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PTAB: Patent Owner / Inventor Cannot Proceed Pro Se

In an IPR petition filed by petitioner Shire Development LLC, the petitioner sought review of patent owner, LCS Group, LLC’s U.S. Patent No. 8,318,813. In its mandatory statement, the patent owner timely designated outside counsel to represent it in the IPR proceeding. Subsequently, the designated counsel for the patent owner sought authorization to withdraw from representation. According to the patent owner’s counsel, the inventor desired to represent himself in the proceeding.

The Board denied the request of the patent owner’s counsel on the grounds that the patent-at-issue is assigned to a juristic entity, i.e., a legal entity that is not a natural person, LCS Group, LLC, which also is designated as the real party-in-interest. Under 37 C.F.R. § 1.31 (2012), because the real party-in-interest in this proceeding is a corporation, a juristic entity, it can only appear through counsel.

The Board relied on Motorola Mobility LLC v. Michael Arnouse, IPR2013-00010 (PTAB April 19, 2013) (Paper 30). In Motorola the Board set forth the standard for a request for counsel to withdraw from representation:

Counsel may withdraw from an inter partes review proceeding only with authorization from the Board. 37 C.F.R. § 42.10(e). Under the Office’s current disciplinary rules, “a practitioner shall not withdraw from employment until the practitioner has taken reasonable steps to avoid foreseeable prejudice to the rights of the client, including giving due notice to his or her client, [and] allowing time for employment of another practitioner.” 37 C.F.R. § 10.40(a). Furthermore, in deciding a motion to withdraw, the Board will consider the effect of granting such a motion “on the economy, the integrity of the patent system, the efficient administration of the office, and the ability of the office to timely complete proceedings.” See 35 U.S.C. § 316(b). The Board will interpret its rules “to secure the just, speedy, and inexpensive resolution of every proceeding.” 37 C.F.R. § 42.1(b).

The Motorola Board went on to explain its basis for denying patent owner’s request to proceed pro se:

The real party-in-interest in this proceeding is a corporation, a juristic entity that can only appear through counsel. See 37 C.F.R. § 1.31 (2012). Mr. Arnouse has chosen to license ADD exclusively under the ʼ484 patent, granting the corporation (of which he is the CEO) “all substantial rights” in the patent including the right to bring suit. But the consequence of this decision is that now a juristic entity, ADD, is the “effective patentee,” not Mr. Arnouse. See supra. While Mr. Arnouse may be the record owner of the patent, the holder of “all substantial rights” is his corporation. Therefore, he is not the holder of “all substantial rights” in the patent itself. Along with whatever benefits Mr. Arnouse receives from this arrangement come restrictions, one of which is the prohibition against a corporation representing itself in the USPTO.

The Board further explained that patent ownership is not the proper test for determining the real party-in-interest. “[T]o the extent that Dr. Sanfilippo has assigned any rights in the patent to LCS Group, LLC, merely assigning ownership of the patent at issue to Dr. Sanfilippo may not be sufficient, as counsel for Patent Owner would still have to show that Dr. Sanfilippo is also the only real party-in-interest.” Significantly, the Board concluded that “given the complexity and very technical nature of these proceedings, pro se representation carries significant risk.”

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This decision highlights the trade-off facing an inventor who assigns “substantially all rights” in a patent to a juristic entity in terms of forfeiting its ability to proceed pro se before the Patent Office. Thus, while the inventor may remain the patent owner of record, the issue is the identity of the real party-in-interest. This may or may not be the patent owner depending upon whether the patent owner has assigned any rights to the juristic entity and, if so, the extent of the rights assigned. Finally, the Board cautioned that proceeding pro se carries with it significant risk given the complexity and very technical nature of IPR proceedings. Shire Development LLC v. LCS Group, LLC, Case IPR2014-00739 (PTAB Nov. 21, 2014) (Paper 9) (A.P.J. Green)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. The authors represent inventors, patent owners and technology companies in patent licensing and litigation in U.S. District Courts and in the United States Patent and Trademark Office, including numerous IPRs currently pending before the PTAB. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Greg Cordrey at 949.623.7236 or