Trials@uspto.gov
`571-272-7822
`
`
`
`
`Paper No. 36
`Entered: July 13, 2017
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`Before CHRISTOPHER M. KAISER, JEFFREY W. ABRAHAM, and
`MICHELLE N. ANKENBRAND, Administrative Patent Judges.
`
`KAISER, Administrative Patent Judge.
`
`
`
`
`
`
`
`
`
`
`
`
`
`REACTIVE SURFACES LTD., LLP,
`Petitioner,
`
`v.
`
`TOYOTA MOTOR CORPORATION,
`Patent Owner.
`____________
`
`Case IPR2016-01914
`Patent 8,394,618 B2
`____________
`
`ORDER
`Decision Granting in Part Patent Owner’s Motion to Dismiss
`37 C.F.R. §§ 42.5 and 42.71
`
`
`
`
`
`

`

`IPR2016-01914
`Patent 8,394,618 B2
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`
`INTRODUCTION
`I.
`On September 30, 2016, Petitioner Reactive Surfaces Ltd., LLP
`(“Reactive Surfaces”) filed a Petition (Paper 1, “Pet.”) for inter partes
`review of claims 1–11 of U.S. Patent No. 8,394,618 (Ex. 1001, “the ’618
`patent”). We instituted trial on March 23, 2017. Subsequently, Patent
`Owners Toyota Motor Corporation (“Toyota”) and Regents of the University
`of Minnesota (“the Regents”) (collectively, “Patent Owner”) requested a
`conference call with the Board seeking authorization to file a motion to
`dismiss the Petition on the grounds that the Regents are entitled to sovereign
`immunity under the Eleventh Amendment to the United States Constitution
`and that this proceeding may not continue in the absence of the Regents. On
`February 21, 2017, we authorized briefing on the motion to dismiss. Paper
`22, 4. Pursuant to our authorization, Patent Owner has filed a motion to
`dismiss (Paper 23, “Mot.”), Petitioner has filed an opposition (Paper 25,
`“Opp.”), and Patent Owner has filed a reply (Paper 28, “Reply”).
`For the reasons set forth below, we agree that the Regents cannot be
`compelled to join this proceeding against their will, but we conclude that the
`proceeding may continue in their absence. Accordingly, we grant in part
`Patent Owners’ motion to dismiss.
`
`
`BACKGROUND
`II.
`The ’618 patent, titled “Lipase-Containing Polymeric Coatings for the
`Facilitated Removal of Fingerprints,” issued on March 12, 2013. Ex. 1001,
`at [45], [54]. The patent lists six inventors. Id. at [75]. During the
`prosecution of the ’618 patent, three of those inventors assigned their
`interest to the Regents. Ex. 2003. Also during prosecution, two of the
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`remaining inventors assigned their interest to Toyota Motor Engineering &
`Manufacturing North America, Inc., and the remaining inventor assigned his
`interest to Toyota. Ex. 2004; Ex. 2005. Later, Toyota Motor Engineering &
`Manufacturing North America, Inc. assigned its interest to Toyota.
`Ex. 2006. Accordingly, the ’618 patent is co-owned today by Toyota and
`the Regents. See Paper 4, 1 (naming Toyota and the Regents as co-assignees
`of the ’618 patent and real parties in interest in this proceeding). In this
`proceeding, Toyota and the Regents are represented by the same counsel.
`Paper 5, 1 (naming counsel for Toyota); Paper 22, 1 (naming counsel for the
`Regents).
`In its motion to dismiss the present proceeding, Patent Owner argues
`that Eleventh Amendment sovereign immunity extends to inter partes
`reviews, that the Regents are entitled to assert sovereign immunity, and that
`the merits of this inter partes review cannot be adjudicated in the absence of
`the Regents. Mot. 2–18. Patent Owner also argues that the sovereign
`immunity of the Regents cannot be subordinated to speculative concerns
`about the effects of applying sovereign immunity to inter partes reviews. Id.
`at 18–20. Petitioner opposes on several grounds, including that Patent
`Owners have failed to prove that the Regents are entitled to assert sovereign
`immunity, that the Eleventh Amendment does not extend to inter partes
`reviews, and that any sovereign immunity possessed by the Regents does not
`extend to Toyota. Opp. 3–20. Patent Owner argues in its reply that the
`Regents are entitled to assert sovereign immunity as an arm of the State of
`Minnesota. Reply 1–3.
