Trials@uspto.gov
`571-272-7822
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`Paper 18
`Entered: March 17, 2015
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`PETROLEUM GEO-SERVICES INC.,
`Petitioner,
`
`v.
`
`WESTERNGECO LLC,
`Patent Owner.
`____________
`
`Case IPR2014-01477
`Patent 7,080,607 B2
`____________
`
`
`Before SCOTT A. DANIELS, BEVERLY M. BUNTING,
`and BARBARA A. PARVIS, Administrative Patent Judges.
`
`DANIELS, Administrative Patent Judge.
`
`
`
`DECISION
`
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
`571-272-7822
`
`
`
`
`
`
`
`Paper 18
`Entered: March 17, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`PETROLEUM GEO-SERVICES INC.,
`Petitioner,
`
`v.
`
`WESTERNGECO LLC,
`Patent Owner.
`____________
`
`Case IPR2014-01477
`Patent 7,080,607 B2
`____________
`
`
`Before SCOTT A. DANIELS, BEVERLY M. BUNTING,
`and BARBARA A. PARVIS, Administrative Patent Judges.
`
`DANIELS, Administrative Patent Judge.
`
`
`
`DECISION
`
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
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`IPR2014-01477
`Patent 7,080,607 B2
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`A. Background
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`I. INTRODUCTION
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`Petroleum Geo-Services Incorporated (“Petitioner”) filed a Petition to
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`institute an inter partes review of claims 16–23 of U.S. Patent No. 7,080,607
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`B2 (“the ’607 patent”). Paper 1 (“Pet.”). WesternGeco LLC (“Patent
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`Owner”) timely filed a Preliminary Response. Paper 9 (“Prelim. Resp.”).
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`We have authority to determine whether to institute an inter partes
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`review under 35 U.S.C. § 314; 37 C.F.R. § 42.4(a). Upon consideration of
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`the Petition and the Preliminary Response, we determine that Petitioner has
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`established a reasonable likelihood of prevailing on the claims challenged in
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`the Petition. Accordingly, we institute an inter partes review for claims 16–
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`23 of the ’607 patent.
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`B. Additional Proceedings
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`Petitioner states that related lawsuits involving the ’607 patent
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`presently asserted against Petitioner are WesternGeco LLC v. Petroleum
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`Geo-Services, Inc., 4:13-cv-02725 (the “PGS lawsuit”) in the Southern
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`District of Texas and WesternGeco LLC v. ION Geophysical Corp., 4:09-cv-
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`01827 (the “ION lawsuit”) also in the Southern District of Texas. Pet. 8.
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`Petitioner previously filed Petroleum Geo-Services, Inc. v.
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`WesternGeco LLC, IPR2014-00688, (“the first PGS IPR”) upon which we
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`instituted an inter partes review of claims 1 and 15 of the ’607 patent.
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`Claims 1 and 15 of the ’607 patent are also challenged in ION Geophysical
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`Corporation and ION International S.a.r.l., v. WesternGeco LLC, IPR2015-
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`00567 (“the ION IPR”). 1
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`1 ION filed a pending Motion for Joinder under 35 U.S.C. § 315(c) and
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`2
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`Petitioner also has concurrently filed three additional petitions
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`challenging the patentability of claim 4 of U.S. Patent No. 7,162,967 B2
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`(“the ’967 patent”); claims 1–3, 5–20, and 22–34 of U.S. Patent No.
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`7,293,520 B2 (“the ’520 patent”); and claims 1–4, 10, 20–21, 26–29, 35, 39,
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`and 45–47 of U.S. Patent No. 6,691,038 B2 (“the ’038 patent”).2 See
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`IPR2014-01475; IPR2014-01476; IPR2014-01478.
