Medtronic, Inc.v.Robert Bosch Healthcare Systems, Inc.

Patent Trial and Appeal Board

Mar 16, 2015

11843727 (P.T.A.B. Mar. 16, 2015)

Trials@uspto.gov Paper 61
Tel: 571-272-7822 Entered: May 22, 2015

PUBLIC VERSION

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

MEDTRONIC, INC.,
Petitioner,

v.

ROBERT BOSCH HEALTHCARE SYSTEMS, INC.,
Patent Owner.
____________

Case IPR2014-00488 (Patent 7,769,605 B2)
Case IPR2014-00607 (Patent 7,870,249 B2)1

Before MIRIAM L. QUINN, STEPHEN C. SIU, and JUSTIN T. ARBES,
Administrative Patent Judges.

ARBES, Administrative Patent Judge.
DECISION
Patent Owner’s Motion to Terminate
35 U.S.C. § 312(a)(2) and 37 C.F.R. § 42.72

1 Case IPR2014-00691 has been consolidated with Case IPR2014-00607.
This Decision addresses an issue pertaining to both cases. Therefore, we
exercise our discretion to issue a single Decision to be filed in each case.
The parties are not authorized to use this style heading for any subsequent
papers.
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Patent Owner Robert Bosch Healthcare Systems, Inc. (“Bosch”) filed
a Motion to Terminate each of the instant proceedings on the basis that
Petitioner Medtronic, Inc. (“Medtronic”) failed to identify Cardiocom, LLC
(“Cardiocom”) as a real party-in-interest under 35 U.S.C. § 312(a)(2). Paper
32 (“Mot.”).2 Medtronic filed an Opposition, Paper 34 (“Opp.”), and Bosch
filed a Reply, Paper 37 (“Reply”). With the Board’s authorization, the
parties also filed supplemental briefs and evidence pertaining to one issue:
the funding of the Petitions in these proceedings. See Papers 43,
45 (“PO Supp. Br.”), 47 (“Pet. Supp. Br.”). For the reasons stated below,
Bosch’s Motions are granted and the instant proceedings are terminated.

I. BACKGROUND
A. District Court Case
On April 26, 2013, Bosch filed a lawsuit against Cardiocom alleging
infringement of U.S. Patent No. 7,769,605 B2 (“the ’605 patent”), the patent
now being challenged in Case IPR2014-00488, and U.S. Patent No.
7,870,249 B2 (“the ’249 patent”), the patent now being challenged in Case
IPR2014-00607: Robert Bosch Healthcare Sys., Inc. v. Cardiocom, LLC,
Case No. 3:14-cv-01575-EMC (N.D. Cal.) (transferred from Case No.
2:13-cv-00349-JRG (E.D. Tex.)). Paper 16, 2. Cardiocom was served with
Bosch’s complaint on April 29, 2013. Ex. 2059. The district court case has
been stayed. Paper 16, 2. Cardiocom currently is the sole defendant.
Medtronic is not, and has never been, a defendant in the district court case.

2 The parties filed the same papers in both of the instant proceedings.
Unless otherwise specified, we refer to the papers and exhibits filed in
Case IPR2014-00488 for convenience.
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B. The Original IPR Proceedings
In July 2013, Cardiocom filed petitions seeking inter partes review of
the ’605 and ’249 patents in Cases IPR2013-00439 and IPR2013-00460,
respectively. In each petition, Cardiocom identified itself as the sole real
party-in-interest. See IPR2013-00439, Paper 3, 1; IPR2013-00460, Paper 5,
1. Cardiocom challenged all claims of the patents, and asserted grounds of
unpatentability under 35 U.S.C. § 103(a) based on the following prior art
references:
Case Prior Art3
IPR2013-00439 Crawford, Tallman, Vincent, Groner, and
Goodman
IPR2013-00460 Goodman, Wahlquist, Bittorf, Fu, and
Cohen
See IPR2013-00439, Paper 26, 7–8; IPR2013-00460, Paper 23, 2–3.
Cardiocom submitted a Declaration from Robert T. Stone, Ph.D., with its
Petition in each proceeding. See IPR2013-00439, Ex. 1014;
IPR2013-00460, Ex. 1009. In each proceeding, Cardiocom was represented
by attorneys from the law firm of Merchant & Gould, P.C. (“Merchant &
Gould”).
On August 12, 2013, Medtronic announced that it had acquired
Cardiocom. Ex. 2064. On December 30, 2013, Cardiocom filed a notice in
both proceedings stating that it “acknowledges that Medtronic, Inc. should
now be included as an additional real party in interest,” but Cardiocom
“should remain as a real party in interest as well, as a wholly-owned
subsidiary of Medtronic, Inc.” See IPR2013-00439, Paper 25;

3 Additional information regarding the asserted prior art references may be
found in the Decisions on Institution.
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IPR2013-00460, Paper 22. Cardiocom’s petitions were denied on January
16, 2014. See IPR2013-00439, Paper 26; IPR2013-00460, Paper 23.

