Appeals from the United States Patent and Trademark Office,
Patent Trial and Appeal Board in Nos. IPR2014-00687,
IPR2014-00688, IPR2014-00689, IPR2014-01475, IPR2014-01477,
IPR2014-01478, IPR2015-00565, IPR2015-00566, IPR2015-00567.
C. O'Quinn, Kirkland & Ellis LLP, Washington, DC,
argued for appellant. Also represented by William H. Burgess;
Leslie M. Schmidt, Timothy Gilman, New York, NY; Michael
Kiklis, Christopher Ricciuti, Oblon, McClelland, Maier &
Neustadt, LLP, Alexandria, VA.
Gregory A. Castanias, Jones Day, Washington, DC, argued for
appellees. Also represented by Jason M. Garr, Emily Justine
Tait, Detroit, MI; Danielle J. Healey, Brian Gregory Strand,
Fish & Richardson, PC, Houston, TX.
Wallach, Chen, and Hughes, Circuit Judges.
LLC (WesternGeco) appeals from the final written decisions of
the Patent Trial and Appeal Board (Board) in inter
partes review (IPR) proceedings instituted on six
petitions filed by Petroleum Geo-Services, Inc.
(PGS) against three patents owned by
WesternGeco: U.S. Patent Nos. 7, 080, 607 (the '607
Patent), 7, 162, 967 (the '967 Patent), and 7, 293, 520
(the '520 Patent) (collectively, the WesternGeco
Patents). PGS filed its IPR petitions in two rounds: the
first three petitions challenged certain claims of each of
the three WesternGeco Patents; and the second three petitions
challenged additional claims of each of the WesternGeco
Patents. After the first round of IPRs was instituted, ION
Geophysical Corp. and ION International S.A.R.L. (together,
ION) moved, under 35 U.S.C. § 315(c), to join those
IPRs. The Board granted ION's request but restricted its
involvement to receiving notification of filings and
attending, rather than actively participating in, depositions
and oral hearings.
Board issued six final written decisions, finding all of the
instituted claims in the six proceedings to be unpatentable
as anticipated or obvious. It also rejected WesternGeco's
arguments that the IPR proceedings were time-barred under 35
U.S.C. § 315(b). We conclude that substantial evidence
supports the Board's unpatentability determinations, as
well as its conclusion that the proceedings were not
time-barred. We thus affirm the Board's decisions.
familiarity with the WesternGeco Patents through prior
appeals. See, e.g., WesternGeco L.L.C. v. ION
Geophysical Corp., 837 F.3d 1358, 1364 (Fed. Cir.
2016). The WesternGeco Patents are directed to
technologies for controlling the movement and positioning of
a series of streamers towed in an array behind a ship. These
streamers emit acoustic signals and detect the returning
signals that reflect from the ocean floor. '967 Patent
col. 1, ll. 28-41. The collected data can be used to create a
map of the subsurface geology, helping oil companies analyze
underwater natural resource formations and explore for oil
and gas beneath the ocean floor.
marine seismic survey systems use long streamers that are
towed behind ships in open-water conditions. The streamers,
equipped with sensors, can stretch for a mile or more. Vessel
movements, weather, and other conditions can cause the
streamers to tangle or drift apart. To obtain accurate survey
data, it is necessary to control the positioning of the
streamers, both vertically in the water, as well as
horizontally against ocean currents and forces that can cause
the normally-parallel streamers to bend and even entangle
with each other. Id. at col. 1, l. 42-col. 2, l. 16.
The WesternGeco Patents generally relate to a system for
controlling the positioning of the streamers in relation to
each other by mounting on each streamer a set of
"streamer positioning devices" which can realign
the individual streamers into their desired positions.
Id. col. 2, ll. 56-58.
PGS, and ION are all participants in the marine seismic
survey industry. WesternGeco launched its commercial
steerable streamer system, the Q-Marine, in 2000. J.A. 4794.
Subsequently, PGS commissioned ION to design and build a
competing commercial streamer system, the DigiFIN, which
launched several years later. Id.
