1. IIPI/BNA AIA Post-Grant Patent Practice Conference Session V. Estoppel and Privity in US PTO Post-Grant Proceedings Jennifer Bailey David CavanaughFebruary 20, 2013 1

2. Estoppel and Privity at the PTO Introduction Estoppel - Privity When does issue arise? What factors are important? How is the issue resolved Practice tips Evaluating Privity Arguing Estoppel Mock Arguments2 3. Estoppel Privity in IPR IPR must be filed within a Year of service of a complaint - 35 U.S.C. 315(b) provides: An 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.An IPR filed outside the year of service is not permitted by the statuteApplies to Petitioner, real party in interest and those in privity with the petitionerThe issue of privity arises when Patent Owner seeks to prevent an IPR based on the one year rule 3 4. Estoppel Privity in CBM CBM requirement person may not file a petition for a Covered Business Method Patent Review unless the person or the persons real party in interest or privy has been sued for infringement of a patent or has been charged with infringement under that patent. (18 (a)(1)(B) of the AIA).Suit or being charged with infringement requiredThe issue of privity arises when Petitioner desires standing and relies on a privity who was sued or charged with infringement for standing 4 5. Real Party-in-Interest and Privy The core functions of the real party-in-interest and privies requirement to assist members of the Board in identifying potential conflicts, and to assure proper application of the statutory estoppel provisions Helps protect PO from successive petitions Prevents Parties from having a second bite at the apple Protects the integrity of both Federal Courts and USPTO by assuring all issues vetted The USPTO will apply traditional common law principles with these goals in mind and parties will be well-served to factor in these considerations when determining whom to identify 5 6. Real Party-in-Interest and Privy Whether a party who is not a named participant in a given proceeding nonetheless constitutes a real party-in-interest or privy to that proceeding is a highly fact-dependent question. See generally Taylor v. Sturgell, 553 U.S. 880 (2008) Handled by PTAB on a Case-by-case basisPTAB will take into consideration how Courts have viewed privity and real party-in-interestBoard provides no definitive list or taxonomy for determining privity6 7. Real Party-in-Interest and Privy Real Party-in-Interest The spirit of the formulation in the statute as to IPR and PGR proceedings means that, at a general level, the real party-in-interest is the party that desires review of the patent The real party-in-interest may be the petitioner itself, and/or it may be the party or parties at whose behest the petition has been filedSomewhat less interesting issues than Privity7 8. Real Party-in-Interest and Privy Privity The notion of privity is more expansive, encompassing parties that do not necessarily need to be identified in the petition as a real party-ininterestThe Office intends to evaluate what parties constitute privies in a manner consistent with the flexible and equitable considerations established under federal caselawThe analysis seeks to determine whether the relationship between the purported privy and the relevant other party is sufficiently close such that both should be bound by the trial outcome and related estoppels 8 9. Real Party-in-Interest and Privy Privity PTABs approach consistent with legislative history of AIA in which Congress included privies within the parties subject to the statutory estoppel provisions in an effort to capture the doctrines practical and equitable natureThe courts, in the interest of justice and to prevent expensive litigation, strive to give effect to judgments by extending privies beyond the classical descriptionPrivity is essentially a shorthand statement that collateral estoppel is to be applied in a given case; there is no universally applicable definition of privity 9 10. Privity Control The concept of control generally means that it should be enough that the nonparty has the actual measure of control or opportunity to control that might reasonably be expected between two formal co-parties. Wright & Miller 4451No bright-line test for determining the necessary quantity or degree of participation to qualify as a real party-in-interest or privy based on the control concept.A common consideration is whether the non-party exercised or could have exercised control over a partys participation in a proceeding.Many issues of res judicata apply to the considerations of privityFinancial Contribution 10 11. Privity Fact-Combinations generally indicating RPI or Privity a party that funds and directs and controls an IPR or PGR petition or proceeding constitutes a real party-in-interest, even if that party is not a privy of the petitioner real party-in-interest or a privy of the petitioner merely through association with another party in an unrelated endeavor, slight alterations in the facts, as well as consideration of other facts, might result in a different conclusion.Joint Defense Agreement Participation alone not sufficient11 12. When does Privity Arise? Early in proceeding (to prevent Proceeding from moving forward) Patent Owners Preliminary ResponseRequests for Non-Routine Discovery PO request for Petitioner Document Unusual for Petitioner (even in a CBM) to request discovery on issueAt District Court when PO wants to say that others were in privity with the petitioner Petitioners should be aware of this and govern conduct accordinglyParticularly important for privity issues 12 13. Practice Tips Evaluate Privity Determine issues as part of pre-filing diligenceLook at business relationships between parties Is there a vertical relationship (e.g., distribution, supply, etc.)? Is there an indemnity between parties that could create privity?Look at relationships between prior litigigants Did petitioner act in ways that suggest control litigation?Did petitioner the litigation? 13 14. Questions?THANK YOU!14 15. Contact Information Jennifer Bailey Erise IP 6201 College Blvd., Suite 300 Overland Park, KS 66211 Jennifer.bailey@eriseip.comDavid L. Cavanaugh WilmerHale 1875 Pennsylvania Ave. NW Washington DC 20006 David.Cavanaugh@wilmerhale.com15