# United States **Court of Appeals**  **for the Federal Circuit**

______________________ WORLDS INC., Appellant

v.
BUNGIE, INC., Appellee

______________________

2017

- 1481, 2017

- 1546, 2017

- 1583

______________________ Appeals from the United States Patent and Trad emark Office, Patent Trial and Appeal Board in No s

. IPR2015

- 01264, IPR2015

- 01319, IPR2015

- 01321.

______________________
Decided: September 7 , 2018

______________________
W AYNE M ICHA EL H ELGE , Davidson Berquist Jackson & Gowdey, LLP, McLean, VA, argued for appellant. Also represented by G REGORY A. K RAUSS , A LDO N OTO

.

M ICHAEL T. R OSATO , Wilson, Sonsini, Goodrich & Rosati, PC, Seattle, WA, argued for appellee. Also repr esented by M ATTHEW A. A RGENTI , Palo Alto, CA; R ICHARD T ORCZON , Washington, DC.

______________________
Before P ROST , Chief Judge, O’M ALLEY and T ARANTO , Circuit Judges.WORLDS INC

. v. BUNGIE , INC

. 2

P ROST , Chief Judge

. Appellant Worlds Inc. (“Worlds”) appeals the final decisions of the Patent Trial and Appeal Board (“Board”) invalidating three patents in three inter partes reviews (“IPRs”)

. Because we hold that the Board erred in its real

- party

- in

- interest analysis , we vacate its decisions and remand for proceedings consi stent with this opinion

. I This consolidated appeal involves three related p atents: U.S. Patent Nos. 7,945,856 (“the ’856 patent”) ; 8,082,501 (“the ’501 patent”) ; and 8,145,998 (“the ’998 patent”) (collectively, the “patents -on- appeal ”)

. 1 These patents generally relate to the computer

- generated di splay of avatars in a virtual world, including methods and systems to determine which particular avatars are di splayed in a given situation

. In 2012, Worlds asserted the patents -on- appeal
, among other patents
, against Activision Publishing, Inc. (“Activision”) and other related entities i n the District of Massachusetts. J.A. 2992

– 3002 (Compl.)
, 4902

– 04 (Am. Compl.). Activision develops, publishes, licenses, and distributes videogames. In t he district court litigation against Activision , Worlds accused certain videogames, such as Call of Duty , o f infringing claims of Worlds’ s patents. Appellee Bungie , Inc. (“Bungie”) is an independent videogame developer that has developed games such as Halo

. Bungie also d eveloped the series of products rel evant to these appeals

— the Destiny products. Destiny is developed by Bungie and distributed by Activision.

1 The case numbers of the IPRs on appeal are: IPR2015

- 01264 (the ’856 patent); IPR2015

- 01319 (the ’501 patent); and IPR2 015

- 01321 (the ’998 patent)

.WORLDS INC

. v. BUNGIE , INC

. 3

Bungie is not a party to the litigation between Worlds and Activision

. In November 2014, however, Worlds notif ied Activision that it intended to add Destiny as an additional accused product in the district court litigation. J.A. 2944. Approximately six months after Worlds not ified Activision of its intent to add Bungie’s products to the litigation , Bungie filed six IPR petitions , including the three IPRs at issue in this case , challenging Worlds’ s patents

. 2 These petitions were filed more than one year after Activision had been served with a complaint alleging infringement of the patents challenged in the IPR pet itions

. Soon after Bungie filed it s IPR petitions, Worlds moved under 37 C.F.R. § 42.51(b) for routine discovery or, alternatively, a ddi tional d iscovery, requesting info rmation regarding whether Activision should have been named as a real party in interest to the proceedings
, thus making the petitions time

- barred under 35 U.S.C. § 315(b) . J.A. 394

– 405. 3 To support its request for di scovery , Worlds submitted evi dence of a Software Publis hing and Development Agreement (“DevPub Agreement” ) between Bungi e and Activision. 4 The DevPub Agreement provides that the Destiny products would be developed by Bungie and published by Activision. Under the Agreement, Bungie is responsible for conducting “legal review s of the Products to ensure

2 The case numbers of the IPRs that are not on a ppeal are: IPR2015

- 01325 (the ’998 patent); IPR2 015

- 01268 (U.S. Patent No. 7,181,690); and IPR2015

- 01269 (U.S. Patent No. 7,493,558). Worlds did not appeal the final written decisions in these three IPRs.

