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Applications in Internet Time, LLC v. RPX Corp.

“Real Party in Interest,” for IPR Time-Bar Purposes, Has Expansive Common-Law Meaning

Applications in Internet Time, LLC v. RPX Corp., __ F.3d __, 2018 WL ___ (Fed. Cir. July 9, 2018) (O’MALLEY, Reyna (concurring), Hughes (joining in the judgment)) (PTAB) (4 of 5 stars)

Fed Cir vacates final IPR decisions of unpatentability due to obviousness. The Board erred in its assessment of whether RPX was time-barred in filing IPR petitions against two AIT patents. The opinion includes a lengthy review of the statutory language and history, concluding that Congress unambiguously intended “that the term ‘real party in interest’ [in the context of § 315(b)] have its expansive common-law meaning.” Op. at 25. The opinion emphasizes that this may include anyone possessing the right to enforce a particular claim, quoting Wright & Miller § 1543. Op. at 20. For purposes of IPR, this may include whomever, “from a practical and equitable standpoint, will benefit from the redress that the chosen tribunal might provide.” Id. at 23. The Board, in considering whether RPX was acting as a proxy for its client Salesforce.com, undertook an “impermissibly shallow” review of the evidence as to how RPX relates to its clients, including Salesforce.com. The opinion notes that such evidence “impl[ies] that RPX can and does file IPRs to serve its clients’ financial interests, and that a key reason clients pay RPX is to benefit from this practice in the event they are sued by an NPE.” Op. at 27. The opinion also expresses concern that the Board may have impermissibly placed the burden of persuasion on AIT, rather than RPX, for certain issues. Per Zurko, 527 U.S. 150 (1999), and Chenery, 318 U.S. 80 (1943), vacatur was warranted to guard against arbitrary or capricious decision-making by the Board. The opinion also notes “several other legal theories described in Wright & Miller” that may affect the real party-in-interest inquiry relating to how an agency relationship may arise by acquiescence or estoppel. On remand, the Board should reexamine the full record in view of such principles.

Concurrence: Judge Reyna reasons that, in addition to the defects relating to the real party-in-interest inquiry, the Board also failed to fully analyze privity considerations.

KEYWORDS: INTER PARTES REVIEW; REAL PARTY IN INTEREST; PRIVITY