Trial@uspto.gov
`571-272-7822
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` Paper 19
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` Entered: March 24, 2014
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`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 6,3,84,850
`
`
`Before JAMESON LEE, MEREDITH C. PETRAVICK, RICHARD E. RICE, and
`STACEY G. WHITE, Administrative Patent Judges.
`
`LEE, Administrative Patent Judge.
`
`
`
`DECISION
`On Motion to Reconstitute Petitioner
`37 C.F.R. § 42.5
`
`
`
`
`
`
`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`
`Introduction
`
`
`
`Petitioner1 filed a motion, on March 12, 2014, to reconstitute itself by
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`excluding one of its 35 constituent members, Apple Inc. (“Apple”), from this
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`proceeding. Paper 16. Specifically, Petitioner requests (1) elimination of Apple
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`from this proceeding “without imposition of any estoppel against Apple,” and
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`(2) authorization for Apple, by itself, to file a separate petition, identical to the one
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`filed in this proceeding, against the Patent Owner, on the same patent, and a
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`request to join that new proceeding with this proceeding. Id. at 1. The Patent
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`Owner filed an opposition (Paper 17); and Petitioner filed a reply (Paper 18).
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`
`
`
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`The motion is dismissed-in-part and otherwise denied.
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`Background
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`On October 15, 2014, 35 companies including Apple filed a single petition
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`for covered business method patent review of claims 1-16 of U.S. Patent
`
`No. 6,384,850 (“the ’850 patent”), collectively naming themselves “Petitioners.”
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`Paper 1. In the petition, the 35 companies were split into 15 groups, with each
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`group appointing its own lead and backup counsel. In the Board’s electronic
`
`
`1 Expedia, Inc., Fandango, LLC, Hotel Tonight, Inc., Hotwire, Inc., Hotels.com,
`L.P., Kayak Software Crop., Live Nation Entertainment, Inc., Micros Systems,
`Inc., Orbitz, LLC, Opentable, Inc., Papa John’s USA, Inc., Stubhub, Inc.,
`Ticketmaster, LLC., Travelocity.com LP, Wanderspot LLC, Pizza Hut, Inc., Pizza
`Hut of America, Inc., Domino’s Pizza, Inc., Domino’s Pizza, LLC, Grubhub, Inc.,
`Seamless North America, LLC, Order.in, Inc., Mobo Systems, Inc., Starbucks
`Corporaton, Eventbrite, Inc., Best Western International, Inc., Hilton Resorts
`Corp., Hilton Worldwide, Inc., Hilton International Co., Hyatt Corporation,
`Marriott International, Inc., Starwood Hotels & Resorts Worldwide, Inc.,
`Usablenet, Inc., and Apple, Inc.
`
`
`
`-2-
`
`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`Patent Review Processing System (“PRPS”), however, which provides space for
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`only a single entry as lead attorney for a party, Mr. Richard S. Zembek was
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`designated as lead attorney for “Petitioner.”
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`
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`On January 13, 2014, the Patent Owner filed a preliminary response.
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`Paper 11. To clarify the situation with regard to 15 pairs of lead and backup
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`counsel, the Board initiated a conference call, on February 7, 2014, to inquire and
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`discuss what Petitioner had in mind with regard to the conduct of this proceeding.
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`
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`In that conference call, Mr. Zembek explained that the 35 constituent
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`members of Petitioner would submit a common paper in each instance a paper
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`from Petitioner will be filed, in which the 35 members would speak with one
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`voice, so long as all of them agreed to do so, but that any member may decide to
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`go its own way and argue or present something different. Paper 12. In case of the
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`latter, according to Mr. Zembek, the page length of any submission of the
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`Petitioner will be shared to allow the separate views of Petitioner’s constituent
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`members to be expressed. Id. With regard to conference calls, Mr. Zembek
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`indicated that anytime one of the constituent members disagrees with the position
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`being expressed on behalf of all constituent members, it may, immediately during
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`the conference call, voice a different position. Id.
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`
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`The Board determined that the process envisioned and desired by Petitioner
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`was unacceptable. Specifically, in an Order summarizing the conference call of
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`February 7, 2014 (Paper 12), the Board stated:
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`The manner of conducting this proceeding, as proposed by Mr.
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`Zembek, is not in accordance with the rules governing trial practice
`and procedure before
`the Board.
` The
`thirty-five companies
`collectively filed a single petition, and thus, are recognized as a single
`
`
`
`
`-3-
`
`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`
`party, as Petitioner, before the Board. According to 37 C.F.R. § 42.2,
`“Petitioner” means “the party filing a petition requesting that a trial be
`instituted.” In circumstances not involving a motion for joinder or
`consolidation of separate proceedings, for each “petition” there is but
`a single party filing the petition, no matter how many companies are
`listed as petitioner or petitioners and how many entities are identified
`as real parties-in-interest. Even though the separate companies regard
`and identify themselves as “Petitioners,” before the Board they
`constitute and stand in the shoes of a single “Petitioner.”