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`C. The ’607 Patent
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`The ’607 patent (Ex. 1001), titled “SEISMIC DATA ACQUISITION
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`EQUIPMENT CONTROL SYSTEM,” generally relates to a method and
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`apparatus for improving marine seismic survey techniques by more
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`effectively controlling the movement and positioning of marine seismic
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`streamers towed in an array behind a boat. Ex. 1001, col. 1, ll. 16–24. As
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`illustrated in Figure 1 of the ’607 patent, reproduced below, labeled prior art,
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`a seismic source, for example, air gun 14, is towed by boat 10 producing
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`acoustic signals, which are reflected off the earth below. Id. The reflected
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`signals are received by hydrophones (no reference number) attached to
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`streamers 12, and the signals “digitized and processed to build up a
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`representation of the subsurface geology.” Id. at col. 1, ll. 31–33.
`
`
`37 C.F.R. § 42.122(b) (Paper 4) to join IPR2015-00567 with the first PGS
`IPR, IPR2014-00687.
`2 The ’520, ’607, and ’967 patents each issued as continuations of
`Application No. 09/787,723, filed July 2, 2001, now U.S. Patent No.
`6,932,017, which was in turn a 35 U.S.C. § 371 national stage filing from
`Patent Cooperation Treaty application number PCT/IB99/01590, filed
`September 28, 1999, claiming foreign priority under 35 U.S.C. § 119 from
`Great Britain patent application number 9821277.3, filed October 1, 1998.
`See Ex. 1001, col. 1, ll. 4–12.
`
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`Figure 1, reproduced above, depicts an array of seismic streamers 12
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`towed behind the vessel. In order to obtain accurate survey data, it is
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`necessary to control the positioning of the streamers, both vertically in the
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`water column, as well as horizontally against ocean currents and forces,
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`which can cause the normally linear streamers to bend and undulate and, in
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`some cases, become entangled with one another. Id. at col. 1, l. 42–col. 2, l.
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`16.
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`As depicted by Figure 1, each streamer 12 is maintained in a generally
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`linear arrangement behind the boat by deflector 16 which horizontally
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`positions the end of each streamer nearest the vessel. Drag buoy 20 at the
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`end of each streamer farthest from the vessel creates tension along the
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`streamer to maintain the linear arrangement.
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`4
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`Additionally, to control the position and linear shape of the streamer,
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`a plurality of streamer positioning devices, called “birds” 18, are attached
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`along the length of each streamer.3 Id. at col. 3, ll. 47–49. The birds are
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`horizontally and vertically steerable and control the shape and position of the
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`streamer in both vertical (depth) and horizontal directions. Id. at col. 3, ll.
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`49–55. The bird’s job is usually to maintain the streamers in their linear and
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`parallel arrangement, because, when the streamers are horizontally out of
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`position, the efficiency of the seismic data collection is compromised. Id. at
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`col. 2, ll. 5–7. The most important task of the birds, however, is to keep the
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`streamers from tangling. Id. at col. 3, ll. 65–66.
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`Figure 2 of the ’607 patent, reproduced below, illustrates a preferred
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`embodiment of bird 18 as it relates to the described invention.
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`
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`As depicted by Figure 2 of the ’607 patent, reproduced above, when the
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`streamers are towed, birds 18 are capable of controlling their own position,
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`3 Although the term “streamer positioning device” may be inclusive of other
`structures besides a “bird,” unless otherwise noted in this Decision, we use
`the terms “birds” and “streamer positioning devices” interchangeably.
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`5
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`and hence the position of streamers 12, in both horizontal and vertical
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`directions. Id. at col. 5, ll. 34–36. The ’607 patent explains that “[t]he bird
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`18 preferably has a pair of independently moveable wings 28 that are
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`connected to rotatable shafts 32 that are rotated by wing motors 34 and that
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`allow the orientation of the wings 28 with respect to the bird body 30 to be
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`changed.” Id. at col. 5, ll. 43–47.
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`The invention described in the ’607 patent relies on global control
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`system 22 located on or near the vessel to control the birds on each streamer
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`to maintain the streamers in their particular linear and parallel arrangement.
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`Id. at col. 3, ll. 56–60. The control system is provided with a model
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`(desired) position representation of each streamer in the towed streamer
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`array, and also receives (actual) position information from each of the birds.
