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` IPR2014-00935, Paper 52
`IPR2014-00936, Paper 56
`IPR2014-00938, Paper 57
`Entered: August 21, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`JIAWEI TECHNOLOGY (HK) LTD., JIAWEI TECHNOLOGY (USA) LTD.,
`SHENZHEN JIAWEI PHOTOVOLTAIC LIGHTING CO., LTD., ATICO
`INTERNATIONAL (ASIA) LTD., ATICO INTERNATIONAL USA, INC.,
`CHIEN LUEN INDUSTRIES CO., LTD., INC. (CHIEN LUEN FLORIDA),
`CHIEN LUEN INDUSTRIES CO., LTD., INC. (CHIEN LUEN CHINA),
`COLEMAN CABLE, LLC, NATURE’S MARK, RITE AID CORP., SMART
`SOLAR, INC., AND TEST RITE PRODUCTS CORP.,
`Petitioner,
`
`v.
`
`SIMON NICHOLAS RICHMOND,
`Patent Owner.
`_______________
`
`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`_______________
`
`
`Before WILLIAM V. SAINDON, JUSTIN T. ARBES, and
`BARRY L. GROSSMAN, Administrative Patent Judges.
`
`SAINDON, Administrative Patent Judge.
`
`DECISION
`Denying Patent Owner’s Motion to Terminate
`35 U.S.C. § 312(a)(2) and 37 C.F.R. § 42.72
`
`
`
`
`
`
`
`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`
`
`I. INTRODUCTION
`
`Patent Owner filed a Motion to Terminate each of the instant
`
`proceedings on the basis that Petitioner failed to identify Southwire
`
`Company, LLC (“Southwire”) as a real party in interest (“RPI”) under
`
`35 U.S.C. § 312(a)(2) at the time it filed its Petition. Paper 34 (“Mot.”).1
`
`Petitioner filed an Opposition, Paper 43 (“Opp.”), and Patent Owner filed a
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`Reply, Paper 46 (“Reply”).2 For the reasons stated below, Patent Owner’s
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`Motion is DENIED.
`
`A. Issue
`
`The issue addressed in this Decision is whether Patent Owner has
`
`rebutted the presumption that Southwire was not a real party in interest at the
`
`time Petitioner filed its Petition (June 11, 2014). If Southwire was a real
`
`party in interest at the time Petitioner filed its Petition, then, according to
`
`Patent Owner, Petitioner’s Petition was incomplete under 35 U.S.C.
`
`§ 312(a)(2), and this proceeding must be terminated, as the Petition would
`
`be accorded a new filing date and at least one of the Petitioner entities would
`
`be time-barred under 35 U.S.C. § 315(b). See Mot. 11–12; Paper 14, 3 n.4.
`
`
`1 This Decision addresses and disposes of similar motions appearing in
`IPR2014-00936, IPR2014-00935, and IPR2014-00938. Citations in this
`Decision are to those papers and exhibits filed in IPR2014-00936. Similar
`papers and exhibits may be found in IPR2014-00935 and IPR2014-00938.
`2 Petitioner also filed a motion to seal, along with redacted and unredacted
`versions of certain exhibits submitted with its Opposition. Paper 40. Patent
`Owner did not file an opposition to the motion. We do not refer to any of
`the material sought to be sealed in this Decision, and refer to the redacted
`versions of the exhibits where necessary. The motion to seal will be decided
`in a separate decision.
`
` 2
`
`
`
`
`
`
`
`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`
`
`B. Background
`
`
`
`The matter at hand stems from the relationship between Petitioner
`
`entity Coleman Cable, LLC (“Coleman”) and Southwire, Coleman’s current
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`parent corporate entity, which was not listed as a RPI in the Petition. The
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`following represents our understanding of the relevant events in this
`
`relationship.
`
`Patent Owner served a complaint on Coleman Cable, Inc. on July 3,
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`2013, alleging infringement of one or more of its patents. Paper 14, 3 n.4.
`
`In December 2013, Southwire, Cubs Acquisition Corporation (“Cubs”), and
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`Coleman Cable, Inc. signed an “Agreement and Plan of Merger,” wherein
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`Southwire purchased 100% of the outstanding stock of Coleman Cable, Inc.
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`Ex. 1046 ¶ 5.3 At that time, the then-President of Coleman Cable, Inc.
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`issued a letter to its customers, explaining the existence of the merger
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`agreement and that “[y]our Coleman contacts will remain the same, all
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`current contracts will be honored, and there will be no immediate changes in
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`how we conduct business with you.” Ex. 1030. The transaction later closed
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`when Cubs merged with and into Coleman Cable, Inc., with Coleman Cable,
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`Inc. being the surviving corporation; a merger certificate was filed on
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`February 11, 2014. Ex. 1046 ¶ 5; see also Ex. 2037 (a Southwire
`
`PRNewswire release announcing the successful completion of the tender
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`offer). On March 5, 2014, Coleman Cable, Inc. was reorganized into
`
`
`3 Exhibit 1046 contains the testimony of Mr. Guyton Cochran. Mr. Cochran
`is Treasurer of Coleman and Executive Vice President and Chief Financial
`Officer of Southwire. Ex. 1046 ¶¶ 2–3.