`
`Because the thirty-five companies constitute, collectively, a
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`single party, they must speak with a single voice, both in writing and
`oral
`representation.
` Mr. Zembek’s proposal
`transforms
`the
`“Petitioner” under 37 C.F.R. § 42.2 from a single party into thirty-five
`different parties. That is not only contrary to 37 C.F.R. § 42.2, which
`defines “Petitioner” as a single party by referring to “the party filing a
`petition,” but also prejudicial to Patent Owner, who potentially would
`have to respond to thirty-five different, possibly inconsistent,
`positions on every issue. Nor would the Board’s interests in the
`speedy and efficient resolution of post-grant proceedings be served by
`permitting the presentation of inconsistent positions based on the
`filing of a single petition.
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`
`
`
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`On February 11, 2014, the Board ordered Petitioner to file, by
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`February 18, 2014, a paper to re-designate lead and backup counsel in accordance
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`with 37 C.F.R. § 42.10(a) by regarding itself as a single party, and to provide
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`updated service information in light of the re-designation of lead and backup
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`counsel. Paper 12. On February 18, 2014, Petitioner filed a paper re-designating
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`lead and backup counsel, but the re-designation did not include Apple. Paper 13.
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`
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`Instead, the paper stated: “For the purposes of this Notice and future actions
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`in this case, Petitioner consists of the following companies listed in the Amended
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`
`
`
`-4-
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`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`Petition (Paper No. 9): [the names of 34 of the original 35 companies named in the
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`Amended Petition, not including Apple Inc.].” Paper 13, 1 n.1. Thus, Petitioner
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`did not comply with the Order of February 11, 2014. Instead, it attempted to
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`reconstitute itself, with a different set of constituent members, without
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`authorization. Also, Petitioner did not alert the Board that its list of companies
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`included only 34 of the 35 original names. The non-compliance with the Board’s
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`Order was not self-evident.
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`
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`The Board did, however, notice Petitioner’s non-compliance, and initiated
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`another conference call with the parties, on March 7, 2014, to discuss Petitioner’s
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`unauthorized reconstitution of its constituent memberships and non-compliance
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`with the Board’s Order of February 11, 2014. During the conference call, the
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`Board explained the impropriety of Petitioner’s actions in responding to the
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`Board’s Order of February 11, 2014, as follows:
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`Had the Board not noticed the non-compliance, this proceeding would
`have continued indefinitely without a clear picture of the constitution
`of Petitioner or a clear designation of lead and backup counsel. More
`importantly, Petitioner chose to file a paper purporting to re-designate
`counsel for less than all of the companies that jointly filed the petition
`and that the Board ruled collectively constitute Petitioner, without
`seeking an opportunity to explain its difficulties to the Board and to
`ask for an alternative resolution. Such conduct is inappropriate. We
`give notice to Petitioner that such action should not be repeated. It
`should have contacted the Board, prior to filing a noncompliant paper,
`to discuss an alternative resolution.
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`Paper 15, 2-3.
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`
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`In an order dated March 10, 2014, the Board stated that notwithstanding
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`Petitioner’s contrary indication in Paper 13, Apple Inc. remains a member of the
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`
`
`-5-
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`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`group of 35 companies that are collectively regarded as Petitioner, and that that
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`will remain so unless and until the Board authorizes withdrawal of Apple Inc. from
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`the proceeding or terminates the proceeding with respect to Apple Inc. Paper 15,
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`3.
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`
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`During the conference call on March 7, 2014, counsel for Petitioner
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`explained that Petitioner would like to seek authorization for Apple Inc. to
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`withdraw from this proceeding. The Board stated that the parties can move jointly
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`to terminate the proceeding with respect to Apple Inc. See 37 C.F.R. § 42.74.
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`However, counsel for Patent Owner stated that Patent Owner and Petitioner have
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`not reached an agreement that would lead to the filing of a joint motion to
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`terminate the proceeding with respect to Apple Inc., and that Patent Owner
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`opposes the withdrawal of Apple Inc. from the proceeding.
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`
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`The Board authorized briefing by the parties as to why Petitioner should be
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`allowed to reconstitute itself to exclude Apple Inc., and required petitioner’s brief
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`to be filed as a Motion to Reconstitute Petitioner to Exclude Apple Inc., subject to
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`37 C.F.R. § 42.20. Paper 15, 3-4. Patent Owner was given the opportunity to file
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`an opposition, and Petitioner was authorized to file a reply. Id.
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`Discussion
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`
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`Under 37 C.F.R. § 42.20(c), a moving party bears the burden of proof that it
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`is entitled to the relief requested. The Petitioner bears that burden for this motion.
