,
`post-grant review, and covered business
`method patent review proceedings
`commencing on or after September 16,
`2012, as well as derivation proceedings
`commencing on or after March 16, 2013.
`FOR FURTHER INFORMATION CONTACT:
`Michael Tierney, Lead Administrative
`Patent Judge, Board of Patent Appeals
`and Interferences (will be renamed as
`Patent Trial and Appeal Board on
`September 16, 2012), by telephone at
`(571) 272–9797.
`SUPPLEMENTARY INFORMATION:
`Executive Summary: The patent trial
`regulations lay out a framework for
`conducting the proceedings aimed at
`streamlining and converging the issues
`for decision. In doing so, the Office’s
`goal is to conduct proceedings in a
`timely, fair, and efficient manner.
`Further, the Office has designed the
`proceedings to allow each party to
`determine the preferred manner of
`putting forward its case, subject to the
`guidance of judges who determine the
`needs of a particular case through
`procedural and substantive rulings
`throughout the proceedings.
`Background: The Leahy-Smith
`America Invents Act establishes several
`new trial proceedings to be conducted
`by the Board including: (1) Inter partes
`review (IPR); (2) post-grant review
`
`(PGR); (3) a transitional program for
`covered business method patents
`(CBM); and (4) derivation proceedings.
`The AIA requires the Office to
`promulgate rules for the proceedings,
`with the PGR, IPR, and CBM rules to be
`in effect one year after AIA enactment
`and the derivation rules to be in effect
`18 months after AIA enactment.
`Consistent with the statute, the Office
`published a number of notices of
`proposed rulemaking in February of
`2012, and requested written comments
`on the Office’s proposed
`implementation of the new trial
`proceedings of the AIA. The Office also
`hosted a series of public educational
`roadshows, across the country,
`regarding the proposed rules.
`Additionally, the Office published a
`practice guide based on the proposed
`trial rules in the Federal Register to
`provide the public an opportunity to
`comment. Practice Guide for Proposed
`Trial Rules, 77 FR 6868 (Feb. 9, 2012)
`(Request for Comments) (hereafter
`‘‘Practice Guide for Proposed Trial
`Rules’’ or ‘‘Office Patent Trial Practice
`Guide’’). This Office Patent Trial
`Practice Guide is intended to advise the
`public on the general framework of the
`rules, including the structure and times
`for taking action in each of the new
`proceedings.
`In response to the notices of proposed
`rulemaking and the Practice Guide
`notice, the Office received 251
`submissions of written comments from
`intellectual property organizations,
`businesses, law firms, patent
`practitioners, and others, including a
`United States senator who was a
`principal author of section 18 of the
`AIA. The comments provided support
`for, opposition to, and diverse
`recommendations on the proposed
`rules. The Office appreciates the
`thoughtful comments, and has
`considered and analyzed the comments
`thoroughly. In light of the comments,
`the Office has made modifications to the
`proposed rules to provide clarity and to
`balance the interests of the public,
`patent owners, patent challengers, and
`other interested parties, in light of the
`statutory requirements and
`considerations, such as the effect of the
`regulations on the economy, the
`integrity of the patent system, the
`efficient administration of the Office,
`and the ability of the Office to complete
`the proceedings timely.
`For the implementation of sections 3,
`6, 7, and 18 of the AIA that are related
`to administrative trials and judicial
`review of Board decisions, the Office is
`publishing the following final rules in
`separate notices in the Federal Register:
`(1) Rules of Practice for Trials before the
`
`Patent Trial and Appeal Board and
`Judicial Review of Patent Trial and
`Appeal Board Decisions (RIN 0651–
`AC70); (2) Changes to Implement Inter
`Partes Review Proceedings, Post-Grant
`Review Proceedings, and Transitional
`Program for Covered Business Method
`Patents (RIN 0651–AC71); (3)
`Transitional Program for Covered
`Business Method Patents—Definitions of
`Covered Business Method Patent and
`Technological Invention (RIN 0651–
`AC75); and (4) Changes to Implement
`Derivation Proceedings (RIN 0651–
`AC74). The Office also provides
`responses to the public written
`comments in these final rules in the
`Response to Comments sections of the
`notices.
