`
`
`Case CBM2014-00039
`Patent 5,949,880
`Attorney Docket No. 131209-002USCBM
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`PNC BANK, N.A., JP MORGAN CHASE & CO.
`AND JP MORGAN CHASE BANK, N.A.
`Petitioner
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner
`____________
`
`Case CBM2014-00039
`Patent 5,949,880
`____________
`
`PATENT OWNER MAXIM INTEGRATED PRODUCTS, INC.’S
`RESPONSE TO PETITIONER’S MOTION REQUESTING ADVERSE
`JUDGMENT AGAINST PNC PURSUANT TO 37 C.F.R. § 42.73(b)(4)
`
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`
`
`I.
`
`II.
`
`BACKGROUND OF PNC’S AND JP MORGAN’S JOINT
`PETITION .................................................................................................... 1
`
`“ADVERSE JUDGMENT” CANNOT CONVENIENTLY ERASE
`THE EFFECTS OF PNC AND JP MORGAN’S JOINT
`PARTICIPATION. ....................................................................................... 2
`
`III. CONCLUSION .............................................................................................. 5
`
`
`
`
`
`
`
`i
`
`
`
`TABLE OF AUTHORITIES
`
`
`
`ADMINISTRATIVE DECISIONS
`
`
`
`Page(s)
`
`BB&T v. Maxim Integrated Products, Inc.,
`CBM2013-00059, paper 12 (Mar. 20, 2014) ........................................................ 2
`
`Fandango et al. v. Ameranth Inc.,
`CBM2014-00013, paper 22 (March 24, 2014) ................................................. 4, 5
`
`
`
`STATUTES AND RULES
`
`35 U.S.C. § 325 .................................................................................................passim
`
`
`
`REGULATIONS
`
`Changes to Implement Inter Partes Review Proceedings, Post-Grant Review
`Proceedings, and Transitional Program for Covered Business Method Patents;
`Final Rule, 77 Fed. Reg. 48,680 (Aug. 14, 2012) (codified at C.F.R. tit. 37, ch.
`1) ................................................................................................................................ 4
`
`37 C.F.R. § 42.73 ................................................................................................... 3, 4
`
`
`
`EXHIBIT LIST
`
`Exhibit 2012
`
`
`
`
`
`Conference Call Transcript, CBM2014-00038, -00039,
`-00040 & -00041 (P.T.A.B. Mar. 27, 2014)
`
`ii
`
`
`
`
`
`Patent Owner Maxim’s Preliminary Statement explained at length why the
`
`identities of the Petitioner and real parties-in-interest in this CBM review case bar
`
`its initiation under 35 U.S.C. § 325(a)(1). Two weeks ago, the Board affirmed in a
`
`related case that this statutory bar can apply to CBM patent reviews. Now, PNC
`
`and the JP Morgan entities (“Petitioner”) request “adverse judgment” against PNC
`
`on special terms, in a blatant attempt to launder the original, barred Petition so that
`
`JP Morgan can carry on as if PNC had never participated. Petitioner’s hope is that
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`it can magically un-declare PNC as a party and real party-in-interest and continue
`
`to harass Maxim with baseless, repetitive, and expensive CBM review arguments.
`
`Such an outcome is contrary to law and prejudicial to Maxim. The Board should
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`not allow PNC to take judgment on the terms PNC and JP Morgan say they prefer.
`
`Maxim would not object to a truly adverse judgment, one that preserves
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`Petitioner’s admission that PNC is a real party-in-interest, and the consequences
`
`that flow from PNC’s past participation and ongoing interest in this case.
`
`I.
`
`BACKGROUND OF PNC’S AND JP MORGAN’S JOINT PETITION.
`
`PNC and JP Morgan are joined at the hip. They both participate in a joint
`
`defense group in litigation with Maxim over infringement of the Patent, and have
`
`both challenged the Patent in court.1 Together they also decided to challenge the
`
`
`1 PNC’s invalidity claim was a declaratory complaint, JP Morgan’s a counterclaim.
`
`
`
`1
`
`
`
`
`
`Patent before this Board. They jointly prepared and filed a Petition for CBM
`
`patent review with common counsel. Petition at i, 3, 68-69. They did so even
`
`though they believed the statute “was not clear if DJ plaintiffs [like PNC] were
`
`able to file CBM.” Ex. 2012 (3/27/14 Call) at 2012-005:10-14.
