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IP Alert: Section 315(b) Time-Bar Does Not Apply Absent "Right to Control"

May 3, 2018

In Wi-Fi One, LLC v. Broadcom Corp., the Federal Circuit ruled en banc that section 315(b) time-bar determinations made by the Patent Trial and Appeal Board (PTAB) in inter partes review (IPR) proceedings are appealable. As discussed in our earlier alert on that case, the en banc court remanded the case to a Federal Circuit panel to consider whether Broadcom’s IPR petition was time-barred under 35 U.S.C. § 315(b). On April 20, 2018, the panel affirmed the PTAB’s holding that Broadcom’s IPR petition was not time-barred, upholding the PTAB’s “right to control” standard. Specifically, the court held that a third party will not be deemed to be in privity with a litigation defendant unless the third party had a right to control the litigation.

The patents at issue were previously litigated in Ericsson, Inc. v. D-Link Sys., Inc. There the district court found infringement of three patents owned by the plaintiff, Ericsson. After the court entered judgment, and more than one year after D-Link was served, a third party, Broadcom, petitioned for IPR of all three patents. Broadcom was the manufacturer of some of the components of D-Link’s products, but was not itself a defendant in the district court litigation.

At the PTAB, the patent owner (now Wi-Fi One) argued that Broadcom was barred from the IPR filing under section 315(b). There was no question that the petition was filed more than one year after the complaint in the Ericsson case was served on D-Link, but the parties disputed whether Broadcom was in privity with the D-Link defendants. Under section 315(b), “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” Wi-Fi One argued that Broadcom should be barred because Broadcom was in privity with the defendants in the district court case.

In the remanded decision, the Federal Circuit panel disagreed. Wi-Fi One argued that the PTAB had applied an overly rigid legal standard for determining privity between Broadcom and D-Link by requiring that Broadcom exercised control over the prior Ericsson litigation. Instead, Wi-Fi One claimed, Broadcom was in privity with D-Link by virtue of (1) an indemnity agreement between Broadcom and D-Link, and (2) an amicus curiae brief filed by Broadcom in the prior Ericsson litigation. The Federal Circuit panel disagreed and held that the “right to control” was indeed the correct standard. Neither the indemnity agreement nor the filing of the amicus curiae brief was sufficient to show that Broadcom had exercised control in the prior litigation. The Federal Circuit also considered confidential evidence submitted by Broadcom demonstrating the absence of control over the lawsuit.

Wi-Fi One further argued that the PTAB had improperly denied its request for additional discovery that might have demonstrated privity between Broadcom and D-Link, and that the PTAB had failed to provide an adequate basis for its ruling. The Federal Circuit panel rebuffed these arguments, concluding that the PTAB’s discovery order was not an abuse of discretion and that the PTAB’s rulings were adequately supported.

In a dissenting opinion, Judge Reyna argued that the legal standard for finding privity applied by the majority was improperly narrow. Specifically, Judge Reyna would have required the PTAB to have considered a broader range of factors to determine whether the parties were in privity, as enumerated by the courts in other contexts.

This case is relevant for anyone planning to file an IPR petition where prior-served litigation involving the petitioned patent also involves a party in privity with the petitioner. Evidence proving that the petitioner had a right to control the prior litigation or would be bound by the prior litigation could lead to a time-bar where the petition is filed more than one year after the party in privity is served in the litigation.

For more information on this decision, please contact Fitch Even partner Thomas F. Lebens, author of this alert.

Fitch Even law clerk Evan Kline-Wedeen contributed to this alert. 

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