3 The same motion was filed in all six pending IPRs. J.A. 394 n.1.

4 Worlds discovered the DevPub Agreement through its own independent investigation. See J.A. 400.WORLDS INC

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that all Intellectual Property and other rights are fully cleared for use.” J.A. 2924

. Such “legal reviews” are “subject to prior review and approval of Activision, (bud get to [sic] mutually approved) such approval not to be unreasonably withheld .” Id. The Agreement also co ntains certain representations and warranties, as well as indemnity provisions. J.A. 2933

– 36. And, the Agreement contemplates financial support from Activision to Bungie for development of the Destiny products. J.A. 2928

– 29

. Based on the DevPub Agreement , Worlds ’s discovery motion contained six specific requests for production seeking further details of the relationship between A ctivision and Bungie. J.A. 394

– 97

. Bungie opposed the motion for discovery, J.A. 407

– 18, and t he Board denied the motion in its entirety
, J.A. 423

– 32. In doing so, the Board concluded that Worlds had not shown more than a “mere allegation” that something useful would have been found through the requested discovery. J.A. 430

. Four days later , Wo rlds filed its pre

- institution Pr eliminary Re sponse, arguing that Bungie should have named Activision as a real party in interest. J.A. 434

– 77
, 3841

– 49, 5047

– 57. In its decisions to institute , t he Board rejected Worlds’ s argument , concluding that “Patent Owner has not demonstrated that Activision is an u nnamed real party in interest in this proceeding.” J.A. 511, 3878, 5095.
The Board issued final written decisions in these three IPRs on November 10, 2016; November 28, 2016; and December 6, 2016. In these final decisions, the Board reiterate d its rejection of Worlds’ s real

- party

- in -interest argument by referring back to the analysis in its instit ution decisio ns. J.A. 10 6–0 7, 19 4–9 5, 25 8–5 9. Finding the petitions not time

- barred, the Board proceeded to address the patentability of the instituted claims.WORLDS INC

. v. BUNGIE , INC

. 5

Worlds timely appealed each final written decision

. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).

II This consolidated appeal presents two issues. First, Worlds contends that Bungie’s IPR petitions were time

barred because an alleged real party in interest , A ctivision, had been served with a complaint alleging i nfringement of these patents over one year prior to the IPRs’ filing date s . Second, Worlds appeals the Board’s substantive obviousness analysis.

A Under 35 U.S.C. § 312(a)(2), an IPR petition “ may be considered only if .

. . the petition identifies all real pa rties in interest. ” Correctly identifying all real parties in interest with respect to each IPR petition is important, as the determination may impact whether a petition may be instituted. S ee 35 U.S.C. § 315(a)(1) ( concerning a real party in interest’s civil action challenging the pa tent’s validity); id. § 315(b) ( concerning a patent owner’s civil action against a real party in interest ). It may also limit the arguments available in subsequent proceed ings. Se e id. § 315(e)

. In this case, Worlds argues that Bungie’s IPR petitions we re time

- barred under § 315(b) because they were filed over one year after Worlds served A ctivision
, the alleged real party in interest
, with a co mplaint alleging infringement of the challenged patents. 5

5 The parties’ briefing in this case occurred prior to this court’s en banc decision in Wi

- Fi One, LLC v. Broa dcom Corp. , 878 F.3d 1364 (Fed. Cir. 2018) (en banc). As such, Bungie in its briefing relied on Achates Reference Publishing, Inc. v. Apple Inc. to argue that the Board’s real

- party

- in

- interest determination for purposes ofWORLDS INC

. v. BUNGIE , INC

. 6

On appeal, Worlds contends that the Board placed the burden of persuasion on the patent owner to prove that Bungie’s petitions were time

- barred under § 315(b) b ecause Activision was a real party in interest
, and that this allocation of the burden was error

. These appeals ther efore require us to determine the appropriate burden framework for analyzing the real

- party

- in

- interest dete rminations in these IPRs

. Worlds has not sought review of the Board’s order denying Worlds’ s motion for discovery on this issu e.
1
Absent from the Board’s analysis of the real

