Under 35 U.S.C. § 312(a), an IPR petition must identify “all real parties in interest,” and, an IPR petition is time-barred under 35 U.S.C. § 315(b) if “filed more than 1 year after the date on which the petitioner, the real party in interest, or a privy of the petitioner is served with a complaint alleging infringement of the patent.” As we have discussed, PTAB decisions on whether § 315(b) has been satisfied are reviewable on appeal.
In Worlds Inc. v. Bungie, Inc. (Fed. Cir. Sept. 7, 2018), the Federal Circuit determined that the petitioner bears the burden of persuasion on the issue of whether a petition properly named all real parties in interest, and the court remanded the PTAB’s IPR decision for evaluation of this issue under the proper burden of persuasion.
In 2012, Worlds asserted several patents against Activision Publishing, Inc., alleging infringement by certain videogames that Activision developed and distributed. Bungie is an independent videogame developer, and developed the Destiny series of videogame products, which Activision distributed. Bungie was not a party to the Worlds v. Activision litigation, however its Destiny products were accused of infringement in that case, and Bungie filed its IPR petition six months after Worlds identified Destiny as an accused infringing product in 2014. Worlds argued to the PTAB and on appeal that Bungie’s IPR petition was time-barred under § 315(b) because the petition should have named Activision as a real party in interest, and because Activision had been sued for infringement of the patents more than one year before the petition was filed.
Soon after Bungie filed its IPR petition, Patent Owner Worlds moved for discovery concerning whether Activision was a real party in interest. In support of its motion, it submitted evidence of a software publishing and development agreement between Activision and Bungie, referred to as the “DevPub Agreement.” The Agreement provides that Bungie would develop the Destiny products and Activision would publish them. The PTAB denied Worlds’s motion for discovery, and Worlds filed a preliminary response arguing that Bungie should have named Activision as a real party in interest. The PTAB instituted IPRs of the challenged Worlds patents, concluding that Worlds had not demonstrated that Activision was an unnamed real party in interest. In its final written decisions, the PTAB reiterated its rejection of Worlds’s real-party-in-interest argument, and determined that the petitions were not time-barred.
On appeal, the Federal Circuit determined that an IPR petitioner bears the burden of persuasion to demonstrate that its petitions are not time-barred under § 315(b). An IPR petitioner’s initial identification of real parties in interest should be accepted unless and until disputed by a patent owner, although there is no “presumption” that that the petition named the correct real parties in interest. A patent owner arguing that a particular third party should have been named as a real party in interest must produce some evidence to support that argument.
In the IPRs on appeal, the court determined that Worlds properly presented evidence that Activision should have been named as a real party in interest, including: (1) the DevPub Agreement between Activision and Bungie, relating to Destiny; (2) a letter from Worlds indicating that it intended to add the Destiny products to the litigation; and (3) the fact that Bungie’s IPR petitions challenged the same patents asserted in the Activision litigation. This evidence was sufficient, according to the court, to put in dispute Bungie’s identification of itself as the sole real party in interest.
In its IPR decisions, the PTAB did specify the burden of persuasion, but stated that it was “unpersuaded that there is sufficient evidence that Activision is an unnamed real party in interest,” which suggests that the PTAB may have improperly placed the burden on the Patent Owner. On remand, the PTAB was directed to evaluate this evidence under the proper burden of persuasion.
Petitioners and patent owners disputing whether a petition properly named all real parties in interest should keep in mind that the petitioner has the burden of persuasion on this issue, although patent owners must provide sufficient evidence to raise this issue.