`
` Paper 30
`Entered: April 19, 2013
`
`
`
`
`
`
`
`Trials@uspto.gov
`571-272-7822
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`MOTOROLA MOBILITY LLC
`Petitioner,
`
`v.
`
`MICHAEL ARNOUSE
`Patent Owner.
`____________
`
`Case IPR2013-00010
`Patent 7,516,484
`____________
`
`
`
`
`Before MICHAEL P. TIERNEY, JONI Y. CHANG, THOMAS L. GIANNETTI,
`and JENNIFER S. BISK, Administrative Patent Judges.
`
`GIANNETTI, Administrative Patent Judge.
`
`DECISION
`RENEWED MOTION TO WITHDRAW
`37 C.F.R. § 42.10(e)
`
`Attorneys Thomas D. Kohler and Lawrence H. Meier, of the law firm
`
`
`
`
`
`Downs Rachlin Martin PLLC (“Downs Rachlin”), have renewed their motion to
`
`withdraw from this proceeding. Paper 29 (“Mot.”). For the following reasons the
`
`motion is granted.
`
`

`

`Case IPR2013-00010
`Patent 7,516,484
`
`
`FINDINGS OF FACT
`
`
`
`Based upon the evidence of record in this proceeding the Board makes the
`
`following findings of fact:
`
`
`
`1. The Petition in this proceeding was filed by Motorola Mobility LLC on
`
`October 3, 2012. Paper 2 (“Pet.”). The patent for which inter partes review is
`
`sought is U.S. Patent 7,516,484 (the “ʼ484 Patent”). Pet. 1.
`
`
`
`2. The Petition identifies a Vermont district court action in which the ʼ484
`
`patent is being asserted against the Petitioner: Arnouse Digital Devices Corp. v.
`
`Motorola Mobility, Inc., No. 5:11-cv-00155-cr (D.Vt.). Pet. 2.
`
`
`
`3. A copy of an Amended Complaint in that Vermont action was filed by
`
`Petitioner as Exhibit 1007 in this proceeding. According to the Amended
`
`Complaint, the plaintiff in that proceeding is Arnouse Digital Devices Corp.
`
`(“ADD”), a Delaware corporation. Ex. 1007, ¶2.
`
`
`
`4. The Amended Complaint further avers that Michael Arnouse, the “sole
`
`owner” of the ʼ484 patent, has “exclusively licensed ADD under the ʼ484 Patent.”
`
`Id. ¶ 10. Further according to the Amended Complaint, “ADD’s exclusive license
`
`runs for the full term of the ʼ484 patent and includes all substantial rights in such
`
`patent, including the explicit right to sue and recover damages for infringement of
`
`the ʼ484 patent and to otherwise seek enforcement of the rights it owns under the
`
`ʼ484 patent.” Id. ¶ 11.
`
`
`
`5. The Amended Complaint is signed by the law firm Downs Rachlin,
`
`specifically, by R. Bradford Fawley and Lawrence H. Meier, as attorneys for
`
`plaintiff ADD. The complaint is dated October 3, 2011 and was filed two days
`
`later, on October 5th.
`
`
`
`6. On October 26, 2012, a document titled Arnouse Power of Attorney was
`
`filed in this proceeding Paper 9. The paper, signed by Michael Arnouse, grants
`
`
`
`2
`
`

`

`Case IPR2013-00010
`Patent 7,516,484
`
`power of attorney in this proceeding to attorneys Lawrence H. Meier and Thomas
`
`D. Kohler, and directs that all correspondence and communications be sent to Mr.
`
`Meier at Downs Rachlin.
`
`
`
`7. In the Power of Attorney, Mr. Arnouse states: “As an individual, I hereby
`
`certify that to the best of my knowledge and belief I am owner of the entire right,
`
`title and interest in and to U.S. Patent 7,516,484, and represent that I am authorized
`
`and empowered to sign as patent owner.” The Power of Attorney makes no
`
`mention of ADD or the exclusive license to ADD referred to in the Amended
`
`Complaint.
`
`
`
`8. Also on October 26, 2012, a document titled Patent Owner Mandatory
`
`Notice Information was filed in this proceeding. Paper 10. The document, signed
`
`by attorney Lawrence H. Meier, of Downs Rachlin, identifies Mr. Meier as lead
`
`counsel and Mr. Kohler as back-up counsel. The document identifies Mr. Arnouse
`
`as the real party-in-interest as “sole owner” of the ʼ484 patent. The document also
`
`identifies the district court proceeding in Vermont involving ADD as a related
`
`proceeding. There is no other mention of ADD or any mention of the exclusive
`
`license to ADD.
`
`
`
`9. On March 19, 2013, the Board held a telephone conference call. The call
`
`was initiated by Mr. Kohler to seek authorization to file a motion to withdraw as
`
`counsel. Paper 24. At the hearing the Board raised the question of ADD’s role.
`
`The parties were advised that if ADD were effectively the patent owner, ADD’s
`
`interests would have to be considered. Furthermore, as ADD is a corporation,
`
`ADD would have to be represented by counsel. After discussing the matter
`
`further, the Board authorized the motion to withdraw, instructing counsel to
`
`address the questions of identity of the patent owner, the basis for the withdrawal,
`
`and the steps taken to avoid prejudice to the patent owner’s rights.
`
`
`
`3
`
`

