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Adding a Real Party in Interest Does Not Necessarily Alter the Petition’s Filing Date

Gregory Huh
Associate
Haynes and Boone, LLP

In Mayne Pharma International Pty. Ltd. v. Merck Sharp & Dohme Corp., (Fed. Cir. June 21, 2019), the Federal Circuit affirmed the decision of the Patent Trial and Appeal Board (“Board”) permitting the petitioner to include an additional real party in interest in its mandatory notice without altering the petition’s filing date.

Background

Merck Sharp & Dohme Corp. (“MSD”) filed a petition for inter partes review against U.S. Patent Number 6,881,745 (“the ’745 patent”) assigned to Mayne Pharma International Pty. Ltd. (“Mayne”). In its Patent Owner’s Preliminary Response, Mayne urged the Board to decline institution because MSD’s parent company, Merck & Co., Inc. (“MCI”), was not identified as a real party in interest. Based on the record at that time, however, the Board was not persuaded and instituted review. Mayne then requested rehearing, arguing that the Board abused its discretion. The Board rejected this argument and maintained the proceeding.

During the proceeding, with the record further developed, Mayne again raised the real party in interest issue. The Board then permitted MSD to update its mandatory notice to include MCI as a real party in interest. In permitting the late addition, the Board relied on the “interests of justice” language in 37 C.F.R. § 42.5(c)(3), late-action rule: “A late action will be excused on a showing of good cause or upon a Board decision that consideration on the merits would be in the interests of justice.” Merck Sharp & Dohme Corp. v. Mayne Pharma Int’l Pty Ltd., No. IPR2016-01186, 2017 WL 6398319, at *2 (P.T.A.B. Dec. 13, 2017). After MCI was added to the petition without altering the filing date, the Board in the final written decision determined that Mayne’s time bar argument was moot and found the claims unpatentable in view of the prior art.

Appeal

On appeal to the Federal Circuit, Mayne presented two main arguments regarding the real party in interest issue: (1) the Board should not have instituted review since the petition was time-barred under 35 U.S.C. § 315(b) because MCI was added more than a year after the service of Mayne’s complaint against it; and (2) pursuant to PTO rules a petition can only be considered and accorded a filing date after all real parties in interest are identified, and under 37 C.F.R. § 42.104 only clerical or typographical mistakes can be fixed without impacting the filing date. Slip. Op. at 8.

MSD responded that the decision whether to institute review and the sufficiency of the initial disclosure in identifying the real party in interest involve AIA mandatory disclosure provisions 35 U.S.C. § 312(a)(2) & (3) that should be read with § 314(d), which renders unappealable a determination by the Director “under this section.” Slip. Op. at 9. Alternatively, MSD argued that if the Court can review, the Board’s action was permissible under its late-action rule of 37 C.F.R. § 42.5(c)(3). Slip. Op. at 9.

As an initial matter, the Court concluded “that the Board committed no reversible error (whether or not it is appealable)” and therefore it “need not decide the issue of appealability.” Slip. Op. at 10 (citing Lone Star Silicon Innovations LLC v. Nanya Tech. Corp., No. 2018-1581, 2019 WL 2292485, at *7 (Fed. Cir. May 30, 2019)).

Turning to the merits, the Court concluded that “[i]n applying § 42.5(c)(3), the Board did not plainly err in finding that MSD’s amendment [to add MCI] would serve the interests of justice.” Slip. Op. at 12. The Court reasoned that “[b]oth MSD and MCI agreed to be bound by the estoppel effects flowing from the proceeding,” there was “no evidence suggesting that MSD intended to conceal MCI’s identity,” and Mayne suffered no prejudice since “had MSD named MCI as a real party in interest in its original petition, Mayne would be in the same position it is in now.” Slip Op. 12.

The Court then addressed Mayne’s argument “that § 42.104(c) provides the sole means for correction of a petition.” Slip Op. 13. The Court noted that the Board has in numerous instances permitted a petitioner to add a real party in interest without changing the filing date. Slip Op. 13 (citing Elekta Inc. v. Varian Med. Sys., Inc., No. IPR 2015-01401, 2015 WL 9898990, at *5 (P.T.A.B. Dec. 31, 2015) & Lumentum Holdings, Inc. v. Capella Photonics, Inc., No. IPR2015-00739, 2016 WL 2736005, at *3 (P.T.A.B. Mar. 4, 2016)). The Court further explained that it had also “noted in Wi-Fi One [that] if a petition fails to identify all real parties in interest under § 312(a)(2), the Director can, and does, allow the petitioner to add a real party in interest.” Slip. Op. at 13-14 (citing Wi-Fi One, LLC v. Broadcom Corp., 878 F.3d 1364, 1374 n.9. (Fed. Cir. 2018)) (internal citations omitted). Thus, the Court was “unpersuaded that § 42.104(c) provides the exclusive means for correcting a petition.” Slip. Op. at 14.

Accordingly, the Court concluded “that the Board did not err in allowing MSD to amend its disclosures to add MCI as a real party in interest without altering the petition’s filing date.” Slip. Op. at 14.

Conclusion

The decision underscores the importance of identifying all real parties in interest at the time of filing a petition for inter partes review, which remains the best practice. If a petitioner, however, unintentionally omits a party that should have been named as a real party in interest, the petitioner should seek leave from the Board to amend the mandatory notice under 35 U.S.C. § 42.5(c)(3).

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