Trials@uspto.gov
`571-272-7822
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`PUBLIC VERSION-REDACTED
` Paper No. 87
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`Entered: October 5, 2017
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`RUBICON COMMUNICATIONS, LP,
`Petitioner,
`
`v.
`
`LEGO A/S,
`Patent Owner.
`____________
`
`Case IPR2016-01187
`Patent 8,894,066 B2
`____________
`
`Before SCOTT A. DANIELS, NEIL T. POWELL, and
`TIMOTHY J. GOODSON, Administrative Patent Judges.
`
`POWELL, Administrative Patent Judge.
`
`
`DECISION
`Patent Owner’s Motion to Vacate Institution Decision and Terminate
`Proceeding and Petitioner’s Motion to List Additional Parties as Real
`Parties-In-Interest
`35 U.S.C. § 312(a)(2) and 37 C.F.R. § 42.71
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`Patent 8,894,066 B2
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`Introduction
`Pursuant to our authorization, Patent Owner filed a Motion to Vacate
`Institution Decision and Terminate Proceeding. Papers 56, 571 (“Motion” or
`“Mot.”). Patent Owner’s Motion contends that the Petition in this
`proceeding does not comply with 35 U.S.C. § 312(a)(2), which states that
`“[a] petition filed under section 311 may be considered only if . . . the
`petition identifies all real parties in interest.” As a result, Patent Owner
`asserts that the Petition is incomplete, and should not be awarded a filing
`date until it is corrected to list all real parties in interest (i.e. RPIs). Mot. 15.
`Patent Owner notes that assigning a new filing date to the Petition would
`result in a statutory bar under 35 U.S.C. § 315(b). Id. Thus, Patent Owner
`asserts that the alleged omission of RPIs is fatal to Petitioner’s case, and we
`must terminate this proceeding. Id.
`Pursuant to our authorization, Petitioner filed an Opposition to Patent
`Owner’s Motion to Vacate Institution Decision and Terminate Proceeding.
`Paper 60 (“Opposition” or “Opp.”). Petitioner’s Opposition indicates that it
`does not believe it has failed to identify any RPIs, but that Petitioner
`nonetheless offers to identify additional RPIs to address Patent Owner’s
`concerns. Opp. 15. Consistent with this, and pursuant to our authorization,
`Petitioner has filed a Motion to List Additional Parties as Real Parties-In-
`Interest, which requests leave to add RPIs without assigning a new filing
`date. Paper 53, 5–6.
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`1 Paper 56 is a confidential, unredacted version of the Motion, which is
`subject to a motion to seal and available only to the parties and the Board.
`Paper 57 is a public, redacted version of the Motion, which has information
`subject to the motion to seal redacted. All citations to “Mot.” refer equally
`to Papers 56 and 57.
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`Background
`Initially, Petitioner identified “Rubicon Communications, LP” as the
`only real party-in-interest. Paper 1, 5. Pursuant to our authorization (see
`Paper 40), Petitioner filed a corrected Petition that lists “SmallWorks, LLC”
`as a real party-in-interest. Paper 41, 4 (hereafter “Petition” or “Pet.”).
`The record indicates that James and Jamie Thompson own
`SmallWorks, LLC. See Ex. 2022, 80:14–22. The record also indicates the
`Thompsons own Rubicon Communications, LLC. See id. at 83:7–84:5.
`Patent Owner contends that Rubicon Communications, LLC and the
`Thompsons constitute RPIs not identified in the Petition. Mot. 1. After
`Patent Owner previously asserted that Rubicon Communications, LLC and
`the Thompsons were unnamed RPIs, we suggested Petitioner should
`consider whether additional entities should be named as RPIs and, if so, act
`promptly. See Paper 40, 3, 5–6. Patent Owner argues that Petitioner did not
`follow our admonition to address any omissions in the named RPIs. Mot. 1–
`2.
