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IP News

By Howard Shire and Adam Fischer
October 01, 2018

 

Federal Circuit: IPR Petitioner Always Retains Burden of Establishing Timeliness

On September 7, the Federal Circuit made clear that an IPR petitioner always retains the burden of establishing the timeliness of its petition, and that the burden never formally shifts to the patent holder; not even to identify a real party in interest. More specifically, in Worlds Inc. v. Bungie, Inc., Nos. 2017-1481, 2017-1546 & 2017-1583 (Fed. Cir. Sept. 7, 2018), slip op. Chief Judge Prost reiterated that an IPR petitioner “bears the ultimate burden of persuasion to show that its petitions are not time-barred” because of a complaint previously served on a real party in interest. Slip. Op. at 8-9 (“the timely filing of a petition … is a condition precedent to the Director's authority to act”). The court then outlined the procedure for analyzing that issue, rejecting any formal “presumption” in favor of the petitioner, and instead mandating that the PTO Board make all “factual determinations necessary to evaluate” the issue once a sufficient question is raised by the patent holder. Id. at 15.

Worlds grew out of a dispute related to computer-generated avatars. In 2012, Worlds filed suit against Activision Publishing, Inc. (Activision) in the District of Massachusetts, alleging that Activision infringed Worlds's avatar-related patents in certain of its video games, including Call of Duty. Id. at 2. In 2014, Worlds notified Activision that it intended to add another video game series — Destiny — as an additional accused product in the litigation. See, id. at 2-3. The Destiny games were distributed by Activision, but developed by Bungie, Inc. (Bungie), which was not a party to the district court suit.

Roughly six months later (and more than two years after Activision was served in the district court litigation), Bungie filed IPR petitions challenging Worlds's patents. Id. at 3. Worlds quickly sought discovery in IPR, “requesting information regarding whether Activision should have been named as a real party in interest to the proceedings, … making the petitions time barred under 35 U.S.C. §315(b).” Id. According to Worlds, a development agreement between Activision and Bungie required Activision to “review and approv[e]” all “legal reviews” of the video game products, and that likely meant Activision “had the opportunity to control the IPRs, making [it] a real party in interest.” Id. at 13. The Board was unconvinced, and denied the motion for discovery, as well as Worlds's substantive real party in interest arguments. Ultimately (at least in view of Chief Judge Prost), the Board simply took Bungie's (and its counsel's) word, and accepted their interpretation of the development agreement at face value. That, the court held, was error.

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