Summary
The Federal Circuit granted a motion to substitute Mojave Desert Holdings as the appellant in a PTAB inter partes reexamination appeal, holding that a third-party requester's right to challenge a patent is assignable when transferred along with liability for past infringement. The court found that the broad transfer of "all" assets in a bankruptcy sale effectively transferred the requester's interest, distinguishing *Agilent Techs., Inc. v. Waters Techs. Corp.*, and that the PTAB erred in refusing substitution based on the timeliness requirements of 37 C.F.R. § 41.8(a). The court further held that Mojave had Article III standing because its acquired counterclaims were subject to setoff by Crocs' infringement claim, creating a concrete injury traceable to the patent's validity.
Topics
Practice areas
Questions Presented
- Whether Mojave is the successor-in-interest to U.S.A. Dawgs with respect to the inter partes reexamination.
- Whether the Board properly denied substitution based on untimely filing under 37 C.F.R. § 41.8(a).
- Whether the requester's right to appeal is assignable.
- Whether Mojave has standing to pursue the appeal.
- Whether the notice of appeal filed by U.S.A. Dawgs was sufficient to confer jurisdiction.
Holdings
- Mojave is the successor-in-interest to U.S.A. Dawgs with respect to the inter partes reexamination because the bankruptcy sale transferred all assets, including the reexamination rights, and the broad language of the assignment did not require individual enumeration.
- The Board erred in denying substitution based on untimely filing under 37 C.F.R. § 41.8(a) because the rule is not a substitution rule; it is for identifying the real party in interest and does not impose a time limit on substitution.
- The requester's right to appeal under 35 U.S.C. § 141 is assignable when transferred together with past infringement liability.
- Mojave has standing because it acquired false advertising counterclaims from U.S.A. Dawgs and faces potential setoff from Crocs's infringement claim, creating an injury in fact that is traceable to the patent and redressable by reversal of the Board's decision.
- The notice of appeal filed by U.S.A. Dawgs was sufficient to confer jurisdiction on this court, as Mojave could not file its own notice until substituted as a party.
Key quotations
“the transfer of all assets on its face included the rights in the Board proceeding.” (10)
“We hold that, under the statute, the requester's right (including its right to appeal) may be transferred at least when it occurs as part of the transfer of the requester's past infringement liability.” (16)
“We do not read 37 C.F.R. § 41.8(a) as permitting the Board to ignore a transfer of interest in an inter partes reexamination that has been assigned to a successor-in-interest.” (12)
“Mojave suffers an Article III injury connected with the false advertising counterclaims in the District of Colorado litigation that it acquired from U.S.A. Dawgs.” (17-18)
“We therefore conclude that Mojave is the successor-in-interest to U.S.A. Dawgs, that it has standing to pursue this challenge to the '789 patent, and that the Board erred in not substituting Mojave for U.S.A. Dawgs as the third-party requester during the inter partes reexamination.” (19)
Factual background
Crocs, Inc. owns U.S. Design Patent No. D517,789 for a foam-molded clog design. In 2012, Crocs sued U.S.A. Dawgs, Inc. for infringement. Dawgs filed a third-party request for inter partes reexamination. While reexamination was pending, Dawgs filed for Chapter 11 bankruptcy and sold all its assets, including litigation claims, to Dawgs Holdings, which then assigned them to Mojave Desert Holdings, LLC. The PTAB denied Mojave's request to substitute as the real party in interest, and Dawgs appealed.
Procedural history
Crocs sued U.S.A. Dawgs for infringement of design patent. Dawgs filed inter partes reexamination. Dawgs filed for Chapter 11 bankruptcy and sold all assets to Dawgs Holdings, which then assigned litigation claims to Mojave. The Board denied Mojave's request to substitute as real party in interest. Dawgs appealed, and Mojave moved to substitute on appeal.