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`Patent Owner notes that in the related district court infringement
`proceeding, there have been significant discovery and disputes regarding
`Petitioner’s corporate structure and transactions. Id. at 3. Patent Owner
`asserts that, although Petitioner contends that Rubicon Communications,
`LLC is not a necessary party to the district court proceeding, discovery
`demonstrated that the Thompsons at one time directed Rubicon
`Communications, LLC to engage in conduct accused of infringing Patent
`Owner’s patent. Id. at 4.
`Patent Owner contends that Petitioner has not maintained clear
`boundaries between Rubicon Communications, LLC and SmallWorks, LLC,
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`particularly with respect to these companies’ conduct accused of infringing
`Patent Owner’s patent. Id. at 4–6. Patent Owner notes that shortly after the
`district court proceeding was initiated, the Thompsons created SmallWorks,
`LLC. Id. at 4. Patent Owner further notes that on the same day they created
`SmallWorks, LLC, the Thompsons
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`contends that this agreement was a
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` Patent Owner
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`Patent Owner notes that the Thompsons “have operated SmallWorks,
`LLC without any employees and, instead, directed Rubicon
`Communications, LLC’s employees to fill orders for ‘SmallWorks’
`products.” Id. at 5.
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` Patent Owner argues that “[d]espite such blurring of
`corporate boundaries, James Thompson testified that SmallWorks, LLC is
`the only entity liable for any potential judgment in the related litigation.” Id.
`at 5–6. Patent Owner contends that “SmallWorks, LLC appears to be
`nothing more than a corporate shell without any employees or sufficient
`funding.” Id. at 14. In view of this, Patent Owner asserts that Rubicon
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`Communications, LLC “has exercised control over this proceeding, and
`indisputably has engaged in infringing activities.” Id.
`Patent Owner further argues that the Thompsons have exercised
`control over this proceeding, “perhaps through Rubicon Communications,
`LLC.” Id. at 10. Patent Owner asserts that the Thompsons “have had
`exclusive ownership over [Petitioner] and Rubicon Communications, LLC,”
`adding that “[a]s sole directors and officers, they also have exercised
`complete control over [Petitioner] and Rubicon Communications, LLC.” Id.
`at 14. Based on the contention that Petitioner has not maintained clear
`corporate boundaries, Patent Owner argues that Petitioner acted in bad faith
`in contending that Rubicon Communications, LLC and the Thompsons are
`not RPIs. Id. at 5–7.
` In response, Petitioner contends that it had a good faith basis for not
`identifying Rubicon Communications, LLC and the Thompsons as RPIs.
`Opp. 2–4. Following Patent Owner’s assertion that these individuals and
`entity are unidentified RPIs, Petitioner states that it reviewed the issue in
`light of Board decisions after the precedential decision Lumentum Holdings,
`Inc. v. Capella Photonics, Inc., Case IPR2015-00739, (PTAB Mar. 4, 2016)
`(Paper 38) (precedential). Petitioner asserts that review led to the conclusion
`that Rubicon Communications, LLC and the Thompsons are not RPIs.
`Id. at 3. Instead, Petitioner contends, Rubicon Communications, LLC and
`the Thompsons are related through privity to SmallWorks, LLC. Id. at 6, 12.
`Regarding Rubicon Communications, LLC, Petitioner asserts that
`“[o]n June 5, 2015, Rubicon Communications, LLC assigned all assets and
`liabilities to SmallWorks, LLC.” Id. at 2 (citing Ex. 1033 (the
`“Assignment”)). Thus, Petitioner contends that this Assignment executed
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`before this proceeding obviated any interest in this matter for Rubicon
`Communications, LLC. Id. at 2–3.
`Regarding the Thompsons, Petitioner explains that it noted Board
`cases have held that individuals’ ownership of an entity does not necessarily
`render those individuals RPIs. Id. at 3 (citing Enovate Medical, LLC v.
