DTN, LLC v. Farms Technology, LLC

When a written agreement between the patent owner and a petitioner made in connection with, or in contemplation of, termination of an IPR refers to other agreements, 35 U.S.C. § 317(b) requires that those referenced collateral agreements be filed in the Office before termination as between the parties. This is so even if the patent owner is not a party to the collateral agreements and even if the collateral agreements were not themselves made in connection with, or in contemplation of, termination. The Board will deny motions to expunge such agreements, and they may be kept as business confidential information. No prior precedent directly addressed this issue in the text; the Board construed § 317(b) and 37 C.F.R. § 42.74(b) on their own terms. For a petitioner settling an IPR, every agreement referred to in the settlement agreement must be filed, including agreements with affiliated or third-party entities to which the patent owner is not a party, and an agreement that never mentions the IPR still has to be filed. For a patent owner, the same obligation applies, and it cannot keep side deals out of the filing by having them signed by someone other than the patent owner or by making them independent of the IPR's termination. The Board relied on Hughey v. U.S., 495 U.S. 411 (1990), only to distinguish it, reading it as involving a catchall phrase following restrictive terms. It cited no Federal Circuit authority. LEGAL TEST OR STANDARD: Section 317(b) requires filing of "[a]ny agreement or understanding between the patent owner and a petitioner, including any collateral agreements referred to in such agreement or understanding," made in connection with, or in contemplation of, termination of the IPR. The Board held it is sufficient that the collateral agreement be "referred to" in the agreement between the patent owner and a petitioner; the "any" in "any collateral agreements" means "any." Only the primary agreement must be made in connection with, or in contemplation of, termination. TRIGGERING FACTS: The parties filed joint motions to terminate on the basis of settlement and filed a written Settlement Agreement between patent owner Farms Technology, LLC and petitioner DTN, LLC. That agreement referred to two other agreements in its WHEREAS clauses. The patent owner was not a party to either one. One of them did not mention the IPRs; the other mentioned them only in WHEREAS clauses and did not depend on termination. The proceedings were at a relatively early stage with no final written decision. KEY QUOTE: "We conclude, instead, that the term “any” means “any,” so the collateral agreements need not be between the patent owner and a petitioner to fall under the ambit of the statute." (Paper 21, p. 6) PRIOR PRECEDENT AFFECTED: No prior precedential or informative decision is directly affected. The Board distinguished Hughey v. U.S., 495 U.S. 411 (1990), and found 37 C.F.R. § 42.74(b) and its commentary, 77 Fed. Reg. 48,612, not contrary to its reading. PRACTICE TIP: Before filing a joint motion to terminate, identify every agreement referred to in the settlement agreement, including agreements with affiliates or third parties and agreements that do not mention the IPR. File them all with the settlement agreement and request business confidential treatment under § 317(b), rather than moving to expunge them or arguing they are outside the statute.