Takeaway: Although a change to the list of real-parties-in-interest on record should be filed via an Updated Mandatory Notice within 21 days of the effective date of the change, the Board may excuse lateness of this type of submission if the interests of justice so require.

In its Decision, the Board denied Patent Owner’s Motion to Terminate. Patent Owner had argued that the failure by Petitioner to timely identify Valeo North America, Inc. as a real-party-in-interest warranted termination of the proceedings; but the Board disagreed.

The original Petition listed five different entities as real-parties-in-interest, including Valeo North America, Inc., Valeo S.A., Valeo GmbH, Valeo Schalter Und Sensoren GmbH, and Connaught Electronics Ltd. The Petition was filed on December 4, 2013.  Valeo, Inc. then merged with another entity, with the result being Valeo North America, Inc., on December 31, 2013.  Months later, on October 31, 2014, Patent Owner asserted that Valeo, Inc. was not actually a real-party-in-interest because the corporate entity Valeo, Inc., had ceased to exist as a result of its merger into Valeo North America, Inc. on December 31, 2013.  Petitioner then filed Updated Mandatory Notices on November 14, 2014, which omitted Valeo, Inc., and identified Valeo North America, Inc., as a real party-in-interest.

Although the Board agreed with Patent Owner that Petitioner’s Updated Mandatory Notice “should have been filed within 21 days of the effective date of the merger—December 31, 2013,” the Board nevertheless exercised its discretion to excuse the lateness of Petitioner’s action, because it was found that consideration of the merits would be in the interests of justice. Among the factors the Board considered in reaching this conclusion were that: Patent Owner had not indicated how the delay impacted either of the core functions to update mandatory notices within 21 days under 37 C.F.R. § 42.8(a)(3), namely, “to assist the Board in identifying potential conflicts and ensure proper application of estoppel provisions;” Patent Owner had not shown that it would suffer any prejudice due to Petitioner’s failure to identify the corrected real-party-in-interest; and Patent Owner had now shown that the Board’s “acceptance of the late-filed Updated Mandatory Notice will cause any delay in these proceedings, which are scheduled for hearing on January 14 and 15, 2015.”

Instead, the Board indicated that “Patent Owner [had only argued] that Petitioner knew, or should have known, of the change in corporate identity, and updated its Mandatory Notices sooner.” This, according to the Board, was not enough to terminate the proceedings.

Valeo North America, Inc., Valeo S.A., Valeo GmbH, Valeo Schalter Und Sensoren GmbH, and Connaught Electronics Ltd. v. Magna Electronics, Inc., IPR2014-00220, -00221, -0022, and -00227
Paper 45: Order on Conduct of the Proceedings
Dated: January 8, 2015
Patents: 7,859,565; 7,991,522; 8,386,114; and 7,877,175
Before: Jameson Lee, Phillip J. Kauffman, and Matthew R. Clements
Written by: Clements