WesternGeco’s Time-Bar Argument Fails to Save its Invalidated Patents

Federal CircuitWesternGeco LLC v. ION Geophysical Corp., Nos. 2016-2099, 2016-2100, 2016-2101, 2016-2332, 2016-2333, 2016-2334, 2018 (Fed. Cir. May 7, 2018) (Before Wallach, Chen, and Hughes, J.) (Opinion for the court, Chen, J.)

Petroleum GeoServices Inc. (PGS) successfully challenged WesternGeco’s patents in two rounds of IPRs before the Board. In the second round, the Board granted ION’s request under 35 U.S.C. § 315(c) to join the proceedings but restricted its involvement to receiving notifications of filings and attendance. On appeal, WesternGeco argued 1) the Board erred as to its unpatentability determinations; and 2) the IPR proceedings were time-barred under 35 U.S.C. § 315(b) because ION acted in privity with PGS, and over a year passed between its infringement complaint against ION and the PGS IPR petition.

Based on the Federal Circuit’s en banc decision known as Wi-Fi One, the time-bar issue was appealable, but WesternGeco’s argument was unpersuasive because the relationship between ION and PGS was not close enough to trigger the time bar. The Federal Circuit weighed the legislative intent of preventing successive challenges to patents versus due process, i.e., whether a party had a full chance to be heard. The due process concerns implicate nonparty preclusion which is evaluated according to Taylor v. Sturgell, 553 U.S. 894–95 (2008). The Court noted ION’s inability to control PGS’s petitions based on its lack of involvement in the IPR (no funding, no assistance, distinct entities, and different counsel). Also, the Board properly found the consumer-manufacturer relationship between ION and PGS to be standard and consequently insufficient to be a proxy. Moreover, the indemnity provisions in their agreement were silent regarding ION’s responsibility for patent infringement suits and invalidity challenges.

Take Away

A time bar will not be imposed to prevent successive IPR and litigation challenges to a patent based on alleged privity with a non-party, when the parties have a standard consumer-manufacturer relationship without specific indications of mutual involvement in and control of the relevant judicial proceedings.



The Author

Robert Schaffer

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

Robert Schaffer

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

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