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`48756
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`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 (AJA) 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
`AJA 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 pub.Uc on the genera l framework of
`the regularlom. including the slru cture
`and times for toking oclion in each of
`the new proc:eedit1gs.
`DATES: Effective Date: This practice
`guide applies to inter partes review,
`post-grant review, and covered business
`method patent review proc eedings
`commencing on or after September 16,
`2012, as well as derivation proc eedings
`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
`slreum lin ing and converging th
`issues
`for decision. In do.ing so, tho Office' s
`goal is to conduct pro ceedings in a
`thn ly. fair, and efficie nt manm ir.
`Further , the Office has designed the
`proc eed ings to allow each party to
`determine the preferred manner of
`putting forward its case, subject to the
`guidance of judges who determine the
`1rneds ofa pa1ticular case through
`procedural and su.bstanlive rulings
`throughout the proceedings .
`Background: The Leahy-Smith
`Amorico Invents Act establi shes several
`new trial proceedings to be conducted
`by the Board including : (1) Int er partes
`review (IPR); (2) post-grant review
`
`(PGR); (3) a tran sitional program for
`covel'ed business method patents
`(CBM) ; and (tl) derivation proceedings.
`The AJA 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 requ ested written comm ents
`011 the Office's proposed
`impl emontation of th new trial
`proceedings of the AIA. The Office also
`hosted r1 series of pub lic educatio nal
`roadshows, across the country,
`regarding the proposed rules.
`Addilionolly, 1h, Offic published a
`pra tico gujde based on the propos ed
`trial I'll Jes 'in the Federal Register to
`provid e Uw publi c an opportuni
`ty to
`comment. Pmcti ce Guide for Proposed
`'/'rial nu/es , 77 FR 686/l (Feb. 9, 2012)
`(Requ,~st for Comments) (herea fter
`"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 mgauizations .
`busin esses. law firms. patent
`pra·ct ilioners, and others, including a
`United States senator who w;is a
`principal author of section 18 of the
`AIA. Th e 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 requir ements and
`considerations, such as the effect of the
`regu lations on lhe economy. U1e
`inl egrily of the pat ent system, Lhe
`oHiciont 11dministralion o f the Office,
`and the ab ility of the Offi e to compl ete
`lhe proceedings limely.
`For 1he impl emenlation of soctions 3,
`6, 7, an<l 18 of lhe AJA that aro r lated
`to administrative
`trials and judicial
`review of Board decisions , the Office is
`publishing the following final rules in
`separat e notices in the Federal Register :
`(1) Rules of Practice for Trials before the
`
`of
`
`Patent Trial and Appeal Board and
`Judicial Review of Patent Trial and
`Appeal Board Decisions (RIN 0651-
`AC7U); (2) Changes to lmplemenl Tnl r
`Pnl'tes Review Proceedings, Post-Gmnt
`Review Proceedings, and TransiLio110/
`Program for Covered Business Method
`Patents (RIN 0651-AC71); (3)
`Transitional Program for Covered
`Business Method Patents-Definitions
`Covered Business Method Patent and
`Technological Invention (RIN 0651-
`AG75): and (4) Chcmges to Implement
`Derivatio11 Proceedings (RIN 0651-
`AC74). The
`ffica 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
`1·clatcd to tlie new AlA trinl pl'o edings
`anrl lhe Office Patent Trial Prnctice
`Guide in the Federal Register
`concurrently. Due to certain limitations,
`how ever , the Office Patent Trial Practice
`and the specific final rule for derivation
`proc eedings will be published
`in the
`Federal Register after the other final
`rules. ln pa:rlicular, lhe specific rules for
`derivnlion, i.e.,§§ 42.404 through
`42.412, will be published al a later date .
`Statuto1y Requirements: The AJA
`provides certain minimum requirements
`for each of the new proceedings.
`Provided below is a brief overvi ew of
`these requirements.
`Proceedings begin with the filing of a
`petition to institute a trial. The petition
`must be filed with th e Board consistent
`with ony time period requfred 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
`nfforded an opportunity
`to file a
`prelimi nary 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 th e standards
`for instituting the requ steel trial are met
`taking into acco unt any pr elimiaary
`rosponse filed by the paten t own e.r.
`Conversely, th Board may not
`aut hori ze a trial where the inform ation
`presented in the petition, taking into
`account any patent owner pr eliminary
`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
`matt ers in th e Office involving the same
`patent, the Board may dete rmin e how
`
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`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.
`the AIA mandates the
`Additionally,
`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
`is filed. See, e.g., 35 U.S.C.
`termination
`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 Oveiview 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
`
`the trial to proceed only on
`authorizing
`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
`See §42.71(d) and (c).
`misapprehended.
