`Tel: 571-272-7822
`
`IPR2015-01750, Paper 128
`IPR2015-01751, Paper 128
`IPR2015-01752, Paper 126
`Entered: October 2, 2020
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`RPX CORPORATION,
`Petitioner,
`v.
`APPLICATIONS IN INTERNET TIME, LLC,
`Patent Owner.
`
`Case IPR2015-01750
`Patent 8,484,111 B2
`
`Case IPR2015-01751
`Case IPR2015-01752
`Patent 7,356,482 B2
`
`Before SCOTT R. BOALICK, Chief Administrative Patent Judge,
`JACQUELINE WRIGHT BONILLA, Deputy Chief Administrative Patent
`Judge, and SCOTT C. WEIDENFELLER, Vice Chief Administrative Patent
`Judge.
`BOALICK, Chief Administrative Patent Judge.
`
`JUDGMENT
`Final Decision on Remand
`Terminating Institution
`35 U.S.C. §§ 314, 315
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`I.
`INTRODUCTION
`
`We address these cases on remand after a decision by the U.S. Court
`of Appeals for the Federal Circuit in Applications in Internet Time, LLC v.
`RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018) (“AIT”) (see Paper 1101). Upon
`review, we follow the Federal Circuit’s admonition that “Congress intended
`that the term ‘real party in interest’ have its expansive common-law
`meaning.” AIT, 897 F.3d at 1351. We approach the inquiry by focusing on
`the “two related purposes” of the real party in interest (“RPI”) requirement
`set forth in the legislative history, i.e., to preclude parties from getting “two
`bites at the apple” by: (1) ensuring that third parties who have sufficiently
`close relationships with IPR petitioners are bound by the outcome of
`instituted IPRs in final written decisions under 35 U.S.C. § 315(e), the IPR
`estoppel provision; and (2) safeguarding patent owners from having to
`defend their patents against belated administrative attacks by related parties
`via 35 U.S.C. § 315(b). Id. at 1350. As stated by the Federal Circuit,
`“[d]etermining whether a non-party is a ‘real party in interest’ demands a
`flexible approach that takes into account both equitable and practical
`considerations, with an eye toward determining whether the non-party is a
`clear beneficiary that has a preexisting, established relationship with the
`petitioner.” Id. at 1351.
`As explained below, when considering the entirety of the evidentiary
`record, including evidence relating to RPX’s business model and RPX’s
`
`1 Unless otherwise indicated, citations herein are to the papers and exhibits
`filed in IPR2015-01750. The same or similar papers and exhibits also have
`been filed in IPR2015-01751 and IPR2015-01752.
`
`2
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`relationship with Salesforce, who would have benefited from IPRs filed by
`RPX, in view of the two purposes of the RPI provision in § 315(b), as noted
`above, as well as equitable and practical considerations, we determine that
`Salesforce is a real party in interest of RPX.
`
`II. BACKGROUND
`
`A.
`
`Proceedings at PTAB
`
`Petitioner, RPX Corporation (“RPX”), filed Petitions for inter partes
`review of claims 13–18 of U.S. Patent No. 8,484,111 B2 (Ex. 1001,
`“the ’111 patent”) (Paper 1); and claims 1–59 of U.S. Patent No. 7,356,482
`B2 (IPR2015-01751 Ex. 1001, “the ’482 patent”) (IPR2015-01751, Paper 1;
`IPR2015-01752, Paper 1). Patent Owner, Applications in Internet Time,
`LLC (“AIT”), filed a Preliminary Response in each proceeding. Paper 21,
`Paper 26 (redacted version) (“Prelim. Resp.”); IPR2015-01751, Paper 20,
`Paper 26 (redacted version); IPR2015-01752, Paper 20, Paper 26 (redacted
`version). The Board also authorized additional briefing on RPI issues. See
`Paper 28, Paper 29 (redacted version); Paper 38, Paper 37 (redacted version)
`(the same documents also were filed in IPR2015-01751, Papers 28, 29, 38,
`37 and IPR2015-01752, Papers 28, 29, 38, 37). AIT alleged Salesforce.com,
`Inc. (“Salesforce”) should have been named as an RPI in these proceedings,
`and because Salesforce was served with a complaint alleging infringement
`of the challenged patents2 more than one year before the filing of the
`
`2 We refer to the ’111 patent and the ’482 patent, collectively, as “the
`challenged patents.”