C. The Instant IPR Proceedings
Medtronic filed its Petition challenging the ’605 patent in Case
IPR2014-00488 on March 6, 2014, and filed two Petitions challenging the
’249 patent in Cases IPR2014-00607 and IPR2014-00691 on April 10, 2014,
and April 25, 2014, respectively. In each proceeding, Medtronic stated that
it is the sole real party-in-interest. See IPR2014-00488, Paper 1, 1;
IPR2014-00607, Paper 1, 3; IPR2014-00691, Paper 2, 3.
Medtronic challenged all claims of the patents, and asserted grounds
of unpatentability under 35 U.S.C. § 103(a) based on the following prior art
references:
Case Prior Art
IPR2014-00488 Crawford, Tallman, Vincent, Groner,
Goodman, and Shabot
IPR2014-00607 Goodman, Wahlquist, Bittorf, Wright Jr.,
Kaufman, and Jeacock
IPR2014-00691 Goodman, Wahlquist, Bittorf, Wright Jr.,
Kaufman, Jeacock, and Lyons
See IPR2014-00488, Paper 17, 7–8; IPR2014-00607, Paper 17, 3–4;
IPR2014-00691, Paper 17, 3–4. Medtronic submitted a Declaration from
Dr. Stone with its Petition in each proceeding. See IPR2014-00488,
Ex. 1018; IPR2014-00607, Ex. 1009; IPR2014-00691, Ex. 1009. At the
time of filing its Petitions, Medtronic was represented by attorneys from
Merchant & Gould in Cases IPR2014-00488 and IPR2014-00607, and by
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attorneys from the law firm of Sterne, Kessler, Goldstein & Fox P.L.L.C.
(“Sterne Kessler”) in Case IPR2014-00691.
Bosch argued in its Preliminary Response in each proceeding that the
Petition should be denied under 35 U.S.C. § 312(a)(2) because Cardiocom
also is a real party-in-interest. See IPR2014-00488, Paper 17, 9–11;
IPR2014-00607, Paper 17, 12–14. Based on the record before us at the time,
we concluded that Bosch had not provided sufficient facts upon which we
could conclude that Cardiocom is a real party-in-interest. See
IPR2014-00488, Paper 17, 9–11; IPR2014-00607, Paper 17, 12–14.
We instituted a trial with respect to both patents, and consolidated Case
IPR2014-00691 with Case IPR2014-00607. See IPR2014-00488, Paper 17,
25; IPR2014-00607, Paper 17, 29–30.
Subsequent to institution, we granted-in-part Bosch’s motion for
additional discovery of information pertaining to whether Cardiocom is a
real party-in-interest and, based on the materials produced by Medtronic and
arguments of the parties, authorized Bosch to file its Motion to Terminate.
See IPR2014-00488, Papers 25, 27; IPR2014-00607, Papers 29, 31.

D. Related Matters
On February 27, 2014, a Merchant & Gould attorney filed a request
for ex parte reexamination of all claims of the ’605 patent. Ex. 2083. The
request was granted on June 13, 2014, and the reexamination
(Reexamination Control No. 90/013,167) currently is pending.
On June 6, 2014, a Sterne Kessler attorney filed a request for ex parte
reexamination of claims 14–18, 20, 21, and 23–26 of the ’249 patent.
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Ex. 3001. The request was granted on June 20, 2014, and the reexamination
(Reexamination Control No. 90/013,262) currently is pending.
Various patents related to the ’605 and ’249 patents also are involved
in other inter partes reviews, inter partes reexaminations, and ex parte
reexaminations. See Paper 16, 2–5.