`Further, the Office revised the Office
`Patent Trial Practice Guide based on the
`final rules. The Office has been working
`diligently to publish all of the final rules
`related to the new AIA trial proceedings
`and the Office Patent Trial Practice
`Guide in the Federal Register
`concurrently. Due to certain limitations,
`however, the Office Patent Trial Practice
`and the specific final rule for derivation
`proceedings will be published in the
`Federal Register after the other final
`rules. In particular, the specific rules for
`derivation, i.e., §§ 42.404 through
`42.412, will be published at a later date.
`Statutory Requirements: The AIA
`provides certain minimum requirements
`for each of the new proceedings.
`Provided below is a brief overview of
`these requirements.
`Proceedings begin with the filing of a
`petition to institute a trial. The petition
`must be filed with the Board consistent
`with any time period required by statute
`and be accompanied by the evidence the
`petitioner seeks to rely upon. See, e.g.,
`35 U.S.C. 135(a) and 311(c), as
`amended, and § 42.3 (references to
`§ 42.x or § 1.x refer to title 37 of the
`Code of Federal Regulations). For IPR,
`PGR, and CBM, the patent owner is
`afforded an opportunity to file a
`preliminary response. 35 U.S.C. 313, as
`amended, and 35 U.S.C. 323.
`The Board acting on behalf of the
`Director may institute a trial where the
`petitioner establishes that the standards
`for instituting the requested trial are met
`taking into account any preliminary
`response filed by the patent owner.
`Conversely, the Board may not
`authorize a trial where the information
`presented in the petition, taking into
`account any patent owner preliminary
`response, fails to meet the requisite
`standard for instituting the trial. See
`e.g., 35 U.S.C. 314, as amended, and 35
`U.S.C. 324. Where there are multiple
`matters in the Office involving the same
`patent, the Board may determine how
`
`VerDate Mar<15>2010 17:26 Aug 13, 2012 Jkt 226001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\14AUR5.SGM 14AUR5
`
`sroberts on DSK5SPTVN1PROD with RULES
`
`

`

`Federal Register / Vol. 77, No. 157 / Tuesday, August 14, 2012 / Rules and Regulations
`
`48757
`
`the proceedings will proceed, including
`providing for a stay, transfer,
`consolidation, or termination of any
`such matter. See, e.g., 35 U.S.C. 315, as
`amended, and 35 U.S.C. 325.
`The AIA requires that the Board
`conduct AIA trials and that the Director
`prescribe regulations concerning the
`conduct of those trials. 35 U.S.C. 6, 135,
`and 316, as amended, and 35 U.S.C.
`326. For example, for IPR, PGR, and
`CBM, the AIA mandates the
`promulgation of rules including motions
`to seal, procedures for filing
`supplemental information, standards
`and procedures for discovery, sanctions
`for improper use of the proceeding,
`entry of protective orders, and oral
`hearings. See, e.g., 35 U.S.C. 316(a), as
`amended, and 35 U.S.C. 326.
`Additionally, the AIA mandates the
`promulgation of rules for IPR, PGR, and
`CBM concerning the submission of a
`patent owner response with supporting
`evidence and allowing the patent owner
`a motion to amend the patent. Id.
`A petitioner and a patent owner may
`terminate the proceeding with respect to
`the petitioner by filing a written
`agreement with the Board, unless the
`Board has already decided the merits of
`the proceeding before the request for
`termination is filed. See, e.g., 35 U.S.C.
`317, as amended, and 35 U.S.C. 327. If
`no petitioner remains in the proceeding,
`the Board may terminate the review or
`proceed to a final written decision. For
`derivation proceedings, the parties may
`arbitrate issues in the proceeding, but
`nothing precludes the Office from
`determining the patentability of the
`claimed inventions involved in the
`
`proceeding. 35 U.S.C. 135, as amended.
`Where a trial has been instituted and
`not dismissed, the Board will issue a
`final written decision with respect to
`the involved patent and/or applications.
