In a decision denying institution on a covered business method (CBM) review petition, the Patent Trial and Appeal Board (PTAB or Board) declined to institute a proceeding, finding that the petitioner lacked of standing. The Board concluded that merely having a customer-supplier relationship and an indemnity agreement with an accused infringer did not confer standing on a supplier sufficient to pursue a CBM review on behalf of its customer. Acxiom Corp. v. Phoenix Licensing, LLC, CBM2015-00134 (Nov. 19, 2015) (S. G. White, APJ).

The case began when Phoenix Licensing sued two of Acxiom’s clients, Gerber Life Insurance and AAA Life Insurance, for patent infringement related to services purchased from Acxiom. Gerber then sought indemnification from Acxiom. Acxiom and its clients brought CBM petitions against seven of Phoenix’s patents. After Acxiom’s clients settled, leaving it alone on the CBM petitions, Phoenix called Acxiom’s standing into question.

For a party to have standing to file a CBM petition, § 18(a)(1)(B) of the America Invents Act (AIA) requires a patentee to allege infringement against that party or another party they have a special relationship with, such as being a privy or a real-party-in-interest. Acxiom argued that it qualified as either a real-party-in-interest or privy of Gerber because of its customer-supplier relationship and Gerber’s indemnification demand. The Board disagreed, citing Acxiom’s failure to produce sufficient evidence to prove the special relationship.

Acxiom had submitted two pieces of evidence relevant to special relationship with Gerber: a “Services and Data” agreement between the companies and a declaration from Acxiom’s senior account executive responsible for Gerber. With respect to the Services and Data agreement, the Board noted that Acxiom heavily redacted the contract, blacking out all but two paragraphs of the 12-page document. One paragraph showed that Acxiom agreed to provide services to Gerber but did not explain the nature of the services. The second paragraph provided for indemnification, as long as a party made a proper written demand. The declaration merely stated that Gerber made such a demand.

The Board concluded that the evidence was insufficient to prove privity or a relationship that could confer standing. For instance, Acxiom failed to provide the actual demand for indemnification or any correspondence related to it. The evidence also did not show that the agreement applied over the time period when Gerber could ask for indemnification. Finally, the Board noted that the contract only included an agreement to provide services. Without more clarity on the nature of those services, the Board could not conclude that there was any type of “special relationship” between Gerber and Acxiom. Consequently, the Board denied institution of the CBM review.

Practice Note: The America Invents Act imposes stricter standing requirements for CBM reviews than for IPR proceedings. A CBM petitioner must ensure that if it is not a directly accused infringer, it submits sufficient evidence to meet the CBM standing requirements in order to sustain its petition.