II. ANALYSIS
A. Legal Standard
Pursuant to 35 U.S.C. § 312(a)(2), a petition for inter partes review
“may be considered only if . . . the petition identifies all real parties in
interest” (emphasis added). The identification of all real parties-in-interest
assists the Board in identifying potential conflicts of interest, helps identify
any potential estoppel issue with respect to 35 U.S.C. § 315(e)(1), and may
affect the credibility of evidence presented in a proceeding. See Rules of
Practice for Trials Before the Patent Trial and Appeal Board and Judicial
Review of Patent Trial and Appeal Board Decisions; Final Rule, 77 Fed.
Reg. 48,612, 48,617 (Aug. 14, 2012). Identification of all real
parties-in-interest also enables the Board to determine whether inter partes
review may be barred under 35 U.S.C. §§ 315(a)(1) or 315(b).
We generally accept a petitioner’s identification of real
parties-in-interest at the time of filing the petition. See Changes to
Implement Inter Partes Review Proceedings, Post-Grant Review
Proceedings, and Transitional Program for Covered Business Method
Patents; Final Rule, 77 Fed. Reg. 48,680, 48,695 (Aug. 14, 2012) (“Trial
Rules”). Thus, there is a rebuttable presumption that a petitioner’s
identification of real parties-in-interest is accurate. However, when a patent
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owner provides sufficient rebuttal evidence that reasonably brings into
question the accuracy of the petitioner’s identification, the ultimate burden
of proof remains with the petitioner to establish that it has complied with the
statutory requirement of 35 U.S.C. § 312(a)(2) to identify all real
parties-in-interest. This allocation of the burden for establishing whether a
third party has, or has not, been identified properly as a real party-in-interest
appropriately accounts for the fact that a petitioner is far more likely to be in
possession of, or have access to, evidence relevant to the issue than is a
patent owner. See Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc.,
IPR2013-00453, slip op. at 6–8 (PTAB Jan. 6, 2015) (Paper 88) (“Atlanta
Gas”); Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc., slip op. at
2–7 (PTAB Feb. 23, 2015) (Paper 91); Zerto, Inc. v. EMC Corp.,
IPR2014-01254, slip op. at 6–7 (PTAB Mar. 3, 2015) (Paper 35).
Whether a non-party is a “real party-in-interest” for purposes of an
inter partes review proceeding is a “highly fact-dependent question” that
takes into account how courts generally have used the term to “describe
relationships and considerations sufficient to justify applying conventional
principles of estoppel and preclusion.” Office Patent Trial Practice Guide,
77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) (“Trial Practice Guide”). In
general, a “real party-in-interest” is “the party that desires review of the
patent,” and “may be the petitioner itself, and/or it may be the party or
parties at whose behest the petition has been filed.” Id. Depending on the
circumstances, various factors may be considered, including whether the
non-party “exercised or could have exercised control over [the petitioner’s]
participation in a proceeding,” the non-party’s “relationship with the
petitioner,” the non-party’s “relationship to the petition itself, including the
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nature and/or degree of involvement in the filing,” and “the nature of the
entity filing the petition.” Id. at 48,759–60. Another potentially relevant
factor is whether the non-party is funding or directing the proceeding. Id.
For example, “a party that funds and directs and controls an IPR . . . petition
or proceeding constitutes a ‘real party-in-interest,’ even if that party is not a
‘privy’ of the petitioner.” Id. at 48,760. Complete funding or control is not
required for a non-party to be considered a real party-in-interest, however;
the exact degree of funding or control “requires consideration of the
pertinent facts.” Id.; see also ZOLL Lifecor Corp. v. Philips Elecs. N. Am.
Corp., IPR2013-00607, slip op. at 9 (PTAB Mar. 20, 2014) (Paper 13)
(determination of whether a non-party is a real party-in-interest is based on
“the totality of the circumstances”).
As explained in the Trial Practice Guide, we also find guidance in the
Supreme Court’s decision in Taylor v. Sturgell, 553 U.S. 880 (2008), which
sets forth the general rule under federal common law that a person not a
party to a lawsuit is not bound by a judgment in that suit, subject to certain
exceptions. 553 U.S. at 884, 891–95 (citations omitted); see Trial Practice
Guide at 48,759 (citing Taylor). In Taylor, the Supreme Court listed six
“categories” of exceptions under which non-party preclusion may be
appropriate, two of which are relevant to the instant proceedings:
Fourth, a non[-]party is bound by a judgment if she
“assume[d] control” over the litigation in which that judgment
was rendered. Because such a person has had “the opportunity
to present proofs and argument,” he has already “had his day in
court” even though he was not a formal party to the litigation.
Fifth, a party bound by a judgment may not avoid its
preclusive force by relitigating through a proxy. Preclusion is
thus in order when a person who did not participate in a
litigation later brings suit as the designated representative of a
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person who was a party to the prior adjudication. And although
our decisions have not addressed the issue directly, it also
seems clear that preclusion is appropriate when a non[-]party
later brings suit as an agent for a party who is bound by a
judgment.
553 U.S. at 895 (citations omitted; emphasis added).