`
` 3
`
`
`
`
`
`
`
`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`
`Coleman Cable, LLC, with Southwire as the sole member.4 Ex. 1046 ¶¶ 7–
`
`8; Ex. 1017.
`
`On June 11, 2014, Coleman, along with several other entities, filed a
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`Petition in each of the instant proceedings. See Paper 4 (Coleman Power of
`
`Attorney); Paper 10 (first petition). The power of attorney for Coleman was
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`signed by Mr. Floyd W. Smith, having a title of “Secretary.” Paper 4. At
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`that time, Mr. Smith was also Executive Vice President, Secretary, and
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`General Counsel of Southwire. Opp. 3; Ex. 1046 ¶¶ 12–13. Coleman’s
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`share of the payments for the IPRs came from Coleman accounts, separate
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`from Southwire’s accounts. Opp. 4–5; Ex. 1046 ¶¶ 17–21.
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`Patent Owner alleges that at the National Hardware Show (May 5–7,
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`2015), Southwire was listed in the directory as the exhibitor of a product
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`formerly exhibited by Coleman. Mot. 4–5; Ex. 2055 ¶ 3. On June 22, 2015,
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`Patent Owner contacted the Board seeking authorization to file the subject
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`Motion, leading to the above-identified briefing. Paper 30. On July 17,
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`2015, Petitioner filed updated mandatory notice information adding
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`Southwire as a real party in interest, pursuant to 37 C.F.R. § 42.8. Paper 38.
`
`II. ANALYSIS
`
`A. Legal Principles
`
`Pursuant to 35 U.S.C. § 312(a)(2), a petition for inter partes review
`
`“may be considered only if . . . the petition identifies all real parties in
`
`
`4 The ownership of limited liability companies is by one or more
`“members,” akin to the shareholders of traditional corporations or the
`partners of partnerships.
`
` 4
`
`
`
`
`
`
`
`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`
`interest” (emphasis added). We generally accept a petitioner’s identification
`
`of real parties in interest at the time of filing the petition. See Changes to
`
`Implement Inter Partes Review Proceedings, Post-Grant Review
`
`Proceedings, and Transitional Program for Covered Business Method
`
`Patents; Final Rule, 77 Fed. Reg. 48,680, 48,695 (Aug. 14, 2012). Thus,
`
`there is a rebuttable presumption that a petitioner’s identification of real
`
`parties in interest is accurate. However, when a patent owner provides
`
`sufficient rebuttal evidence that reasonably brings into question the accuracy
`
`of the petitioner’s identification, the ultimate burden of proof remains with
`
`the petitioner to establish that it has complied with the statutory requirement
`
`of 35 U.S.C. § 312(a)(2) to identify all real parties in interest.
`
`Whether a non-party is a real party in interest for purposes of an inter
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`partes review proceeding is a “highly fact-dependent question” that takes
`
`into account how courts generally have used the term to “describe
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`relationships and considerations sufficient to justify applying conventional
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`principles of estoppel and preclusion.” Office Patent Trial Practice Guide,
`
`77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) (“Trial Practice Guide”). In
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`general, a real party in interest is “the party that desires review of the
`
`patent,” and “may be the petitioner itself, and/or it may be the party or
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`parties at whose behest the petition has been filed.” Id. Courts have
`
`identified multiple relevant factors that inform our analysis. Id. at 48,759–
`
`60. Relevant factors include the non-party’s “relationship with the
`
`petitioner” and “relationship to the petition itself, including the nature and/or
`
`degree of involvement in the filing; and the nature of the entity filing the
`
` 5
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`
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`petition.” Id.
`
`
`
`
`
`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`
`
`B. Analysis
`
`We have reviewed the arguments and evidence before us and
`
`determine that Southwire was not a RPI in this proceeding at the time
`
`Petitioner filed its Petition. In general, “rarely will one fact, standing alone,
`
`be determinative” of the RPI issue. Trial Practice Guide at 48,760.
`
`Accordingly, we discuss those facts that we considered most important in
`
`making our decision.