2009, WesternGeco sued ION in the U.S. District Court for the
Southern District of Texas (the District Court) for
infringement of the WesternGeco Patents, as well as the
'038 Patent. To assist in developing its infringement
case against ION, WesternGeco served PGS with a third-party
subpoena, seeking information relating to PGS's use and
operation of ION's DigiFIN product. In response, PGS
appeared (through its own counsel) in the lawsuit as a third
party and produced documents, but did not file anything in
that litigation. In August 2012, a jury returned a verdict
finding ION had infringed all four patents asserted and that
ION had failed to prove that any of the asserted patents were
invalid. On appeal, this court affirmed all aspects of the
District Court's judgment except for willful infringement
receiving a favorable infringement verdict against ION,
WesternGeco next sued PGS in the District Court for
allegedly-related infringement of the same four patents ION
had been found to have infringed. In response, PGS sought to
have the patent claims asserted against it administratively
cancelled, by filing at the Board the two rounds of inter
partes review petitions discussed above. The Board
denied institution of review for the petitions concerning the
'038 Patent but instituted review on all six of PGR's
IPR petitions concerning the WesternGeco Patents, finding a
reasonable likelihood that PGS would prevail with respect to
the challenged claims.
the first round of PGS's petitions had been instituted,
ION moved to join those proceedings. Both WesternGeco and PGS
opposed. WesternGeco argued that joinder would create delay
and complicate the PGS IPR schedule. PGS, for its part,
expressed concern that WesternGeco would seek to add a
"substantial volume of testimony" from the ION
litigation to the IPR proceeding. PGS added that such
testimony would be highly prejudicial because it did not have
the opportunity to participate in the ION lawsuit. After
considering the arguments, the Board granted ION's
request to join PGS's first round of IPRs, but restricted
ION's role to "spectator" status, meaning that
it had no right "to file papers, engage in discovery, or
participate in any deposition or oral hearing." J.A.
13439. ION did not join the second round of IPRs.
Board issued six final written decisions (two decisions per
patent), finding that various claims were either anticipated
by or would have been obvious over several prior art
references. See generally Petroleum Geo-Servs., Inc. v.
WesternGeco L.L.C. (PGS I), No. IPR2014-00687,
2015 WL 10378275 (P.T.A.B. Dec. 15, 2015) (J.A. 1-44)
(invalidating claims 1 and 15 of the '967 Patent);
Petroleum Geo-Servs., Inc. v. WesternGeco L.L.C.
(PGS II), No. IPR2014-00688, 2015 WL 10378495
(P.T.A.B. Dec. 15, 2015) (J.A. 45-99) (invalidating claims 1
and 15 of the '607 Patent); Petroleum Geo-Servs.,
Inc. v. WesternGeco L.L.C. (PGS III), No.
IPR2014-00689, 2015 WL 10380984 (P.T.A.B. Dec. 15, 2015)
(J.A. 100-52) (invalidating claims 1-2 and 18-19 of the
'520 Patent); Petroleum Geo-Servs., Inc. v.
WesternGeco L.L.C. (PGS IV), No. IPR2014-01475
(P.T.A.B. Mar. 16, 2016) (J.A. 153-216) (invalidating claim 4
of the '967 Patent); Petroleum Geo-Servs., Inc. v.
WesternGeco L.L.C. (PGS V), No. IPR2014-01477
(P.T.A.B. Mar. 16, 2016) (J.A. 217-95) (invalidating claims
16-23 of the '607 Patent); Petroleum Geo-Servs., Inc.
v. WesternGeco L.L.C. (PGS VI), No.
IPR2014-01478 (P.T.A.B. Mar. 16, 2016) (J.A. 296-359)
(invalidating claims 3, 5, 13-17, 20, 22, and 30-34 of the
appealed the Board's decisions in PGS I-VI to
this court. The appeals were consolidated, listing both PGS
and ION as Appellees. See Order at 1-2, ECF No. 27.
In relevant part, WesternGeco argued that the Board deprived
WesternGeco of due process and violated the Administrative
Procedure Act by denying Western-Geco the opportunity to be
heard on whether the inter partes reviews were
time-barred pursuant to 35 U.S.C. § 315(b). WesternGeco
also reserved rights to file additional briefing in light of
our then-pending en banc reconsideration of Wi-Fi
One, LLC v. Broadcom Corp., 837 F.3d 1329 (Fed.
Cir. 2016). PGS filed a response brief, and ION
"join[ed] in and adopt[ed] by reference" PGS's
brief rather than filing its own. ION's Joinder in the
Br. of PGS at 1, ECF No. 50; see Order at 2, ECF No.
briefing was completed in this appeal, PGS settled with
WesternGeco and filed a motion to withdraw. See
PGS's Unopposed Mot. to Withdraw at 2, ECF No. 82. We
granted PGS's motion, ordered the USPTO to inform the
court whether it intended to intervene, and ordered
WesternGeco and ION to file a joint status report.