`
`3
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`petitions, the proceedings are time-barred pursuant to 35 U.S.C. § 315(b).
`See Prelim. Resp. 2–20.
`Taking into account that briefing, the Board instituted the instant inter
`partes reviews, and later issued Final Written Decisions, determining that
`RPX demonstrated by a preponderance of the evidence that the challenged
`claims were unpatentable. Paper 513; IPR2015-01751, Paper 514; IPR2015-
`01752, Paper 515. AIT appealed to the Federal Circuit the Board’s
`determinations that these claims were unpatentable, as well as the
`determination that Salesforce was not an RPI and thus that the proceedings
`were not time-barred pursuant to § 315(b). See Paper 83.
`
`B. Proceedings at the Federal Circuit
`
`In its decision on appeal, issued July 9, 2018 (unsealed July 24, 2018),
`the Federal Circuit determined that “the Board applied an unduly restrictive
`test for determining whether a person or entity is a ‘real party in interest’
`within the meaning of § 315(b) and failed to consider the entirety of the
`evidentiary record in assessing whether § 315(b) barred institution of these
`IPRs,” vacated the Final Written Decisions, and remanded for further
`proceedings consistent with its decision. AIT, 897 F.3d at 1339. The
`mandate issued on October 30, 2018. Paper 111.
`In its analysis of the term “real party in interest,” the Federal Circuit
`noted various aspects of the AIA that suggest that the term should “sweep[]”
`
`
`3 A public version is available as Paper 60 in IPR2015-01750.
`4 A public version is available as Paper 62 in IPR2015-01751.
`5 A public version is available as Paper 60 in IPR2015-01752.
`
`4
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`broadly. Id. at 1346–47. It held that “the focus of the real-party-in-interest
`inquiry is on the patentability of the claims challenged in the IPR petition,
`bearing in mind who will benefit from having those claims canceled or
`invalidated” (id. at 1348), and that, ultimately, the determination of who is
`an RPI should consider “who, from a ‘practical and equitable’ standpoint,
`will benefit from the redress that the chosen tribunal might provide” (id. at
`1349). It also noted that the common law of real party in interest was
`designed to protect parties from multiple lawsuits, and it pointed out that the
`purpose of the RPI provision in IPRs was to protect patent holders from
`multiple petitions. Id. at 1349–50.
`Based on the foregoing, the Court concluded that the Board had
`applied too-narrow a definition, had failed to adequately consider the
`evidence that Salesforce was an RPI to RPX’s IPRs, and appeared to have
`placed the burden on AIT rather than RPX. Id. at 1358. The court further
`stated that “the Board may authorize additional discovery relevant to
`whether Salesforce is either a real party in interest or a privy of RPX for
`purposes of § 315(b).” Id.
`
`C. Proceedings on Remand
`
`After the Federal Circuit’s remand decision, the Board authorized
`post-remand briefing and discovery related to the question of whether
`Salesforce should have been identified as a real party in interest or privy.
`See Paper 84 (addressing the scope of factual and legal issues to be
`addressed on remand); Paper 87 (setting discovery and briefing schedule);
`
`5
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`see also AIT, 897 F.3d at 1358. RPX filed an Opening Brief. Paper 986,
`Paper 95 (redacted version) (“Pet. Remand Br.”)7. AIT filed an Opposition.
`Paper 100, Paper 104 (redacted version) (“Remand Opp.”). RPX filed a
`Reply. Paper 101, Paper 102 (redacted version) (“Remand Reply”). An oral
`hearing was held on April 25, 2019. A transcript of the hearing is included
`in the record. Paper 112, Paper 123 (redacted version) (“Remand Tr.”). In
`view of the significant and broad implications on remand raised in these
`cases, the cases were repaneled to the panel identified above of the most
`senior administrative patent judges available. See 35 U.S.C. §§ 3(a)(2)(A),
`6(c) (2018); Paper 124 (order changing the panel).
`
`III. LEGAL PRINCIPLES
`
`Under 35 U.S.C. § 315(b), an inter partes review may not be
`instituted “if the petition requesting the proceeding [wa]s filed more than 1
`year after the date on which the petitioner, real party in interest, or privy of
`the petitioner [wa]s served with a complaint alleging infringement of the
`patent.” It is “the IPR petitioner [who] bears the burden of persuasion to
`demonstrate that its petitions are not time-barred under § 315(b) based on a
`complaint served on a real party in interest more than a year earlier.”