`
`First, no evidence before us indicates that Southwire is accused of
`
`infringing Patent Owner’s patent. See Opp. 4 (alleging that Southwire “did
`
`not sell any allegedly infringing products [and] had not been sued”). If a
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`RPI is “the party that desires review of the patent,” Trial Practice Guide at
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`48,759, it would stand to reason that of the Southwire/Coleman
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`parent/subsidiary relationship, it is Coleman, not Southwire, that desires
`
`review of the patent. Further, the Board has indicated previously that neither
`
`corporate control nor mutual interest in invalidity, alone, is sufficient to
`
`deem a non-party a RPI. See, e.g., Sony Comp. Entm’t Am. LLC v. Game
`
`Controller Tech. LLC, Case IPR2013-00634, slip op. at 7–8 (PTAB Apr. 2,
`
`2015) (Paper 31) (parent-subsidiary relationship insufficient); Butamax
`
`Advanced Biofuels LLC v. Gevo, Inc., Case IPR2013-00215, slip op. at 4
`
`(PTAB Sept. 30, 2013) (Paper 10) (mutual interest in invalidity of a patent
`
`insufficient); Denso Corp. v. Beacon Navigation GmbH, Case IPR2013-
`
`00026, slip op. at 11 (PTAB Mar. 14, 2014) (Paper 34) (status as co-
`
`defendant insufficient); Trial Practice Guide at 48,760 (participation in joint
`
`defense group insufficient).
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` 6
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`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`
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`Second, the evidence before us indicates that Coleman contributed
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`funds towards this proceeding, but not Southwire. See Opp. 4–5 (describing
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`the evidence showing Coleman’s payments to Petitioner’s law firm); see
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`also GEA Process Eng’g, Inc. v. Steuben Foods, Inc., IPR2014-00041, slip
`
`op. at 13–21 (PTAB Feb. 11, 2015) (Paper 140) (finding a non-party that
`
`paid the petitioner’s legal fees for a period of time in an inter partes review
`
`to be a real party in interest) (“GEA Process”); In re Guan, Reexamination
`
`Control No. 95/001,045, Decision Vacating Filing Date at 8 (Aug. 25, 2008)
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`(“a party paying for a particular patent to be the subject of a request for inter
`
`partes reexamination would appear to be a real party in interest”); Trial
`
`Practice Guide at 48,760 (funding of a petition can be an important factor in
`
`the RPI inquiry).
`
`In this case, the evidence before us indicates that the monies paid for
`
`this proceeding were paid out of a Coleman account. See Ex. 1020 (listing
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`Coleman’s bank accounts separately from Southwire’s); Ex. 1044 (depicting
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`Coleman-logo checks having a Southwire address); Ex. 1043 (reproducing
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`receipts for funds wires from Coleman to Petitioner’s counsel); Ex. 1045
`
`(declaration of Petitioner’s counsel explaining the fund transfer evidence
`
`provided). The invoices for legal services were directed to Coleman.
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`Ex. 1042.
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`Patent Owner points out that the address on Coleman’s checks lists
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`Southwire’s address. Reply 3 (discussing the checks in Exhibit 1044). This
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`co-location, however, does not speak to the authority to issue the payments,
`
`nor does it speak to which entity was making the payments; it just indicates
`
`where the administrative unit that processed the payments was physically
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` 7
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`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
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`located. See Ex. 1046 ¶¶ 19–20 (explaining that the account listed on the
`
`checks is a Coleman account, that “[t]he reason Southwire’s name appears
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`on the paystubs is that in October 2014, Coleman switched its financial
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`software from an AS400 platform to an SAP platform,” and that “[a]t that
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`time, Coleman accounts payable processing moved to Carrollton, Georgia
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`and a PO box was utilized for Coleman and Southwire mail”).
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`Third, the particular type of corporate structure does not require us to
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`find Southwire a RPI, as Patent Owner argues. See Reply 1–4. Southwire is
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`the sole member of Coleman. See supra n.3; Ex. 1017 (Section 3 – listing
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`“Southwire Company, LLC” as sole Member). In that sense, Southwire
`
`exercises control over Coleman generally. See also id. (discussing in
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`Section 7 the Member’s authority). Although corporate control may imply
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`the right to control all aspects of an organization in theory, the relevant
`
`inquiry here is whether Southwire had practical control over Coleman’s
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`participation in this proceeding or, in other words, “the opportunity to
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`present proofs and argument.” Taylor v. Sturgell, 553 U.S. 880, 895 (2008);
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`Gonzalez v. Banco Central Corp., 27 F.3d 751, 759 (1st Cir. 1994)
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`(requiring that “the non[-]party possessed effective control over a party’s
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`conduct of the [proceeding] as measured from a practical, as opposed to a
`
`purely theoretical standpoint”). Patent Owner has only provided evidence of
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`theoretical control, by way of corporate structure, but has not provided
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`sufficient evidence that Southwire had any actual control over Coleman’s
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`participation in this proceeding.
