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`Paper No.
`Filed: April 1, 2014
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`Filed on behalf of: PNC Bank, N.A.,
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`JP Morgan Chase & Co., and
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`JP Morgan Chase Bank, N.A.
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`PNC BANK, N.A. AND JP MORGAN CHASE & CO.
`AND JP MORGAN CHASE BANK, N.A.
`Petitioner
`v.
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`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner
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`Case CBM2014-00039
`Patent No. 5,949,880
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`PETITIONERS’ MOTION REQUESTING ADVERSE JUDGMENT
`AGAINST PNC PURSUANT TO 37 C.F.R. § 42.73(b)(4)
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`Case No. CBM2014-00039
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`TABLE OF CONTENTS
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`PRELIMINARY STATEMENT ............................................................................... 1
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`PRECISE RELIEF REQUESTED ........................................................................... 1
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`I.
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`II.
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`III. BACKGROUND .......................................................................................................... 1
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`IV. ARGUMENT ................................................................................................................ 2
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`A.
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`Adverse Judgment for PNC is Consistent with PTO Regulations ............ 3
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`B. Maxim Has No Basis to Challenge Adverse Judgment for PNC ............... 3
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`C.
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`D.
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`E.
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`JP Morgan Consents to Adverse Judgment for PNC .................................. 3
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`The Statute and Regulations Expressly Provide for Multi-Party
`Proceedings, Including Means for Withdrawal by Those Parties ............... 3
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`Petitioners’ Motion for Adverse Judgment as to PNC Would
`Demonstrably Promote Just, Speedy, and Inexpensive Resolution ........... 5
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`CONCLUSION............................................................................................................. 5
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`i
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`V.
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`Case No. CBM2014-00039
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`TABLE OF AUTHORITIES
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` Page(s)
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`Patent and Trademark Office Decisions
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`BB&T v. Maxim Integrated Products, Inc.,
`CBM2013-00059, paper 12 (March 20, 2014) ............................................................. 1, 2
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`Fandango et al. v. Ameranth Inc.,
`CBM2014-00013, paper 22 (March 24, 2014) ........................................................ 3, 4, 5
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`SAP v. Pi-Net Int’l,
`CBM2013-00013, paper 15 (Sept. 19, 2013) .................................................................... 2
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`Federal Statutes
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`AIA § 18 .................................................................................................................................. 1, 2
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`35 U.S.C. § 317 ........................................................................................................................... 3
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`35 U.S.C. § 327 ....................................................................................................................... 2, 4
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`Federal Regulations
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`37 C.F.R. § 42.1 ...................................................................................................................... 2, 5
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`37 C.F.R. § 42.73 ............................................................................................................... passim
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`37 C.F.R. § 42.201 ..................................................................................................................... 1
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`37 C.F.R. § 42.302 ..................................................................................................................... 1
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`77 Fed. Reg. 48693 .................................................................................................................... 2
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`ii
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`Case No. CBM2014-00039
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`I.
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`PRELIMINARY STATEMENT
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`Petitioners request adverse judgment against PNC Bank, N.A. (“PNC”) per 37
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`C.F.R. § 42.73(b)(4). PNC filed four petitions for CBM review with JP Morgan Chase
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`& Co. and JP Morgan Chase Bank, N.A. (“JP Morgan”) on November 22, 2013. At
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`the time, the PTO allowed a declaratory judgment (DJ) plaintiff to petition for CBM
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`review. See 37 C.F.R. § 42.302(a). Recently, however, the Board denied a CBM petition
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`because the petitioner was a DJ plaintiff before it filed its CBM petition. See BB&T v.
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`Maxim Integrated Products, Inc., CBM2013-00059, paper 12 (March 20, 2014). In view of
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`this decision, PNC—a DJ plaintiff before it filed the four CBM petitions—seeks to
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`withdraw from the four CBM proceedings, as allowed by 37 C.F.R. § 42.73(b).
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`Although Maxim objects, the rules do not allow for an objection to adverse judgment.
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`II.
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`PRECISE RELIEF REQUESTED
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`Petitioners request adverse judgment against PNC per 37 C.F.R. § 42.73(b)(4).
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`III. BACKGROUND
`Consistent with Petitioners’ understanding of the statute and regulations
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`governing CBM review, Petitioners filed four CBM petitions on November 22, 2013.
