Acxiom Corp. v. Phoenix Licensing LLC (CBM2015-00068, Paper 23) presents a rare denial of a petition for covered business method review (as of June 25, 2015, CBM petitions are granted at a rate of over 70%). In denying the petition, the PTAB stressed that, to have standing, a petitioner must have been sued (or threatened with suit), or be a privy to a party that has been sued (or been threatened with suit). And “privy” in this context is synonymous with customer. In other words, suppliers have a right to step in for their customers with a CBM, but not the other way around.
… suppliers have a right to step in for their customers with a CBM, but not the other way around.
Standing to file a covered business method patent review is a threshold issue. Under § 18(a)(1)(B) of the AIA:
A person may not file a petition for a transitional proceeding with respect to a covered business method patent unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent.
Here, Phoenix Licensing sued Ford Motor Company and AT&T. Ford and AT&T were joined by Acxiom in filing a petition seeking CBM review of Phoenix Licensing’s patent. Shortly thereafter, both Ford and AT&T were terminated from the proceeding, but Acxiom wished to continue. In its preliminary response, Phoenix Licensing challenged standing, pointing out that Acxiom had not been sued or otherwise accused of infringing the patent, and Acxiom presented no evidence that Ford or AT&T were Acxiom’s privies.
The PTAB agreed. In its decision, the PTAB elaborated on what it means to be a “privy,” citing congressional testimony from Senator Schumer, who said privy “effectively means customers of the petitioner.” 157 Cong. Rec. S5432 (daily ed. Sept. 8, 2011) (statement of Sen. Schumer). Though correct that Acxiom presented no evidence of it, in reality Ford and AT&T are likely very much Acxiom’s customers. Acxiom is a billion dollar enterprise and data analytics company, and the asserted Phoenix Licensing patent (U.S. Patent No. 8,352,317) covers a “system for facilitating production of variable offer communications.” Is it possible that Acxiom was protecting its customers, but did not see the need, or may not have wanted, to disclose Ford and AT&T as customers? Was Acxiom contractually obligated to keep those relationships confidential? Or did Acxiom just not see the point in establishing individual standing for each party to the CBM petition?
In any event, when filing a petition with more than one real party-in-interest, petitioners should include facts supporting standing for each and every entity. You never know when you will be the last petitioner standing.