`Worlds Inc. v. Bungie, Inc., 903 F.3d 1237, 1242 (Fed. Cir. 2018). The same
`
`
`6 Petitioner’s Opening Brief was filed originally as Paper 94. Pursuant to the
`Board’s authorization, a corrected brief was filed as Paper 98 to add a
`“PROTECTIVE ORDER MATERIAL” stamp to the document, and
`Paper 94 was expunged. See Paper 99.
`7 Pursuant to the panel’s instructions (Paper 87, 4), the same briefs were
`filed in each of the three proceedings.
`
`6
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`logic requires placing the burden on IPR petitioners to demonstrate that their
`petitions are not time-barred under § 315(b) based on a complaint served on
`a real party in interest or a privy more than a year before a petition is filed.
`See Ventex Co., Ltd. v. Columbia Sportswear N. Am., Inc., IPR2017-00651,
`Paper 152 at 4–5 (PTAB Jan. 24, 2019) (precedential) (citing Worlds,
`903 F.3d at 1242). RPX, therefore, bears the burden of establishing that no
`RPI or privy was served with a complaint alleging infringement more than
`one year prior to filing of RPX’s Petitions on August 17, 2015. Here, on
`remand, we limit our analysis to whether the § 315(b) time-barred entity
`Salesforce should have been identified as an RPI or privy in these
`proceedings. See AIT, 897 F.3d at 1338–39, 1358; Paper 84, 5 (ordering that
`“the proceeding on remand is limited to the issues of whether Salesforce is a
`real party-in-interest or a privy of Petitioner” (emphasis added)).
`Whether a non-party is a real party in interest is a “highly
`fact-dependent question.” Ventex, Paper 152 at 6 (quoting Trial Practice
`Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012)); see also Patent Trial
`and Appeal Board Consolidated Trial Practice Guide 13 (Nov. 2019)
`(“Whether a party who is not a named participant in a given proceeding
`nonetheless constitutes a ‘real party-in-interest’ or ‘privy’ to that proceeding
`is a highly fact-dependent question.”). In AIT, the Federal Circuit held that
`“Congress intended that the term ‘real party in interest’ have its expansive
`common-law meaning.” AIT, 897 F.3d at 1351. According to the Federal
`Circuit:
`Determining whether a non-party is a “real party in interest”
`demands a flexible approach that takes into account both
`equitable and practical considerations, with an eye toward
`
`7
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`determining whether the non-party is a clear beneficiary that
`has a preexisting, established relationship with the petitioner.
`Indeed, the Trial Practice Guide . . . suggests that the agency
`understands the “fact-dependent” nature of this inquiry,
`explaining that the two questions lying at its heart are whether a
`non-party “desires review of the patent” and whether a petition
`has been filed at a nonparty’s “behest.”
`Id. (quoting Trial Practice Guide, 77 Fed. Reg. at 48,759); accord
`Consolidated Trial Practice Guide 13–14.
`We must ask “who, from a ‘practical and equitable’ standpoint, will
`benefit from the redress” that the inter partes review might provide. AIT,
`897 F.3d at 1349 (quoting Trial Practice Guide, 77 Fed. Reg. at 48,759);
`accord Consolidated Trial Practice Guide 14–15. In addition, we must
`“inquire whether RPX can be said to be representing [Salesforce’s] interest
`after examining its relationship with Salesforce.” AIT, 897 F.3d at 1353; see
`also Ventex, Paper 152 at 8 (determining that Seirus was a real party in
`interest, in part because the petitioner “Ventex represents Seirus’s interests
`in this proceeding”).
`As AIT explained, there is extensive support in the legislative history
`for the traditional expansive common-law meaning of RPI, noting that there
`is “nothing that suggests Congress intended for the term ‘real party in
`interest’ to have a meaning that departs from its common-law origins.
`Instead, it reveals that Congress intended for it to have an expansive
`formulation.” 897 F.3d at 1350. To that end, a 2011 House Report on the
`AIA explains that the RPI and privity requirements are designed to prevent
`parties “from improperly mounting multiple challenges to a patent or
`initiating challenges after filing a civil action challenging the validity of a
`
`8
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`claim in the patent.” Id. (quoting H.R. Rep. No. 112-98, at 48
`(2011), reprinted in 2011 U.S.C.C.A.N. 67, 78 (emphasis added by the
`Federal Circuit)). The report also “makes clear that Congress ‘recognizes
`the importance of quiet title to patent owners to ensure continued investment
`resources.’” Id. (quoting H.R. Rep. No. 112-98, at 48 (2011)). Likewise,
`the RPI and privity requirements are designed to ensure that AIA trials
`“are not to be used as tools for harassment” of patent owners or to permit
`“repeated litigation and administrative attacks on the validity of a
`patent.” Id. (quoting H.R. Rep. No. 112-98, at 48 (emphases added by the
`Federal Circuit)).