`

`Case IPR2013-00010
`Patent 7,516,484
`
`
`
`10. On March 26, 2013, a document entitled Motion to Withdraw as Counsel
`
`to Patent Owner was filed. Paper 25. Along with the motion, a supporting
`
`Declaration of Michael Arnouse was filed. Paper 26.
`
`
`
`11. On April 5, 2013, the Board denied the motion, without prejudice, and
`
`granted leave to file additional evidence and information in support of a renewed
`
`motion. Paper 27 (“Decision”). The Board concluded that based upon the
`
`uncontested facts of record, including the complaint in the Vermont district court
`
`proceeding, that ADD is the effective patentee and therefore the real party-in-
`
`interest in this proceeding. Thus the Board was not persuaded that Mr. Arnouse
`
`was empowered to discharge counsel.
`
`
`
`12. The Board gave Downs Rachlin ten days to submit additional evidence
`
`and renew the motion.
`
`
`
`13. On April 15, 2013, Downs Rachlin filed a document entitled Renewed
`
`Motion for Authorization to Withdraw as Counsel (Paper 29) accompanied by
`
`exhibits: two notarized letters to the Board from Mr. Arnouse (Ex. 2014, 2015).
`
`
`
`14. The first letter (Ex. 2014) is signed by Mr. Arnouse in his stated capacity
`
`as CEO of ADD, and after stating that Downs Rachlin was retained by him
`
`personally, and confirming the existence of the exclusive license, purports on
`
`behalf of ADD to discharge Downs Rachlin as counsel “to the extent it has
`
`authority to do so.” The second letter signed by Mr. Arnouse (Ex. 2015) simply
`
`states: “In my own right and as CEO/President of Arnouse Digital Devices Corp.,
`
`[Downs Rachlin] is no longer authorized to represent nor speak on behalf of me
`
`personally nor Arnouse Digital Devices Corp., in the Inter Partes Review of US
`
`Patent No. 7,516,484.”
`
`
`
`
`
`
`
`
`
`
`
`4
`
`

`

`Case IPR2013-00010
`Patent 7,516,484
`
`
`DISCUSSION
`
`
`
`
`
`Counsel may withdraw from an inter partes review proceeding only with
`
`authorization from the Board. 37 C.F.R. § 42.10(e). Under the Office’s current
`
`disciplinary rules, “a practitioner shall not withdraw from employment until the
`
`practitioner has taken reasonable steps to avoid foreseeable prejudice to the rights
`
`of the client, including giving due notice to his or her client, [and] allowing time
`
`for employment of another practitioner.” 37 C.F.R. § 10.40(a). Furthermore, in
`
`deciding a motion to withdraw, the Board will consider the effect of granting such
`
`a motion “on the economy, the integrity of the patent system, the efficient
`
`administration of the office, and the ability of the office to timely complete
`
`proceedings.” See 35 U.S.C. § 316(b). The Board will interpret its rules “to secure
`
`the just, speedy, and inexpensive resolution of every proceeding.” 37 C.F.R. §
`
`42.1(b).
`
`
`
`Our concern here is that the Mandatory Disclosures filed by Downs Rachlin
`
`did not properly identify ADD as the real party-in-interest. See Finding of Fact 8,
`
`supra. We find this difficult to comprehend, as Downs Rachlin, and specifically
`
`Mr. Meier, are counsel of record in the Vermont district court proceeding, where
`
`ADD was identified as holder of an exclusive license under the ʼ484 patent that
`
`“includes all substantial rights in such patent.” Thus, Downs Rachlin in October
`
`2011 filed a district court pleading signed by Mr. Meier naming ADD as the sole
`
`plaintiff. See Finding of Fact 4, supra. Presumably, they were aware of
`
`Fed.R.Civ.P. 17(a): “An action must be prosecuted in the name of the real party in
`
`interest.” Yet before the Board, in their October 2012 mandatory disclosures, they
`
`made no mention of the exclusive license or the grant of “all substantial rights” to
`
`ADD. Instead, the Board was provided with a carefully worded statement that Mr.
`
`
`
`5
`
`