`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:
`
`Pelllion
`Flied
`
`PO
`Preliminary
`Response
`
`Decision
`on
`Pellllon
`
`PO ResponM
`& Mallon lo
`Amend Claims
`
`Pelilioner
`Reply lo
`PO Response
`& Opposition
`lo Amendment
`
`PO Reply
`lo Opposition
`to Amendment
`
`Orel
`Hearing
`
`Final
`Written
`Decision
`
`e--+e:==e--+e--+e---+e e--+e
`
`3 months
`
`3 monlhs
`
`3 months
`
`3 monlhs
`
`1 monlh
`
`Httaring Set
`on Request
`
`PO
`Discovery
`Period
`
`Petitioner
`Discovery
`Period
`
`PO
`Discovery
`Period
`
`Period for
`Observations
`& Motions to
`Exdude Evidence
`
`No more than 12 moolhs
`
`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
`
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`48758
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`Federal Register/ Vol. 77, No. 157 / Tuesday, August 14, 2012 /Rules and Regulations
`
`to
`owner's respons e and an opposition
`an amendment,
`the patent owner may
`depose th e petitioner's declarants and
`file a reply in support of its claim
`amendments. Where the patent owner
`relies upon new declaration evid ence in
`support of its amendments,
`the
`petitioner will be authoriz ed 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
`am endment. Both parties will then be
`permitted an opportunity
`to file motions
`to exclud e an opponent's evidence
`believed to be inadmissibl e. After all
`motions have be en filed, the parties will
`be afforded an opportunity
`to hav e an
`oral argument at the Board.
`Summa1y of the Rules : The following
`is a general summary of th e rules for the
`proceedings.
`I. General Procedures
`The rules are to be construed so as to
`ensure th e just, speedy, and inexpensive
`resolution of a proceeding and, where
`appropriat e, the rules may be modified
`to accomplish these goals. § 42. l(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 proc eedings, inter
`partes revi ews, and post-grant reviews.
`The Board also conducts the transitional
`program for covered business method
`reviews. which ar e 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
`th erefore will hav e exclusive
`jurisdiction within the Office ov er every
`application and p atent that is involved
`in a deriv ation , IPR, PGR, or CBM
`proceeding. Ex parte reexamination
`proceedings and inter partes
`reexamination pro ceedings are not
`"involv ed" patent s (as defined in§ 42.2)
`in derivation, IPR, PGR, and CBM
`
`proceedings and are thus treat ed
`separat ely exc ept as ordered by the
`Board .
`2. Prohibition on Ex Porte
`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 parle communications
`does not extend to: (1) Ministerial
`communications with support staff (for
`instance, to arrange a conference call) ;
`(2) conference calls or hearings in whi ch
`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
`pend ing case or referring to a pending
`cas e to illustrate a systemic problem).
`AJTa11ging a conf erenc e call with the
`Board. The Board encourages the use of
`conference calls to rais e 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. Wh en arranging a
`confer ence call , parties should be
`prepared to discuss with a Trial Section
`paralegal why the call is needed and
`wha l materia ls ma be needed during
`the call, e.g., a part icular exhibit.
`Refusal to parti cipate. 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 (cid:173)
`up counsel who can conduct business
`on behalf of th e lead counsel, as
`instan ces may arise where lead counsel
`may be unavailable. § 42.1 O(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. lO(b).
`Pro hoc vice . The Board may
`recognize counsel pro hoc vice during a
`proce eding upon a showing of good
`caus e , and subj ect to th e requirement
`that lead couns el is a registered
`practitioner. § 42.1 O(c). The Board may
`impos e other considerations as well. Id.
`Proce edings before th e Office can be
`technically complex. For example, it is
`
`to a patent
`exp ected that amendments
`will be sought. The grant of a motion to
`app ear pro hoc vice is a discretionary
`action taking into account the specifics
`of the proceedings. Similarly, the
`revocation of pro hoc vice is a
`discr etionary action taking into account
`various factors, including
`to abide
`incompetence, unwillingness
`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
`wh en 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
`
`Electroni c filing is the default manner
`in which documents are to be filed with
`the Board. § 42.B(b). Electronic filing of
`legal docum ents 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 mnnagemcmt system
`for the Office and parties. The manner
`of submission will be established by the
`Board. Th e 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). Bas ed
`upon experi ence with cont ested cases,
`the Board does not expect to receive
`many requests to file paper submissions.
`Circumstanc es wher e a pap er filing may
`be warranted
`include those occasions
`wh ere the Office's electronic filing
`system is unable to accept filings.
`Alt ernativ ely, if a problem with
`ele ctronic filing ari ses during normal
`business hours, a party may contact the
`Board and request a one-day extension
`of time for due dat es that ar e set by rule
`or orders of the Board. § 42.5. In the
`unlikely event that an administrativ e
`pat ent judg e is not availabl e to rul e on
`th e extensi on, the Board may grant an
`ext ension th e day after the paper is due,
`whi ch includes situations where
`electronic filing problems ar e shown to
`have occurr ed.