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`Fourth, Southwire and Coleman share the same officers, but Patent
`
`Owner has not provided sufficient evidence that persuades us that the
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` 8
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`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`
`officers had the ability to, or in fact did, blur the lines between their
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`respective roles in the organizations. Petitioner argues that officers are
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`permitted to “change hats” without triggering RPI. Opp. 5–6 (citing United
`
`States v. Bestfoods, 524 U.S. 51, 69 (1998) (discussing the “well established
`
`principle [of corporate law] that directors and officers holding positions with
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`a parent and its subsidiary can and do ‘change hats’ to represent the two
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`corporations separately, despite their [corporations’] common ownership”).
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`Patent Owner cites Direct Marketing Concepts, Inc. v. Trudeau, 266 F.
`
`Supp. 2d 794, 797 (N.D. Ill. 2003) to argue that the “changing hats”
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`argument is “legally irrelevant.” Reply 4. Patent Owner’s argument relying
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`on Direct Marketing Concepts is unpersuasive because that case involved a
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`different fact pattern from this proceeding. In particular, in Direct
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`Marketing Concepts, the “changing hat” issue revolved around the
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`involvement of a single individual who was the sole managing-member of
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`multiple limited liability companies. Id. Here, the sole member of Coleman
`
`is a corporate entity; thus, the management is delegated to a number of
`
`individuals (officers) who, as one of a number of individuals having
`
`delegated authority, do not have the same kind of complete control of the
`
`organization as the individual in Direct Marketing Concepts. See Ex. 1017
`
`(Section 7 – discussing how the “Member shall have full, exclusive and
`
`complete discretion to manage and control the business and affairs”; and
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`Section 8 – discussing that Officers “shall act pursuant to such delegated
`
`authority”) (emphasis added). In fact, Petitioner has pointed to evidence
`
`indicating that the authority delegated to the officers of Southwire does not
`
`include the authority to act on behalf of Coleman. Opp. 7 (citing Ex. 1018, a
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` 9
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`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
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`Southwire resolution that “would have permitted Southwire officers acting
`
`in their capacity as such to make decisions for Coleman”); Ex. 1046 ¶¶ 8–9
`
`(explaining that Coleman did not ratify the resolution in Exhibit 1018 and, as
`
`such, Southwire officers do not have the authority to act for Coleman, or
`
`vice versa). Thus, even if those officers were the same persons, there is no
`
`evidence before us that suggests that Southwire’s officers, acting in that
`
`capacity, have been delegated the authority to act on behalf of Coleman. See
`
`also Ex. 1046 ¶ 9 (the Treasurer of Coleman testifying that “Southwire[’s
`
`officers] do not have the authority to act on behalf of Coleman”).
`
`Lastly, in its Opposition, Petitioner notes that Southwire may have
`
`become a RPI on July 6, 2015, and, “out of an abundance of caution,”
`
`updates its mandatory notices to include Southwire. Opp. 13–14. On that
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`day, invoices changed over from Coleman-branded invoices to Southwire-
`
`branded ones. Ex. 1032. Regardless of this development, and without
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`commenting on whether Southwire did or did not become a RPI in July
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`2015, the relevant inquiry here is whether Southwire was a real party in
`
`interest as of the filing date of the petition (here, June 11, 2014). 35 U.S.C.
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`§ 312(a)(2) (requiring that “the petition identifies all real parties in interest”)
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`(emphasis added); 37 C.F.R. § 42.8(a)(3) (addressing a change in the real
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`party in interest); see also Opp. 14–15 (arguing that the PTAB’s rules and
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`the statutory scheme permit adding real parties in interest, based on changes
`
`in circumstances, that were not previously real parties in interest when the
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`petition was filed). Thus, this development does not affect our analysis.
`
`
`
`10
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`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`
`
`C. Conclusion
`
`Reviewing the arguments and evidence presented by Petitioner and
`
`Patent Owner, we determine that Patent Owner has not rebutted the
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`presumption that Petitioner correctly identified all real parties in interest at
`
`the time of filing its Petition. No one factor proves dispositive; we
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`considered all of the evidence and arguments in arriving at our decision.
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`III. ORDER
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`In view of the foregoing, it is hereby ORDERED that Patent Owner’s
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`Motions to Terminate in IPR2014-00935, -00936, and -00938 are denied.
`
`
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`
`11
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`
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`IPR2014-00935 (Patent 8,089,370 B2)
`IPR2014-00936 (Patent 7,196,477 B2)
`IPR2014-00938 (Patent 7,429,827 B2)
`
`
`PETITIONER:
`
`Mark Nelson
`Mark.nelson@dentons.com
`
`Daniel Valenzuela
`Daniel.valenzuela@dentons.com
`
`Lissi Mojica
`Lissi.mojica@dentons.com
`
`Kevin Greenleaf
`Kevin.greenleaf@dentons.com
`
`
`
`PATENT OWNER:
`
`Theodore Shiells
`tfshiells@shiellslaw.com
`
`Marcus Benavides
`marcusb@tlpmb.com
`
`
`
`
`12