`
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`
`III.
`
`ANALYSIS
`
`A. Whether a State May Assert Eleventh Amendment Immunity in Inter
`Partes Review Proceedings
`
`The first question we must answer is whether the sovereign immunity
`reserved to states under the Eleventh Amendment may be asserted in inter
`partes reviews. Two earlier decisions of the Board have addressed this
`issue. NeoChord, Inc. v. Univ. of Md., Balt., Case IPR2016-00208 (PTAB
`May 23, 2017) (Paper 28); Covidien LP v. Univ. of Fla. Research Found.
`Inc., Case IPR2016-01274 (PTAB Jan. 25, 2017) (Paper 21). Both of those
`decisions concluded that Eleventh Amendment sovereign immunity may be
`invoked in inter partes review proceedings. Although neither of those
`decisions is binding on us, we find their reasoning persuasive.
`As the panels in NeoChord and Covidien did, we note the Supreme
`Court’s decision in Federal Maritime Commission v. South Carolina State
`Ports Authority (hereinafter “FMC”), in which the Court held that the
`Eleventh Amendment extends to agency proceedings that “walk[], talk[],
`and squawk[] very much like a lawsuit.” 535 U.S. 743, 756–59 (2002).
`Accordingly, whether the Eleventh Amendment extends to inter partes
`reviews can be determined by examining the extent to which inter partes
`reviews resemble lawsuits. Id. The FMC analysis has been applied to
`interference proceedings before the Board of Patent Appeals and
`Interferences, our predecessor. Vas-Cath, Inc. v. Curators of Univ. of Mo.,
`473 F.3d 1376, 1382 (Fed. Cir. 2007). In Vas-Cath, the Federal Circuit held
`that interference proceedings “bear ‘strong similarities’ to civil litigation.”
`Id. (quoting FMC, 535 U.S. at 760). This conclusion was based on several
`characteristics of interference proceedings:
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`
`PTO interferences involve adverse parties, examination and
`cross-examination by deposition of witnesses, production of
`documentary evidence, findings by an
`impartial federal
`adjudicator, and power to implement the decision. See, e.g.,
`37 C.F.R. § 1.651(a) (during an interference, “an administrative
`patent judge shall set a time for filing motions (§ 1.635), for
`additional discovery under § 1.687(c) and testimony period for
`taking any necessary testimony.”); § 1.671(a) (“Evidence [for an
`interference] consists of affidavits, transcripts of depositions,
`documents and things.”); § 1.671(b) (“[T]he Federal Rules of
`Evidence shall apply to interference proceedings” except
`“[t]hose portions of the Federal Rules of Evidence relating to
`criminal actions, juries, and other matters not relevant to
`interferences.”).
`
`Id. The Board’s procedures for conducting inter partes reviews resemble
`those for conducting interferences. As with interferences, inter partes
`reviews generally involve adverse parties; provide for examination and
`cross-examination of witnesses; and result in findings by an impartial federal
`adjudicator and decisions that the agency has the power to implement. See
`35 U.S.C. §§ 6, 311–318; 37 C.F.R. §§ 42.51–.53. Accordingly, under FMC
`and Vas-Cath, inter partes reviews are similar to lawsuits.
`As noted in NeoChord, inter partes reviews are not identical to
`lawsuits. “[T]he Office has explained that there is not a one to one
`correspondence between inter partes review proceedings and district court
`litigation inasmuch as inter partes review proceedings are designed to allow
`for a lower cost to parties and a more rapid outcome.” NeoChord, Case
`IPR2016-00208, slip op. at 7 n.5 (PTAB May 23, 2017) (Paper 28) (citing
`Final Rule, Rules of Practice for Trials Before the Patent Trial and Appeal
`Board and Judicial Review of Patent Trial and Appeal Board Decisions,
`77 Fed. Reg. 48,612, 48,636 (Aug. 14, 2012) (Response to Comment 92)).
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`As the Supreme Court has noted, “in [some] significant respects, inter partes
`review is less like a judicial proceeding and more like a specialized agency
`proceeding.” Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2143
`(2016) (citing differences between inter partes review and civil litigation as
`including standing requirements, burden of proof, and ability to continue
`with the proceeding following withdrawal of a party); see also id. at 2144
`(quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S.