`AIT concluded that the legislative history reveals “two related
`purposes” for the RPI and privity requirements:
`(1) to ensure that third parties who have sufficiently close
`relationships with IPR petitioners would be bound by the
`outcome of instituted IPRs under § 315(e), the related IPR
`estoppel provision; and (2) to safeguard patent owners from
`having to defend their patents against belated administrative
`attacks by related parties via § 315(b).
`Id. (quoting Senators Kyl and Schumer). In other words, the RPI and privity
`requirements were designed to avoid harassment and preclude parties from
`getting “two bites at the apple” by allowing such parties to avoid either the
`estoppel provision or the time-bar. A member organization having a
`business model such as RPX gives rise to both concerns. 8
`
`
`8 The Federal Circuit analogized to Federal Rule of Civil Procedure 17(a),
`titled “Real Party in Interest,” which was codified to: “protect the defendant
`against a subsequent action by the party actually entitled to recover, and to
`
`9
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`IV. FACTUAL FINDINGS
`
`The Federal Circuit remanded these cases to us, with the foregoing
`principles in mind, to (1) “consider[] the full range of relationships under
`§ 315(b) and the common law that could make Salesforce a real party in
`interest with respect to this IPR”; and (2) “properly appl[y] the principles
`articulated in the Trial Practice Guide” regarding RPI. AIT, 897 F.3d at
`1358. In doing so, we “consider the evidence that justifies and detracts from
`[our] conclusions.” Id.
`On remand, at the Federal Circuit’s direction, we further examine
`(a) “RPX’s business model,” including “‘the nature of’ RPX as an entity”;
`(b) “RPX’s explanation of its own interest in the IPRs”; (c) “whether, and
`under what circumstances, RPX takes a particular client’s interests into
`account when determining whether to file IPR petitions”; (d) Salesforce’s
`relationship with RPX; (e) Salesforce’s “interest in” and “benefit from” the
`IPRs; (f) “whether RPX can be said to be representing that interest”;
`(g) “whether Salesforce actually ‘desire[d] review of the patent[s]’”; and
`(h) the relevance of “the fact that Salesforce and RPX had overlapping
`Board members.” Id. at 1351, 1353–54. We also address evidence
`regarding communications between RPX and Salesforce. Id. at 1355. With
`these things in mind, we take “into account both equitable and practical
`considerations, with an eye toward determining whether the non-party
`
`
`ensure generally that the judgment will have its proper effect as res
`judicata.” Id. at 1348.
`
`10
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`[Salesforce] is a clear beneficiary that has a preexisting, established
`relationship with the petitioner.” Id. at 1351.
`The findings of fact below focus on these areas, highlighting facts
`relevant to our analysis of whether Salesforce should have been named as an
`RPI or privy in these proceedings.
`
`A. RPX’s Business Model
`
`According to the Federal Circuit:
`[g]iven that one of RPX’s publicly stated business solutions is
`to file IPRs where its clients have been sued by non-practicing
`entities to “reduce expenses for [its] clients,” J.A. 31, and that
`any IPR petitions Salesforce might have wanted to file would
`have been time-barred, this evidence at least suggests that RPX
`may have filed the three IPR petitions, in part, to benefit
`Salesforce.
`
`AIT, 897 F.3d at 1353. Because the court faulted the Board for “its decision
`not to examine critically . . . RPX’s business model,” id. at 1354, we do so
`now in light of the court’s guidance. Among other things, we consider “the
`nature of the entity filing the petition.” Id. (quoting Trial Practice Guide, 77
`Fed. Reg. at 48,760; accord Consolidated Trial Practice Guide 17–18).
`RPX states that its “mission is to transform the patent market by
`establishing RPX as the essential intermediary between patent owners and
`operating companies.” Ex. 20089, 4. RPX’s core service is defensive patent
`aggregation. Id. at 3 (The RPX 2013 Annual Report stating: “The core of
`
`
`9 Citations to Exhibit 2008 are to the pagination at the bottom center of each
`page.
