Addressing issues of estoppel and the standard to be considered a real party-in-interest, the Patent Trial and Appeal Board (PTAB) granted institution of a petition for inter partes review (IPR), rejecting the patent owner's argument that the petition should be denied for failure to name the litigation co-defendants as real parties-in-interest. Panties Plus, Inc. v. Bragel International, Inc., Case No. IPR2017-00044 (PTAB, Apr. 12, 2017) (Weatherly, APJ).
Bragel sued Panties Plus (PPI) as well as PPI's customers Charlotte Russe and Styles for Less for infringement of a breast form system. In response, PPI filed an IPR petition challenging the claims of the patent as being unpatentable under § 103. Bragel argued that PPI's petition should be denied for failure to identify all of the real parties-in-interest—specifically, PPI's co-defendants in the litigation. According to Bragel, because all of the co-defendants were represented by the same counsel, used the same expert and cooperated in the underlying litigations, PPI's failure to name its customers as real parties-in-interest would permit the customers to evade the estoppel provisions of 35 USC § 315(e)(2). Bragel further contended that PPI's failure to name its customers allowed it to unfairly extend the window during which the petition may be filed without running afoul of the time bar under 35 USC § 315(b).
The PTAB disagreed, concluding that Bragel failed to show that PPI's customers controlled its participation in the IPR proceeding. The PTAB explained that "[m]ere status as a co-defendant is insufficient to establish that the customer defendants had the required control over the filing of the Petition in this proceeding." The PTAB rejected Bragel's estoppel argument, explaining that estoppel is not relevant when determining real party-in-interest status but is merely a pre-condition for justifying the application of estoppel. Rather, "control of a named party by an unnamed entity is the primary basis for determining whether the unnamed entity is a real party in interest." Finding that PPI's cooperation with and status as co-defendant with its customers in the underlying litigation did not demonstrate that such customers had control or influence over PPI's conduct of the proceeding, the PTAB granted institution. As for Bragel's "extension" argument, the PTAB found it irrelevant, because Bragel presented no argument that the petition was barred, or would have been barred, as a result of the addition of PPI's customers.
Without Controlling Interest, Co-Defendants Are Not Real Parties-In-Interest In IPR
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