`806, 816 (1945)) (noting that the aspects of inter partes review that resemble
`earlier reexamination proceedings “help[] protect the public’s ‘paramount
`interest in seeing that patent monopolies . . . are kept within their legitimate
`scope’”). But the test for Eleventh Amendment applicability does not
`require identity with civil litigation in all respects. Instead, it requires
`similarity in “Rules of Practice and Procedure,” “discovery,” and “the role of
`the . . . impartial officer designated to hear a case.” FMC, 535 U.S. at 757–
`59. As discussed above, such similarity is present with respect to inter
`partes reviews.
`We are not persuaded otherwise by Petitioner’s arguments. Petitioner
`argues that the list of similarities to consider is much longer than the list
`articulated by the Supreme Court, including “1) whether the proceeding is
`adversarial; 2) whether the proceeding arose as a result of a deprivation or
`injury; 3) whether there are at least two parties involved in the proceeding;
`4) whether the attendance of the parties is required; 5) whether one of the
`parties is prosecuting a claim against the other; [and] 6) whether the injured
`party is demanding the restoration of something from the defending party.”
`Opp. 9 (quoting In re Barrett Ref. Corp., 221 B.R. 795, 803 (Bankr. W.D.
`Okla. 1998)) (alteration in original). We rely on the list of factors articulated
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`in FMC, however, both because FMC is a Supreme Court decision and
`because FMC post-dates the list articulated in Barrett Refining.
`Petitioner also argues that “[t]he explicit language of [35 U.S.C.
`§ 311] indicates that [an inter partes review] is a challenge to the patent, not
`the patent owner,” making it “a proceeding in rem, not in personam.”
`Opp. 10. It is true that Congress can provide for actions to be in rem
`through express language. See, e.g., 15 U.S.C. § 1125(d)(2)(A) (creating
`“an in rem civil action against a domain name”). Express language of this
`nature does not appear in § 311 of the inter partes review statutes.
`35 U.S.C. § 311. Although § 311 does say, as Petitioner argues, that “a
`person . . . may file with the Office a petition to institute an inter partes
`review of the patent,” the Supreme Court has described inter partes reviews
`as “hybrid proceeding[s]” with both “adjudicatory characteristics [that]
`make these agency proceedings similar to court proceedings” and
`“features . . . [that] indicate that the purpose of the proceeding is not quite
`the same as the purpose of district court litigation.” Id.; Cuozzo, 136 S. Ct.
`at 2143–44; see also Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S.
`306, 312 (1950) (noting that proceedings can be termed “quasi in rem, or
`more vaguely still, ‘in the nature of a proceeding in rem’” in addition to the
`more traditional in rem and in personam). In light of the spectrum of
`possible types of actions, even if we were to accept Petitioner’s argument
`that inter partes reviews are not purely proceedings in personam against
`patent owners, we are not prepared to say on the present record and
`arguments that inter partes reviews are purely proceedings in rem against
`patents.
`
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`
`This is so even in light of Petitioner’s argument that the ability of the
`Board to commence inter partes review proceedings without the
`participation of the patent owner, and to continue inter partes review
`proceedings after the withdrawal of the patent owner, proves the in rem
`nature of inter partes reviews. Opp. 10–14. Although these characteristics
`of inter partes reviews distinguish them from civil litigation and give them
`some features of in rem actions, we are not persuaded that they transform
`what the Supreme Court has called “hybrid proceeding[s]” with some
`“adjudicatory characteristics” into purely administrative proceedings in rem.
`Given the presence of “adjudicatory characteristics” that were found to make
`agency proceedings similar to civil litigation in FMC and Vas-Cath, we
`consider it more likely that inter partes reviews have sufficient in personam
`character for the Eleventh Amendment to apply.
`Accordingly, we conclude that sovereign immunity under the
`Eleventh Amendment may be asserted in inter partes review proceedings.
`
`B. Whether Eleventh Amendment Immunity Has Been Abrogated or
`Waived
`
`Even though inter partes reviews are similar enough to civil litigation
`for Eleventh Amendment sovereign immunity to apply, that immunity could
`have been abrogated by Congress or waived by the state to which it
`otherwise would apply. See Coll. Sav. Bank v. Fla. Prepaid Postsecondary
`Educ. Expense Bd., 527 U.S. 666, 672–87 (1999); Vas-Cath, 473 F.3d at
`1383.
