Director Demonstrates Ability to Review Non-Dispositive PTAB Determinations

By Ashvi Patel, Adam J. Cook,* and Josh Nightingale –

On May 16, 2023, Director Katherine Vidal vacated a portion of a final written decision regarding real parties in interest (“RPIs”) in Unified Patents, LLC v. Memory Web, LLC, IPR2021-01413.  Director Vidal held that the Patent Trial and Appeal Board (“PTAB”) improperly determined whether Apple and Samsung were RPIs in addition to Petitioner Unified Patents (“Unified”) in the inter partes review (“IPR”) proceeding.

On September 9, 2021, Unified petitioned for IPR of MemoryWeb’s U.S. Patent No. 10,621,228 (“the ‘228 Patent”).  The ‘228 Patent relates to a computer-implemented method of organizing and searching digital files using digital tags.  In response, MemoryWeb asserted that Unified should have named Apple and Samsung as RPIs in the petition, and Unified’s failure to do so necessarily implicated institutional denial.  Apple and Samsung are members of Unified, and MemoryWeb pointed to Unified’s practice of attacking patents that its members are accused of infringing.

An RPI is “the party or parties at whose behest the petition has been filed.”  77 Fed. Reg. 48756, 48759.  “In other words, if a nonparty can influence a petitioner’s actions in a proceeding before the Board, to the degree that would be expected from a formal copetitioner, that nonparty should be considered an RPI to the proceeding.”  Aruze Gaming Macau, Ltd. v. MGT Gaming, Inc., IPR2014-01288, Paper 13 (PTAB Feb. 20, 2015).  This is especially relevant when a non-party is estopped or is time barred from filing an IPR under 35 U.S.C. § 315(b), which places a mandatory time bar for filing an IPR petition one year after any RPI is served with an infringement suit involving the challenged patent.

The apparent impetus of the IPR proceeding was Memory Web’s district court proceeding against Apple and Samsung for patent infringement.  The district court proceeding was filed less than one year before Unified filed its IPR petition.  Therefore, neither § 315(b) nor any other estoppel or time bar would have precluded Apple or Samsung from petitioning for IPR on its own.  Ultimately, the PTAB instituted IPR.

However, six days before filing its final written decision (where it found that the challenged claims were unpatentable), the PTAB ordered Unified to identify Apple and Samsung as RPIs to the IPR, stating that Unified had failed to show that Apple and Samsung were not RPIs.  The PTAB found that Apple and Samsung were members of Unified, and that Unified had “a long-term, established, mutually beneficial relationship with its members.”  Unified appealed the RPI determination by requesting precedential panel review and Director review.  Unified argued that Apple and Samsung’s due process rights were violated when the PTAB made an RPI determination (1) without a time bar or estoppel issue and (2) without Apple and Samsung’s participation.

In her decision granting Director review, Director Vidal vacated the PTAB’s RPI order.  Director Vidal cited the precedential SharkNinja Operating LLC v. iRobot Corp case, which held that “it best serves the [USPTO’s] interests in cost and efficiency to not resolve an RPI issue when ‘it would not create a time bar or estoppel under 35 U.S.C. § 315.’”  IPR2021-01413, Paper 74 (PTAB May 16, 2023).  Director Vidal further held that “[t]he Board can and should make a determination of the real parties in interest or privity in any proceeding in which that determination may impact the underlying proceeding.”  In this case, the Apple and Samsung RPI determination would not affect the underlying IPR proceeding and could only impact wholly separate IPR proceedings brought by Apple and Samsung.  Thus, Director Vidal found that the PTAB erred in considering the RPI issue in this proceeding brought by Unified.

Takeaway:  This case exemplifies how Director review can be used to evaluate non-dispositive PTAB determinations.

* Adam is a summer associate in Jones Day’s Pittsburgh office.