`35 U.S.C. 135 and 35 U.S.C. 318, as
`amended, and 35 U.S.C. 328.
`For IPR, PGR, and CBM, the AIA
`requires that the Office consider the
`effect of the regulations on the economy,
`the integrity of the patent system, the
`efficient administration of the Office,
`and the ability of the Office to timely
`complete the proceedings. 35 U.S.C.
`316, as amended, and 35 U.S.C. 326. In
`developing the general trial rules, as
`well as the specific rules for the
`individual proceedings, the Office has
`taken these considerations into account.
`Further, the specific rules for the
`individual proceedings take into
`account the jurisdictional and timing
`requirements for the particular
`proceedings.
`General Overview of Proceedings:
`Generally, the proceedings begin with
`the filing of a petition that identifies all
`of the claims challenged and the
`grounds and supporting evidence on a
`claim-by-claim basis. Within three
`months of notification of a filing date,
`the patent owner in an IPR, PGR, or
`CBM proceeding may file a preliminary
`response to the petition, including a
`simple statement that the patent owner
`elects not to respond to the petition. The
`Board acting on behalf of the Director
`will determine whether to institute a
`trial within three months of the date the
`patent owner’s preliminary response
`was due or was filed, whichever is first.
`In instituting a trial, the Board will
`narrow the issues for final decision by
`
`authorizing the trial to proceed only on
`the challenged claims for which the
`threshold standards for the proceeding
`have been met. Further, the Board will
`identify, on a claim-by-claim basis, the
`grounds on which the trial will proceed.
`Any claim or issue not included in the
`authorization for review will not be part
`of the trial. A party dissatisfied with the
`Board’s determination to institute a trial
`may request rehearing as to points
`believed to have been overlooked or
`misapprehended. See § 42.71(d) and (c).
`The Board will enter a Scheduling
`Order (Appendix A) concurrent with the
`decision to institute a trial. The
`Scheduling Order will set due dates for
`the trial taking into account the
`complexity of the proceeding but
`ensuring that the trial is completed
`within one year of institution.
`For example, a Scheduling Order for
`an IPR or PGR might, consistent with
`§§ 42.120 and 42.220, provide a three
`month deadline for patent owner
`discovery and for filing a patent owner
`response and motion to amend. Once
`the patent owner’s response and motion
`to amend have been filed, the
`Scheduling Order might provide the
`petitioner with three months for
`discovery and for filing a petitioner’s
`reply to the response and the
`petitioner’s opposition to the
`amendment. The Scheduling Order
`might then provide the patent owner
`with one month for discovery and for
`filing a patent owner reply to
`petitioner’s opposition to a patent
`owner amendment. A representative
`timeline is provided below:
`
`ER14AU12.000</GPH>
`
`Sequence of discovery. Once
`instituted, absent special circumstances,
`discovery will proceed in a sequenced
`fashion. For example, the patent owner
`
`may begin deposing the petitioner’s
`declarants once the proceeding is
`instituted. After the patent owner has
`filed a patent owner response and any
`
`motion to amend the claims, the
`petitioner may depose the patent
`owner’s declarants. Similarly, after the
`petitioner has filed a reply to the patent
`
`VerDate Mar<15>2010 17:26 Aug 13, 2012 Jkt 226001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 E:\FR\FM\14AUR5.SGM 14AUR5
`
`sroberts on DSK5SPTVN1PROD with RULES
`
`

`

`48758
`
`Federal Register / Vol. 77, No. 157 / Tuesday, August 14, 2012 / Rules and Regulations
`
`owner’s response and an opposition to
`an amendment, the patent owner may
`depose the petitioner’s declarants and
`file a reply in support of its claim
`amendments. Where the patent owner
`relies upon new declaration evidence in
`support of its amendments, the
`petitioner will be authorized to depose
`the declarants and submit observations
`on the deposition. Once the time for
`taking discovery in the trial has ended,
`the parties will be authorized to file
`motions to exclude evidence believed to
`be inadmissible. Admissibility of
`evidence is generally governed by the
`Federal Rules of Evidence.
