Institution Denied Where Customer Indemnification Insufficient to Establish Standing as Real Party in Interest CBM2015-00134


Takeaway:  Indemnifying customer for alleged patent infringement, without sufficient substantiation, does not make an entity a real party in interest for a transitional proceeding with respect to a covered business method patent.

In its Decision, the Board denied institution of covered business method patent review of seven related cases.  Two Petitioners (AAA and Gerber) had previously “settled with Phoenix Licensing LLC (‘Patent Owner’) and have been terminated from each of the proceedings.”  The Board determined “that Petitioner [Acxiom] has not demonstrated that it has standing to file these Petitions for covered business method review under § 18(a)(1)(B) of AIA and 37 C.F.R. § 42.302.”

“Section 18 of the AIA created a transitional program, limited to persons or their real parties-in-interest or privies that have been sued or charged with infringement of a ‘covered business method patent,’ which does not include patents for ‘technological inventions.’”  Specifically, “a person may not file a petition for a transitional proceeding with respect to a covered business method patent unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent.”  Here, Petitioner argued that “its standing arises from its relationship to other entities that have been sued for infringement of the ‘184 patent.”  In particular, Petitioner argued “that its standing arises from that of its customer, Gerber, because Gerber ‘sent Acxiom a demand for indemnification of costs and potential liabilities arising from the infringement suit, referencing a Services and Data Agreement between the two companies.’”

The Agreement “indicates that Petitioner contracted with Gerber to provide ‘services’ as ‘set forth in one or more documents executed by the parties and made subject to this Agreement.’”  The Board found that Petitioner did not provide sufficient “evidence as to what services are contemplated under this Agreement.”  The Agreement also “indicates that there may be indemnity for alleged patent infringement provided that the indemnified party provides a proper written demand for indemnity.”  The Board did “not find this evidence to be sufficient to show that Petitioner has standing to bring this Petition.”

The Board noted that “the Petition does not supply the demand for indemnification, Acxiom’s response, or any correspondence regarding indemnification.”  Thus, the Board found that “Petitioner has not provided evidence sufficient to show that it has an obligation to indemnify Gerber or any other entity that may have been sued for infringement.”  Thus, the Board was not persuaded that Petitioner has proper standing and denied institution of a covered business method review.

The Board also denied Petitioner’s Motion to Seal certain exhibits as confidential because “[c]onfidential information relied upon in a decision to grant or deny a request to institute ordinarily will be made public.”  The Board was “not persuaded that there is sufficient reason to depart from the principle.”

Acxiom Corp. v. Phoenix Licensing, LLC, CBM2015-00134
Paper 22:  
Decision Denying Institution of Covered Business Method Patent Review
November 19, 2015
8,234,184 B2
Stacey G. White, Peter P. Chen, Robert J. Weinschenk, and Robert A. Pollock
Written by:  
Related Proceedings:  Case CBM2015-00135 (Patent 6,999,938 B1); Case CBM2015-00136 (Patent 7,856,375 B2); Case CBM2015-00137 (Patent 7,890,366 B2); Case CBM2015-00138 (Patent 8,738,435 B2); Case CBM2015-00139 (Patent 7,860,744 B2); Case CBM2015-00140 (Patent 5,987,434); “more than three dozen district court cases in the United States District Court for the Eastern District of Texas.”