- party

- in

interest issue is a ny clear statement of what, if any, burden framework the Board used to analyze the evidence presented in these IPRs , including an identification of which party the Board viewed as bearing the burden of persuasion

. B oth Worlds and Bungie point us to Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc. as representing a burden framework used by other Board panels in the real

party

- in -interest ana lysis

. See IPR2013

- 00453, Paper 88 (P .T.A.B. Jan. 6, 2015). Although there is no indication that the Board relied on Atlanta Gas Light in these a ppeals, we find it appr opriate to begin our analysis with that decision, given the parties’ focus on that fra mework.

evaluating the time bar under § 315(b) is not subject to review by this court. 803 F.3d 652, 65 9 (Fed. Cir. 2015), overruled by Wi

- Fi One
, 878 F. 3 d at 1367

. In Wi

- Fi One
, the court overruled Achates and held that the § 314(d) bar

on the appeal of the Director’s determination of whether to institute an IPR proceeding does not apply to t he Board’s time

- bar determinations under § 315(b), thus making such time

- bar determinations reviewable on appeal. Wi

- Fi One , 878 F.3d at 1367.WORLDS INC

. v. BUNGIE , INC

. 7

Under Atlanta Gas Light
, the Board generally accepts an IPR petitioner’s identification of the real parties in interest at the time the petition is filed. Atlanta Gas Light
, Paper 88 at 7 ( citing ZOLL Lifecor Corp. v. Philips Elec. N. Am. Corp. , IPR2013

- 00606, Paper 13 at 7 (P.T.A.B. Mar. 20, 2014), which cit es 77 F ed. Reg. at 48,695 ). 6 Atlanta Gas Light explained that t his initial acceptance “acts as a rebuttable presumption ” that ben efits the IPR petitioner. Id. Quoting Federal Rule of Evid ence 301, the Board stated that “ [t] he party against whom a presumption is directed has the burden of produ cing evidence to rebut the presumption. But this rule does not shift the burden of persuasion, which remains on the party who had it originally .” I d. a t 8 (quoting Fed. R. Evid. 301 (emphasis in Board’s opinion)). From this, the Board in Atlanta Gas Light explained that
, where “ a patent owner provides sufficient rebuttal evidence that reasonably brings into question the accuracy of a petitio ner’s identification of the real parties in interest, the bu rden remains with the petitioner to establish that it has complied with the statutory requirement to identify all the real parties in interest. ” Id. We largely concur with the burden framework used in Atlanta Gas Light

. As explained below, w e agree that the IPR petitioner bears the burden of persuasion to demo nstrate that its petitions are not time

- barred under § 315(b) based on a complaint served on a real party in

6 The Federal Register notice cited in Atlanta Gas Light includes the PTO’s responses to public comments. In re sponse to a question regarding burdens of proof and persuasion in a challenge to the real

- party

- in -interest identification, the PTO stated: “ The Office gener ally will accept the petitioner’s ‘real party

- in -interest’ identific ation at t he time of filing the petition.” Part III, 77 Fed. Reg. 48,680, 48,695 (Aug. 14, 2012)

.WORLDS INC

. v. BUNGIE , INC

. 8

interest more than a year earlie r. We also agree that an IPR petitioner’s initial identification of the real parties in interest should be accepted unless and until disputed by a patent owner

. And although we disagree with treating this initial acceptance as a “rebuttable presumption” that formally shifts a burden of production to the patent

owner , we agree that a patent owner must produce some evidence to support its argument that a particular third party should be named a real par ty in interest.