`
`11
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`our [patent risk management] solution is defensive patent aggregation
`. . . .”); see also id. at 27 (“We sell our patent risk management solution on a
`standalone basis as our core business product.”). RPX’s Form Membership
`Agreement is directed to these services. See Ex. 1074.
`RPX “acquire[s] patent assets that are being or may be asserted
`against [its] current and prospective clients. [It] then provide[s its] clients
`with a license to these patent assets to protect them from potential patent
`infringement assertions.” Ex. 2008, 3. “[E]ach client generally receives a
`license to the majority of [RPX’s] patent assets.” Id. at 27; see also
`Ex. 1074 § 2 (“License and Membership Rights” section of RPX’s Form
`Membership Agreement). Mr. Chuang10 testifies that RPX has a “vast
`portfolio of patent assets” and that, in a typical membership year, RPX
`members receive a license under “thousands of patents.” Ex. 1073 ¶¶ 5, 31.
`As part of the core defensive patent aggregation service, RPX
`“provide[s] extensive patent market intelligence and data to [its] clients.”
`Ex. 2008, 3; see Ex. 1073 ¶ 8; Ex. 1090 ¶ 32; Ex. 1095, 116:6–117:1
`(Chuang deposition). This market intelligence service also is referenced on
`
`
`10 RPX provides sworn testimony of Mr. William M. Chuang (Ex. 1019;
`Ex. 1073), who is Vice President of Client Relations at RPX (see Ex. 1019
`¶ 1), and Mr. Steve W. Chiang (Ex. 1090), who is Senior Director and IP
`Counsel at RPX (see Ex. 1090 ¶ 1). AIT argues that “[a]ttorney argument,
`whether in brief or in a declaration, is not evidence upon which the Board
`can rely.” Remand Opp. 7. AIT notes that “[b]oth of the RPX witnesses –
`[Mr.] Chuang and [Mr.] Chiang] -- are attorneys.” Id. at 11. We disagree
`that Mr. Chuang’s and Mr. Chiang’s testimony constitutes improper attorney
`argument. Both have submitted sworn fact testimony as to factual issues at
`play in this proceeding.
`
`12
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`a page titled “Client Relations” on RPX’s website, which states, “[o]ur
`insight into the patent market allows RPX to serve as an extension of a
`client’s in-house legal team to better inform its long-term IP strategy.” Ex.
`2006. As an example, RPX’s website describes “client briefings to discuss
`[RPX’s] assessments of open market opportunities, relevant litigation
`landscape activity, key players and trends, as well as to provide specific
`technical and strategic analyses on potential threats.” Id.
`RPX sells its core business solution, i.e., defensive patent aggregation,
`as a subscription-based service. Ex. 2008, 3. The “annual subscription fee
`is based on a published fee schedule applicable to all . . . clients that
`commence their membership while that fee schedule is in effect.” Id. at 10.
`“The subscription fee is typically based on a fee schedule that is tied to a
`client’s revenue or operating income and remains in place over the life of a
`membership.” Id. at 3.
`Additionally, as the Federal Circuit noted, RPX’s SEC filing states
`that “one of [RPX’s] ‘strategies’ for transforming the patent market is ‘the
`facilitation of challenges to patent validity,’ one intent of which is to ‘reduce
`expenses for [its] clients.’” AIT, 897 F.3d at 1351.
`As of the date of Mr. Chuang’s testimony (January 4, 2019), RPX had
`filed fifty-seven IPR petitions. Ex. 1073 ¶ 32. Mr. Chuang testifies that
`RPX provides validity challenges on behalf of a client only if that client
`specifically, explicitly, and separately contracts for such services. Id. ¶ 10.
`He further testifies that “the prospect of an RPX-filed IPR in the event a
`client is sued by an NPE would not reasonably be a ‘key reason’ for the
`client to pay membership fees to RPX.” Id. ¶ 32. We find that these
`
`13
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`statements conflict with statements made by RPX in its marketing materials
`outside of litigation. As AIT points out, RPX’s website provides credible,
`contemporaneous evidence as to its belief that its service helps “each RPX
`client avoid[] more in legal costs and settlements each year than they pay
`RPX in subscription fees.” Remand Opp. 24 (citing Ex. 2007 (website
`bearing copyright date of 2008–2014)). RPX’s website describes ways in
`which its defensive patent aggregation services also may “help [clients] after
`a litigation has begun.” Ex. 2007 (RPX website page, titled “Why Join”). In
`particular, RPX advertises that it:
`is uniquely able to help members of our client network quickly
`and cost-effectively extricate themselves from [non-practicing
`entity (“NPE”)] lawsuits. Our central, trusted position in the
`market enables us to negotiate with plaintiffs, acquire a license
`to the litigated patent and selectively clear our clients from the
`suit.