`
`Neither party raises an argument that abrogation or waiver should
`apply in this case. In addition, we agree with the NeoChord panel that
`“Congress has not abrogated Eleventh Amendment immunity with respect to
`
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`IPR2016-01914
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`this inter partes review proceeding, under Section 5 of the Fourteenth
`Amendment or under Article I of the Constitution” and that waiver generally
`does not apply in any case in which a State “serves as a defendant.”
`NeoChord, Case IPR2016-00208, slip op. at 9–12, 14–15 (PTAB May 23,
`2017) (Paper 28). Accordingly, we conclude that, on the present record and
`arguments, neither abrogation nor waiver precludes assertion of Eleventh
`Amendment sovereign immunity.
`
`C. Whether the Regents May Assert Sovereign Immunity under the
`Eleventh Amendment
`
`Given that Eleventh Amendment sovereign immunity may be asserted
`in inter partes review proceedings, we next need to determine whether the
`Regents are capable of asserting it. Patent Owner argues that the Regents
`are entitled to assert sovereign immunity under the Eleventh Amendment.
`Mot. 8–11; Reply 1–3. Petitioner disagrees. Opp. 3–7.
`The Eleventh Amendment “encompasses not only actions in which a
`State is actually named as the defendant, but also certain actions against state
`agents and state instrumentalities.” Regents of the Univ. of Cal. v. Doe, 519
`U.S. 425, 429 (1997). Accordingly, “a state university typically enjoys
`sovereign immunity.” Univ. of Utah v. Max-Planck-Gesellschaft zur
`Forderung der Wissenschaften e.V., 734 F.3d 1315, 1319 (Fed. Cir. 2013).
`The question for us is whether the Regents are a “state agent[] or state
`instrumentalit[y]” similar to “a state university.” Answering this question
`requires “focus[ing] on the ‘nature of the entity created by state law’ to
`determine whether it should ‘be treated as an arm of the State.’” Doe, 519
`U.S. at 429–30 (quoting Mt. Healthy City Bd. of Ed. v. Doyle, 429 U.S. 274,
`
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`IPR2016-01914
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`280 (1977)). We can do this “only after considering the provisions of state
`law that define the agency’s character.” Id. at 429 n.5.
`Patent Owner begins by arguing that the University of Minnesota “is
`an arm of the State of Minnesota.” Mot. 8–11. We agree with Patent Owner
`that the status of the University of Minnesota as an arm of the State of
`Minnesota is “a matter of settled federal law.” Id. at 8; see Raygor v.
`Regents of the Univ. of Minn., 534 U.S. 533, 536 (2002); Treleven v. Univ.
`of Minn., 73 F.3d 816, 819 (8th Cir. 1996); Hoeffner v. Univ. of Minn., 948
`F. Supp. 1380, 1385 (D. Minn. 1996). We also agree with Petitioner,
`however, that the status of the University of Minnesota as an arm of the
`State of Minnesota does not necessarily resolve the question of whether the
`Regents are an arm of the State. Opp. 4–6.
`It appears that federal courts treat the Regents and the University of
`Minnesota as interchangeable for purposes of Eleventh Amendment
`analysis. See, e.g., Raygor, 534 U.S. at 535–36 (2002) (treating a suit
`against “Regents of the University of Minnesota” as a suit “against
`respondent university”); Humenansky v. Regents of Univ. of Minn., 152 F.3d
`822, 824 (8th Cir. 1998) (discussing the Eleventh Amendment status of
`“[t]he University of Minnesota” in a case against “Regents of the University
`of Minnesota”); Richmond v. Bd. of Regents of Univ. of Minn., 957 F.2d 595,
`596 (8th Cir. 1992) (treating a suit against “Board of Regents of the
`University of Minnesota” and implicating the Eleventh Amendment as a
`“suit against the University of Minnesota”). This strongly suggests that we
`should treat the Regents as an arm of the State of Minnesota.
`Treating the Regents as such is sensible given their status under
`Minnesota law. Minnesota state courts treat the Regents as “an agency of
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`the state.” Miller v. Chou, 257 N.W.2d 277, 278 (Minn. 1977). The
`Regents were “established by the [Minnesota] territorial legislature in 1851.”