`
`In its Preliminary Response, Maxim explained that PNC’s prior suit
`
`challenging the Patent bars initiation of review under 35 U.S.C. § 325(a)(1)—and
`
`what is more, Petitioner cannot evade that bar now by reducing PNC’s role. POPR
`
`at 1-2, 28-34. The Board later affirmed in a related case that § 325(a)(1) applies in
`
`CBM review. BB&T v. Maxim, CBM2013-00059, Paper 12 (Mar. 20, 2014).
`
`Having waited to see what the Board would do in BB&T, and disliking what
`
`the Board did, PNC and JP Morgan now seek to evade § 325(a)(1) by
`
`reconstituting Petitioner to include only JP Morgan.2 Their request is
`
`unprecedented: Maxim believes the Board has never granted “adverse judgment”
`
`against less than all of a Petitioner, let alone over any party’s objection.
`
`II.
`
`“ADVERSE JUDGMENT” CANNOT CONVENIENTLY ERASE THE
`EFFECTS OF PNC AND JP MORGAN’S JOINT PARTICIPATION.
`
`Petitioner (now calling itself “Petitioners” for the first time) seeks to
`
`reconstitute itself and un-declare PNC as a real party-in-interest in an effort to
`
`2
` Petitioner at first told Maxim it wished to drop PNC due to “settlement.” There is
`
`no settlement, however. And Petitioner’s Motion never mentions or relies on one.
`
`
`
`2
`
`
`
`
`
`thwart Congress’ § 325(a)(1) bar. But if Petitioner were able to remove PNC from
`
`this case without consequence, then any party barred by § 325(a)(1) would be free
`
`to fund and draft a petition, persuade or pay a straw man to join in filing it, and
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`then seek a so-called “adverse” judgment removing itself from the case—so that its
`
`straw man, fully persuaded, could then freely prosecute the petition and arguments
`
`that the barred party has crafted and controlled. That cannot be the law.
`
`The Motion says “PNC unconditionally seeks abandonment” and “expressly
`
`abandons the CBM proceedings and will no longer participate.” Mot. at 3-4.3 It
`
`then says the “precise” and only relief sought is “adverse judgment against PNC
`
`per 37 C.F.R. § 42.73(b)(4).” Id. at 1. If all Petitioner wants is an unconditional,
`
`“adverse judgment against PNC per 37 C.F.R. § 42.73(b)(4),” with nothing more,
`
`Maxim would not oppose such a judgment. But this supposedly “precise” request
`
`actually obscures strings that Petitioner—and more particularly, JP Morgan—is
`
`improperly hinting should be attached to that request.
`
`The Motion does not say JP Morgan consents unconditionally to PNC’s
`
`request for adverse judgment. Rather, it says that “JP Morgan consents to PNC’s
`
`request for adverse judgment, and once granted, JP Morgan (which was not a DJ
`
`
`3
` PNC does not need any permission to “no longer participate.” PNC has always
`
`been free to cease its control and contributions in these proceedings at any time.
`
`
`
`3
`
`
`
`
`
`plaintiff) will maintain all the pending CBM petitions.” Id. at 3 (emphasis added).
`
`It goes on to argue that “once PNC takes adverse judgment, it is no longer a real-
`
`party-in-interest [sic].” Id. at 5. Thus, it seems that what PNC and JP Morgan
`
`want is a so-called “adverse” judgment, independent of settlement, that professes
`
`to (i) eliminate PNC’s admitted status as real party-in-interest, and (ii) allow JP
`
`Morgan to “maintain all the pending CBM petitions.” Id. at 3, 5. A judgment
`
`satisfying these conditions over Maxim’s objections would be illegal and improper.
`
`First, it is too late to seek to revise the Petition and its Petitioner and real
`
`party-in-interest identifications to cure standing. “The Office generally will accept
`
`the petitioner’s ‘real party-in-interest’ identification at the time of filing the
`
`petition.” IPR/PGR/CBM Rules, 77 FR 48,680, 48,695. Maxim’s opportunity to
`
`address that identification with evidence in a Preliminary Response, for “the Board
`
`[to] consider in determining whether to grant the petition,” id., has come and gone.