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`Section 18(a)(1) of the AIA left open the question of whether a DJ plaintiff could
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`petition for CBM review. But, the PTO regulations and practice expressly allowed a
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`DJ plaintiff to petition for CBM review. Compare 37 C.F.R. § 42.201(a) (identifying
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`who may petition for post-grant review and explicitly precluding DJ plaintiffs from
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`doing so) with 37 C.F.R. § 42.302(a) (identifying who may petition for CBM review
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`Case No. CBM2014-00039
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`and not addressing DJ plaintiffs); 77 Fed. Reg. 48693 (“This is consistent with section
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`18(a)(1) of the AIA, which provides that the transitional proceeding shall be regarded
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`as, and shall employ the standards and procedures of, a post-grant review with certain
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`exceptions.”); SAP v. Pi-Net Int’l, CBM2013-00013, Paper No. 15 (Sept. 19, 2013)
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`(instituting CBM review despite Petitioner being a DJ plaintiff). In view of PTO
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`regulations and practice, PNC’s filing of the CBM petitions was entirely in good faith.
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`However, on March 20, 2014, the Board issued an order in BB&T, holding for
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`the first time that a petitioner’s filing of a DJ action bars institution of CBM review.
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`Thus, PNC immediately requested a conference call with the Board to withdraw PNC
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`from the four CBM proceedings. On March 28, 2014, the Board issued an Order on
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`Conduct of the Proceedings, directing PNC to file this motion requesting adverse
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`judgment.
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`IV. ARGUMENT
`37 C.F.R. § 42.73(b)(4) explicitly permits PNC’s request for adverse judgment.
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`Although PNC and JP Morgan jointly filed the CBM petitions-at-issue, the statutory
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`and regulatory framework under 35 U.S.C. § 327 and 37 C.F.R. § 42.73(b) expressly
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`allow for adverse judgment against PNC, and the Patent Owner has no basis to object
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`to PNC’s request. Further, PNC’s request will cause no prejudice to the Patent
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`Owner and will help “secure the just, speedy, and inexpensive resolution” of the
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`proceedings. See 37 C.F.R. § 42.1(b). Therefore, Petitioners’ motion for adverse
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`judgment against PNC pursuant to 37 C.F.R. § 42.73(b)(4) should be granted.
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`Case No. CBM2014-00039
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`Adverse Judgment for PNC is Consistent with PTO Regulations
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`A.
`37 C.F.R. § 42.73(b) allows a party to withdraw by requesting an adverse
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`judgment. Among the methods of seeking adverse judgment, the abandonment of a
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`proceeding constitutes a request for adverse judgment. 37 C.F.R. § 42.73(b)(4).
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`Indeed, the Board has recognized that a party may remove itself from a proceeding by
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`requesting adverse judgment by abandonment. See Fandango et al. v. Ameranth Inc.,
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`CBM2014-00013, paper 22 at 8 (March 24, 2014) (“Apple may remove itself from this
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`proceeding, by requesting entry of adverse judgment as to Apple, or by settling with
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`Patent Owner and filing a joint motion to terminate the proceeding with respect to
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`Apple.”). Here, PNC expressly abandons the CBM proceedings and will no longer
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`participate. Nothing more is required to grant PNC’s request for adverse judgment.
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`B. Maxim Has No Basis to Challenge Adverse Judgment for PNC
`Maxim opposes PNC’s request for adverse judgment, but Section 42.73(b) does
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`not allow a Patent Owner an opportunity to challenge a request for adverse judgment.
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`Further, Maxim will not be prejudiced in any way by an adverse judgment as to PNC.
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`JP Morgan Consents to Adverse Judgment for PNC
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`C.
`JP Morgan consents to PNC’s request for adverse judgment, and once granted,
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`JP Morgan (which was not a DJ plaintiff) will maintain all the pending CBM petitions.
