In Application in Internet Time v. RPX, the Federal Circuit vacated inter partes review (IPR) decisions invalidating two US patents because the Patent Trial and Appeal Board (PTAB) applied an unduly restrictive test for determining whether an entity (i.e., a RPX member) is a real party in interest within the meaning of 35 U.S.C. § 315(b) and failed to consider the entire evidence in assessing whether § 315(b) barred institution of the IPRs filed by RPX.
The Federal Circuit stated the PTAB erred in not further investigating whether the RPX member was the real party in interest even though RPX had communications back and forth with the RPX member and received a large payment from the RPX member just before the IPR petitions were filed.
In short, a defendant in a patent infringement suit that waits more than one year after being served is time barred from filing an IPR. 35 U.S.C. § 315(b). Thus, a defendant that is a member of an organization that files IPR to avoid the one year time bar might expect that PTAB will permit discovery on the relationship between the organization and the defendant to see if the defendant is a real party in interest and the organization is its proxy. The discovery may encompass the communications and the funding of the organization. Once the facts are ascertained it may affect the final IPR decision. Thus, a defendant should expect that it needs to file an IPR petition within one year of being sued rather than rely on a third party organization which may be held to be its proxy.
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