B. Whether Cardiocom is a Real Party-in-Interest
Bosch contends that, based on the history of the prior inter partes
review proceedings and instant proceedings, and the relationship between
Medtronic and Cardiocom, Cardiocom is a real party-in-interest in the
instant proceedings under 35 U.S.C. § 312(a)(2). Mot. 1–9. According to
Bosch, Medtronic’s failure to name Cardiocom in the Petitions cannot be
cured because Cardiocom was served with a complaint alleging infringement
of the challenged patents more than one year ago under 35 U.S.C. § 315(b).
Id. at 10. Medtronic responds that Cardiocom is not a real party-in-interest
because Medtronic exercised exclusive control over the preparation of the
Petitions and participation in these proceedings, and that even if Cardiocom
is a real party-in-interest, termination is inappropriate under the Board’s
rules. Opp. 1–10. After considering all of the evidence of record and the
parties’ arguments, we are persuaded that Medtronic is acting as a proxy for
Cardiocom, and that Cardiocom should have been named in the Petitions as
a real party-in-interest.
First, Cardiocom is the party accused of infringing the ’605 and ’249
patents in the district court case, not Medtronic. Thus, Cardiocom has an
interest in the claims of the patents being determined to be unpatentable,
which would allow it to avoid liability in the district court case. See Trial
Practice Guide, 77 Fed. Reg. at 48,759 (a “real party-in-interest” is “the
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party that desires review of the patent”). At least at the time of filing the
Petitions, any interest Medtronic may have had in the claims being
determined to be unpatentable came solely from its ownership of
Cardiocom. Indeed, as Bosch points out, Medtronic challenged the same
claims of the ’249 patent (claims 1, 2, 6–8, and 11–13) in its Petition in
Case IPR2014-00607 that are being asserted against Cardiocom in the
district court case. See Mot. 3 (citing Ex. 2085). This further supports that it
is Cardiocom’s interest that matters, and that Medtronic is acting merely as a
proxy on behalf of its subsidiary.4
Medtronic argues that it has an independent interest in challenging the
’605 and ’249 patents, apart from its interest as Cardiocom’s parent. Opp. 6.
Medtronic cites as support an email from Bosch to Medtronic stating that
Bosch would like to “re-ignite the communication” between the two
companies and stating Bosch’s position that Medtronic products infringe
certain unspecified patents of Bosch. Id. The email in question, however,
was sent on April 15, 2014—after the Petitions in Cases IPR2014-00488 and
IPR2014-00607 were filed. See Ex. 2086; Reply 4. Similarly, Medtronic
points to communications it had with Bosch in September 2014 regarding
Medtronic products. Opp. 6 (citing Ex. 1031 ¶¶ 2–4). Because these
materials do not predate the filing of the Petitions, the email and subsequent
communications could not have factored into Medtronic’s decision to file
the Petitions.

4 We recognize that Medtronic also challenged the remaining claims of the
’249 patent (claims 3–5, 9, 10, and 14–29) in its Petition in Case
IPR2014-00691. The Petition in Case IPR2014-00607, however, was filed
by the same law firm that represented Cardiocom in Case IPR2013-00460,
and was similar to the previous case in many respects, as explained herein.
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Medtronic also cites evidence that Bosch attempted to license its
portfolio of patents and asserted those patents against various other
companies. Id. (citing Ex. 1031 ¶¶ 7–8). The fact that Bosch licensed or
asserted its portfolio of patents generally, with companies other than
Medtronic, does not demonstrate that Medtronic had an interest, independent
of its ownership of Cardiocom, in challenging the ’605 and ’249 patents, or
specific claims of those patents, when it filed the Petitions.
Second, Cardiocom’s interest is evidenced by the fact that it
previously filed its own petitions seeking inter partes review of the ’605 and
’249 patents, naming itself as the real party-in-interest. Cardiocom’s
petitions involved the same challenged claims, and similar prior art
references and arguments, as Medtronic’s Petitions in the instant
proceedings, and were supported by testimony from the same declarant,
Dr. Stone. See supra Section I.B–C. Cardiocom and Medtronic also have
the same counsel, Merchant & Gould.5 See id. Further, after Cardiocom
was acquired by Medtronic, Cardiocom represented that both Medtronic and
Cardiocom were real parties-in-interest in the earlier proceedings,
demonstrating Cardiocom’s recognition of its interest in the patents being
reviewed. See id.
Third, statements made by Cardiocom in the district court case
suggest that Cardiocom believed itself to be a real party-in-interest for
purposes of the instant proceedings, or, at the very least, that it has a
collective interest with Medtronic in the Petitions. On May 15, 2014, after