`Sequence of filing responses and
`motions. An initial conference call will
`be held about one month from the date
`of institution to discuss the motions that
`the parties intend to file and to
`determine if any adjustment needs to be
`made to the Scheduling Order. The
`patent owner may file a patent owner’s
`response and/or a motion to amend the
`claims by the time set in the Scheduling
`Order. The petitioner will then file a
`reply to the patent owner’s response and
`any opposition to the patent owner’s
`amendment. Both parties will then be
`permitted an opportunity to file motions
`to exclude an opponent’s evidence
`believed to be inadmissible. After all
`motions have been filed, the parties will
`be afforded an opportunity to have an
`oral argument at the Board.
`Summary of the Rules: The following
`is a general summary of the rules for the
`proceedings.
`I. General Procedures
`The rules are to be construed so as to
`ensure the just, speedy, and inexpensive
`resolution of a proceeding and, where
`appropriate, the rules may be modified
`to accomplish these goals. § 42.1(b);
`§ 42.5(a) and (b).
`A. Jurisdiction and Management of the
`Record
`1. Jurisdiction: 35 U.S.C. 6(b), as
`amended, provides that the Board is to
`conduct derivation proceedings, inter
`partes reviews, and post-grant reviews.
`The Board also conducts the transitional
`program for covered business method
`reviews, which are subject to Board
`review under 35 U.S.C. 6(b), as
`amended, 35 U.S.C. 326(c), and Public
`Law 112–29, section 18. The Board
`therefore will have exclusive
`jurisdiction within the Office over every
`application and patent that is involved
`in a derivation, IPR, PGR, or CBM
`proceeding. Ex parte reexamination
`proceedings and inter partes
`reexamination proceedings are not
`‘‘involved’’ patents (as defined in § 42.2)
`in derivation, IPR, PGR, and CBM
`
`proceedings and are thus treated
`separately except as ordered by the
`Board.
`2. Prohibition on Ex Parte
`Communications: All substantive
`communications with the Board
`regarding a proceeding must include all
`parties to the proceeding, except as
`otherwise authorized. § 42.5(d). The
`prohibition on ex parte communications
`does not extend to: (1) Ministerial
`communications with support staff (for
`instance, to arrange a conference call);
`(2) conference calls or hearings in which
`opposing counsel declines to
`participate; (3) informing the Board in
`one proceeding of the existence or status
`of a related Board proceeding; or (4)
`reference to a pending case in support
`of a general proposition (for instance,
`citing a published opinion from a
`pending case or referring to a pending
`case to illustrate a systemic problem).
`Arranging a conference call with the
`Board. The Board encourages the use of
`conference calls to raise and resolve
`issues in an expedited manner. The
`Board envisions that most of the
`procedural issues arising during a
`proceeding will be handled during a
`conference call or shortly thereafter, i.e.,
`in a matter of days. When arranging a
`conference call, parties should be
`prepared to discuss with a Trial Section
`paralegal why the call is needed and
`what materials may be needed during
`the call, e.g., a particular exhibit.
`Refusal to participate. The Board has
`the discretion to permit a hearing or
`conference call to take place even if a
`party refuses to participate. In such
`cases, the Board may order as a
`condition for the call additional
`safeguards, such as the recording of the
`communication and the entry of the
`recording into the record.
`B. Counsel
`Need for lead and back-up counsel. A
`party represented by counsel must
`designate both a lead as well as a back-
`up counsel who can conduct business
`on behalf of the lead counsel, as
`instances may arise where lead counsel
`may be unavailable. § 42.10(a).
`Power of attorney. A power of
`attorney must be filed with the
`designation of counsel, unless the
`designated counsel is already counsel of
`record. § 42.10(b).
`Pro hac vice. The Board may
`recognize counsel pro hac vice during a
`proceeding upon a showing of good
`cause, and subject to the requirement
`that lead counsel is a registered
`practitioner. § 42.10(c). The Board may
`impose other considerations as well. Id.
