VMware Inc. v. Good Technology Software Inc., IPR2015-00027, 00030, and 00031 PTAB Paper 11 (’027 case) (March 6, 2015) (McKool Smith represents Good Technology)
In a decision further clarifying what parties are eligible to file for inter partes review, the PTAB recently rejected VMWare Inc.’s Petition against Good Technology Software Inc. as untimely because it found that VMWare was in privity with AirWatch, LLC, a company that VMWare had recently acquired and that had been served with a complaint for infringement of the disputed patents by Good in 2012.
As discussed in earlier editions of this newsletter, 35 U.S.C. § 315(b) estops a petitioner from filing inter partes review of a patent more than one year after the petitioner, real party in interest, or privy of the petitioner is served with a complaint for infringement of that patent. In this case, eight months before filing three petitions requesting review of Good’s patents, VMWare acquired AirWatch, LLC, a company that Good had sued for infringement of the same patents two years prior.
VMWare argued that, even though AirWatch, as its wholly owned subsidiary, was its privy at the time VMWare filed its petitions in October 2014, the petitions remained timely under § 315(b) because the two companies were not related when Good sued AirWatch in 2012.
At least some previous PTAB decisions had been argued to suggest that the time of service of the complaint alleging infringement was the proper time to determine whether a privity relationship existed. The PTAB clarified, however, that “at least some of the factors analyzed in determining whether a party is a real party in interest or a privy of the petitioner involve actions or events that may occur after service of a complaint alleging infringement of the challenged patent” (emphasis in original).
Under this record, the PTAB was convinced that VMWare’s privity with AirWatch, arising at least a year after the Good’s infringement suit, but before the filing of the petition by VMware was sufficient to invoke the 315(b) time-bar and deny institution of VMWare’s petition. The ruling dispels the notion that privity may only be established at the time of the filing of the complaint for infringement.
The decision again proves that real party in interest and privity determinations with respect to inter partes review remain a new and complex area of law. Because this issue is typically case-dispositive, parties on both sides should be mindful of the case law as it develops.