5 Medtronic retained different counsel in Case IPR2014-00691, but its lead
counsel in the consolidated proceeding, Case IPR2014-00607, is the same as
Cardiocom’s lead counsel in the earlier proceeding, Case IPR2013-00460.
See IPR2013-00460, Paper 5, 2–3; IPR2014-00607, Paper 21, 2.
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the Petitions in the instant proceedings were filed, Cardiocom moved to stay
the district court case pending the Board’s resolution of these proceedings.
Ex. 2076. Cardiocom stated that it “respectfully requests this Court to hear
Cardiocom’s motion to stay this lawsuit pending the resolution of the inter
partes review (IPR) and reexamination proceedings requested by Cardiocom
regarding all six patents-in-suit.”6 Id. at 1 (second emphasis added). The
’605 and ’249 patents are among the six patents asserted in the district court
case. In its reply brief, Cardiocom stated that “the PTO has already granted
IPRs covering the majority of the asserted claims of four of the patents in
suit and Cardiocom and Medtronic have already filed petitions and
reexaminations requesting any remaining claims be canceled by the PTO.”
Ex. 2077, 14 (emphasis added).
In response, Medtronic contends that the statements cited above are
“literally erroneous,” and should be given little weight in view of two other,
more specific statements in Cardiocom’s motion. Opp. 5–6. Cardiocom
stated later in its motion that “Medtronic . . . filed its own petition for IPR
against the ’605 patent” and “Medtronic filed two petitions for IPR . . . to
address all of the claims in the ’249 Patent.” Ex. 2076, 10–11. Medtronic,
however, ignores the sentence immediately following these two statements:
“Medtronic’s filings [of the Petitions in the instant proceedings] were less
than one year after Cardiocom was served with the suit and thus were within
the statutory deadline for real parties in interest. 35 U.S.C. § 315(b).” Id.
at 11 (emphasis added). The one-year bar of 35 U.S.C. § 315(b) applies

