Whether a non-party should be listed as an RPI is a fact-dependent inquiry. Factors that the Board consider include “whether a non-party exercises control over a petitioner’s participation in the proceeding and whether the non-party is directing the proceeding.”
The Patent Owner presented undisputed evidence that Petitioner is a wholly owned subsidiary of XM Holdings, nine executive officers of XM Holdings are the same as those of Petitioner, XM Holdings’ SEC filings indicate that it was a defendant in legal proceedings that name only Petitioner (including patent infringement cases), and XM Holdings funded a settlement in certain class-action lawsuits filed against Petitioner.
The Board relied on this evidence and concluded that XM Holdings was an RPI. Although Petitioner argued—and submitted a declaration from its General Counsel attesting—that XM Holdings has not and will not actually control this proceeding, the Board rejected the argument explaining that actual control is not the only measure in the RPI analysis. The Board explained that the RPI inquiry includes a determination of whether there is an opportunity to control, taking into account “whether the non-party is a clear beneficiary that has a preexisting, established relationship with the petitioner.” Based on the evidence, the Board determined that XM Holdings has this relationship with Petitioner and should have been identified as an RPI.
In the alternative, Petitioner had requested authorization to amend its petition to name XM Holdings so as to keep its original filing date if the Board determined that XM Holdings was an RPI. The Board, however, denied the request.
Practice Tip: Careful consideration should be given to disclosure, as real parties-in-interest, of entities with an established relationship to IPR petitioners, including parent companies, especially when there is even the slightest indicia of involvement in the IPR proceeding or related litigation.
Sirius XM Radio, Inc. v. Fraunhofer-Gesellschaft zur Forderung der angewandten Förschung e. V, IPR2018-00681 (PTAB Sept. 6, 2018).