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`
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`First, we discuss two portions of the motion, that were not the subject of the
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`conference call on the basis of which we authorized filing of the motion.
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`
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`A.
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`
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`
`
`-6-
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`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`
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`Petitioner requests (1) elimination of Apple from this proceeding “without
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`imposition of any estoppel against Apple,” and (2) authorization for Apple to file a
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`separate petition against Patent Owner, on the same patent, and also a request to
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`join that new proceeding with this proceeding. Paper 16, 1.
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`
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`Even if we permit Petitioner to reconstitute itself by excluding Apple, the
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`effects of any estoppel applicable to Apple, based on its withdrawal from this
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`proceeding, should be determined by the tribunal before which the issue of
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`estoppel against Apple as a party, becomes relevant. When it is applicable,
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`estoppel is imposed automatically by operation of law. At the time of rendering a
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`decision, the Board typically does not choose to impose or not to impose future
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`estoppel effects on that decision. Petitioner would like us to declare, for all future
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`proceedings and actions that may follow, whatever is the tribunal and the cause of
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`action, that no estoppel effect shall fall on Apple, in the context of those future
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`proceedings and actions, for having been a constituent member of Petitioner in this
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`proceeding. We decline to do so, as we do not stand in the shoes of all those future
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`tribunals, and we do not preside over those future proceedings and actions. The
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`matter simply is inappropriate for general determination here, and now, for all
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`future purposes. We also did not authorize Petitioner’s motion in that regard.
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`
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`The motion also seeks authorization for Apple to file a separate but identical
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`petition against Patent Owner, on the same patent involved in this proceeding, and
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`a request for joinder of that new proceeding with this proceeding. Petitioner does
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`not explain, and it is not apparent, why authorization from the Board is required for
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`Apple to file a separate petition against Patent Owner, whether or not it is excluded
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`from this proceeding as a constituent member of Petitioner.
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`
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`-7-
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`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`
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`If it is Petitioner’s intent to seek pre-approval of the request for joinder, the
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`matter is premature, as we have no occasion to consider, at this time, the merits of
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`such a joinder request. If a separate petition is filed by Apple, together with a
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`request for joinder, then such matters will be taken up in due course, in the context
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`of the new proceeding. We also did not authorize Petitioner’s motion in
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`connection with seeking permission to file another petition and a joinder request.
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`
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`For the foregoing reasons, that part of Petitioner’s motion, seeking to free
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`Apple from any estoppel effect of a decision allowing reconstitution of Petitioner
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`to exclude Apple as a constituent member, is dismissed, and that part of the motion
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`seeking authorization for Apple to file a separate but identical petition, and a
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`request for joining that new proceeding with this proceeding, is also dismissed.
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`B.
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`
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`In light of the partial dismissal discussed above, what remains in Petitioner’s
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`motion is the request for Petitioner to reconstitute itself by excluding Apple as a
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`constituent member. If granted, Apple will no longer be a part of this proceeding.
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`
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`Patent Owner correctly notes that Apple may remove itself from this
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`proceeding, by requesting entry of adverse judgment as to Apple, or by settling
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`with Patent Owner and filing a joint motion to terminate the proceeding with
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`respect to Apple. It appears, however, that neither option suits Apple. The motion
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`explains that Apple would like to have its own representation against Patent Owner
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`and to not have to speak with the same voice as the other 34 constituent members
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`of Petitioner. Paper 16, 4-5. Apple intends to file another petition, on its own, and
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`to seek joinder of that new proceeding with the instant proceeding, against the
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`Patent Owner. Id.
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`
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`-8-
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`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`
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`The motion contends that had Apple known that all constituent members of
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`Petitioner would have to speak with one voice, it would have proceeded in a
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`different manner. Paper 16, 6. The motion further contends that Apple’s
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`misunderstanding was in good faith and reasonable. Paper 16, 3, 7. We do not
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`doubt that the misunderstanding was in good faith. But we disagree with the
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`assertion that it was reasonable to have expected and believed that each of the
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`35 constituent members of Petitioner is entitled to take different positions against
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`the Patent Owner in this one proceeding involving a single petition, including even
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`inconsistent positions.
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`This is not a situation in which multiple parties have filed separate petitions,
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`and the resulting proceedings have been joined, under certain conditions to ensure
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`a separate voice for each petitioner who has filed its own petition. Instead, Apple
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`chose to be joined with 34 partners in the filing of a single petition against Patent
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`Owner with respect to U.S. Patent No. 6,384,850. According to 37 C.F.R. § 42.2,
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`“Petitioner” means “the party filing a petition requesting that a trial be instituted.”
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`Because only a single petition was filed, there is only one party on the side of
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`“Petitioner,” regardless of how many companies joined in the filing of that
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`petition. The single petition may not be transformed into multiple petitions by
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`incorporating disparate positions of the different companies, and the one party may
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`not be transformed into multiple parties by allowing the different companies to
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`speak with separate voices.