At the outset, there can be no doubt that the IPR pet itioner bears the ultimate burden of persuasion to show that its petitions are not time

- barred under § 315(b) based

on a complaint served on an alleged real party in interest more than a year earlier

. On this point, the relevant statute is clear. Under § 556(d) of the Administrative Procedure Act (“APA”)
, “[e] xcept as otherwise provided by statute, the proponent of a rule or order has the burden of proof. ” 5 U.S.C. § 556(d) ; see also id. § 551(6) (defining “order” to mean “the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing”). The Supreme Court has e xplained that this provision of the APA refers to the bu rden of persuasion. Dir., Office of Workers’ Comp. Pro grams, Dep’t of Labor v. Greenwich Collieries , 512 U.S. 267, 276 (1994) (“[W]e understand the APA’s unadorned reference to ‘burden of proof ’ to refer to the burden of persuasion. ”). Thus, because the IPR petitioner is the party seeking an order from the Board, § 556(d) requires the petitioner to bear the burden of persuasion. And
, while § 556(d) allows for exceptions to be provided by statute, no such exception exists here

. This allocation of the burden of persuasion makes

sense. First, it is consistent with the general rule that “[a] bsent some reason to believe that Congress intended otherwise, . . . we will conclude that the burden of persu asion lies where it usually falls , upon the party seekingWORLDS INC

. v. BUNGIE , INC

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relief.” Schaffer ex rel. Schaffer v. Weast , 546 U.S. 49, 57

– 58 (2005) ; see also id. at 57 (indicating that § 556(d) reflects the “general rule” that the party seeking court action bears the burden of p ersuasion regarding the essential aspects of the party’s claims)

. 7 And as this court held in Wi

- Fi One , “[t] he time ly filing of a petition under § 315(b) is a cond ition precedent to the Director’ s author ity to act.” 878 F.3d at 1374; see also 35 U.S.C. § 312(a)(2) (requiring an IPR petitioner to identify all real parties in interest). Second, an IPR petitioner will usually be in a better position, at least relative to the patent owner, to access evidence relevant to the real

- party

- in -interest inquiry

. See United States v. N.Y. , N ew Haven & H ar tford R .R. Co. , 355 U.S. 253, 256 n.5 (1957) (“ The ordinary rule, based on considerations of fairness, does not place the burden upon a litigant of establishing facts peculiarly within the knowledge of his adversar y. ”). Having identified the party bearing the burden of pe rsuasion , we turn to the proper procedure for analyzing whether a petition should be time

- barred based on a complaint served on a real party in interest more than a year earlier

. As discussed above, t he Board i n Atlanta Gas Light explained that its practice of “ initially accep ting the identification of real parties in interest in a pet ition as accurate acts as a rebuttable presumption that

7 Although exceptions to this general rule exist, for example, where elements of a plaintiff’s claim “ can fairly be characterized as affirmative defenses or exemptions ,” Schaffer
, 546 U.S. at 57, we do not view § 315(b) as an affirmative defense. Instead , unlike a traditional statute of limitations defense, “[t]he time ly filing of a petition under § 315(b) is a condition precedent to the Director’s authority to act
, ” and “[it] sets lim its on the Director’ s statutory authority to institute.” Wi

- Fi One , 878 F.3d at 1374

.WORLDS INC

. v. BUNGIE , INC

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benefits petitioners. ” Atlanta Gas Light
, Paper 88 at 7. Referring to Federal Rule of Evidence 301, the Board indicated that such a presumption shifts the burden of production to the patent owner, who then must produce evidence sufficient to “reasonably bring[] into question the accuracy of a petitioner’s id entification of the real parties in interest.” Id. at 8. Initially, we question the Board’s practice of creating a “presumption” by its acceptance of a petitioner’s initial identification of the real par ties in interest

. Generally , for a party to gain t he benefit of a presumption, the party must prove certain basic facts from which the presumed fact is then inferred according to the relevant substantive law. See A.C. Aukerman Co. v. R.L. Chaides Const r . Co.
, 960 F.2d 1020, 103 5– 37 (Fed. Cir. 1992) (en banc) (e xplaining that the presumption of laches, which was a defense available in patent cases prior to SCA Hygiene
, arose upon proof that the patentee delayed filing suit for more than six years after actual or constructive knowledge of the defendant’s alleged infringing activ ity ), abrogated on other grounds by SCA Hygiene Prod s

. Aktiebolag v. First Quality Baby Prod s ., LLC , 137 S. Ct. 954 (2017) ; 21B Charles A

. Wright & Kenneth W. Gr aham, Jr., Federal Practice and Procedure: Evidence § 5122 (2d ed. 2005 ) (“[A] true presumption cann ot arise without proof of some ‘ basic fact ’

. . . . ”). I n the real

- party

in

- interest context at issue here
, the relevant statute and regulations do not require evidentiary proof of such basic facts

. See 35 U.S.C. § 312(a)(2) (requiring a petition to “identif[y] all real parties in inter est”); 37 C.F.R. § 42.8(b)(1) (requiring a party to “[i]dentify each real party

- in

- inter est for the party”); see also id. § 42.104(a) (requiring a petitioner to “certify .