`Id.; see Ex. 2007 § 7. The powers possessed by the Regents are “of
`constitutional stature.” Miller, 257 N.W.2d at 278–79. The members of the
`Regents are “elected by the Legislature.” Ex. 2007 § 4. The Regents are
`required to “make a report annually, to the Legislature” that details “the state
`and progress of the University.” Id. § 16. The state legislature “may at any
`time alter, amend, [or] modify” the laws relating to the establishment of the
`Regents. Id. § 20.
`Given the evidence of record, the previous decisions of Minnesota and
`federal courts, and the arguments of the parties here, we are persuaded that
`the Regents are an arm of the State of Minnesota for Eleventh Amendment
`purposes. Because the Regents have asserted their sovereign immunity and
`have thereby expressed a desire not to continue with this inter partes review
`proceeding, we dismiss them from the proceeding.
`
`D. Whether the Inter Partes Review May Continue in the Absence of the
`Regents
`
`Because the Regents are no longer a part of this proceeding, and
`because the Regents are an owner of the patent being challenged, we must
`determine whether this inter partes review may continue in the absence of
`the Regents. Patent Owner argues that this proceeding may not continue.
`Mot. 11–18. Petitioner argues that it may. Opp. 17–20. As the moving
`party, Patent Owner has the burden of establishing “that it is entitled to the
`requested relief,” i.e., that this proceeding should be terminated rather than
`continuing in the absence of the Regents. 37 C.F.R. § 42.20(c).
`
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`
`The rules governing inter partes review proceedings provide for
`continuing in the absence of a patent owner in at least three circumstances.
`First, the Board may institute trial and proceed to a final written decision
`even in the absence of any preliminary response or response by the patent
`owner. 37 C.F.R. §§ 42.108(c) (requiring the Board to take a preliminary
`response into account in deciding whether to institute trial only “where such
`a response is filed”), 42.120(a) (permitting, but not requiring, a patent owner
`to file a response). Second, if the parties to an inter partes review settle their
`dispute, the Board may continue to “independently determine any question
`of jurisdiction, patentability, or Office practice.” Id. § 42.74(a); see
`35 U.S.C. § 317(a) (permitting the Board to “proceed to a final written
`decision” following settlement by the parties to an inter partes review);
`Yahoo! Inc. v. CreateAds L.L.C., Case IPR2014-00200, slip op. at 2
`(PTAB Feb. 26, 2015) (Paper 40) (undertaking this process). Third, “[a]n
`owner of a part interest in the subject patent may move to act to the
`exclusion of an inventor or a co-owner” upon a showing that the excluded
`co-owner is unable or refuses “to prosecute the proceeding” or upon a
`showing that there is another reason “why it is in the interests of justice to
`permit the owner of a part interest to act in the trial.” 37 C.F.R. § 42.9(b).
`Although none of these rules applies precisely in the present situation, their
`existence demonstrates that it is not the case that the absence of one patent
`owner necessarily requires the termination of the inter partes review.
`Patent Owner argues for a rule requiring automatic termination of a
`proceeding upon the dismissal of a party on the grounds of sovereign
`immunity. Mot. 11–15. Patent Owner’s argument relies on a statement in
`Republic of Philippines v. Pimentel that, “where sovereign immunity is
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`asserted, and the claims of the sovereign are not frivolous, dismissal of the
`action must be ordered where there is a potential for injury to the interests of
`the absent sovereign.” 553 U.S. 851, 867 (2008). Further, argues Patent
`Owner, the “interests of the absent sovereign” include an interest in
`sovereign immunity itself, which cannot be protected adequately by any
`remaining private-party defendants. Mot. 13–15 (citing Enter. Mgmt.
`Consultants, Inc. v. United States, 883 F.2d 890, 894 (10th Cir. 1989)).
`Accordingly, Patent Owner argues that the only way to prevent “injury to the
`interests of the absent sovereign” is to dismiss the action entirely. Id.
`Petitioner counters that federal courts that have considered the issue
`have not applied a bright-line rule that requires dismissal of any action after
`a finding that one defendant has sovereign immunity. Opp. 17–19. We
`agree. “If the inability to join a sovereign as a party had the automatic effect
`of nullifying the suit against other private defendants, Rule 19 [of the
`Federal Rules of Civil Procedure] would be rendered superfluous in these
`cases. That is not the law.” SourceOne Global Partners, LLC v. KGK
`Synergize, Inc., No. 08-C-7403, 2009 WL 1346250, at *4 (N.D. Ill. May 13,
`2009); see also Davis v. United States, 192 F.3d 951, 960 (10th Cir. 1999)
`(holding, pre-Pimentel, that to suggest “that immunity is so compelling by
`itself as to eliminate the need to weigh the four Rule 19(b) factors” used to
`determine whether to continue with litigation in the absence of a party is to
`create “far too categorical[]” a rule).