`Id. (emphases added). The webpage further indicates that as of “June 30,
`2014, [RPX] had achieved more than 575 dismissals for [its] clients in 74
`litigations” by acquiring such licenses. Id.; see also Ex. 1073 ¶ 31
`(Mr. Chuang testifying that, as of the time of his testimony (January 4,
`2019), “RPX has secured dismissals of 1,286 lawsuits against RPX clients,
`through acquisition of the patent-in-suit or a license with sublicensing
`rights.”).
`Moreover, on RPX’s website, there is a statement that “RPX’s
`interests are 100% aligned with those of our clients.” Ex. 2015 (RPX
`website “FAQ” page). According to RPX’s SEC filings, this “alignment of
`interests” results from the fixed “pricing structure and [the] guarantee never
`to assert [its] patent assets against” them. Ex. 2008, 6; see also id.
`
`14
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`(“Alignment of Interests With Our Clients – Our business model aligns our
`interests with those of our clients. We have not asserted and will not assert
`our patents. We generate revenue from subscription fees that are based on
`our published fee schedule rather than the value of the patent assets we
`acquire or the potential costs associated with defending against assertions
`related to our patent assets. As a result, we have relationships with our
`clients that are based on trust, enabling them to communicate with us
`without concern that the information shared will be used against them.”).
`At bottom, the evidence demonstrates that patent aggregation,
`licensing, and filing IPRs to protect its clients work together to protect its
`members from the threat of patent litigation and are all important
`components of RPX’s core subscription business. We therefore find that
`RPX filed these IPRs to benefit its member Salesforce, supporting a
`conclusion that Salesforce is an RPI in these proceedings.
`
`B. RPX’s Interest in the IPRs
`
`The Federal Circuit faulted the Board’s “decision to accept at face
`value RPX’s explanation of its own interest in the IPRs.” AIT, 897 F.3d at
`1354. Therefore, we address expressly the record evidence in this regard.
`In doing so, we “probe the extent to which Salesforce—as RPX’s client—
`has an interest in and will benefit from RPX’s actions, and inquire whether
`RPX can be said to be representing that interest after examining its
`relationship with Salesforce.” Id. at 1353.
`According to RPX, its primary motivation for filing these IPRs was
`“reputational benefits to better position RPX’s core patent aggregation
`
`15
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`business by refuting accusations that RPX was ‘too close to NPEs’ and
`‘didn’t have the stomach’ to challenge facially invalid NPE patents like
`AIT’s.” Pet. Remand Br. 10–11 (citing Ex. 1095, 97:4–98:12; Ex. 1019
`¶¶ 10, 41; Ex. 1090 ¶¶ 23–25). RPX further contends that “[d]emonstrating
`a history of successfully invalidating patents via IPR also enhances RPX’s
`leverage in negotiating reasonable acquisition fees with NPEs.” Id. at 11
`(citing Ex. 1019 ¶ 9); see also Ex. 1019 ¶ 9 (Mr. Chuang testifying that
`“RPX also files IPRs to address the irrational pricing expectations of owners
`of patents with serious validity issues”).
`We can accept RPX’s representation that filing IPRs against patents it
`believes are weak improves its negotiating position. This fact, however, is
`not at odds with our finding above that it also files IPRs to protect its clients.
`Indeed, challenging patents asserted against its clients—as the evidence
`discussed above suggests—serves this objective as well. For example, RPX
`asserts that of the fifty-seven IPRs it has filed, at least ten have challenged
`patents that were not actively asserted against any RPX client. Ex. 1073
`¶ 28 (discussing these cases); see Pet. Remand Br. 41. But, conversely, that
`necessarily means that the other forty-seven IPRs were challenging patents
`actively asserted against its clients. 11 Moreover, we observe from RPX’s
`mandatory disclosures that all but one of the fifty-seven IPRs challenged a
`patent involved in district court litigation. Even when not asserted against
`its clients, the evidence suggests that RPX selects patents to challenge, at
`
`
`11 All of RPX’s fifty-seven petitions, and patents challenged therein, are a
`matter of public record.