. . that the petition er is not barred or estopped from requesting an inter partes review challenging the patent claims on the grounds identified in the petition” )

.WORLDS INC

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Moreover, presumptions are usually created based on certain policy considerations, such as correcting an imba la nce due to one party’s superior access to sources of proof,

or promoting efficiency by presuming a fact to be true where the existence of certain basic facts make s the truth of the presumed fact highly probable. See 2 George E. Dix, et al., McCormick o n E vid ence § 343 (7th ed. 2016 )

. In the real

- party

- in

- interest context, however, we see no particular need to create a formal presump tion— especially a presumption that would disfavor the party that likely has inferior access to potential sources of proof. Regardless, w e agree that an IPR petitioner’s initial identification of the real parties in interest should be accepted unless and unt il disputed by a patent owner. But instead of viewing this as a presumption, we simply view this as practical. In short, we see no reason for the Board to question an IPR petitioner’s identification of the real parties in interest unless and until a patent owner has chosen to raise the issue

. The next question then becomes: what must a patent owner do to sufficiently rai se the issue? In Atlanta Gas Light , the Board viewed the “presumption” created by the IPR petitioner’s initial identification of the real parties in interest as shifting the burden of production to the patent owner. From this, the Board explained that
, where “ a patent owner provides sufficient rebuttal evidence that reasonably brings into question the accuracy of a petitio ner’s identification of the real parties in interest , the burden remains with the petitioner to establish that it has co mplied with th e statutory requirement to identify all the real parties in interest. ” Atlanta Gas Light , Paper 88 at 8 (emphasis added)

. As explained above, we disagree with the use of a presumption in this context. We agree, however, that a patent owner must produce some evidence that tends to show that a particular third party should beWORLDS INC

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named a real party in interest. 8 A mere assertion that a third party is an unnamed real party in interest , without any support for that assertion , is insufficient to put the issue in to dispute

. 2
In view of this burden framework, we next turn to the Board’s analysis of the evidence in this case. In its IPR petitions, Bungie listed itself

— and only itself

— as the real party in interest. 9 J.A. 354, 3728, 4918

. Worlds then
p resented evidence that a particular third party, A ctivision, was an unnamed real party in interest , inclu ding: (1) the DevPub Agreement between Bungie and Activision, which related to development of Destiny ; (2) the November 2014 letter indicating Worlds’ s intent to add Bungie’s Destiny products to the Activision litigation ; and (3) the fact that the five patents asserted in the Activision litigation were the same five patents Bungie challenged in its IPR petitions

.

8 For purposes of deciding this case , w e need not address the quantum of support required from a patent

owner. If it were not framed in terms of a presumption
, the stan dard used in Atlantic Gas Light

— evidence that

“ reasonably brings into question the accuracy of a pet itioner’s identification of the real parties in interest ”— may prove useful

. I n this case
, it suffices to say that , as di scussed below, Worlds presented mor e than enough ev idence to sufficiently put this issue into dispute

. 9 Bungie’s identification of the real parties in inte rest reads, in its entirety: “Bungie, Inc. is the real party

in

- interest.” J.A. 354, 3728, 4918

. Given the statutory requirement that an IPR petition list “ all real parties in interest,” 35 U.S.C. § 312(a)(2) (emphasis added), Bungie’s statement effectively represents that Bungie is the sole real party in interest.WORLDS INC

. v. BUNGIE , INC

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Worlds focused much of its argument on Recital 7A.15 of the DevPub Agreement , which Worlds views as giving Activision an opportunity to control the instant IPRs

. 10 This provision is found in the section of the DevPub Agreement titled “Activision’s Responsibilities” and provides that Bungie is r esponsible for “[c]onducting legal reviews of the Products to ensure that all Intellectual Property and other rights are fully cleared for use.” J.A. 2924 , Recital 7A.15

