IP Law Daily Agilent could not appeal PTAB decision as ‘successor in interest’ to third-party requestor of patent reexamination
Friday, January 29, 2016

Agilent could not appeal PTAB decision as ‘successor in interest’ to third-party requestor of patent reexamination

By Mark Engstrom, J.D.

Agilent Technologies, the purported successor in interest to Aurora SFC Systems, did not have a cause of action to appeal a PTAB decision that reversed a patent examiner’s anticipation and obviousness rejections of a patent that Waters Technologies had asserted against Aurora in an independent infringement action, the U.S. Court of Appeals for the Federal Circuit has ruled (Agilent Technologies, Inc. v. Waters Technologies Corp., January 29, 2016, O’Malley, K.). The court dismissed Agilent’s appeal because Aurora, not Agilent, was the third-party requestor of the inter partes reexamination of the Waters patent (U.S. Patent No. 6,648,609), which described a high-pressure chromatography system that used a pump as a pressure source for the precision pumping of a compressible fluid.

The parties framed their dispute as a jurisdictional issue, but the court found that the relevant issue was whether Agilent had a cause of action to appeal the PTAB decision. The parties agreed that Agilent’s right to appeal, if any, arose from 35 U.S.C. §141. On its face, that provision gave patent owners and third-party requestors the right to appeal an adverse reexamination decision.

Agilent argued that it was the “true third-party requestor” for appeal purposes because Agilent had become Aurora’s factual and legal “successor in interest” when it: (1) acquired “substantially all” of Aurora’s assets and (2) agreed to be bound by the outcome of the reexamination proceeding and the pending patent infringement action.

The statutory language did not explicitly forbid a change in the identity of the third-party requestor over the course of the proceeding or on appeal, the court observed, but neither did it address whether, and under what circumstances, a change in the identity of the third-party requestor could occur. The court concluded that Agilent failed to establish itself as Aurora’s successor in interest, and for that reason, the court declined to decide whether a successor in interest could become the third party requestor for the purpose of §100(e) or §141.

Agilent had alleged that it had acquired “substantially all” of Aurora’s assets, including “all rights relating to the reexaminations,” in August of 2012—five months after Aurora had filed its reexamination request. The court could not discern precisely what was transferred, but “substantially all” did not mean “all,” and after the transaction, Aurora remained a distinct and ongoing entity.

In addition, after Waters filed a response to the examiner’s Action Closing Prosecution (ACP), Aurora, not Agilent, submitted third-party comments. According to the court, Aurora’s third-party submission contradicted Agilent’s claim that Agilent had effectively stepped into Aurora’s shoes—as the third-party requestor—when Agilent acquired Aurora’s assets.

Further, Aurora did not file a request to change the name of the “real party in interest” from Aurora to Agilent until April 26, 2013, about eight months after the assets were transferred and one month after the parties had cross-appealed the decision of the patent examiner. And neither Aurora nor Agilent had asked to substitute Agilent as the “third-party requestor.” As late as April 23, 2014, Aurora’s counsel appeared at a Board hearing on behalf of Aurora, the respondent. In fact, Aurora’s counsel never withdrew from the proceeding and Aurora was subsequently listed in the caption of the Board’s decision as the third-party requestor.

Moreover, Aurora remained a party to the district court litigation that had precipitated the inter partes reexamination. Because Aurora was still a party to, and would be bound by, the judgment in the underlying infringement litigation, the court could not find that Agilent had established that it was Aurora’s successor in interest, or that Agilent had otherwise “stepped into the shoes of Aurora” for all intents and purposes.

Finally, the court noted that Agilent did not proffer a copy of the asset transfer agreement, even though the company had relied on a portion of the agreement as the basis for its right to appeal. Because the burden of demonstrating a cause of action rested on Agilent (the party that was seeking relief), and because Agilent had ample opportunity to establish itself as Aurora’s successor in interest (but failed to do so), the court did not decide whether a successor in interest would qualify as a third-party requestor.

For all of those reasons, the court concluded that Agilent lacked a statutory cause of action to appeal the PTAB’s decision on the reexamination proceedings. Dismissal of the appeal was therefore warranted.

The case is No. 2015-1280.

Attorneys: John M. Griem, Jr. (Carter, Ledyard & Milburn, LLP) for Agilent Technologies, Inc. Erik Paul Belt, Kia Lynn Freeman, and Deborah M. Vernon (McCarter & English, LLP) for Waters Technologies Corp.

Companies: Agilent Technologies, Inc.; Waters Technologies Corp.

MainStory: TopStory Patent FedCirNews

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