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PTAB Denies Institution Of Supplier’s IPR Petition Under 35 U.S.C. § 315(b)
05/23/2024On May 9, 2024, the USPTO’s Patent Trial and Appeal Board (“PTAB”) denied the Petition for inter partes review of Luminex International Co., Ltd (“Luminex”), under 35 U.S.C. § 315(b), finding that Luminex filed the Petition more than one year after the date on which a real party in interest was served with a complaint alleging infringement of the challenged patent. Luminex Int’l Co., Ltd. v. Signify Holdings B.V., IPR2024-00101, Paper 10 (PTAB May 9, 2024).
The underlying dispute at-issue began on August 12, 2022, when Signify Holdings B.V. (“Signify”) filed a lawsuit against Menard Inc. (“Menard”), alleging inter alia that Menard infringes U.S. Patent No. 10,299,336, which relates to lighting systems that illuminate at different color temperatures. In Menard’s answer, it stated that “Menard’s suppliers will indemnify and defend Menard in this action.” On October 27, 2022, Menard filed a third-party complaint for indemnity against thirteen entities, including Luminex. On February 27, 2023, Luminex answered Menard’s third-party complaint. In its answer, Luminex asserted affirmative defenses to Signify’s complaint against Menard, as well as crossclaims directly against Signify, seeking declaratory judgments of noninfringement and invalidity.
On October 25, 2023, Luminex filed the instant IPR Petition, seeking to invalidate the ’336 Patent. Signify asserted in its Patent Owner Preliminary Response that the PTAB should deny institution of the IPR under both § 315(a) and (b). The PTAB allowed additional pre-institution briefing on the issues. This article focuses on the real party-in-interest issue under § 315(b), which the PTAB found to be dispositive (not reaching the parties’ § 315(a) arguments).
35 U.S.C. § 315(b), titled “Patent Owner’s Action,” bars institution of an inter partes review “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.” 35 U.S.C. § 315(b). In determining whether a non-party is a real party in interest, courts examine whether the non-party is a clear beneficiary that has a preexisting, established relationship with the petitioner. This analysis involves considering: (1) whether a non-party desires review of the patent; (2) whether a petition has been filed at a nonparty’s ‘behest;’” (3) who, from a “practical and equitable” standpoint, will benefit from the redress that the chosen tribunal might provide; (4) the extent to which the non-party has an interest in and will benefit from the petitioner’s actions; and (5) whether the petitioner can be said to be representing that interest after examining its relationship with the non-party.
In its preliminary response briefing, Signify contended, inter alia, that § 315(b) bars institution because (1) Luminex filed its IPR Petition in October 2023 more than one year after Signify served Menard with a complaint for patent infringement (in August 2022) and (2) Menard is “at least one of” a real party in interest and a privy of Luminex by virtue of, e.g., its contractual relationship with Menard that requires it to indemnify and defend Menard. Luminex argued that Menard is not a real party in interest because of its complete lack of involvement with the IPR. Specifically, Luminex argued that Menard did not: request that Luminex file the IPR Petition; control the decision to file, or coordinate in the filing of, the IPR Petition; fund the IPR; or have any input into the arguments or substance of the IPR Petition.
In reaching its conclusion that Menard is a real party in interest, the PTAB found that: (1) Luminex and Menard are parties to an agreement; (2) under the agreement, Luminex supplies accused products to Menard; (3) the agreement includes an indemnity provision; (4) under the agreement, Menard made multiple demands for Luminex to “indemnify or defend as a matter of first defense;” and (5) Luminex responded to Menard’s multiple demands by, among other things, filing the Petition challenging the claims in the ’336 patent.
The PTAB explained that the fact that Luminex filed its IPR Petition in response to Menard’s multiple demands for it to indemnify or defend as a matter of first defense, shows that Luminex filed its IPR Petition at Menard’s “behest”—which the PTAB explained is the heart of the inquiry. Specifically, Menard demanded defense from infringement liability, and Luminex responded by initiating the IPR seeking to free Menard from infringement liability for all 20 claims in the ’336 patent. The PTAB further noted that Luminex’s asserted challenges to patentability in the IPR largely overlap the joint invalidity contentions for the ’336 Patent in the parallel district court case—which shows that Menard “desires review” of the ’336 Patent. And the PTAB explained that, from a practical standpoint, Menard will benefit from the redress that the PTAB might provide in the IPR because a decision determining that the challenged claims are unpatentable would relieve Menard from liability for infringing the ’336 Patent.