See Order at 2, ECF No. 86. The USPTO declined to
intervene. Upon consideration of the parties' report, we
ordered ION to file a new brief, addressing only PGS
I-III, and permitted WesternGeco to file a new reply
brief. Order at 2, ECF No. 92.
before the date scheduled for oral argument, we issued our en
banc decision in Wi-Fi One v. Broadcom Corp., 878
F.3d 1364 (Fed. Cir. 2018) (en banc). Wi-Fi One held
that "time-bar determinations under [35 U.S.C.] §
315(b) are reviewable by this court" and overruled our
prior contrary precedent. Id. at 1374. Consequently,
WesternGeco requested leave to file supplemental briefing
regarding the proper legal standard to determine whether a
party is a "real party in interest, or privy of the
petitioner" under 35 U.S.C. § 315(b) and whether
ION was a "real party in interest" or a "privy
of" of PGS. Notice at 1, ECF No. 107. We granted the
request. Order at 2, ECF No. 108.
review Board decisions using the standard set forth in the
Administrative Procedure Act (APA), 5 U.S.C. § 706 et
seq. In re Sullivan, 362 F.3d 1324, 1326 (Fed. Cir.
2004) (citing Dickinson v. Zurko, 527 U.S. 150, 154
(1999)); see Belden Inc. v. Berk-Tek LLC, 805 F.3d
1064, 1080 (Fed. Cir. 2015). Under the APA, we must
"hold unlawful and set aside agency action . . . not in
accordance with law [or] . . . without observance of
procedure required by law." 5 U.S.C. § 706.
review the Board's legal conclusions de novo but review
for substantial evidence any underlying factual
determinations. See Nike, Inc. v. Adidas AG, 812
F.3d 1326, 1332 (Fed. Cir. 2016); In re Giannelli,
739 F.3d 1375, 1378-79 (Fed. Cir. 2014). Substantial evidence
is "such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion." Consol.
Edison Co. v. NLRB, 305 U.S. 197, 229 (1938); In re
Applied Materials, Inc., 692 F.3d 1289, 1294 (Fed. Cir.
contends that the Board's decisions invalidating claims
of the WesternGeco Patents are wrong on the merits and should
be reversed. But WesternGeco argues we need not reach the
merits because Wi-Fi One has made time-bar decisions
under § 315(b) judicially reviewable, and, as a
threshold matter, we should vacate and dismiss the petitions
as time-barred. In Western-Geco's view, (1) ION was
served with a patent infringement complaint well over a year
before the IPR petitions were filed and unquestionably would
have been time-barred from filing any petitions challenging
the Western-Geco Patents had it not been joined with
PGS's petitions; and (2) PGS's petitions should be
time-barred because ION was a "real party in interest,
" or "privy" of PGS. Consequently, WesternGeco
argues that the Board never should have instituted the
requested IPRs because no party timely filed the
Time Bar Under 35 U.S.C. § 315(b)
Legal Standard for Privity
315(b) of the Leahy-Smith America Invents Act (AIA), Pub. L.
No. 112-29, § 3(b)(1), 125 Stat. 284, 287 (2011)
provides that the USPTO may not institute an IPR where the
petition "is filed more than 1 year after the date on
which the petitioner, the real party in interest, or
privy of the petitioner is served with a complaint
alleging infringement of the patent." 35 U.S.C. §
315(b) (emphases added).
purposes of this appeal, WesternGeco focuses on privity as
the key basis of its time-bar challenge, reasoning that
privity is more expansive in the types of parties it
encompasses compared to real party in interest. See
Appellant's Supp. Br. 8 n.5 (citing the USPTO Office
Patent Trial Practice Guide, 77 Fed. Reg. 48, 756, 48, 759
(Aug. 14, 2012) (hereinafter, "Trial Practice
the AIA nor the Patent Act defines the statutory term
"privy." But "privy" is a
well-established common-law term, and it is a "cardinal
rule of statutory construction" that where Congress
adopts a common-law term without supplying a definition,
courts presume that Congress "knows and adopts the
cluster of ideas that were attached" to the term.
FAA v. Cooper, 566 U.S. 284, 291- 92 (2012);
Microsoft Corp. v. i4i P'ship Ltd., 564 U.S. 91,
103-04 (2011). Where Congress adopts a term that is used in
common law across multiple legal subjects, courts
"cannot rely on any all-purpose definition but must con-
sider the particular context in which the term appears."
Cooper, 566 U.S. at 294.
