Sanctions At The PTAB: Recent Cases

• Published date: 04 September 2023
• Subject Matter: Intellectual Property, International Law, Patent, Export Controls & Trade & Investment Sanctions
• Law Firm: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
• Author: Ms Amanda Murphy, Stacy Lewis and Leith Shafi

Case 1. Ventex Co., Ltd. v. Columbia Sportswear N. Am., Inc., IPR2017-00651, IPR2017-00789, Paper 164 (P.T.A.B. Apr. 12, 2023)

Holding

The Patent Trial and Appeals Board ("PTAB" or the "Board") granted Columbia's motion for sanctions seeking attorneys' fees and costs incurred since discovery began and ordered Ventex to pay Columbia $32,761.

Background

After granting institution to evaluate U.S. Patent Nos. 8,424,119 and 8,453,270 ("the '119 patent" and "the '270 patent"), the Board sought party input regarding issues raised relating to the statutory bar under 35 U.S.C. ' 315(b). Id. at *2.

'315(b) states that "[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent." 35 ' 315(b) (emphasis added). Columbia argued that Ventex's petition was time-barred because Seirus Innovative Accessories, Inc. ("Seirus") was a real party-in-interest and privy to Ventex and Seirus was served with a complaint alleging infringement of the '119 patent more than one year prior to filing the petition.

To support its contentions, Columbia relied on two agreements between Ventex and Seirus: a 2013 Supplier Agreement and 2016 Exclusive Manufacturing Agreement. Id. at *3. The 2013 Supplier Agreement required Ventex to "indemnify, defend and hold harmless Seirus . . . from and against any and all claims, demand, damages, liabilities, losses, costs and expenses, (including without limitation, attorney's fees and costs), of any nature whatsoever, which arise from [Ventex's] failure to perform its obligations." Ventex Co., Ltd. v. Columbia Sportswear N. Am., Inc., IPR2017-00651, Paper 148 at *7 (P.T.A.B. Jan. 24, 2019) (precedential), quoting Ex. 2009, at 3. The 2016 Exclusive Manufacturing Arrangement dictates that Ventex "agrees to only manufacture Heatwave Material for Seirus" in exchange for Seirus's payment of "an exclusivity fee." Id. quoting Ex. 2189, at 1-2.

Based on the non-exhaustive list of factors set out by the Supreme Court in Taylor v. Sturgell, 553 U.S. 880 (2008), the Board determined that the legal relationship between Ventex and Serius establishes that one is the privy of the other.¹ Relying on factors 2 and 5, the Board found the parties had a preexisting substantive legal relationship through the Supplier Agreement and Exclusive Manufacturing Agreement...