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`Id. at col. 4, ll. 15–19. The control system uses the desired and actual
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`position of the birds to “regularly calculate updated desired vertical and
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`horizontal forces the birds should impart on the seismic streamers 12 to
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`move them from their actual positions to their desired positions.” Id. at
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`col. 4, ll. 28–34.
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`D. Illustrative Claims
`
`Claims 16–23 are dependent directly or indirectly upon claim 15,
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`Claims 15 and 16 are reproduced below:
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`15. An array of seismic streamers towed by a towing
`vessel comprising:
` (a) a plurality of streamer positioning devices on or inline
`with each streamer;
` (b) a prediction unit adapted to predict positions of at least
`some of the streamer positioning devices; and
` (c) a control unit adapted to use the predicted positions to
`calculate desired changes in positions of one or more of
`
`
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`6
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`the streamer positioning devices.
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`16. Apparatus as claimed in claim 15, in which each
`streamer positioning device has a first hydrodynamic
`deflecting surface and a second hydrodynamic deflecting
`surface, said first deflecting surface and said second deflecting
`surface being independently moveable to steer the
`streamer positioning device laterally and vertically.
`
`
`
`Ex. 1001, col. 12, ll. 26–40.
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`
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`E. The Alleged Grounds of Unpatentability
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`Petitioner contends that the challenged claims are unpatentable on the
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`following specific grounds.4
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`
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`References
`’636 PCT5 and Gikas6
`’636 PCT, Gikas, and
`Spink7
`’636 PCT, Gikas,
`Spink, and ’394 PCT8
`
`
`Basis
`§ 103
`§ 103
`
`§ 103
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`Claim Challenged
`16 and 17
`18–20
`
`21–23
`
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`4 Petitioner supports its challenge with Declarations of Dr. Brian J. Evans,
`Ph.D. (Ex. 1002) (“Evans Decl.”) and Dr. Jack H. Cole, Ph.D. (Ex. 1003)
`(“Cole Decl.”). See infra.
`5 Ex. 1013, PCT International Publication No. WO 98/28636 (published July
`2, 1998).
`6 Ex. 1006, V. Gikas et al., A Rigorous and Integrated Approach to
`Hydrophone and Source Positioning during Multi-Streamer Offshore
`Seismic Exploration, 77 THE HYDROGRAPHIC JOURNAL 11–24 (July 1995).
`7 Ex. 1058, U.S. Patent No. 3,560,912 (issued Feb. 2, 1971).
`8 Ex. 1059, PCT International Publication No. WO 97/11394 (published
`March 27, 1997).
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`II. CLAIM CONSTRUCTION
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`A. Legal Standard
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`In an inter partes review, claim terms in an unexpired patent are
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`interpreted according to their broadest reasonable construction in light of the
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`specification of the patent in which they appear. 37 C.F.R. § 42.100(b); see
`
`also In re Cuozzo Speed Techs., LLC., No. 14-01301, slip op. at 16, 19 (Fed.
`
`Cir. Feb. 4, 2015) (“Congress implicitly adopted the broadest reasonable
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`interpretation standard in enacting the AIA,” and “the standard was properly
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`adopted by PTO regulation.”). Claim terms are given their ordinary and
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`customary meaning as would be understood by a person of ordinary skill in
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`the art at the time of the invention and in the context of the entire patent
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`disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir.
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`2007). If the specification “reveal[s] a special definition given to a claim
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`term by the patentee that differs from the meaning it would otherwise
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`possess[,] . . . the inventor’s lexicography governs.” Phillips v. AWH Corp.,
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`415 F.3d 1303, 1316 (Fed. Cir. 2005) (en banc) (citing CCS Fitness, Inc. v.
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`Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002)). Also, we must be
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`careful not to read a particular embodiment appearing in the written
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`description into the claim, if the claim language is broader than the
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`embodiment. See In re Van Geuns, 988 F.2d 1181, 1184 (Fed. Cir. 1993)
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`(“[L]imitations are not to be read into the claims from the specification.”).
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`We apply this standard to the claims of the ’607 patent.