6 The district court’s decision granting Cardiocom’s motion to stay discusses
the various petitions for inter partes review and ex parte reexamination
requests filed by Cardiocom and Medtronic cited herein. Ex. 3002, 1–3.
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only to a party that has been served with a complaint alleging infringement,
and other real parties-in-interest and privies of that party. Only Cardiocom
has been served with a complaint alleging infringement of the ’605 and ’249
patents. Accordingly, Cardiocom’s statement regarding the “statutory
deadline for real parties in interest” only makes sense if Cardiocom believed
itself to be a real party-in-interest. Yet Medtronic did not name Cardiocom
in the Petitions.
We also note that, with respect to the ex parte reexamination request
for the ’605 patent filed by a Merchant & Gould attorney on February 27,
2014 (Reexamination Control No. 90/013,167), Cardiocom represented to
the district court that the request, along with another ex parte reexamination
request for a related patent, was filed by “Medtronic and Cardiocom.” See
Ex. 2076, 10 n.7; Exs. 2083, 2084 (reexamination requests). At the very
least, the statement suggests coordinated interest and action between
Medtronic and Cardiocom in attempting to challenge the claims of the ’605
patent.
Fourth, in response to our granting Bosch’s motion for additional
discovery, Medtronic produced a privilege log listing four “communications
between Medtronic and Cardiocom regarding the preparation or filing of the
Medtronic IPRs.” See Paper 25, 3–4, 9; Ex. 2078. Medtronic states in the
privilege log that the materials pertain to “Medtronic’s plans regarding
reexaminations and IPRs” and “work done to prepare [the] Medtronic IPRs.”
Ex. 2078, 2. Although the exact content of the communications is unknown,
and Medtronic contends that Cardiocom had no substantive input into the
content of the Petitions, see Opp. 3; Ex. 1030 ¶¶ 4–5, 8–9, the privilege log
at least demonstrates that Medtronic communicated with Cardiocom senior
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executives about the preparation or filing of the Petitions, at the time when
the Petitions were being prepared. We also note that one individual named
on the emails held executive positions with both Cardiocom and Medtronic,
which again is indicative of coordinated interest between the two companies
with respect to challenging the ’605 and ’249 patents. See Ex. 2078, 2 (first,
second, and third emails); Ex. 1030 ¶ 9.
Fifth, the evidence of record shows that Cardiocom paid a portion of
the fees incurred for preparing the Petitions in Cases IPR2014-00488 and
IPR2014-00607. Again in response to our granting Bosch’s motion for
additional discovery of “[d]ocuments or things containing communications
between Medtronic and Cardiocom regarding the preparation or filing of the
Medtronic IPRs,” Medtronic produced two emails from a Cardiocom
employee forwarding Merchant & Gould’s invoices for January and
February 2014 to Medtronic and asking Medtronic to “approve” the
invoices. See Paper 25, 3, 9; Exs. 2080, 2088. The two invoices were paid
by check by a Cardiocom employee from a Cardiocom bank account.
See Pet. Supp. Br. 2; Ex. 1050 ¶¶ 12, 14 (Cardiocom employee “paid the
invoice[s] from a checking account bearing the name Cardiocom”); Ex. 1048
¶¶ 13–14 (Merchant & Gould received checks “that bear[] the name
‘Cardiocom’”).
Medtronic argues that Cardiocom paid the invoices “under
Medtronic’s direction and control (and thus as Medtronic’s agent),” and that
the bank account was controlled by Medtronic once it “assumed ownership
of Cardiocom’s assets” in 2013. Pet. Supp. Br. 2. According to Medtronic,
when it acquired Cardiocom, it “folded Cardiocom’s finances into its own.”
Opp. 1; see Ex. 1034 ¶ 2 (“Medtronic has integrated finances with
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Cardiocom and controls Cardiocom’s budget. Medtronic assumed control of
Cardiocom’s finances and budget at the time it acquired Cardiocom.
Medtronic does not separately report Cardiocom’s finances, but rather
integrates them into its reporting of Medtronic’s finances.”) Medtronic also
points out that it paid all fees to Sterne Kessler associated with the Petition
in Case IPR2014-00691, and that it paid all fees incurred for the three
Petitions after February 2014, including the filing fees to the Office. Pet.
Supp. Br. 1–2.
Funding of a petition for inter partes review can be an important
factor in determining whether a non-party is a real party-in-interest. See
Trial Practice Guide, 77 Fed. Reg. at 48,760. Complete funding is not
necessary; “less” than total funding may be indicative of a real
party-in-interest depending on all of the “pertinent facts.” See id.;
GEA Process Eng’g, Inc. v. Steuben Foods, Inc., IPR2014-00041, slip op. at
13–21 (PTAB Feb. 11, 2015) (Paper 140) (finding a non-party that paid the
petitioner’s legal fees for a period of time in an inter partes review to be a
real party-in-interest) (“GEA Process”); see also In re Guan, Reexamination
Control No. 95/001,045, Decision Vacating Filing Date at 8 (Aug. 25, 2008)
(“a party paying for a particular patent to be the subject of a request for inter
partes reexamination would appear to be a real party in interest”). Here,
Medtronic paid the majority of fees associated with its participation in the
proceedings. It is of some relevance, however, that Cardiocom was the
entity invoiced for the preparation of the Petitions that occurred in January
and February 2014, and that Cardiocom paid those invoices (albeit with
Medtronic’s approval). At minimum, Cardiocom’s actions contradict
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Medtronic’s position that Cardiocom had no role at all in the preparation of
the Petitions.
It also is relevant that Medtronic’s Petitions in the instant proceedings
rely on similar prior art references and arguments as Cardiocom’s petitions
in the earlier proceedings, and that portions of Dr. Stone’s testimony in the
instant proceedings are identical to his testimony in the earlier proceedings.7
At some level, therefore, Medtronic’s Petitions enjoyed the benefit of work
done previously, and paid for, by Cardiocom. We weigh these facts together
with all of the other evidence discussed herein.
Taken alone, none of the facts above may be sufficient to show that
Cardiocom is a real party-in-interest in these proceedings. See Trial Practice
Guide, 77 Fed. Reg. at 48,760 (“rarely will one fact, standing alone, be
determinative of the [real party-in-interest] inquiry”). Collectively, though,
assessing the totality of the evidence, they demonstrate that Cardiocom is the
party with the substantive interest that desires review of the ’605 and ’249
patents, and that Medtronic is acting as a proxy for Cardiocom. See Taylor,
553 U.S. at 895 (“[A] party bound by a judgment may not avoid its
preclusive force by relitigating through a proxy. Preclusion is thus in order
when a person who did not participate in a litigation later brings suit as the
designated representative of a person who was a party to the prior
adjudication.”).

