In a decision granting in part and denying in part a petition for inter partes review (IPR), the Patent Trial and Appeal Board (PTAB) held that membership in a defensive patent aggregator does not by itself render members real parties-in-interest to proceedings brought by the aggregator. Unified Patents, Inc. v. Uniloc Luxembourg S.A., Case No. IPR2017-02148 (PTAB, Apr. 17, 2018).
Unified Patents is a defensive patent aggregator and describes itself as a "deterrence entity" that is "designed to deter NPE [non-practicing entity] activity" within certain industrial "zones." Unified Patents seeks to accomplish the "deterrence" by bringing validity challenges in proceedings before the US Patent and Trademark Office.
Unified Patents filed an IPR petition against a patent that Uniloc is asserting in district court against several of Unified Patents' members (member-defendants). In the petition, Unified Patents identified itself as the sole real party-in-interest and certified that no other party exercised or could exercise direction, funding or control over its participation in this proceeding, the filing of this petition, or the conduct of any ensuing trial. Uniloc filed a preliminary response, arguing that the petition should be denied because Unified Patents failed to identify the member-defendants as real parties-in-interest. In support of its argument, Uniloc asserted that had the member-defendants not contracted with and paid money to Unified Patents, Unified Patents would not have had the desire or the resources to file the petition against Uniloc's patent.
The PTAB rejected Uniloc' argument, declining to deny institution for failure to name all real parties-in-interest. The PTAB found no evidence that any other entity was controlling the proceeding, reasoning that the mere fact that members provide payment to Unified Patents for a subscription to its services was insufficient to show that such members were funding the instant IPR. The PTAB noted that the evidence did not show an obligation on Unified Patents' part to file an IPR petition on behalf of any member in return for payment, nor did it show that Unified Patents' members have any control over when and how Unified Patents spends the revenue received from its members. Thus, although the member-defendants contributed indirectly to the funding of the IPR and would stand to benefit from the invalidation of the challenged patent, the PTAB held that the member-defendants were not real parties-in-interest.
Practice Note: The PTAB's requirement of actual control or direct financing leaves the door open for multiple proceedings to be brought against the same patent by, for example, a district court defendant, a patent aggregator in which the defendant is a member, and investors in the defendant. As a result, various parties representing the same or similar interests are likely to bring—and patent owners may expect to face—multiple challenges to the validity of a patent.
Actual Control, Not Common Interest, Guides Real Party-In-Interest Inquiry
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