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`B. Streamer Positioning Device
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`Claims 15–19, 21, and 23 recite the limitation, “streamer positioning
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`device[].” Petitioner proposes that under the broadest reasonable
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`IPR2014-01477
`Patent 7,080,607 B2
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`interpretation, a “streamer positioning device” is “a device that controls the
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`position of a streamer as it is towed (e.g., a ‘bird’).” Pet. 20. Patent Owner
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`opposes the proposed construction and argues that, in accordance with the
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`plain meaning of the term, the broadest reasonable construction of “streamer
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`positioning device” is “a device that controls at least the lateral position of a
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`streamer as it is towed.” Prelim. Resp. 22.
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`A review of the claims and specification provides context for defining
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`“streamer positioning device.” Claim 15 recites the limitations of “a
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`plurality of streamer positioning devices.” Describing how the wing is
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`controlled, claim 15 further requires the step of “a control unit adapted to
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`use the predicted positions to calculate desired changes in positions of one or
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`more of the streamer positioning devices.” There is no specificity provided
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`by the claim to the manner, trajectory, or direction in which the wing of the
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`positioning device is controlled. The specification of the ’607 patent
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`describes seismic streamers being maintained in linear position by “a
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`plurality of streamer positioning devices known as birds 18. Preferably[,]
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`the birds 18 are both vertically and horizontally steerable.” Ex. 1001, col. 3,
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`ll. 48–50. The bird preferably has “a pair of independently moveable wings
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`28 that are connected to rotatable shafts 32 that are rotated by wing motors
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`34 and that allow the orientation of the wings 28 with respect to the bird
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`body 30 to be changed.” Id. at col. 5, ll. 44–47. However, none of the
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`structure or function for adjusting the wings, or “horizontal,” i.e. lateral, or
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`“vertical” steering, is required by claim 15.
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`Because, inter alia, the specification of the ’607 patent discloses that
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`“positioning” of the streamer may be accomplished by either horizontal or
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`vertical steering, or both, any interpretation including specific directional
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`terms would read limitations improperly from the specification into the
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`claims. Consequently, the broadest reasonable interpretation of “streamer
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`positioning device” is, therefore, “a device that positions a streamer as it is
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`towed.”
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`C. Predicting Positions
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`Petitioner argues that “predicting positions” should be interpreted in
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`terms of the root word “predict” as “encompass[ing] either present or future
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`predictions of streamer positioning device locations (i.e., ‘estimates of the
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`real time or future locations’).” Pet. 21. The Specification of the ’607
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`patent explains that “[d]ue to the relatively low sample rate and time delay
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`associated with the horizontal position determination system, the global
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`control system 22 runs position predictor software to estimate the actual
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`locations of each of the birds 18.” Ex. 1001, col. 4, ll. 51–55. From this
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`description, we understand that because of a low sample rate and time delay
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`in the process of determining the actual position of birds 18 at any given
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`time, the global positioning system uses “position predictor software to
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`estimate the actual locations of each of the birds 18.” Id. In other words, the
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`received position data for any bird 18 is old, i.e., not instantaneous, or
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`current, but is used to estimate a position of bird 18, and assess the estimate
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`as an actual position of bird 18. Based on this disclosure, and for purposes
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`of this Decision, the broadest reasonable interpretation of “predicting
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`positions” is “estimating the actual locations.”
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`D. Means for determining Angular velocity
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`Dependent claim 18 recites “means for determining the angular
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`velocity of each streamer positioning device.” Petitioner proposes that
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`“means for determining” be construed as the structure disclosed in the ’607
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`patent, specifically, “a horizontal and vertical accelerometer placed at right
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`angles with respect to one another, a rate gyro, or their equivalents.” Pet.
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`22–23 (citing Ex. 1001, col. 8, ll. 20–27). Our review of the Specification
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`reveals that the only structure disclosed for performing the function of
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`“determining the angular velocity of each streamer positioning device” is a
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`horizontal accelerometer and a vertical accelerometer, placed at right angles
`
`with respect to one another and a vibrating rate gyro. Ex. 1001, col. 8, ll.
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`20–27. We find Petitioner’s proposed construction to be reasonable and
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`Patent Owner does not oppose this construction. See Prelim Resp. 21–27.