`Proceedings before the Office can be
`technically complex. For example, it is
`
`expected that amendments to a patent
`will be sought. The grant of a motion to
`appear pro hac vice is a discretionary
`action taking into account the specifics
`of the proceedings. Similarly, the
`revocation of pro hac vice is a
`discretionary action taking into account
`various factors, including
`incompetence, unwillingness to abide
`by the Office’s Rules of Professional
`Conduct, and incivility.
`The Office expects that lead counsel
`will, and back-up counsel may,
`participate in all hearings and
`conference calls with the Board and will
`sign all papers submitted in the
`proceeding. In addition, the role of
`back-up counsel is to conduct business
`with the Office on behalf of lead counsel
`when lead counsel is not available.
`Actions not conducted before the Office
`(e.g., taking of deposition) may be
`conducted by lead or back-up counsel.
`C. Electronic Filing
`
`Electronic filing is the default manner
`in which documents are to be filed with
`the Board. § 42.6(b). Electronic filing of
`legal documents is being implemented
`across the country in state and federal
`courts. The use of electronic filing aids
`in the efficient administration of the
`proceeding, improves public
`accessibility, and provides a more
`effective document management system
`for the Office and parties. The manner
`of submission will be established by the
`Board. The Board will publish
`electronic submission information on its
`Web site (www.uspto.gov/PTAB) in
`August of 2012. Due to system
`constraints, no single uploaded file may
`exceed 250 megabytes in size.
`Paper filing may be used where
`appropriate, but must be accompanied
`by a motion explaining the need for
`non-electronic filing. § 42.6(b). Based
`upon experience with contested cases,
`the Board does not expect to receive
`many requests to file paper submissions.
`Circumstances where a paper filing may
`be warranted include those occasions
`where the Office’s electronic filing
`system is unable to accept filings.
`Alternatively, if a problem with
`electronic filing arises during normal
`business hours, a party may contact the
`Board and request a one-day extension
`of time for due dates that are set by rule
`or orders of the Board. § 42.5. In the
`unlikely event that an administrative
`patent judge is not available to rule on
`the extension, the Board may grant an
`extension the day after the paper is due,
`which includes situations where
`electronic filing problems are shown to
`have occurred.
`
`VerDate Mar<15>2010 17:26 Aug 13, 2012 Jkt 226001 PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 E:\FR\FM\14AUR5.SGM 14AUR5
`
`sroberts on DSK5SPTVN1PROD with RULES
`
`

`

`Federal Register / Vol. 77, No. 157 / Tuesday, August 14, 2012 / Rules and Regulations
`
`48759
`
`D. Mandatory Notices
`The rules require that parties to a
`proceeding provide certain mandatory
`notices, including identification of the
`real parties-in-interest, related matters,
`lead and back-up counsel, and service
`information. § 42.8. Where there is a
`change of information, a party must file
`a revised notice within 21 days of the
`change. § 42.8(a)(3).
`1. Real Party-in-Interest or 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. The latter,
`in turn, seeks to protect patent owners
`from harassment via successive
`petitions by the same or related parties,
`to prevent parties from having a
`‘‘second bite at the apple,’’ and to
`protect the integrity of both the USPTO
`and Federal Courts by assuring that all
`issues are promptly raised and vetted.
`Cf. Fed. R. Civ. P. 17(a) (Advisory
`Committee Note to 1966 Amendment to
`Rule 17(a)) (‘‘[T]he modern function of
`the rule in its negative aspect is simply
`to protect the defendant against a
`subsequent action by the party actually
`entitled to recover, and to insure
`generally that the judgment will have its
`proper effect as res judicata.’’). 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.
`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); 18A Charles Alan Wright,
`Arthur R. Miller & Edward H. Cooper,
`Federal Practice & Procedure §§ 4449,
`4451 (2d ed. 2011) (hereinafter ‘‘Wright
`& Miller’’). Such questions will be
`handled by the Office on a case-by-case
`basis taking into consideration how
`courts have viewed the terms ‘‘real
`party-in-interest’’ and ‘‘privy.’’ See, e.g.,
`Taylor, 553 U.S. at 893–895 and 893 n.6
`(noting that ‘‘[t]he list that follows is
`meant only to provide a framework [for
`the decision], not to establish a
`definitive taxonomy’’). Courts invoke
`the terms ‘‘real party-in-interest’’ and
`‘‘privy’’ to describe relationships and
`considerations sufficient to justify
`applying conventional principles of
`estoppel and preclusion. Accordingly,
`courts have avoided rigid definitions or
`recitation of necessary factors.
