UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`AGILYSYS, INC., ET AL.
`Petitioner
`
`v.
`
`AMERANTH, INC.
`Patent Owner
`
`____________
`
`Case CBM2014-00015
`Patent No. 6,384,850
`____________
`
`MAIL STOP PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`Post Office Box 1450
`Alexandria, Virginia 22313-1450
`
`Submitted Electronically via the Patent Review Processing System
`
`PATENT OWNER’S OPPOSITION TO PETITIONER’S
`MOTION TO RECONSTITUTE PETITIONER TO
`EXCLUDE APPLE INC. UNDER 37 C.F.R. §42.20
`
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`AGILYSYS, INC., ET AL.
`Petitioner
`
`v.
`
`AMERANTH, INC.
`Patent Owner
`
`____________
`
`Case CBM2014-00015
`Patent No. 6,384,850
`____________
`
`MAIL STOP PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`Post Office Box 1450
`Alexandria, Virginia 22313-1450
`
`Submitted Electronically via the Patent Review Processing System
`
`PATENT OWNER’S OPPOSITION TO PETITIONER’S
`MOTION TO RECONSTITUTE PETITIONER TO
`EXCLUDE APPLE INC. UNDER 37 C.F.R. §42.20
`
`
`
`TABLE OF CONTENTS
`
`CBM2014-00015
`
`I.
`
`II.
`
`The Board Should Deny Apple’s Request To
`Withdraw, Or Alternatively Allow Apple To Be
`Terminated Under Adverse Judgment ………….……...….…..……..……. 1
`
`If The Board Allows Apple To Withdraw And
`Re-File Its Petitions, Prejudice To Ameranth
`Should Be Avoided …………………………………........……..………… 3
`
`III. Conclusion ……………………………… …..……………..………….... 7
`
`ii
`
`
`
`TABLE OF AUTHORITIES
`
`CBM2014-00015
`
`Regulations
`
`37 C.F.R. §42.73(b)(4) ………..…………………….………………..…………. 1
`
`37 C.F.R. §42.74 ……….……..…………………….………………..…………. 1
`
`PTAB Proceedings
`
`Denso Corp. v. Beacon Navigation GmBH, IPR2013-00026 .……..………… 4, 7
`
`iii
`
`
`
`Petitioner has requested that the Board reconstitute Petitioner to exclude
`
`Petitioner Apple, Inc. from CBM2014-00013, -00014, -00015 and -00016. For the
`
`reasons detailed below, the request should be denied.
`
`I.
`
`The Board Should Deny Apple’s Request To Withdraw, Or
`Alternatively Allow Apple To Be Terminated Under Adverse Judgment
`There is no statutory authority or provision under the PTAB Rules to
`
`dismiss a party who files a petition other than (1) termination of the proceeding
`
`against such party as a result of settlement (37 C.F.R. §42.74) or (2) entry of
`
`adverse judgment against such party (37 C.F.R. §42.73(b)(4)). Petitioner Apple has
`
`not sought a settlement with Ameranth and Apple has withdrawn its previous offer
`
`to accept entry of adverse judgment against it. There is thus no basis for allowing
`Apple to withdraw.1
`
`Ameranth submits that the only vehicle for termination of Apple from these
`
`proceedings, absent settlement, is entry of adverse judgment against Apple under
`
`37 C.F.R. §42.73(b)(4). Apple’s counsel first proposed the adverse judgment route
`
`in meet-and-confer discussions with counsel for Ameranth. In response, Ameranth
`
`advised Apple in writing that it would consent to withdrawal of Apple pursuant to
`
`1 Apple first sought only to withdraw, but never mentioned re-filing petitions until
`the Board ordered briefing on the issue in the context of Apple’s request to
`withdraw. While Apple originally told the Board that it was unable to be
`represented by the same counsel as the other parties to the Petitions, Apple did not
`say why. As is now clear from Petitioner’s Motion, the reason is that Apple wants
`to be “represented by counsel of its choice.” Apple is thus clearly not, e.g., faced
`with an irreconcilable conflict. Note that Ameranth is not waiving its conflict of
`interest objections currently stayed in the District Court. See Exhs. 2001, 2002.