. 11 The section further provides that these legal reviews “shall be subject to prior r eview and approval of Activision, (budget to [sic] mutually approved) such approval not to be unreasonably wit hheld.” Id

. From this evidence , Worlds argued before the Board that these IPRs are “legal reviews” necessary to clear intellectual property rights, and that Activision had the opportunity to control the IPRs, making Activision a real party in interest. In response, Bungie presented a different interpretation of the “legal reviews” provision, arguing that
, in th e context of a videogame development agreement, a “legal review [] ” refers to “ reviewing the title, script, and visual and audio assets to ensure that any appropriate rights have been obtained and that they do

10 Worlds also emphasized other portions of the DevPub Agreement, such as the section regarding A ctivision’s participation in Bungie’s Board of Directors’ meetings, J.A. 2938, Recital 18.2, as well as the section requiring Activision to pay “development advan ces” to Bungie to “fully fund [Bungie’s] operations directly rela ted to the development o f the Products
, ” J.A. 2928

– 29, Recital 10.1. And it also pointed to representations and warranties made by Bungie, including that the products would not violate the r ights of others. See J.A. 2933, Recital 14.1.2.

11 “Intellectual Property” is defined in the DevPub Agreement to include patents and patent rights. J.A. 2919 , Recital 6.1

.WORLDS INC

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not infringe any trademarks or copyrights.” J. A. 415 ( Opp. to Worlds’ s Discovery Mot.)

. 12 The Board flatly rejected Worlds’ s argument that Bung ie’s IPRs could be considered “legal review [s] of a

‘ Product ,’” first in its o rder denying Worlds’ s disco very motion, then again in its institution d ecisions. J.A. 429 ( Discovery Order) ( stating that “[a] legal review of a

‘ Product ’ under the Agreement and other provisions do not specify, require, or necessarily include filing an IPR against a pa tent”); J.A. 507 , 3874, 5092 (Institution Decisions ) (stating that Worlds’ s argument was based on a faulty assumption that “legal reviews” could include IPRs). The Board’s institution decisions explained that the IPR s involved a patent rather than a product , and thus the IPR s c ould not be considered “lega l review s of a Product” that would give Activision a right of review and approval. J.A. 507 (“The only subject of this proceeding is the ’856 patent; this proceeding does not involve any product. Thus, Patent Owner has not shown that this proceeding fall s within the scope of a ‘legal review[] of the Products’ . . . .” (citation omit t ed) ) ; see also J.A. 3874, 5092

. After rejecting each of Worlds’ s other arguments r egarding the DevPub Agreement, the Board concluded that “Patent Owner has not demonstrated that the Agreement gives Activision any opportunity to control this procee ding.” J.A. 509 , 3877, 5094 . In so doing , the Board also relied on statements in Bungie’s Opposition to Worlds’ s Motion for Discovery, including that “Bungie is solely responsible for the cost and control of the IPRs against [Worlds’ s ] patents,” J.A. 409

– 10, and that “Activision’s payment of development advances to Bungie funded the development of the Destiny videogame, not these IPRs,”

12 The parties maintain their r espective interpret ations of this provision on appe al.WORLDS INC

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J.A. 416. See J.A. 510 , 3877, 5094

– 95 (relying on these statements). In Bungie’s briefing, those statements were made without citations to any evidence. See J.A. 409

– 10, 416. Nonetheless, f rom these statements, the Board concluded that “Petition er has expressly denied any control or funding of this proceeding by Ac tivision, ” and “[o]n this record, we accept Petitioner’s express represe ntations that Activision is not controlling or funding this proceeding.” J.A. 509

– 10
, 3877, 5094

– 95 . The Board ultimately conclu ded its real

- party

- in

- interest analysis by stating that “Patent Owner has not demonstrated that Activision is an unnamed real party in interest in this proceeding. Accordingly, Patent Owner has not esta blished that the Petition violates 35 U.S.C. § 312(a) (2) or that institution of review is barred under 35 U.S.C. § 315(b).” J.A. 511 , 3878, 5095

. The Board reaf firmed this analysis in its final written d ecisions . J.A. 106

– 07
, 194

– 95, 258

– 59

. Under the framework we have outlined above, the Board was enti tled to rely , at least initially, on Bungie ’s list of all real parties in interest, which raised no time

- bar issues under the facts presented

. Here, however, W orlds presented evidence sufficient to put Bungie’s identific ation of itself as the sole real party in interest into dispute

. Thus, in this circumstance
, the Board could no longer merely rely upon Bungie’s initial identification of the real parties in interest. Instead, the Board was required to make any factual determinations necessary to evalua te whether Bungie had satisfied its burden to demonstrate that its petition was not time

- barred based on the co mplaints served upon Activision, the alleged real party in interest.