`Similarly, multiple Federal Rules
`invoke the terms without attempting to
`
`define them or what factors trigger their
`application. See, e.g., Fed. R. Civ. P. 17;
`Fed. Cir. R. 47.4.
`The typical common-law expression
`of the ‘‘real party-in-interest’’ (the party
`‘‘who, according to the governing
`substantive law, is entitled to enforce
`the right’’) does not fit directly into the
`AIA trial context. See 6A Charles Alan
`Wright, Arthur R. Miller, Mary Kay
`Kane, & Richard L. Marcus, Federal
`Practice & Procedure Civil section 1543
`(3d ed. 2011) (discussing Fed. R. Civ. P.
`17). That notion reflects standing
`concepts, but no such requirement
`exists in the IPR or PGR context,
`although it exists in the CBM context. In
`an IPR or PGR proceeding, there is no
`‘‘right’’ being enforced since any entity
`(other than the patent owner) may file
`an IPR or PGR petition. However, the
`spirit of that formulation 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. Thus, 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. In
`this regard, the Office’s prior
`application of similar principles in the
`inter partes reexamination context offers
`additional guidance. See generally In re
`Guan et al. Inter Partes Reexamination
`Proceeding, Control No. 95/001,045,
`Decision Vacating Filing Date (Aug. 25,
`2008). Similar considerations apply to
`CBM proceedings, although the statute
`governing those proceedings also
`requires that the party seeking the
`proceeding, or its real party-in-interest
`or privy, have been sued for infringing
`the subject patent, or been charged with
`infringement under that patent.
`The notion of ‘‘privity’’ is more
`expansive, encompassing parties that do
`not necessarily need to be identified in
`the petition as a ‘‘real party-in-interest.’’
`The Office intends to evaluate what
`parties constitute ‘‘privies’’ in a manner
`consistent with the flexible and
`equitable considerations established
`under federal caselaw. Ultimately, that
`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. This approach is
`consistent with the legislative history of
`the AIA, which indicates that Congress
`included ‘‘privies’’ within the parties
`subject to the statutory estoppel
`provisions in an effort to capture ‘‘the
`doctrine’s practical and equitable
`nature,’’ in a manner akin to collateral
`estoppel. In that regard, the legislative
`history endorsed the expression of
`‘‘privy’’ as follows:
`
`The word ‘‘privy’’ has acquired an
`expanded meaning. The courts, in the
`interest of justice and to prevent expensive
`litigation, are striving to give effect to
`judgments by extending ‘‘privies’’ beyond the
`classical description. The emphasis is not on
`the concept of identity of parties, but on the
`practical situation. 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.
`The concept refers to a relationship between
`the party to be estopped and the unsuccessful
`party in the prior litigation which is
`sufficiently close so as to justify application
`of the doctrine of collateral estoppel.
`154 Cong. Rec. S9987 (daily ed. Sept.
`27, 2008) (statement of Sen. Kyl) (citing
`Cal. Physicians’ Serv. v. Aoki Diabetes
`Research Inst., 163 Cal.App.4th 1506
`(Cal. App. 2008)); see also 157 Cong.
`Rec. S1376 (daily ed. Mar. 8, 2011)
`(incorporating prior 2008 statement).
`Subsequent legislative history expanded
`on the prior discussion of ‘‘privy’’ by
`noting that ‘‘privity is an equitable rule
`that takes into account the ‘practical
`situation,’ and should extend to parties
`to transactions and other activities
`relating to the property in question.’’
`157 Cong. Rec. S1376 (daily ed. Mar. 8,
`2011) (statement of Sen. Kyl).