`
`
`
`CBM2014-00015
`
`adverse judgment if Apple would agree to application of estoppel as if the Board
`
`had rendered a Final Decision in these proceedings adverse to Apple on all issues
`
`as to which estoppel would apply based on such a Final Decision. After realizing
`
`that its request to withdraw carried estoppel implications, Apple rejected
`
`Ameranth’s proposal and withdrew its offer to accept entry of adverse judgment.
`
`Ameranth submits that any termination of Apple from these proceedings
`
`must leave Ameranth in no worse position than it would be in had Apple not been
`
`terminated. Ameranth’s proposed stipulated conditions are required to guarantee
`
`that will happen, and further to avoid establishing a precedent allowing a party
`
`who files a petition to unilaterally walk away from that petition at a time of its own
`
`choosing with no potential ill effects. Applying estoppel as of the date of the
`termination is the only way to prevent future petitioners from gaming the system
`
`by withdrawing from a proceeding involving other parties at opportune times and
`
`“waiting to see what happens.” Such withdrawing petitioners would get all of the
`
`upside benefit if the matter is later decided favorably to the remaining petitioners,
`
`but would suffer none of the downside risk if the matter is subsequently decided
`
`adversely to the remaining petitioners. That cannot be what the AIA intended by
`
`expressly providing for estoppel against petitioners.
`
`Allowing Apple to withdraw from the present proceedings, re-file the
`
`Petitions, and then file motions to join, will create a needless burden on the Board
`and on Ameranth, and all for a mere speculative future need.2 Petitioner’s Motion
`
`2 Petitioner admitted in its Motion that Apple has no present need to be represented
`by different counsel from the counsel representing other parties to the Petitions:
`
`2
`
`
`
`CBM2014-00015
`
`acknowledges these required steps, when it requested that Apple be allowed to
`
`“file its own duplicate petitions naming its own counsel together with requests for
`joinder to the Existing Proceedings.” Petitioner thus recognizes that excluding
`
`Apple from the present proceedings, re-filing the Petitions, and joining the present
`
`proceedings, are all separate procedures which cannot occur simultaneously under
`
`the Rules because they must happen serially. Ameranth submits that there is no
`
`authority for joining an actual pending proceeding with another proceeding which
`
`does not yet even exist. Thus, if Petitioner’s request is allowed, at a minimum,
`
`Apple would need to file, and Ameranth would be required to respond to, two
`
`separate sets of four papers (one for each new CBM proceeding). Ameranth asserts
`
`that imposing even this amount of additional burden on Ameranth is prejudicial
`
`considering that Apple freely signed on to the present Petitions. Apple’s post-hoc
`
`desire to preemptively put itself into a position to possibly “articulate a difference
`
`of opinion” at some indeterminate future time vis-à-vis the other parties to the
`
`Petitions should not inure to the detriment of Ameranth.
`II.
`If The Board Allows Apple To Withdraw And Re-File Its
`Petitions, Prejudice To Ameranth Should Be Avoided
`Petitioner requested that the Board dismiss Apple from the present
`
`proceedings and authorize Apple to file identical petitions vis-à-vis the originally-
`
`filed petitions. Ameranth does not believe there is any basis for granting the
`
`“While Petitioner expects that the parties’ positions will be in alignment
`throughout the proceeding, this would allow Apple to preserve its ability to
`articulate a difference of opinion in the event this occurs.”
`
`3
`
`
`
`CBM2014-00015
`
`requested relief as discussed above. Nevertheless, if the Board decides to grant the
`
`request, Ameranth believes the Board should put in place clear procedures which
`
`avoid prejudice to Ameranth by such Petitioner-initiated re-filing and joinder.