7 See supra Section I.B–C. Compare IPR2013-00439, Paper 3, 6–7, 9–11,
40–48, 51–56, with IPR2014-00488, Paper 1, 8–12, 48–51, 54–60; compare
IPR2013-00439, Ex. 1014 ¶¶ 1–8, 11–16, 20, 23–25, 27, 28, 32–35, 38, 40,
45, 46, 51–54, 59–62, with IPR2014-00488, Ex. 1018 ¶¶ 1–8, 11–16, 35, 37,
61, 63, 65, 66, 69, 74, 75, 77, 80, 85–89, 96–100, 106–108, 110, 111.
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Medtronic’s arguments in its Opposition focus entirely on whether
Cardiocom controls or has the opportunity to control Medtronic’s
participation in these proceedings. Opp. 1–8 (citing Exs. 1030–34,
declarations from Medtronic employees and a Merchant & Gould attorney).
A non-party may be a real party-in-interest even in the absence of control or
an opportunity to control. See Trial Practice Guide, 77 Fed. Reg. at 48,760
(citing California Physicians’ Serv. v. Aoki Diabetes Research Inst., 163
Cal. App. 4th 1506, 1523–25 (Cal. App. 2008), for the proposition that
“preclusion can apply even in the absence of such control”). Relitigating
through a proxy is a separate category under which non-party preclusion
may occur. See Taylor, 553 U.S. at 895.
The instant proceedings are analogous to the situation in RPX Corp.
v. VirnetX, Inc., IPR2014-00171, slip op. at 4–11 (PTAB July 14, 2014)
(Paper 57) (“RPX”). In that case, there was no dispute that the petitioner
RPX Corporation (“RPX”) had control over the filing of the petitions, but
the panel nevertheless found Apple Inc. (“Apple”) to be a real
party-in-interest because RPX was acting as a proxy for Apple. Similar to
the situation here, (1) Apple, not the petitioner RPX, was the party accused
of infringing the challenged patents and, therefore, the party with the interest
in the claims being reviewed; (2) Apple previously attempted to challenge
the patents by filing its own petitions for inter partes review, which were
denied; (3) RPX asserted grounds in its petitions similar to those asserted
previously by Apple, using the same counsel and declarant as Apple; and
(4) Apple compensated RPX for certain activities, including filing the
petitions, even though the agreement between the parties specified that RPX
would have “complete control” over the activities. Id. at 4–10. The panel
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concluded that RPX was, “at most, a ‘nominal plaintiff’ with ‘no substantial
interest’ in the[] IPR challenges apart from those of its client, Apple.” Id. at
9. For similar reasons, we conclude that Medtronic is acting as a proxy for
Cardiocom, just as RPX acted as a proxy for Apple.
Finally, our determination that Cardiocom is a real party-in-interest is
consistent with the purposes of the statutory estoppel provisions in the
Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011)
(“AIA”), to “protect patent owners from harassment via successive petitions
by the same or related parties [and] prevent parties from having a ‘second
bite at the apple.’” Trial Practice Guide, 77 Fed. Reg. at 48,759; see RPX,
slip op. at 10 (noting the “express legislative intent concerning the need for
quiet title” for patent owners). As explained above, Medtronic is a nominal
party with no substantial interest apart from that of its subsidiary Cardiocom,
the party sued for infringement of the ’605 and ’249 patents. Permitting
Medtronic to circumvent the one-year time bar incurred by its acquired, now
time-barred subsidiary would amount to a “second bite at the apple” for
Cardiocom.