`Since Pimentel was decided, our reviewing court has considered at
`least twice the issue of whether to dismiss litigation in the absence of a
`sovereign defendant. In both of those decisions, the court considered the
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`proper application of the Rule 19(b) factors1 rather than relying solely on the
`sovereign immunity of the absent defendant. Univ. of Utah, 734 F.3d at
`1326–28; A123 Sys., Inc. v. Hydro-Quebec, 626 F.3d 1213, 1221–22 (Fed.
`Cir. 2010). These decisions continue the Federal Circuit’s pre-Pimentel
`practice of looking to Rule 19(b) in cases in which a federal court can
`exercise jurisdiction over one defendant but not over another. See, e.g.,
`Dainippon Screen Mfg. Co., Ltd. v. CFMT, Inc., 142 F.3d 1266, 1272–73
`(Fed. Cir. 1998) (conducting Rule 19(b) analysis where one defendant was
`beyond reach of district court’s personal jurisdiction). Accordingly, we do
`not agree with Patent Owner that the federal courts have adopted a rule
`under which the successful assertion of sovereign immunity by one party
`requires a dismissal of the action against the remaining parties.
`
`1 Rule 19(b) of the Federal Rules of Civil Procedure provides that “[i]f a
`person who is required to be joined if feasible cannot be joined, the court
`must determine whether, in equity and good conscience, the action should
`proceed among the existing parties or should be dismissed.” It goes on to
`state four “factors for the court to consider” in making that determination:
`
`(1) the extent to which a judgment rendered in the person’s
`absence might prejudice that person or the existing parties;
`(2) the extent to which any prejudice could be lessened or avoid
`by:
`(A) protective provisions in the judgment;
`(B) shaping the relief; or
`(C) other measures;
`(3) whether a judgment rendered in the person’s absence would
`be adequate; and
`(4) whether the plaintiff would have an adequate remedy if the
`action were dismissed for nonjoinder.
`
`Fed. R. Civ. P. 19(b).
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`
`Instead, when the absent sovereign party and a remaining party have
`identical “interests in the asserted patents,” the remaining party adequately
`represents the interests of the absent sovereign party under Rule 19(b)(1).2
`A123, 626 F.3d at 1221; see Univ. of Utah, 734 F.3d at 1327.3 The
`adequacy of that representation is even stronger when the parties at issue are
`patent owners, when all of the patent owners except the absent sovereign are
`present in the action, and when all of the present patent owners are
`represented by the same legal counsel. Univ. of Utah, 734 F.3d at 1327.
`Here, there are only two patent owners, Toyota and the Regents. With the
`Regents dismissed from this proceeding, all patent owners are present except
`the sovereign. The present patent owner and the absent patent owner both
`hold identical interests in the ’618 patent. Ethicon, Inc. v. U.S. Surgical
`Corp., 135 F.3d 1456, 1465 (Fed. Cir. 1998) (“each co-inventor
`
`
`2 We acknowledge, as do the parties, that the Federal Rules of Civil
`Procedure do not apply to inter partes reviews and that the inter partes
`review rules “do not have a direct analogue to Rule 19(b).” Mot. 14; see
`Opp. 19–20. Nevertheless, we find instructive the Federal Circuit’s analysis
`under Rule 19(b)(1) in A123 and University of Utah regarding the identity of
`interests between present and absent patent owners.
`
`3 The analysis of the identity of interests takes into account any difference in
`the claims made by the plaintiff against each defendant. Ali v. Carnegie
`Inst. of Wash., No. 2016-2320, 2017 WL 1349280, at *7 (Fed. Cir. Apr. 12,
`2017) (nonprecedential) (finding potential prejudice to an absent patent
`owner against whom the plaintiff had brought a claim for monetary damages
`when the remaining patent owner was not faced with a monetary-damages
`claim). Needless to say, there is no difference here between the nature of the
`claim made by Petitioner against Toyota and the nature of the claim made by
`Petitioner against the Regents. As to each patent owner, the sole remedy
`Petitioner seeks is cancellation of claims 1–11 of the ’618 patent. Pet. 1.
