With Request for Discovery, Patent Owner Hopes to Fry Bass

Posted by Ed Walsh on Jul 6, 2015

In response to a patent owner’s complaints that Kyle Bass—or more specifically, two hedge funds that he manages—is using IPRs improperly, the PTAB has authorized the patent owner to file a request for additional discovery in its IPR. (IPR2015-01086, Paper 8) The patent owner accuses Bass of using the IPRs to manipulate the price of its stock so that these hedge funds can profit. Further, the patent owner alleges that this manipulation is an abuse of process or an improper use of the proceeding, which warrants dismissing the IPRs.

Authorizing the patent owner to seek additional discovery is still a far cry from agreeing that the IPR process is being used improperly or that the penalty should be dismissal. The patent owner has only been authorized to ask for offering documents of the hedge funds, which it expects will show an improper purpose in filing the IPRs.

However, discovery in an IPR is not freely available, as it is in litigation. A party requesting discovery must show that something helpful to their case is likely to be obtained through discovery. This order indicates that the patent owner has taken the first step towards convincing the PTAB that the IPR process is being used improperly and that some sanction is appropriate because of that. 

The motion for additional discovery was filed on June 29. The hedge funds can respond on or before July 3. If discovery is granted, whatever the patent owner learns will likely be reflected in its preliminary response to be filed before the end of July—setting the PTAB up to tackle the issues of whether these IPRs have been filed for an improper purpose and whether some sanction should be awarded as a result.

Topics: Kyle Bass

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