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`D. The Statute and Regulations Expressly Provide for Multi-Party
`Proceedings, Including Means for Withdrawal by Those Parties
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`The statute contemplates that, in a multi-party proceeding, less than all of the
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`parties may remove themselves from the proceeding. Statutorily, 35 U.S.C. §§ 317(a)
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`Case No. CBM2014-00039
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`and 327(a) allow inter partes and post-grant reviews to be terminated with respect to “a
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`petitioner” and further provide that “[i]f no petitioner remains in the inter partes [or
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`post-grant] review, the Office may terminate the review . . . .” Thus, the statute
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`expressly contemplates more than one party to a post-grant proceeding. Indeed, the
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`Board recently addressed multi-party proceedings in some detail, where less than all of
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`entities forming the petitioner had requested removal. In Fandango, 35 companies
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`collectively filed a single petition, where the parties were represented as a single party
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`by the same lead and back-up counsel. The Board recognized that one of the 35
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`entities forming the petitioner (specifically, Apple) could withdraw by requesting
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`adverse judgment under 37 C.F.R. § 42.73(b)(4), as PNC does here, but that the single
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`entity could not conditionally withdraw (Apple wanted to withdraw, refile, and then
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`rejoin with separate lead and back-up counsel), which PNC does not do here. See
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`Fandango, CBM2014-00013, paper 22 at 8. The Board did not allow a conditional
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`withdrawal by Apple, explaining that it is “unreasonable . . . [to] expect[] . . . that each
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`. . . constituent member[] of Petitioner is entitled to advance its own separate position,
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`. . . other than in the context of a request for entry of adverse judgment or settlement.” See
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`Fandango, CBM2014-00013, paper 22 at 10 (emphasis added). PNC unconditionally
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`seeks abandonment and adverse judgment per 37 C.F.R. § 42.73(b)(4), so PNC fully
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`satisfies the Boards’ recognition that each member is entitled to advance its own
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`separate position in the context for entry of adverse judgment. That is PNC here.
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`Maxim objects to PNC’s abandonment, because the Petition lists PNC as a real
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`Case No. CBM2014-00039
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`party-in-interest. See Paper 7 at 28-34. But, 37 C.F.R. § 42.73(b) provides no basis for
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`Maxim to object—any objection by Maxim is fully inconsistent with Fandango.
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`Additionally, once PNC takes adverse judgment, it is no longer a real-party-in-interest.
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`E.
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`Petitioners’ Motion for Adverse Judgment as to PNC Would
`Demonstrably Promote Just, Speedy, and Inexpensive Resolution
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`PNC’s request for adverse judgment under 37 C.F.R. § 42.73(b) will help
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`“secure the just, speedy, and inexpensive resolution” of the proceedings. See 37 C.F.R.
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`§ 42.1(b). Adverse judgment for PNC advances a “just resolution” here, because 37
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`C.F.R. § 42.73(b) specifically allows for it. Adverse judgment for PNC advances a
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`“speedy resolution” here, because, if the Board denies PNC’s request and summarily
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`denies the petitions because PNC was a DJ plaintiff, then JP Morgan will re-file the
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`CBM petitions, which will significantly delay resolution of the patentability issues
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`herein. And, adverse judgment for PNC advances an “inexpensive resolution” here,
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`because the alternative would duplicate costs for JP Morgan and Maxim. JP Morgan
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`would incur additional attorney fees to prepare (and filing fees to file) the second
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`series of petitions, and Maxim would incur added attorney fees in response.
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`V.
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`CONCLUSION
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`For the foregoing reasons, Petitioners respectfully request that the Board grant
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`Petitioners’ motion for adverse judgment pursuant to 37 C.F.R. § 42.73(b)(4).
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`Respectfully submitted,
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`/ Lionel M. Lavenue/
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` Lionel M. Lavenue, Lead Counsel, Reg. No. 46,859
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`5
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`Case No. CBM2014-00039
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 1st day of April 2014, a copy of Petitioner’s Motion
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`Requesting Adverse Judgment Against PNC Pursuant to 37 C.F.R. § 42.73(b)(4) was
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`served via Express Mail upon the following:
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`Kenneth J. Weatherwax, Esq.
`Parham Hendifar, Esq.
`GOLDBERG, LOWENSTEIN & WEATHERWAX LLP
`11400 West Olympic Boulevard, Suite 400
`Los Angeles, CA 90064
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`Stefani Smith, Esq.
`TENSEGRITY LAW GROUP, LLP
`555 Twin Dolphin Drive, Suite 360
`Redwood Shores, CA 94065
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` Respectfully submitted,
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`Date: April 1, 2014
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` /Ashley F. Cheung/
`Ashley Cheung
`Case Manager
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`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, L.L.P.
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`6
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