`
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`to
`
`D. Mandatory Notices
`The rules requir e that parties to a
`proceeding provide certain mandatory
`notices, including
`identification of th e
`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 fil e
`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(cid:173)
`interest" and "privies" requirement
`assist m embers 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 ar e promptly raised and vetted.
`Cf Fed. R. Civ. P. 17(a) (Advisory
`Committee Note to 1966 Am endment to
`Rule 17(al) ("[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(cid:173)
`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(cid:173)
`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
`and "privy." See, e.g.,
`party-in-interest"
`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 describ e relationships and
`considerations
`sufficient to justify
`applying conventional principles of
`estoppel and preclusion. Ac cordingly,
`courts hav e avoid ed rigid definitions or
`recitation of nec essary factor s.
`Similarly , multipl e Federal Rul es
`invok e th e terms without att empting 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
`in the
`application of similar principles
`inter partes reexamination context offers
`additional guidan ce . See generally In re
`Guan et al. Inter Portes Reexamination
`Proceeding, Control No. 95/001,045,
`Decision Vacating Filing Dat e (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 be en sued for infringing
`the subject patent, or been charged with
`infringement under that patent.
`The notion of "privily"
`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 evaluat e what
`parties constitute "privies"
`in a mann er
`consistent with the flexible and
`equitabl e considerations
`established
`under federal cas elaw. Ultimately, that
`analysis seeks to determine whether th e
`relationship betw een the purported
`"privy" and the relevant oth er party is
`sufficiently clos e such that both should
`be bound by the trial outcom e and
`related estoppels. This approach
`is
`consistent with the legislative history of
`the AIA, which indicates that Congress
`includ ed "privies" within the parties
`subject to the statutory estoppel
`provisions
`in an effort to capture "th e
`doctrin e' s practical and equit able
`natur e, " in a mann er akin to collateral
`estopp el. In that regard, th e legislativ e
`history endorsed th e expression of
`"privy" <1S 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. Privily is essentially a
`shorthand statement that collateral estoppel
`is to be applied in a given case; there is no
`universally applicable definition of privily.
`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 estoppal.
`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 "privily 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. Ky!).
`There are multiple factors relevant to
`the question of whether a non-party may
`be recognized as a "real party-in(cid:173)
`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 fram ework [for the
`decision] , not to establish a definitive
`taxonomy"). A common consideration
`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 degre e 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
`& Mill er section 4451 ("The measure of
`control by <1 nonparty that justifies
`preclusion cannot be defined rigidly.").
`Accordingly,
`th e rules do not enumerate
`particular factors regarding a "control"
`theory of "real party-in-inter est" or
`"privy" under th e statute.
`Addition<1lly, many of the same
`considerations
`that apply in the context
`of "res judicata" will likely apply in the
`
`is
`
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`
`and Regulations
`
`"real party-in-inter est" or "privy"
`cont exts . See Gonzolez, 27 F.3d at 759 ;
`see generolly Wright & Miller section
`4451. Other considerations may also
`apply in the uniqu e context of statutory
`estopp el. 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 Schle cht Inter Portes
`Reexamination Proceeding, Control No.
`95/001,206, Decision Dismissing
`Petition, at 5 (June 22, 2010); In re Guan
`Inter Portes 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(cid:173)
`interest" or "privy." Some fact(cid:173)
`combinations will gen erally 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 proc eeding constitut es a
`"real party-in-interest,"
`even if that
`party is not a "privy" of the petitioner .
`But wh ether something less than
`complete funding and control suffices to
`justify similarly treating the party
`requir es consideration of the pertinent
`facts. See, e.g., Cal. Physicians, 163
`Cal.App.4th at 1523-25 (discussing the
`role of control in th e "privy" analysis,
`and observing that "pr eclusion can
`apply even in the abs ence 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
`gen erally a party do es not become a
`"r eal party-in-interest" or a "privy" of
`the petitioner merely through
`association with anoth er party in an
`unrelated endeavor, slight alterations
`the facts, as well as consideration of
`other facts, might result in a different
`conclusion. So, for example, if Trad e
`Association X files an IPR petition,
`Party A does not becom e a "real party(cid:173)
`in-inter est" or a "privy " of the
`Association simply based on its
`memb ership in the Asso ciation.
`Similarly, if Party A is part of a Joint
`Defens e Group with Party B in a pat ent
`infring ement suit , and Party B files a
`PGR pe tition, Party A is not a "real
`party-in -interest" or a " privy" for th e
`purpo ses of the PGR p etition based
`sol ely on its participati on in that Group.
`That is not to say that Party A's
`m emb ership in Trad e Ass ociation X, or
`the Joint Defense Group , in those
`
`in
`
`scenarios is irrelevant to the
`determination; deeper consideration of
`the facts in the particular cas e 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 itse