`There are multiple factors relevant to
`the question of whether a non-party may
`be recognized as a ‘‘real party-in-
`interest’’ or ‘‘privy.’’ See, e.g., Taylor,
`553 U.S. at 893–895 and 893 n.6 (noting
`that ‘‘[t]he list that follows is meant only
`to provide a framework [for the
`decision], not to establish a definitive
`taxonomy’’). A common consideration is
`whether the non-party exercised or
`could have exercised control over a
`party’s participation in a proceeding.
`See, e.g., id. at 895; see generally Wright
`& Miller section 4451. 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
`coparties.’’ Wright & Miller § 4451.
`Courts and commentators agree,
`however, that there is 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.
`Gonzalez v. Banco Cent. Corp., 27 F.3d
`751, 759 (1st Cir. 1994). See also Wright
`& Miller section 4451 (‘‘The measure of
`control by a nonparty that justifies
`preclusion cannot be defined rigidly.’’).
`Accordingly, the rules do not enumerate
`particular factors regarding a ‘‘control’’
`theory of ‘‘real party-in-interest’’ or
`‘‘privy’’ under the statute.
`Additionally, many of the same
`considerations that apply in the context
`of ‘‘res judicata’’ will likely apply in the
`
`VerDate Mar<15>2010 17:26 Aug 13, 2012 Jkt 226001 PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 E:\FR\FM\14AUR5.SGM 14AUR5
`
`sroberts on DSK5SPTVN1PROD with RULES
`
`

`

`48760
`
`Federal Register / Vol. 77, No. 157 / Tuesday, August 14, 2012 / Rules and Regulations
`
`‘‘real party-in-interest’’ or ‘‘privy’’
`contexts. See Gonzalez, 27 F.3d at 759;
`see generally Wright & Miller section
`4451. Other considerations may also
`apply in the unique context of statutory
`estoppel. See generally, e.g., In re Arviv
`Reexamination Proceeding, Control No.
`95/001,526, Decision Dismissing section
`1.182 and section 1.183 Petitions, at 6
`(Apr. 18, 2011); In re Beierbach
`Reexamination Proceeding, Control No.
`95/000,407, Decision on section 1.182
`and section 1.183 Petitions, at 6 (July
`28, 2010); In re Schlecht Inter Partes
`Reexamination Proceeding, Control No.
`95/001,206, Decision Dismissing
`Petition, at 5 (June 22, 2010); In re Guan
`Inter Partes Reexamination Proceeding,
`Control No. 95/001,045, Decision
`Vacating Filing Date, at 8 (Aug. 25,
`2008).
`The Office has received requests to
`state whether particular facts will
`qualify a party as a ‘‘real party-in-
`interest’’ or ‘‘privy.’’ Some fact-
`combinations will generally justify
`applying the ‘‘real party-in-interest’’ or
`‘‘privy’’ label. For example, 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.
`But whether something less than
`complete funding and control suffices to
`justify similarly treating the party
`requires consideration of the pertinent
`facts. See, e.g., Cal. Physicians, 163
`Cal.App.4th at 1523–25 (discussing the
`role of control in the ‘‘privy’’ analysis,
`and observing that ‘‘preclusion can
`apply even in the absence of such
`control’’). The Office will handle such
`questions on a case-by-case basis taking
`into consideration how courts have
`viewed the terms. Similarly, while
`generally a party does not become a
`‘‘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. So, for example, if Trade
`Association X files an IPR petition,
`Party A does not become a ‘‘real party-
`in-interest’’ or a ‘‘privy’’ of the
`Association simply based on its
`membership in the Association.
`Similarly, if Party A is part of a Joint
`Defense Group with Party B in a patent
`infringement suit, and Party B files a
`PGR petition, Party A is not a ‘‘real
`party-in-interest’’ or a ‘‘privy’’ for the
`purposes of the PGR petition based
`solely on its participation in that Group.
`That is not to say that Party A’s
`membership in Trade Association X, or
`the Joint Defense Group, in those
`
`scenarios is irrelevant to the
`determination; deeper consideration of
`the facts in the particular case is
`necessary to determine whether Party A
`is a ‘‘real party-in-interest’’ or a ‘‘privy’’
`of the petitioner. Relevant factors
`include: Party A’s relationship with the
`petitioner; Party A’s relationship to the
`petition i