AIA's legislative history supports adopting the common
law meaning of privity. The proposed administrative review
procedures, including IPR, were intended to provide
"quick and cost effective alternatives to
litigation." H. Rep. No. 112-98, at 48 (2011). Another
expressed congressional goal was to "establish a more
efficient and streamlined patent system that will improve
patent quality[.]" Id. at 40. At the same time,
Congress recognized the importance of protecting patent
owners from patent challengers who could use the new
administrative review procedures as "tools for
harassment." Id. ("While this amendment is
intended to remove current disincentives to current
administrative processes, the changes made by it are not to
be used as tools for harassment or a means to prevent market
entry through repeated litigation and administrative attacks
on the validity of a patent.").
particular, Congress observed that the then-existing
inter partes reexamination regime at times unfairly
burdened patent owners in situations where a set of
challengers coordinated reexamination attacks to tie up a
patent in the administrative review process for an extended
period. S. Rep. No. 111-18 at 54-55 (2009) ("It is not
uncommon for the competitors of a patent's owner or
licensee to coordinate their efforts and bring serial inter
partes challenges to a patent, one after another, each
raising a different set of prior art in its
address this concern, Congress placed several restrictions on
IPR petitioners. For example, it raised the substantive
threshold standard that governs the Patent Office's
institution of the agency's review process. Instead of
requiring for IPRs, as for reexaminations, that a petitioner
raise merely a "substantial new question of
patentability, " the AIA requires a showing of "a
reasonable likelihood that" the challenger would prevail
with respect to at least one of the claims challenged in the
petition. Compare 35 U.S.C. § 312(a) (2006)
(repealed 2012), with id. § 314(a) (2012).
statute imposes other restrictions as well. A party cannot
file an IPR petition against a patent after having already
brought a declaratory judgment action challenging the
validity of a claim of that patent. Id. §
315(a)(1). IPR is also barred for petitions filed more than
one year after a party is served with a complaint alleging
infringement of the patent. See id. § 315(b).
And following a final written decision in an IPR, the
petitioner is estopped from continuing to challenge the
validity of the patent claims subject to that decision based
on any grounds that the petition "raised or reasonably
could have raised during" the IPR. See id.
§ 315(e). For § 315(b) and (e), these restrictions
apply with equal force to an IPR petitioner, any "real
party in interest" to that IPR, and any "privy of
Senator observed, privity, as used in the AIA, "takes
into account the 'practical situation, ' and should
extend to parties to transactions and other activities
relating to the property in question." 157 Cong. Rec.
S1376 (daily ed. March 8, 2011) (statement of Sen. Kyl);
see also 154 Cong. Rec. S9987 (daily ed. Sept. 27,
2008) (statement of Sen. Kyl) ("The concept of privity,
of course, is borrowed from the common law of
judgments."). The legislative history thus lends support
to the conclusion that "privity" in § 315(b)
should be given its common law meaning.
common law definitions of privity were narrow and specific,
denoting mutual succession or relationship to the same rights
of property. See 18A Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure
§ 4449 & n.32 (2d ed. 2017). Over time, its common
law meaning expanded: "The term 'privity, '
however, has also come to be used more broadly, as a way to
express the conclusion that nonparty preclusion is
appropriate on any ground." Taylor v. Sturgell,
553 U.S. 880, 894 n.8 (2008) (citing 18A Wright & Miller
§ 4449, at 351-53 & n.33); Cal. Physicians'
Serv. v. Aoki Diabetes Research Inst., 163 Cal.App.4th
1506, 1521 (Cal.App. 2008). As the Trial Practice Guide
observes: "The emphasis is not on a concept of identity
of parties, but on the practical situation." 77 Fed.
Reg. at 48, 759 (quoting Cal. Physicians' Serv.,
163 Cal.App.4th at 1521).
Trial Practice Guide further recognizes that
"privity" has no universally-applicable common law
definition. Id. "Privity is essentially a
shorthand statement that collateral estoppel is to be applied
in a given case." Id. (quoting Cal.
Physicians' Serv., 163 Cal.App.4th at 1521). That
is, the privity analysis seeks to determine "whether the
relationship between the purported 'privy' and the
relevant other party is sufficiently close such that both
should be bound by the trial outcome and related
estoppels." See id. Given that determining
whether two parties may be in privity "is a highly
fact-dependent question, " the Trial Practice Guide
states the Board will engage in a "flexible"
analysis on a "case-by-case basis." Id. In
sum, these descriptions of the privity analysis in the Trial
Practice Guide accurately reflect the common law
considerations for a privity inquiry.
importantly, the reach of privity cannot extend beyond the
limits of due process. In Taylor v. Sturgell, the
Supreme Court observed that a person who was not a party to a
suit generally has not had a "full and fair opportunity
to litigate" the claims and issues settled in that suit.
553 U.S. at 894. Because nonparty preclusion risks binding
those who have not had a full and fair opportunity to
litigate, the Supreme Court has cautioned that there is a
general rule against nonparty preclusion, subject to certain
exceptions. Id. at 892-93; see Aspex Eyewear,
Inc. v. Zenni Optical, Inc., 713 F.3d 1377, 1382 (Fed.
Cir. 2013) ("A full and fair opportunity to litigate is
the touchstone of any ...