`Intermetro Industries Corp., Case IPR2015-00301, slip op. 9 (PTAB
`May 11, 2016) (Paper 50); 1964 Ears, LLC v. Jerry Harvey Audio Holding,
`LLC, Case IPR2016-00494, slip op. 6–7 (PTAB July 20, 2016) (Paper 21)).
`Petitioner also notes that prior Board decisions indicate that a Petitioner’s
`executives and board members are not necessarily RPIs, even if named as
`co-defendants in a related case. Id. (citing Zero Gravity Inside, Inc. v.
`Footbalance System Oy, Case IPR2015-01769, slip op. 26 (Feb. 12, 2016)
`(Paper 17)).
`Petitioner maintains that it did not have bad faith or engage in
`misdirection or concealment. Id. at 4–6. Petitioner asserts that reasonable
`minds may differ on the identities of RPIs, and that its disagreement with the
`Patent Owner on the issue does not evince bad faith. Id. at 5.
`Petitioner also contends that it did not attempt to circumvent estoppel
`rules. Id. at 12. Petitioner asserts that Rubicon Communications, LLC and
`the Thompsons are clearly related to SmallWorks, LLC through privity. Id.
`at 12–14. Accordingly, Petitioner notes, estoppel would apply to Rubicon
`Communications, LLC and the Thompsons without identifying them as
`RPIs. Id.
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`Discussion
`The requirement in § 312(a)(2) for the Petition to identify all real
`parties in interest is important and serves the following “core functions”:
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`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.
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48759 (Aug. 14,
`2012). The requirement of § 312(a)(2), however, is not jurisdictional, nor
`does it prevent correction of the identification of real parties in interest in the
`Petition. Lumentum at 4–5. Indeed, in our view, absent any indication of an
`attempt to circumvent estoppel rules, a petitioner’s bad faith, gamesmanship,
`or prejudice to a patent owner caused by the delay, permitting a petitioner to
`amend challenged RPI disclosures while maintaining the original filing date
`promotes the core functions described in the Trial Practice Guide, while also
`promoting “the just, speedy, and inexpensive resolution of our proceedings.”
`37 C.F.R. § 42.1; see Elekta, Inc. v. Varian Medical Systems, Inc. Case
`IPR2015-01401, slip op. 9 (PTAB Dec. 31, 2015) (Paper 19).
`We are not persuaded that Petitioner’s prior omission of Rubicon
`Communications, LLC and the Thompsons as RPIs resulted from an attempt
`to circumvent estoppel rules, bad faith, or gamesmanship. Patent Owner’s
`concerns focus principally on the relationship of Rubicon Communications,
`LLC, SmallWorks, LLC, and the Thompsons to one another and the
`infringement contentions in the district court proceeding. For example,
`Patent Owner rests its concerns of misconduct heavily on evidence regarding
`which entities sold and/or assisted with the sale of products accused of
`infringing, potentially suggesting attempts to avoid liability for
`infringement. See, e.g., Mot. 4–6, 11–13. We recognize that the actions of
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`the entities with respect to proceedings other than this one has some bearing
`on the general relationship between those entities. At the same time, as prior
`Board decisions have noted, “RPI is the relationship between a party and a
`proceeding,” specifically this proceeding; “RPI does not describe the
`relationship between parties.” E.g., Aruze Gaming Macau, Ltd. v. MGT
`Gaming, Inc., Case IPR2014-01288, slip op. 11 (PTAB Feb. 20, 2015)
`(Paper 13).
`Patent Owner only speculates about the relationship of Rubicon
`Communications, LLC to this proceeding. For example, Patent Owner
`asserts that Rubicon Communications, LLC may have
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`Considering the limited evidence of Rubicon
`Communications, LLC actually or potentially participating in the conduct of
`this proceeding, we are not persuaded that Petitioner’s decision to omit
`Rubicon Communications, LLC as an RPI stemmed from an attempt to
`circumvent estoppel rules, bad faith, or gamesmanship.