C. Remedy for Failure to Name All Real Parties-in-Interest
Having concluded that Cardiocom should have been named in the
Petitions as a real party-in-interest in the instant proceedings, we must
determine the appropriate remedy for that deficiency. A petition for inter
partes review may be considered “only if” it meets certain statutory
requirements, including identification of “all” real parties-in-interest.
35 U.S.C. § 312(a)(2). Medtronic’s Petitions, therefore, are incomplete and
cannot be considered. Further, even if the Petitions could be corrected to
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name Cardiocom as an additional real party-in-interest, the Petitions would
be accorded a new filing date. 37 C.F.R. § 42.106(b). The new filing date
necessarily would be more than one year after the date on which Cardiocom
was served with a complaint alleging infringement of the ’605 and ’249
patents (April 29, 2013), making the Petitions time-barred under 35 U.S.C.
§ 315(b). Because the Petitions cannot be considered, and should not have
been considered at the time of institution, the appropriate remedy is to
terminate the instant proceedings and vacate our Decisions on Institution.
See Atlanta Gas, slip op. at 13–15; GEA Process, slip op. at 21–27.
Medtronic argues that termination is inappropriate because it had a
“factually grounded, objectively reasonable basis to name itself as the sole”
real party-in-interest, and “disclosed its parent-subsidiary relationship with
Cardiocom in the Petitions.” Opp. 8. As explained above, however, even if
Medtronic’s error is deemed correctable, it would require according the
Petitions a new filing date that would cause them to be time-barred. Further,
although Medtronic identified itself in the Petitions as the parent of
Cardiocom, it never identified Cardiocom as a “real party-in-interest.”
See IPR2014-00488, Paper 1, 1 (“Medtronic, Inc. is the real party-in-interest
for petitioner.”); IPR2014-00607, Paper 1, 3 (same); IPR2014-00691, Paper
2, 3 (same). Whether Medtronic’s corporate structure was disclosed is not
the issue; what matters is whether Medtronic identified “all” real
parties-in-interest under 35 U.S.C. § 312(a)(2).
Medtronic also contends that it should be permitted a reasonable
amount of time to “join” Cardiocom under Federal Rule of Civil Procedure
17(a)(3), citing the Trial Practice Guide. Opp. 9 (citing 77 Fed. Reg. at
48,759). The Federal Rules of Civil Procedure do not apply to inter partes
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review proceedings, however. Further, the Trial Practice Guide merely
refers to Rule 17 in explaining how the term “real party-in-interest” is
understood, while acknowledging that the typical understanding of the term
in litigation “does not fit directly into the AIA trial context.” 77 Fed. Reg. at
48,759. It does not state that the Board will follow the procedures of Rule
17(a)(3) when addressing real party-in-interest issues. Also, it is unclear
what Medtronic means by stating that Cardiocom can be “joined” to these
proceedings under Rule 17(a)(3), when the AIA already provides for joinder
in a separate provision, 35 U.S.C. § 315(c), requiring the filing of a new
petition.
Finally, Medtronic argues that the proceedings should not be
terminated because Bosch failed to seek rehearing of the Decisions on
Institution, where we determined that Medtronic had established a
reasonable likelihood of prevailing. Opp. 10. This argument is not
persuasive, as the Motion to Terminate is based on new evidence uncovered
in discovery and new arguments made by Bosch not made in its Preliminary
Responses. See Paper 27, 2 (authorizing the Motion to Terminate based on
“the new evidence cited by Bosch and the parties’ arguments”); Trial Rules,
77 Fed. Reg. at 48,695 (“After institution, standing issues may still be raised
during the trial. A patent owner may seek authority from the Board to take
pertinent discovery or to file a motion to challenge the petitioner’s
standing.”).

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III. CONCLUSION
Based on all of the evidence of record, we conclude that Cardiocom
should have been named as a real party-in-interest in these proceedings.
We do not reach this conclusion lightly, as the consequence of not naming
Cardiocom is termination of the proceedings. Pursuant to 35 U.S.C.
§ 312(a)(2), however, a petition for inter partes review may be considered
“only” if it identifies “all” real parties-in-interest. Bosch has provided
sufficient evidence to reasonably bring into question the accuracy of
Medtronic’s representation in the Petitions that it is the sole real
party-in-interest, and Medtronic has not proved that it is the sole real
party-in-interest. Accordingly, we vacate the Decisions on Institution and
do not issue final written decisions under 35 U.S.C. § 318(a) with respect to
the patentability of the challenged claims.

In consideration of the foregoing, it is hereby:
ORDERED that the instant proceedings are terminated, pending
resolution of any remaining motions to seal;8 and
FURTHER ORDERED that the Decisions on Institution in the instant
proceedings are vacated.

8 In a concurrently entered Decision, the parties’ pending motions to seal are
denied without prejudice to re-filing.
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PETITIONER:

Daniel W. McDonald
Andrew J. Lagatta
William D. Schultz
Thomas J. Leach
Jeffrey Blake
MERCHANT & GOULD, P.C.
dmcdonald@merchantgould.com
alagatta@merchantgould.com
wschultz@merchantgould.com
tleach@merchantgould.com
jblake@merchantgould.com

David K.S. Cornwell
Richard D. Coller III
Kyle E. Conklin
STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
davidc-PTAB@skgf.com
rcoller-PTAB@skgf.com
kconklin-PTAB@skgf.com

PATENT OWNER:

Don Daybell
Davin M. Stockwell
ORRICK, HERRINGTON & SUTCLIFFE LLP
D2DPTABDocket@orrick.com
D2SPTABDocket@orrick.com