`

`Case IPR2013-00010
`Patent 7,516,484
`
`Arnouse is the “sole owner” of the ʼ484 patent and is the real party-in-interest.
`
`Paper 10. But ownership is not the proper test for determining real-party-in
`
`interest, as the Office Patent Trial Practice Guide and the relevant authorities make
`
`clear. See discussion in our prior Decision denying the initial motion to withdraw.
`
`Paper 27 at 3. It is important for counsel to know that sole ownership is not the
`
`dispositive factor in determining real-party-in-interest.
`
`
`
`While we are concerned by that the correct real party-in-interest was not
`
`identified, we also are persuaded that Mr. Arnouse, in his capacity as CEO of
`
`ADD, has the apparent authority and right to dismiss Downs Rachlin as counsel.
`
`Accordingly, we grant them leave to withdraw. In so doing, however, we do not
`
`accept, and specifically reject, Downs Rachlin’s argument that because Mr.
`
`Arnouse is the “sole owner” of the ʼ484 patent, he (and not ADD) is entitled to act
`
`in this matter. Paper 29, Mot. at 7. This argument ignores the undisputed fact that
`
`Mr. Arnouse has effectively assigned ownership in the patent to ADD. See
`
`discussion of Sicom Sys. Ltd. v. Agilent Techs, Inc., 427 F.3d 971 (Fed. Cir. 2005),
`
`and other authorities cited in our prior Decision, Paper 27, at pp. 2-3. It also
`
`ignores Downs Rachlins’ own actions in the Vermont district court.
`
`
`
`The designation of a real party-in-interest in the proceedings before the
`
`Board should be accurate and reflect careful consideration by the parties, as it has
`
`important implications. One of these is to identify potential conflicts. Another is
`
`to assure the proper application of statutory estoppel provisions. See Office Trial
`
`Practice Guide, 77 Fed. Reg. 48756, 48759 (Aug. 14, 2012) (specifically referring
`
`to Fed.R.Civ.P. 17(a)). Counsel therefore is cautioned to look beyond the chain of
`
`title in designating a real party-in-interest.
`
`
`
`Finally, we address Mr. Arnouse’s request to appear pro hac vice. This
`
`request is denied for the following reason. The real party-in-interest in this
`
`
`
`6
`
`

`

`Case IPR2013-00010
`Patent 7,516,484
`
`proceeding is a corporation, a juristic entity that can only appear through counsel.
`
`See 37 C.F.R. § 1.31 (2012). Mr. Arnouse has chosen to license ADD exclusively
`
`under the ʼ484 patent, granting the corporation (of which he is the CEO) “all
`
`substantial rights” in the patent including the right to bring suit. But the
`
`consequence of this decision is that now a juristic entity, ADD, is the “effective
`
`patentee,” not Mr. Arnouse. See supra. While Mr. Arnouse may be the record
`
`owner of the patent, the holder of “all substantial rights” is his corporation.
`
`Therefore, he is not the holder of “all substantial rights” in the patent itself. Along
`
`with whatever benefits Mr. Arnouse receives from this arrangement come
`
`restrictions, one of which is the prohibition against a corporation representing itself
`
`in the USPTO.
`
`In view of the foregoing, it is therefore:
`
`ORDERDED that the Renewed Motion to Withdraw (Paper 29) is granted;
`
`FURTHER ORDERDED that Downs Rachlin, and attorneys Thomas D.
`
`
`
`
`
`
`
`Kohler and Lawrence H. Meier, are authorized to withdraw as counsel from this
`
`proceeding, 37 C.F.R. § 42.10(e);
`
`
`
`FURTHER ORDERED that Michael Arnouse’s request to appear pro se in
`
`this proceeding is denied; and
`
`
`
`FURTHER ORDERED that any further filings on behalf of the Patent
`
`Owner must be signed by a practitioner authorized to practice before the Board in
`
`this proceeding, and further that the Board may decline to accept any filings that
`
`are not so signed.
`
`
`
`7
`
`
`
`
`
`

`

`Case IPR2013-00010
`Patent 7,516,484
`
`PETITIONER:
`
`Ko-Fang Chang
`Steven D. Moore
`KILPATRICK TOWNSEND & STOCKTON LLP
`kchang@kilpatricktownsend.com
`smoore@kilpatricktownsend.com
`
`PATENT OWNER:
`
`Lawrence H. Meier
`Thomas D. Kohler
`DOWNS RACHLIN MARTIN PLLC
`lmeir@drm.com
`tkohler@drm.com
`
`
`
`lb
`
`
`
`
`
`8
`
`