Arris Grp., Inc. v. C-Cation Techs., LLC

Informative decision only: persuasive authority, not binding precedent. When a patent owner seeks additional discovery under 37 C.F.R. § 42.51(b)(2) on whether a petition is time-barred under 35 U.S.C. § 315(b) for privity, and an earlier IPR between the same parties on the same patent ended in adverse judgment as to a different claim, neither 37 C.F.R. § 42.73(a) nor claim preclusion bars the patent owner from raising privity in the later proceeding. Section 42.73(a) goes to the scope of a judgment within its own proceeding, and claim preclusion does not apply where the later petition challenges different claims, not instituted earlier, on different grounds. No prior precedent directly addressed this issue. The Board applied the Garmin factors from Garmin International, Inc. v. Cuozzo Speed Technologies LLC, Case IPR2012-00001 (PTAB Mar. 5, 2013) (Paper 26), and followed its own earlier discovery order in IPR2014-00746. For a petitioner, an adverse judgment or an unsuccessful privity fight in an earlier IPR on one claim will not shield it from privity discovery and a § 315(b) challenge in a later petition on other claims, so it cannot rely on preclusion to resist such discovery. For a patent owner, a prior loss on privity at institution, or a disclaimer and adverse judgment, does not foreclose renewed privity arguments when a new petition targets different claims, and limited discovery is available on a threshold showing of new information. The Board relied on Federal Circuit authority on claim preclusion: Phillips/May Corp. v. United States, 524 F.3d 1264 (Fed. Cir. 2008), and Foster v. Hallco Mfg. Co., 947 F.2d 469 (Fed. Cir. 1991). LEGAL TEST OR STANDARD: Additional discovery must be "necessary in the interests of justice" under 37 C.F.R. § 42.51(b)(2), assessed under the five Garmin factors, of which only the first (whether something useful will be found) was disputed. On preclusion, 37 C.F.R. § 42.73(a) was read as governing the scope of a judgment within a proceeding. Claim preclusion applies when "(1) the parties are identical or in privity; (2) the first suit proceeded to a final judgment on the merits; and (3) the second claim is based on the same set of transactional facts as the first." TRIGGERING FACTS: Same parties and same patent in an earlier IPR (IPR2014-00746), instituted and adjudicated only as to claim 14, ending in adverse judgment after statutory disclaimer. The later petition challenged claims 1, 3, and 4, not part of the earlier instituted proceeding, on different grounds. The patent owner sought only indemnification agreements referencing or contingent on petitioner's ability to control the Comcast litigation, and asserted it had recently obtained additional information supporting privity under § 315(b). KEY QUOTE: "Petitioner cites no authority for its contention that the adverse judgment entered in IPR2014-00746 with respect to claim 14 has preclusive effect beyond that proceeding." (Paper 10, p. 4) PRIOR PRECEDENT AFFECTED: No prior precedential or informative decision is directly affected. The Board applied the factors of Garmin International, Inc. v. Cuozzo Speed Technologies LLC, Case IPR2012-00001 (PTAB Mar. 5, 2013) (Paper 26), and followed its own order in ARRIS Group, Inc. v. C-Cation Techs., LLC, Case IPR2014-00746 (PTAB July 24, 2014) (Paper 15). PRACTICE TIP: Petitioners should not rest an opposition to privity discovery on § 42.73(a) or res judicata from an earlier IPR involving different claims, and should instead contest the Garmin factors on the merits. Patent owners should tie a discovery request narrowly to specific documents and show a threshold of new evidence.