T his marks the point in the analysis at which the burden of persuasion becomes essential. There is here a complete absence of any statement as to which party should bear the burden of persuasion

. At the same time, the Board rejected the patent owner’s arguments becauseWORLDS INC

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the Board was “unpersuaded that there is sufficient evidence that Activision is an unnamed real party in interest for the reasons given in the Institution Decision.” J.A. 107, 195, 259. This implies that the Board assumed the burden of persuasion rests w ith the patent owner. Moreover, the Board’s potential reliance on the rebuttable presumption from Atlanta Gas Light may have effectively skewed the burden of persuasion despite Atlanta Gas Light ’s statement that it was not approving such a shift. Under these circumstances, we cannot discern whether the Board placed the burden on Worlds , the patent owner, to persuade the Board that Bungie failed to list a real party in interest that would render the petitions time

barred under § 315(b). As discussed above , this would have been improper. As an aside, we have some concern that the Board may have relied on attorney argument as evidence that Activision was not controlling or funding these IPRs. S ee J.A. 5 10, 3877, 5095 (citing Bungie’s briefing and stating th at “[o]n this record, we accept Petitioner’s express representations that Activision is not controlling or fun ding this proceeding”) ; see also Icon Health & Fitness, Inc. v. Strava, Inc. , 849 F.3d 1034, 1043 (Fed. Cir. 2017) (“Attorney argument is not evid ence.”)

. This is particula rly concerning given that the Board’s apparent reliance on such statements seemed to outweigh the actual evidence presented by Worlds. Instead of citing evidence to su pport this factual conclusion, the Board merely cited atto rne y argument from Bungie’s briefing

— attorney argument that itself failed to cite evidence , such as affidavits or declarations

. See J.A. 510, 3877, 5095 (Institution Dec isions); J.A. 409

– 10, 416 (Bungie’s briefing). In light of these concerns, we find it appropriate to remand this case to the Board for further consideration of the real

- party

- in

- interest issue. In doing so, we do not speak to how the evidence should be weighed , and we do not prejudge what conclusion the Board, applying aWORLDS INC

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proper analysis, may reach as to whether Activision is a real party in interest in these proceedings. We note, however, that we have issued opinions since the Board issued its final written decisions that clarify the meaning of the term “real party i n interest” in the cont ext of § 315(b). See Applications in Internet Time, LLC v. RPX Corp.
, 897 F.3d 1336, 1351 (Fed. Cir. 2018) (explaining that determining whether a party is a real party in inte rest “demands a flexible approach that takes into account both equitable and pra ctical considerations, with an eye toward determining whether the non

- party is a clear beneficiary that has a preexisting, established relatio nship with the petitioner”); Wi

- Fi One, LLC v. Broadcom Corp. , 887 F.3d 1329, 1336 (Fed. Cir. 2018) (noting that t he Board, in rendering § 315(b) determinations, “seeks to determine whether some party other than the petitioner is the ‘party or parties at whose behest the petition has been filed’” (citing Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012))). We remand with instructions for the Board to weigh the evidence in a manner that places the ultimate burden of persuasion on Bungie , the IPR petitioner , and to do so in a manner consistent with our recent precedent

. 3 Bungie briefly ar gues on appeal that , in light of issue preclusion principles
, Worlds should be estopped from contesting the Board’s real

- party

- in -interest determin ation. Bungie bases its preclusion argument on the three other IPRs that proceeded on a similar time frame as the three IPRs now on appeal

. 13 In those IPRs, Worlds a r-

13 The Board issued final written decisions in the three IPRs on appeal on November 10, 2016; November 28, 2016; and December 6, 2016. Meanwhile, the Board issued final written decisions in the three unappealedWORLDS INC