`
`Second, whether PNC or JP Morgan remain real parties-in-interest, or may
`
`“maintain” proceedings after judgment, is determined by operation of law. They
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`seek, not a mere “termination” by consent, but an adverse “judgment”—that must
`
`necessarily “dispose[] of all issues that were, or by motion reasonably could have
`
`been, raised and decided.” 37 C.F.R. § 42.73(a) (emphasis added). They may not
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`narrow or avoid its legally required effect simply by declaring in advance that they
`
`wish it to be so. See Fandango v. Ameranth, CBM2014-00013, Paper 22, at 6-7.
`
`
`
`4
`
`
`
`
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`Third, in any event, PNC and JP Morgan, fellow financial services providers
`
`and infringement defendants, remain partners with common counsel in common
`
`cause against Maxim and its Patent. Settlement terms have yet to be negotiated or
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`finalized (and the requested judgment does not depend on any). And, after all,
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`what explains PNC’s gratuitous request for “adverse judgment” against itself? JP
`
`Morgan and PNC presumably have a common understanding—that JP Morgan will
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`carry on, continuing the attack on the Patent, which PNC has until now participated
`
`in and supported. This “adverse judgment” will not end the commonality between
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`them. Nor will it elide its past and continuing effects. See POPR at 31-34.
`
`Like the parties in Fandango v. Ameranth, PNC and JP Morgan chose to join
`
`together as “partners in the filing of a single petition against Patent Owner with
`
`respect to [the] Patent.” CBM2014-00013, Paper 22, at 9. “[I]f [one] made a
`
`mistake when choosing to position itself as a joint-filer of a single petition, it is
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`fairer and more equitable for [it] to bear the consequences of its own mistake, than
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`for the Patent Owner to bear additional burdens and costs by, effectively, allowing
`
`[the constituent] to go back in time and un-do that mistake, after benefiting from
`
`the information in Patent Owner’s preliminary response.” Id. at 11.
`
`III. CONCLUSION
`
`Petitioner cannot manufacture standing by retreating from its admissions and
`
`actions to date. PNC may obtain “adverse judgment”—but not on special terms.
`
`
`
`5
`
`
`
`
`
`Respectfully submitted,
`
`
`____/Kenneth J. Weatherwax/_________
`Kenneth J. Weatherwax, Reg. No. 54,528
`Goldberg, Lowenstein & Weatherwax LLP
`
`Date: April 4, 2014
`
`
`
`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`In re: Covered Business Method Review of
`U.S. Patent No. 5,949,880
`Case No. CBM2014-00039
`Filed: November 22, 2013
`For: TRANSFER OF VALUABLE
`INFORMATION BETWEEN A SECURE
`MODULE AND ANOTHER MODULE
`
`
`
`Administrative Patent Judge: Sally Medley
`Atty. Docket: 131209-002USCBM
`
`
`
`Certificate of Service
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`April 4, 2014
`Sir:
`
`Pursuant to 37 C.F.R. § 42.6(e), the undersigned, on behalf of the Patent Owner,
`hereby certifies that a copy of the following documents is being served on the Petitioner by
`Express Mail on April 4, 2014.
`
`PATENT OWNER MAXIM INTEGRATED PRODUCTS, INC.’S RESPONSE
`TO PETITIONER’S MOTION REQUESTING ADVERSE JUDGMENT
`AGAINST PNC PURSUANT TO 37 C.F.R. § 42.73(b)(4), and the
`accompanying Exhibit:
`Exhibit 2012 – Conference Call Transcript, CBM2014-00038, -00039,
`-00040 & -00041 (P.T.A.B. Mar. 27, 2014)
`
`
`
`The names and addresses of the parties being served are as follows:
`
`Lionel M. Lavenue
`Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
`Two Freedom Square
`11955 Freedom Drive
`Reston, VA 20190-5675
`
`
`
`
`
`Timothy J. May
`Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`
`
`
`
`Very truly yours,
`
`____/ Kenneth J. Weatherwax /_________
`Kenneth J. Weatherwax, Reg. No. 54,528
`Goldberg, Lowenstein & Weatherwax LLP
`
`
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