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`presumptively owns a pro rata undivided interest in the entire patent”);
`Exs. 2003–2006 (showing that Toyota and the Regents acquired the
`complete interests of the co-inventors of the ’618 patent). Further, both
`Toyota and the Regents are represented by the same legal counsel. Paper 5,
`1 (naming counsel for Toyota); Paper 7, 1 (naming counsel for the Regents).
`Accordingly, under the Federal Rules of Civil Procedure, Toyota would
`adequately represent the interests of the Regents in the challenged patent.4
`Thus, even if we were to apply the rules that govern the continuation of a
`Federal court proceeding after the dismissal of a party on the ground of
`sovereign immunity, we would not conclude that, as Patent Owner argues,
`this proceeding must be terminated upon the dismissal of the Regents.
`Both parties agree that the Federal Rules of Civil Procedure do not
`apply to inter partes reviews and that “the rules prescribed for the conduct of
`[inter partes review] proceedings do not have a direct analogue to Rule
`19(b).” Mot. 14; see Opp. 19–20. Accordingly, there is no need for us to
`consider the remaining factors of Rule 19(b). Further, neither party has
`briefed the proper application of the Rule 19(b) factors other than the first
`factor, “the extent to which a judgment rendered in [the Regents’] absence
`
`
`4 In NeoChord, the inter partes review was terminated because the patent
`owners did not share identical interests in the challenged patent. NeoChord,
`Case IPR2016-00208, slip op. at 18–19 (PTAB May 23, 2017) (Paper 28)
`(citing A123, 626 F.3d at 1217). But NeoChord is factually distinguishable
`from this case. There, the remaining “patent owner” was an exclusive
`licensee to whom the absent sovereign patent owner had “transferred less
`than ‘substantially all’ rights.” Id. at 19. Here, Toyota is just as much an
`owner of the ’618 patent as the Regents.
`
`16
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`

`IPR2016-01914
`Patent 8,394,618 B2
`
`might prejudice [the Regents],” which we have discussed. Fed. R. Civ. P.
`19(b)(1).
`Because our rules contemplate proceeding with less than all the
`owners of a challenged patent, and because, even under the more restrictive
`rules that prevail in Federal court, Toyota would represent adequately the
`interests of the Regents in the ’618 patent, we conclude that this inter partes
`review proceeding may continue in the absence of the Regents.
`
`
`CONCLUSION
`IV.
`For the foregoing reasons, we conclude that Patent Owner has shown
`sufficiently that the Regents may raise Eleventh Amendment sovereign
`immunity as a defense in this inter partes review proceeding, that Eleventh
`Amendment sovereign immunity has not been abrogated or waived in this
`case, and that the Regents do not wish to continue in this proceeding as a
`patent owner. We conclude that Patent Owner has not shown sufficiently
`that dismissal of the Regents from this proceeding requires termination of
`the proceeding as to the remaining patent owner, Toyota.
`
`
`Accordingly, it is
`ORDERED that Patent Owner’s motion to dismiss is granted in part;
`FURTHER ORDERED that the Regents are hereby dismissed from
`this proceeding;
`FURTHER ORDERED that Toyota is not dismissed from this
`proceeding; and
`
`17
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`

`IPR2016-01914
`Patent 8,394,618 B2
`
`
`FURTHER ORDERED that this proceeding is not terminated or
`dismissed.
`
`
`
`
`
`
`
`
`
`
`
`18
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`

`IPR2016-01914
`Patent 8,394,618 B2
`
`PETITIONER:
`
`David O. Simmons
`IVC PATENT AGENCY
`dsimmons@ivcpatentagency.com
`
`Jonathan D. Hurt
`MCDANIEL & ASSOCIATES, PC
`jhurt@technologylitigators.com
`
`Mark A.J. Fassold
`Jorge Mares
`Watts Guerra LLP
`mfassold@wattsguerra.com
`jmares@wattsguerra.com
`
`
`
`PATENT OWNER:
`
`Joshua A. Lorentz
`Richard Schabowsky
`John D. Luken
`Oleg Khariton
`DINSMORE & SHOHL LLP
`joshua.lorentz@dinsmore.com
`richard.schabowsky@dinsmore.com
`john.luken@dinsmore.com
`oleg.khariton@dinsmore.com
`
`
`
`
`19
`
`