Does the Successor-in-Interest’s Shoe Fit?

MOJAVE DESERT HOLDINGS, LLC v. CROCS, INC.

Before Newman, Dyk, and O’Malley.  Appeal from the Patent Trial and Appeal Board.

Summary: Parties challenging patents in inter partes reexamination can assign their rights to others.

U.S.A. Dawgs, Inc. requested inter partes reexamination of one of Croc’s design patents.  During the reexamination, the USPTO examiner rejected Croc’s claim as anticipated.  Croc appealed. While the appeal was pending, U.S.A. Dawgs filed for Chapter 11 bankruptcy and ultimately assigned its rights “in any post-grant proceeding” before the USPTO to Mojave, including its rights in the reexamination.  Months later, Mojave filed a petition with the PTAB to change the real-party-in-interest from U.S.A. Dawgs to Mojave.  The Board denied this request, finding that the bankruptcy assignment did not transfer U.S.A. Dawgs’ rights to Mojave and that Mojave had failed to file its request within 20 days of any change in the real party-in-interest as required by 37 C.F.R. § 41.8(a).

On appeal, the Federal Circuit reversed.  The Federal Circuit found that the bankruptcy assignment had specifically transferred the rights “in any post-grant proceeding” and that Mojave was the real-party-in-interest based on this assignment.  The Federal Circuit also found that the PTAB could not ignore a transfer of interest in an inter partes reexamination, even though Mojave’s request was outside the time limit required by 37 C.F.R. § 41.8(a).  Instead, the Federal Circuit noted that the purpose of 37 C.F.R. § 41.8(a) is to detect conflicts of interest and to enable enforcement of inter partes reexamination estoppel provisions, and these concerns were not present here.

Editor: Paul Stewart

Written by: Benjamin L. Black & Daniel P. Hughes