`
`Specifically, having made their original decision to join together, even if
`
`they are allowed to sever and re-join, the individual parties to the original Petition
`
`should not get any advantage in briefing pages, minutes of oral argument, separate
`
`motions or any other advantage they would not have obtained had Apple remained
`
`as a party to the present proceeding. This is merely common sense. Ameranth
`
`should not have to face anything over and above what it would have had to face if
`
`the originally-constituted Petitioner remained so. Petitioner, and Apple separately,
`
`cannot say that they did not originally know they would be subject to statutory and
`
`Rules-mandated joint page limits, argument times, single motions etc. when they
`
`joined together to file the original Petitions. Thus, limiting any joined proceedings
`
`in such manner would not be prejudicial to Apple or any of the other parties to the
`
`original Petitions, as indicated by the procedures followed in the very proceeding
`
`cited by Petitioner in its Motion, and which all parties to the original Petitions
`
`admitted studying prior to filing those Petitions. See Denso Corp. v. Beacon
`
`Navigation GmBH, IPR2013-00026 (two separate petitioners shared briefing pages
`
`and argument time, and filed joint motions) (note also that the same law firm
`
`representing Apple in the current matter also represents petitioner Denso in the
`
`Denso v. Beacon proceeding).
`
`Thirty-five parties chose to join forces and file joint Petitions against
`
`Ameranth’s patents. These thirty-five parties are also members of a joint defense
`
`4
`
`
`
`CBM2014-00015
`
`group in the District Court litigation.3 Now, for somewhat nebulous reasons,
`
`Apple, one of those thirty-five parties, seeks to go its own way five full months
`
`after the Petitions were filed. Apple alleges that Ameranth would not be prejudiced
`
`by allowing Apple to belatedly file separate petitions and to re-join the presently-
`
`pending proceedings. However, Apple, a corporation having practically unlimited
`financial resources, fails to acknowledge the obvious financial prejudice to
`
`Ameranth (a very small company). Having freely chosen to join forces with the
`
`other parties to file joint Petitions, Apple should not now, at this late stage and
`
`after Ameranth has filed its Preliminary Responses, be allowed to multiply
`
`proceedings to the financial detriment of Ameranth. The costs of responding to
`
`another set of petitions, motions for joinder and so forth are significant to
`
`Ameranth, while the cost to file additional petitions is trivial to Apple.
`
`The PTAB has indicated a sensitivity to the possibility of using procedural
`
`mechanisms to increase delays and/or costs. The PTAB has also indicated a
`
`sensitivity to providing small companies such as Ameranth a “level playing field:”
`Question CBM8018: What is the Patent Trial and Appeal Board
`doing to provide a level playing field in their trials involving
`independent inventors and small companies?
`
`3 Ameranth’s lawsuits against all defendants in the District Court action were
`stayed, in part, based on the fact that many of the defendants were co-CBM-
`petitioners. That stay, and any increase in the overall length of time of the CBM
`proceedings, is harmful to Ameranth. Thus, if the Motion is granted, the Board
`should ensure that doing so does not increase the length of time of the CBM
`proceedings and thus the stay of the lawsuits.
`
`5
`
`
`
`CBM2014-00015
`
`. . . The Board’s proceedings are intended to provide a quicker, less
`expensive alternative to district court patent litigation. Discovery is
`limited and deadlines are established for the completion of trials. The
`Board believes this is to the benefit of all parties, including
`independent inventors and small companies.
`http://www.uspto.gov/aia_implementation/faqs_covered_business_method.jsp
`
`(emphasis added).
`
`Thus, while Ameranth is not suggesting improper motivations by Apple in
`
`seeking to withdraw from the present proceeding, the situation presents the
`
`possibility of prejudice to Ameranth and thus must be addressed. It would simply
`
`not be fair to a small company such as Ameranth with limited resources to have to
`
`respond to 100% more pages of filings, or be subjected to increased oral argument
`
`allowances, on every issue, after Apple freely chose to file its Petitions jointly with
`
`the other parties. If the Board does not set a clear precedent now by denying
`
`Apple’s request, it will be besieged in future proceedings with requests to allow
`
`parties to multiply the proceedings every time the Petitioner group senses that it
`
`might cause the patent owner financial pain. Of course such future requests to
`
`withdraw will not admit to being based on desires to prejudice the patent owner,
`
`which will put the Board in the position of having to either conduct factual
`
`findings or just ignore the potential of prejudice. Ameranth submits that neither
`
`course would be acceptable to the Board or consistent with the law or the Rules.