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`For purposes of this Decision, “means for determining the angular velocity
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`of each streamer positioning device” is: a horizontal accelerometer and a
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`vertical accelerometer, placed at right angles with respect to one another
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`and a vibrating rate gyro as described in the ’796 patent, or their equivalents.
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`E. Cycle Rate
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`Dependent claim 22 recites the limitation “each local control system
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`has a cycle rate.” Petitioner proposes that “cycle rate” be construed as “the
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`number of cycles a processing unit performs per unit of time.” Pet. 24–25.
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`The specification of the ’607 patent explains that the central processor in the
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`local control system which directly controls the bird, must provide a data
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`sampling frequency, “fast enough . . . for effective local bird control. Ex.
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`1001, col. 9, ll. 10–11. The specification gives an example, “for instance, a
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`sample rate of 10Hz, which may be 10 to 100 times faster than the sample
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`rate of the communications between the global control system 22 and the
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`local control system 36.” Id. at col. 9, ll. 12–15. Petitioner’s construction is
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`incomplete because it interprets the word “rate,” as a number of cycles per
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`unit time, without interpreting “cycle”. In context of the specification, the
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`cycle is a “data sampling” cycle, or frequency. See id. at col. 9, ll. 9–15.
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`This understanding is consistent with the language and context of claim 22
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`itself, having the express limitation that compares the “cycle rate” of the
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`local control system, to the “data transfer rate of said communication line.”
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`For purposes of this Decision we interpret “cycle rate” as “the number of
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`data sampling cycles a processing unit performs per unit of time.”
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`F. Other Claim Constructions
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`Petitioner offers constructions for the terms “global control system”
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`and “on or inline with.” Pet. 22–24. We determine that no express
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`construction is needed for purposes of this Decision for the noted terms or
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`phrases.
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`III. ANALYSIS
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`A. Redundancy
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`Patent Owner asserts that the present proceeding is “doubly-
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`redundant” because (1) we previously declined, in the first PGS IPR, to
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`institute on the combination of the ’636 patent and Gikas, and (2) the present
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`Petition relies exclusively on the combination of the ’636 PCT and Gikas.
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`Prelim. Resp. 6. This Petition, however, involves different claims.
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`Accordingly, Patent Owner’s redundancy argument does not demonstrate a
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`persuasive reason why we should reject the present Petition.
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`B. Statutory Bar Under 35 U.S.C. § 315(b)
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`Patent Owner disputes that Petitioner timely filed its Petition for an
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`inter partes review. Prelim. Resp. 9–12. Specifically, under 35 U.S.C.
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`§ 315(b), a party may not file a petition for inter partes review if the party
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`had been served with a complaint alleging infringement more than one year
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`previously. Patent Owner asserts that Petitioner was served with a
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`complaint on March 14, 2011. Id. at 9–10.
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`On June 12, 2009, Patent Owner filed, via the district court’s
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`electronic case filing procedure (“ECF”), a complaint initiating the ION
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`lawsuit, alleging infringement of the ’607 patent against ION based on
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`ION’s “DigiFIN” and other products. Prelim. Resp. 9. Patent Owner also
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`filed a similar complaint against a company called Fugro, a customer of
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`ION, initiating litigation that was consolidated with the ION lawsuit. Id.
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`(citing Ex. 2037). On December 8, 2009, remarking that Petitioner may
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`have been involved in the design and testing of the ION products, Patent
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`Owner provided Petitioner via email with a copy of the complaint against
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`ION. Id. (citing Ex. 2008).