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`
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`Petitioner identifies Denso Corporation and Clarion Co. Ltd., IPR2013-
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`00026 (PTAB), as an example of multiple petitioners designating separate lead and
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`backup counsel in an inter partes review, and notes that the proceeding reached an
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`
`-9-
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`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`advanced stage without need to designate a common lead attorney. The reference
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`to Denso Corporation and Clarion Co. Ltd. has very limited relevance here,
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`however, because Petitioner does not represent that Denso Corporation and Clarion
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`Co. Ltd. attempted to assert different positions or that the Board permitted Denso
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`Corporation and Clarion Co. Ltd. to share the page length of any paper and submit
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`different substantive positions for consideration. Nor does Petitioner represent that
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`in telephone conference calls, separate counsel spoke and represented Denso
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`Corporation and Clarion Co. Ltd., respectively. Rather, the fact is that, despite
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`having different counsel, the two companies did not advance different positions at
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`any time. The Denso Corporation and Clarion Co. Ltd. case simply does not
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`support the position that it was reasonable for Apple to think that it was entitled to
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`advance arguments different from those of other constituent members of Petitioner.
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`Petitioner further makes reference to 35 U.S.C. § 317(a) and § 327(a), which
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`provides for termination of a proceeding with respect to less than all petitioners,
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`upon the filing of a joint motion, with the Patent Owner, to terminate the
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`proceeding as to petitioners who have settled with the Patent Owner. Those
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`settlement provisions do not suggest that the petitioners in a jointly filed petition
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`may take different positions against the Patent Owner, other than in a settlement
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`situation as described above. Petitioner’s reliance on the settlement provisions are
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`misplaced. Apple is free to settle with the Patent Owner and file a joint request,
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`under 35 U.S.C. § 317(a), to terminate the proceeding with respect to Apple on the
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`basis of settlement. But those are not the facts before us.
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`For the foregoing reasons, we regard as unreasonable the expectation by
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`Apple that each of the 35 constituent members of Petitioner is entitled to advance
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`
`
`-10-
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`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`its own separate position, in this proceeding, other than in the context of a request
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`for entry of adverse judgment or settlement.
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`
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`Furthermore, in the motion, Petitioner indicates clearly that it expects the
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`position of Apple to be in alignment with the other 34 constituent members of
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`Petitioner, “throughout the proceeding.” Paper 16, 5. At this point, any potential
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`difference of opinion that may arise is speculative. It is a problem that Petitioner
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`does not expect to arise. Taking action based on such speculation appears
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`premature. It is also uncertain, at this point, what additional burdens and costs
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`would be incurred by the Patent Owner, if Petitioner were allowed to reconstitute
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`itself. But, if Apple made a mistake when choosing to position itself as a joint-filer
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`of a single petition, it is fairer and more equitable for Apple to bear the
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`consequences of its own mistake, than for the Patent Owner to bear additional
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`burdens and costs by, effectively, allowing Apple to go back in time and un-do that
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`mistake, after benefiting from the information in Patent Owner’s preliminary
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`response. Other than in the context of a request for entry of adverse judgment or
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`settlement, it generally is not in furtherance of “the just, speedy, and inexpensive
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`resolution of every proceeding” to allow a petitioner to withdraw from a
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`proceeding after the filing of a preliminary response by the patent owner. See
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`37 C.F.R. § 42.1(b).
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`For the foregoing reasons, Petitioner has not shown that it is entitled to
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`reconstitute itself by eliminating Apple as a constituent member.
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`
`-11-
`
`

`

`Case CBM2014-00015
`Patent 6,384,850
`
`
` Conclusion
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`
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`Petitioner has not met its burden of proof in showing that it is entitled to the
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`relief requested in the motion.
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`
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`With respect to the request to eliminate Apple from this proceeding “without
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`imposition of any estoppel against Apple,” the motion is dismissed.
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`
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`With respect to the request for authorizing Apple to file a separate petition
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`against Patent Owner, on the same patent, and also a motion to join that new
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`proceeding with this proceeding, the motion is dismissed.
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`
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`With respect to the request to reconstitute Petitioner by excluding Apple as a
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`constituent member, the motion is denied.
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`
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`Petitioner shall comply with the Order dated February 11, 2014, within five
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`calendar days of the date of this decision.
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`
`
`For PETITIONER:
`
`Richard Zembek
`Gilbert Greene
`richard.zembeck@nortonrosefulbright.com
`bert.greene@nortonrosefulbright.com
`
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`For PATENT OWNER:
`
`John Osborne
`Michael Fabiano
`josborne@osborneipl.com
`mdfabiano@fabianolawfirm.com
`
`
`
`-12-
`
`