`
`However, if the Board should decide to grant Apple’s request to withdraw
`
`and refile its Petitions, followed by joining with the present proceedings, the Board
`
`should first limit such re-filed petitions to exactly what Apple previously filed in
`
`6
`
`
`
`CBM2014-00015
`
`the pending CBM proceedings. In fact, Petitioner has not requested that Apple be
`
`allowed to do anything other than that. Petitioner asked only that the Board allow
`
`Apple to file “duplicate petitions” and “permit Apple to file separate petitions,
`identical to those on file that will not raise any new issues or Arguments.”4
`
`Second, should the Board grant Petitioner’s request to permit Apple to re-
`
`file the identical Petitions, all Rules as regards, inter alia, page limits, argument
`
`time and ability to file or respond to motions should continue to apply to Apple and
`
`all of the parties collectively on the Petitioner side throughout the entirety of the
`
`proceedings just as they did in Denso v. Beacon as discussed above. In fact,
`
`Ameranth's request is entirely consistent with the Board's February 11, 2014 Order
`
`directing the parties to the Petitions to “speak with a single voice, both in writing
`
`and oral representation.”
`III. Conclusion
`For at least the reasons set forth above, the Board should not grant
`
`Petitioner’s request to reconstitute Petitioner to exclude Apple absent Apple
`
`consenting to entry of adverse judgment and full estoppel as discussed above. If
`
`the Board should decide to nonetheless grant the request, it should define
`
`applicable procedures as detailed above to avoid prejudice to Ameranth.
`
`4 Of course the re-filed petitions would have to be completely identical to the
`presently-pending Petitions, otherwise Apple would be unfairly advantaged by
`being able to craft new petitions after having seen Ameranth’s Preliminary
`Responses and to attempt to address the many defects and deficiencies that
`Ameranth has pointed out in the existing Petitions and supporting materials.
`
`7
`
`
`
`March 17, 2014
`
`Respectfully Submitted,
`
`CBM2014-00015
`
`/John W. Osborne/
`John W. Osborne
`Lead Counsel for Patent Owner
`USPTO Reg. No. 36,231
`OSBORNE LAW LLC
`33 Habitat Lane
`Cortlandt Manor, NY 10567
`josborne@osborneipl.com
`Tel.: 914-714-5936
`Fax: 914-734-7333
`
`Michael D. Fabiano
`Back-up Counsel for Patent Owner
`USPTO Reg. No. 44,675
`FABIANO LAW FIRM, P.C.
`12526 High Bluff Drive, Suite 300
`San Diego, CA 92130
`mdfabiano@fabianolawfirm.com
`Tel.: 619-742-9631
`
`8
`
`
`
`CBM2014-00015
`
`CERTIFICATE OF SERVICE
`
`I certify that, in accordance with 37 C.F.R. §42.6, a true and correct copy
`of the foregoing Patent Owner’s Opposition to Petitioner’s Motion to
`Reconstitute Petitioner to Exclude Apple Inc. Under 37 C.F.R. §42.20 was
`served on March 17, 2014 by causing said document to be delivered via
`electronic mail, per agreement of the parties, to counsel for Petitioner at the
`following addresses:
`
`Richard S. Zembek
`Reg. No. 43,306
`FULBRIGHT & JAWORSKI LLP
`1301 McKinney, Suite 5100
`Houston, Texas 77010
`Tel: 713-651-5151
`Fax: 713-651-5246
`richard.zembek@nortonrosefulbright.com
`
`Gilbert A. Greene
`Reg. No. 48,366
`FULBRIGHT & JAWORSKI LLP
`98 San Jacinto Boulevard, Suite 1100
`Austin, TX 78701
`Tel: 512.474.5201
`Fax: 512.536.4598
`bert.greene@nortonrosefulbright.com
`
`March 17, 2014
`
`/John W. Osborne/
`John W. Osborne
`Lead Counsel for Patent Owner
`USPTO Reg. No. 36,231
`OSBORNE LAW LLC
`33 Habitat Lane
`Cortlandt Manor, NY 10567
`Email: jwosborne@osborneipl.com
`Tel.: 914-714-5936
`Fax: 914-734-7333
`
`9
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