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`Subsequently, Patent Owner subpoenaed Petitioner on January 22,
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`2010, to produce documents and evidence relating inter alia to Petitioner’s
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`use and operation of ION’s DigiFIN product. Id. (citing Ex. 2009). In
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`response to the subpoena, Petitioner appeared in the ION lawsuit through its
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`counsel, Heim, Payne & Chorush. Id. (citing Ex. 2011). On March 14,
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`2011, Patent Owner filed an amended complaint in the ION lawsuit via the
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`court’s electronic filing system (“ECF”), naming ION and Fugro, but not
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`Petitioner. Id. (citing Ex. 2012). Patent Owner argues that because
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`Petitioner’s counsel, as an ECF notice recipient in the ION lawsuit, received
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`a copy of the amended complaint against Fugro and ION on March 14, 2011,
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`Petitioner was therefore “served” in accordance with 35 U.S.C. § 315(b) the
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`same day. Id. Thus, it is Patent Owner’s position that because Petitioner
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`was “served” with the complaint more than one year before filing the present
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`Petition, the Petition here is now time-barred. Id. at 12.
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`The Board has dealt with similar arguments regarding the statutory
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`interpretation of 35 U.S.C. § 315(b) before in Motorola Mobility LLC v.
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`Arnouse, Case IPR2013-00010 (PTAB Jan. 30, 2013) (Paper 20) (the
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`“Motorola decision”). For reasons similar to those set forth in the Motorola
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`decision, we do not adopt the statutory construction that mere receipt of a
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`complaint, via email or even ECF, initiates the one-year time period. We
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`specifically agree with the Motorola Panel’s review and interpretation of the
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`legislative history and intent of 35 U.S.C. § 315(b) in that, “[w]e do not
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`believe that the Congress intended to have the time period start before a
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`petitioner is officially a defendant in a law suit.” Id. at 5.
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`Patent Owner specifically argues that the present proceeding differs
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`from Motorola because in the ION lawsuit “Petitioner was served with
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`process and formally appeared,” (emphasis omitted) and was thus “‘brought
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`under a court’s authority, by formal process’ before being served with the
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`amended complaint.” Prelim. Resp. 10–11 n.2 (citing Murphy Bros., Inc. v.
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`Michetti Pipe Stringing, Inc. 526 U.S. 344, 347 (1999)). Despite this factual
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`difference from Motorola, Petitioner was not, and never has been, a party
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`defendant in the ION lawsuit.
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`Petitioner, in the ION lawsuit, was served under Fed. R. Civ. P. 45,
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`with a third-party subpoena, to produce documents and things relating to the
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`ION lawsuit. See Ex. 2009. Although a person, or entity, may have been
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`served properly with a subpoena, and may fall under a court’s authority for
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`purposes of producing appropriate documents and things not protected by a
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`privilege or protection, Fed. R. Civ. P. 45(c)–(e) does not express, or imply,
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`that a person subject to the subpoena is a “defendant” to a lawsuit. Indeed,
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`Fed. R. Civ. P. 45 specifically differentiates between a “person” served with
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`the subpoena, and “a party” to the lawsuit. See Fed. R. Civ. P. 45 (d)(2)(B)
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`(“A person commanded to produce documents or tangible things or to permit
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`inspection may serve on the party or attorney designated in the subpoena a
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`written objection to inspecting, copying, testing or sampling any or all of the
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`materials.”). We are not aware of anycase law or precedent, nor has Patent
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`Owner cited to any, indicating that serving a person with a subpoena, and
`
`subjecting them to the authority of the court in enforcing such subpoena
`
`under Fed. R. Civ. P. 45(e), provides sufficient legal process to make such
`
`person a defendant to a lawsuit.
`
`Thus, Petitioner was not a defendant in the ION lawsuit. Concomitant
`
`with the Board’s Motorola decision, we interpret 35 U.S.C. § 315(b) as
`
`requiring service upon a defendant to the lawsuit. Petitioner was not a
`
`defendant; thus, it was never “served with a complaint” in the ION lawsuit
`
`as required by 35 U.S.C. § 315(b).9
`
`C. Real Parties-in-Interest Under 35 U.S.C. § 312(a)
`
`1. PGSAI
`
`The statute governing inter partes review proceedings sets forth
`
`certain requirements for a petition for inter partes review, including that “the
`
`petition identif[y] all real parties in interest.” 35 U.S.C. § 312(a) (emphasis
`
`added); see also 37 C.F.R. § 42.8(b)(1) (requirement to identify real parties
`
`
`9 Patent Owner’s argument that S.D. Texas L.R. 5-1 states that the ECF
`notice “constitutes service of the document on those registered as Filing
`Users,” (Prelim. Resp. 9–10 (citing Ex. 2033)), is not persuasive as to the
`intent of Congress with respect to § 315(b). See 157 Cong. Rec. S5429
`(daily ed. Sept. 8, 2011) (statement of Senator Kyl) (“it is important that the
`section 315(b) deadline afford defendants a reasonable opportunity to
`identify and understand the patent claims that are relevant to the litigation”).
