PTAB Focuses on IPR Control to Determine RPI

By Marc Blackman –

In three related final written decisions, the PTAB ruled that Bayer Healthcare (“Bayer”) was not a real party in interest (“RPI”) to IPR petitions filed by NOF Corporation, even though Bayer had a business relationship with NOF and stood to benefit from the IPR proceedings.  NOF Corporation v. Nektar Therapeutics, IPR2019-01394, Paper 22 (PTAB Feb. 5, 2020); IPR2019-01397, Paper 24 (PTAB Feb. 10, 2020), IPR2019-01398, Paper 17 (PTAB Feb. 12, 2020).

Nektar Therapeutics had challenged NOF’s IPR petitions contending that NOF failed to identify Bayer as an RPI.  Nektar contended that the petitions were now time barred under 35 U.S.C. § 315(b) and should be dismissed.  Citing the Federal Circuit’s precedential Applications in Internet Time (“AIT”) decision, Nektar argued that Bayer is an RPI because Bayer “is a clear beneficiary that has a preexisting, established relationship with the petitioner.”  The PTAB acknowledged that AIT’s broad statement of what constitutes an RPI is accurate.  But the PTAB stated that the Federal Circuit clarified that the relationship must be of such a nature that the petitioner is representing the non-party’s interests or that the petition was filed at the behest of the non-party.

Consequently, despite NOF and Bayer’s long-standing business relationship and the fact that Bayer would benefit from the IPRs, the PTAB considered whether NOF represented Bayer’s interest in the IPRs, or NOF filed the petitions at the behest of Bayer.  The PTAB focused on whether Bayer directed or controlled the filing of the petitions in finding that NOF did not represent Bayer’s interests.  In particular, the PTAB found that there was no evidence that Bayer funded or was involved in the IPR proceedings.  The PTAB also noted that Bayer was not time barred from filing its own petitions in finding that NOF did not file the petitions at the behest of Bayer.

Although the PTAB concluded that Bayer was not an RPI, the PTAB went on to state that, even if Bayer were an RPI, the PTAB would have allowed NOF to amend its identification of RPIs while maintaining the original filing date.  The PTAB found that neither NOF nor Bayer were seeking to circumvent any time bar, NOF was not engaged in gamesmanship, and Nektar would not be prejudiced.

This decision is another example of the PTAB focusing on the “direction or control” test to determine RPIs, despite the Federal Circuit’s “clear beneficiary” test.