`
`16
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`least in part, to reduce risk to existing clients. Finally, we observe that RPX
`makes no suggestion that it had any risk of liability for infringement of the
`patents at issue. As the Federal Circuit indicated in AIT, there is not
`necessarily “only one interested party in each case,” and inter partes review
`may be barred “even where the petitioning party might separately have its
`own interest in initiating an [inter partes review].” AIT, 897 F.3d at 1347.
`We therefore find that RPX filed these IPRs to benefit its existing
`clients, supporting a conclusion that Salesforce is an RPI in these
`proceedings.
`
`C. Whether RPX Takes Client Interests into Account when
`Filing IPRs
`
`Relatedly, the Federal Circuit in AIT instructed us to consider
`“whether, and under what circumstances, RPX takes a particular client’s
`interests into account when determining whether to file IPR petitions.” AIT,
`897 F.3d at 1353. As an initial matter, RPX contends that it “does not file
`IPRs in its own name to benefit any client(s).” Pet. Remand Br. 40 (citing
`Ex. 1073 ¶¶ 30, 34). Rather, when RPX does file an IPR on behalf of a
`particular client, RPX requires that the client be named as a co-filer of the
`IPR petition. See Ex. 1073 ¶ 11; Ex. 1019 ¶ 19; Ex. 2018 (RPX Best
`Practices). According to RPX, that has happened only twenty-one times,
`and not in this case. Ex. 1073 ¶ 30.
`Even assuming these representations are true, they are of little
`relevance, because, as the Federal Circuit noted, even if RPX does not file
`IPRs to benefit a particular client, RPX admits that it takes its clients’
`
`17
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`interests into account. AIT, 897 F.3d at 1351–52. The Federal Circuit also
`noted that there was no dispute that RPX decided to file IPR petitions
`challenging AIT’s patents in accordance with the procedures set forth in its
`“Best Practices Guide,” see id. at 1341, and not because Salesforce told it to
`do so. Instead, the issue is whether the Best Practices Guide is one in which
`RPX “intentionally operates its business to circumvent the Board’s RPI case
`law.” Id. at 1343 (internal quotation marks and brackets omitted). We find
`that it does.
`RPX implemented the Best Practices Guide in 2014 as a “systematic
`process for identifying potential IPR candidates and preparing IPRs.”
`Ex. 1019 ¶ 14; Ex. 2018. The selection criteria include, for example, the
`number of patents asserted, prior validity challenges and the likelihood of a
`new validity challenge by another entity, the number of current and potential
`RPX clients in suit, the number of other companies in suit, the likelihood of
`assertion against additional companies, the likely strength of invalidity
`arguments, and potential reputational benefits. See Ex. 2018.
`Significantly, the Best Practices Guide was created shortly “after
`receiving and studying decisions denying institution in RPX’s IPRs against
`VirnetX,” where RPX had been found to be an RPI. Ex. 1090 ¶ 16. As the
`Federal Circuit noted, these circumstances alone “cast additional doubt on
`the company’s motivations.” AIT, 897 F.3d at 1353 n.4. Mr. Chiang
`testifies that one of the goals of the Best Practices Guide was to “ensure that
`RPX would accurately name all [RPIs]” (Ex. 1090 ¶ 16) and that following
`the Best Practices “ensur[es] that RPX would comply with the law on RPI
`
`18
`
`
`
`
`
`IPR2015-01750 (Patent 8,484,111 B2)
`IPR2015-01751, IPR2015-01752 (Patent 7,356,482 B2)
`and accurately name all RPIs in all future petitions RPX filed” (id. ¶ 18). In
`this regard, Mr. Chiang testifies that, regarding RPIs:
`[t]he set of best practices we developed broadly (a) disallow
`RPX to take into account any suggestion for filing a validity
`challenge from any third party if that party would not agree to
`be named an RPI, (b) disallow RPX to discuss forthcoming
`validity challenges (e.g., by discussing strategy, feedback, or
`otherwise) with third parties who are not named RPIs, and
`(c) ensure that no unnamed third party could exert control over
`any aspect of RPX’s validity challenge proceedings.
`
`
`Id.
`
`By its own admission, therefore, RPX created the Best Practices
`Guide to avoid clients being found to be RPIs by circumventing the Board’s
`case law in the VirnetX decisions, 12 but nonetheless take into account the
`number of current