`Additionally, consistent with Petitioner’s contentions, the language
`within the four corners of the Assignment from Rubicon Communications,
`LLC to Smallworks, LLC expressly transfers “all assets, business, property
`and rights, whether tangible or intangible” and “all obligations.” Ex. 1033,
`1. This occurred nearly a year before Petitioner filed the Petition, providing
`some basis for Petitioner to believe Rubicon Communications, LLC does not
`constitute an RPI to this proceeding. See id. Some of the evidence cited by
`Patent Owner, such as
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` and the timing of the agreement relative to events in
`the district court litigation, may raise some question about the actual purpose
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`and effect of the assignment. Nevertheless, the assignment on its face
`furnishes a reasonable basis for Petitioner’s determination that Rubicon
`Communications, LLC was not an RPI due to the transfer of all of its assets
`and obligations to SmallWorks, LLC.
`We are also unpersuaded that an attempt to circumvent estoppel rules,
`bad faith, or gamesmanship led to Petitioner’s omission of the Thompsons
`from the list of RPIs. The current record reflects that the Thompsons are the
`owners and officers of both Rubicon Communications, LLC and
`Smallworks, LLC. See, e.g., Mot. 4. Whether a non-party is a real party in
`interest is a highly fact-dependent question. Trial Practice Guide at 48759.
`As Petitioner notes, prior Board decisions have explained that an individual
`who is not an RPI can own and serve as an officer of a Petitioner. See, e.g.,
`Enovate at 9; Zero Gravity at 26; 1964 Ears at 6–7. Also consistent with
`Petitioner’s observations, no Board precedent establishes that an
`owner/officer of an RPI paying for an inter partes review necessarily makes
`the owner/officer an additional RPI. See, e.g., 1964 Ears at 6–7. Given this
`and the lack of clear evidence that the Thompsons participated in this
`proceeding in an individual capacity, rather than as the officers of
`Smallworks, LLC, we are not persuaded on this record that Petitioner’s
`decision to omit the Thompsons as RPIs stemmed from misconduct.
`Because we are not persuaded that Petitioner’s omission of Rubicon
`Communications, LLC and the Thompsons resulted from an attempt to
`circumvent estoppel rules, bad faith, or gamesmanship, we determine it will
`serve the core functions of § 312(a)(2) to allow Petitioner to name these
`entities as RPIs, without assigning a new filing date to the Petition.
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`Accordingly, Patent Owner does not persuade us that we should vacate our
`Institution Decision and terminate this proceeding.
`Conclusion
`Based on the foregoing, it is hereby
`ORDERED that Patent Owner’s Motion to Vacate Institution and
`Terminate Proceeding is denied;
`FURTHER ORDERED that Petitioner’s Motion to List Additional
`Parties as Real Parties-In-Interest is granted;
`FURTHER ORDERED that Petitioner shall file a newly corrected
`Petition differing from the currently operative Petition only in the addition of
`James Thompson, Jamie Thompson, and Rubicon Communications, LLC as
`real parties-in-interest; and
`FURTHER ORDERED that the June 10, 2006 filing date of the
`Petition shall remain unchanged.
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`PETITIONER:
`Dean Munyon
`Anthony Petro
`Chris Thompson
`Ryan Beard
`Eric B. Meyertons
`Brian Mangum
`Geoffrey Heaven
`MEYERTONS, HOOD, KIVLIN, KOWERT & GOETZEL, P.C.
`dmunyon@intprop.com
`tpetro@intprop.com
`cthompson@intprop.com
`rtbpto@intprop.com
`emeyertons@intprop.com
`bmangum@intprop.com
`gheaven@intprop.com
`
`
`PATENT OWNER:
`Andrew Riddles
`Elizabeth Alquist
`Howard Grossman
`DAY PITNEY LLP
`ariddles@daypitney.com
`eaalquist@daypitney.com
`hgrossman@daypitney.com
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