. v. BUNGIE , INC

. 18

gued, as it does here, that Bungie should have named Activision as a rea l party in interest. The Board dis agreed

. Worlds did not appeal the Board’s final written decisions in those IPRs, and the time for appeal has now expired. The general rule for issue preclusion (also called co llateral estoppel) is “ [w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judg ment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” B & B Hardware, Inc. v. Hargis Indus., Inc. , 135 S. Ct. 1293, 1303 (2015) (quoting Restatement (Second) of Judg ment s § 27 (1982)). This general r ule is “subject to certain well

- known exceptions.” Id. (citing Restatement (Second) of Judgment s § 28 (1982) as listing exceptions ). Bungie devotes just two page s of its briefing to arg uing that the basic requirements of issue preclusion are satisfied in this case. Appellee’s Br. 6 2–6 3. In similarly cursory fashion, Worlds ’s Reply Brief compiles a handful of conclusory assertions in an attempt to avoid issue preclusion. Reply Br. 30

– 32

. And because of t he timing of the six IPRs, the Board did not consider issue precl usion. In this case, s uch a limited record is insufficient for this court to decide, for the first time on appeal, whether issue preclusion should apply to this unusual set of facts

. The record before us is scant on details regarding the issues raise d in the three unappealed IPRs. B ased on the limited record before us, we cannot say that the “issue” is the same between the now

- final IPRs and the IPRs cu r-

IPRs on November 28, 2016 (for two proce edings) and November 30, 2016.WORLDS INC

. v. BUNGIE , INC

. 19

rently on appeal. Bungie, of course, views the “issue” as the ultimate determination of whether Activision is a real party in interest. See Appellant’s Br. 63. But i n our view, the determination of whether a party is a real party in interest may differ from one IPR to the next, even among a set of seemingly related IPRs. Without a more compr ehensive understanding of the issues raised in each case,

we decline to apply collateral estoppel. Instead, given that we are already remanding this case with regard to the merits of the real

- party

- in

- interest analysis, we find it appropriate to have the Board analyze in the first i nstance whether issue preclusion should apply under these particular circumstances. In doing so, the Board should develop a more complete record that expla ins the diffe rences, if any, between the issues raised in present IPRs and the unappealed IPRs. The Board should also consider any relevant exceptions to issue preclusion raised by the parties and explain why such exceptions do or do not apply to these facts

. See Restatement (Second) of Jud gment s § 28 (1982) ; see also In re Cygnus Telecomms

. Tech., LLC, Patent Litig. , 536 F.3d 1343 , 1349

– 50 (Fed. Cir. 2008) (regarding issue preclusion where a party did not appeal all cases consolidat ed in a mu lti

- district litig ation proceeding ).

B

Because of our conclusions with respect to the real

party

- in

- interest issue, we need not address the merits of the parties’ invalidity arguments at this time

. We ther efore vacate the Board’s merits decisions in their entirety, without speaking to the merit s of the Board’s analysis. On remand, if the Board determines that the IPRs are not time

- barred, the Board may use its prior merits analysis in new final written decisions, and a future panel of the court will have occasion to review the merits of the Board’s analysis at that time , should the parties choose to appeal.WORLDS INC

. v. BUNGIE , INC

. 20

III For the foregoing reasons, the Board’s final written decisions in these three consolidated appeals are vacated

. On remand, the Board should first address whether Worlds is estopped from arguing the real

- party

- in -interest issue

. The Board should thoroug hly consider the posture of the related proceedings, as well as any relevant exce ptions to collateral estoppel. If the Board det ermines that collateral estoppel does not apply, the Board should then reevaluate the merits of the real

- party

- in

- interest issue

. And, in light of this court’s recent guidance on the su bstantive real

- party

- in

- interest inquiry, t he Board, in its discretion
, should consider whether to allo w for additional discovery on this issue. 14
VACATED AND REMANDED

C OSTS The parties shall bear their own costs.

14 See Applications in Internet Time
, 897 F.3d 1336 ; Wi

- Fi One , 887 F.3d 1329 ; cf. WesternGeco LLC v. ION Geophysical Corp. , 889 F.3d 1308 (Fed. Cir. 2018)

.