`
`
`
`
`15
`
`
`
`IPR2014-01477
`Patent 7,080,607 B2
`
`in interest in mandatory notices). The Office Patent Trial Practice Guide,
`
`77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012) (“Practice Guide”) explains
`
`that “[w]hether a party who is not a named participant in a given proceeding
`
`nonetheless constitutes a ‘real party-in-interest’ . . . to that proceeding is a
`
`highly fact-dependent question.” 77 Fed. Reg. at 48,759. The Practice
`
`Guide further states that:
`
`
`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.
`
`
`Id. (emphasis added). The determination of whether a non-party is a real
`
`party-in-interest involves a consideration of control; “[a] common
`
`consideration is whether the non-party exercised or could have exercised
`
`control over a party’s participation in a proceeding.” Id.
`
`Patent Owner alleges that a company called PGS Americas,
`
`Incorporated (“PGSAI”) is a real party-in-interest to this proceeding because
`
`an in-house attorney for PGSAI, Kevin Hart, has been involved in the ION
`
`lawsuit, and “controlled the review, dissemination and discussion of the
`
`prior art that was presented in the Petition.” Prelim. Resp. 14. Patent Owner
`
`argues that Kevin Hart retained trial counsel for Petitioners PGS and a
`
`related company PGS Geophysical AS, (“PGSAS”), and “acted as
`
`‘[Petitioner’s] in-house counsel.’” Id. (citing Ex. 2018). Patent Owner
`
`argues that Kevin Hart of PGSAI also controlled the negotiation of
`
`indemnity protections for PGSAS, with ION, for potential patent
`
`infringement related to DigiFIN. Id. (citing Exs. 2022–23). Patent Owner
`
`
`
`
`16
`
`
`
`IPR2014-01477
`Patent 7,080,607 B2
`
`further asserts that PGSAI controlled the payment of DigiFIN invoices to
`
`ION as well as the repair and shipment of DigiFIN products for PGSAS. Id.
`
`at 15 (citing Exs. 2019–21).
`
`Patent Owner’s argument relies on the requirement that all real
`
`parties-in-interest be identified in the Petition, and speculation that
`
`“[b]ecause PGSAI’s counsel is controlling [Petitioner’s] interests in the
`
`validity and infringement of the ’607 patent, PGSAI is an RPI.” Prelim.
`
`Resp. 15.
`
`The Practice Guide provides guidance regarding factors to consider in
`
`determining whether a party is a real party-in-interest. Considerations may
`
`include whether a non-party exercises control over a Petitioner’s
`
`participation in a proceeding. Other considerations may include whether a
`
`non-party, in conjunction with control, is funding the proceeding and
`
`directing the proceeding. 77 Fed. Reg. at 48,759–60.
`
`
`
`Patent Owner provides insufficient evidence to support its speculative
`
`contention that any entity other than Petitioner is, in fact, funding or
`
`controlling Petitioner’s involvement in this proceeding, or that the Petition
`
`was filed “at the behest” of anyone other than Petitioner. We are not
`
`persuaded that the evidence of common in-house counsel between PGSAI
`
`and Petitioner alone shows that PGSAI funded, or directed, Petitioner in
`
`connection with the filing of this Petition. While Kevin Hart may act on
`
`behalf of PGS at times, and PGSAI at other times, this employment
`
`association does not explain the corporate, or legal, relationship between
`
`PGSAI and Petitioner, or demonstrate that PGSAI has the ability to control
`
`the proceeding before the Board, nor is it evidence of corporate control
`
`between PGS and PGSAI. Discussions of potential remedies and indemnity
`
`
`
`
`17
`
`
`
`IPR2014-01477
`Patent 7,080,607 B2
`
`protections by Mr. Hart on behalf of either entity, without specific evidence
`
`of corporate relationship, control, or contractual obligations of these entities,
`
`fail to prove that any entity is able to control the actions of another.
`
`Moreover, based on this record, invoice payments by PGSAI for the
`
`DigiFIN product repair and development, at best, show that PGSAI and PGS
`
`may share a corporate financial structure, not that any control was exercised
`
`by PGSAI over Petitioner and this inter partes review proceeding.
`
`2. ION
`
`Patent Owner asserts that ION is a real party in interest because
`
`(a) ION and Petitioner have a mutual desire to invalidate the ’607 patent and
`
`other WesternGeco patents, and because in this regard, Petitioner claimed a
`
`“common interest privilege” over communications with ION; (b) ION
`
`expressed its desire to satisfy its product assurance pledge and fulfill its
`
`obligations to Petitioner by securing rights to the DigiFIN product, or
`
`replace it with a non-infringing product; and (c) because Petitioner invoked
`
`ION’s indemnity obligations, notifying ION that Petitioner expected ION to
`
`fulfill its obligations and provide a remedy should infringement be found in
`
`the district court. Prelim. Resp. 16–17 (citing Exs. 2015, 2022, 2027).
`
`The common interest privilege serves to protect confidential, or
`
`privileged, communications with third parties, which might otherwise be
`
`exceptions to the attorney-client privilege. There is nothing surreptitious
`
`about separate entities, as either third parties, or separate parties to a legal
`
`action, proclaiming shared interests to protect communications that are
`
`relevant to advance the interests of the entities possessing the common
`
`interest. See In re Regents of Univ. of California, 101 F.3d 1386, 1389 (Fed.
`
`Cir. 1996) (“The protection of communications among clients and attorneys
`
`
`
`
`18
`
`
`
`IPR2014-01477
`Patent 7,080,607 B2
`
`‘allied in a common legal cause’ has long been recognized.”) (quoting In re
`
`Grand Jury Subpoena Duces Tecum, 406 F.Supp. 381, 386 (S.D.N.Y.1975)).
`
`The fact that Petitioner and ION, have a desire, and common interest, in
`
`invalidating the ’607 patent and other WesternGeco patents, and have
`
`collaborated together, and invoked a common interest privilege with respect
`
`to sharing potentially invalidating prior art references, does not persuade us
`
`that ION has the ability to control the instant Petition or is directing or
`
`funding the present proceeding.
`
`The Board has issued decisions determining that a non-party entity is
`
`a real party-in-interest. See Zoll Lifecor Corp. v. Philips Elecs. North
`
`America Corp., Case IPR2013-00609 (PTAB Mar. 20, 2014) (Paper 15) (the
`
`“Zoll Decision”). In the Zoll Decision, the Board was persuaded that an
`
`unnamed party to the inter partes review, Zoll Medical, exercised consistent
`
`control over Zoll Lifecore for over six years, including control of the inter
`
`partes review. Id. at 11. Specific evidence of control included Zoll
`
`Lifecor’s acknowledgment that Zoll Medical controlled 100% of Zoll
`
`Lifecor and approved Zoll Lifecor’s corporate budget and plans. Id. Other
`
`evidence of control included the fact that common counsel for Zoll Medical
`
`and Zoll Lifecor would not state affirmatively that counsel did not provide
`
`input into preparation of the inter partes reviews. Id. at 11–12. Additional
`
`evidence showed that only Zoll Medical’s management team attended court-
`
`ordered mediation in the underlying district court litigation filed against Zoll
`
`Lifecor. Id. at 12.
`
`We have no such evidence in this proceeding. ION and Petitioner are
`
`not related corporate entities. The evidence of record shows that Petitioner
`
`and ION preliminarily discussed potential remedies, relating to the product
`
`
`
`
`19
`
`
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`IPR2014-01477
`Patent 7,080,607 B2
`
`itself, not indemnification from l
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