Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`JP MORGAN CHASE & CO.
`AND JP MORGAN CHASE BANK, N.A.
`Petitioner
`
`v.
`
`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner
`____________
`
`Case CBM2014-00179
`Patent 5,940,510
`____________
`
`PATENT OWNER MAXIM INTEGRATED PRODUCTS, INC.’S
`PRELIMINARY RESPONSE TO PETITION FOR COVERED BUSINESS
`METHOD PATENT REVIEW OF UNITED STATES PATENT NO.
`5,940,510 PURSUANT TO 35 U.S.C. § 321, 37 C.F.R. § 42.304
`
`
`
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`

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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`
`
`TABLE OF CONTENTS
`
`I.  
`II.  
`
`INTRODUCTION ......................................................................................... 1  
`THIS RE-FILED PETITION SHOULD BE DENIED BECAUSE IT IS
`A RE-FILING OF A PETITION BARRED BY 35 U.S.C. § 325(A)(1). .. 6  
`A.  
`The Board Held That § 325(a)(1) Bars Initiation. ................................................. 10  
`B.  
`The Board’s § 325(a)(1) Bar Determination Also Applies To The Re-Filed
`Petition. .................................................................................................................. 13  
`The Changed Participation Level Of Barred Petitioner Co-Constituent PNC Does
`Not Change Its Real Party-In-Interest Status. ....................................................... 15  
`1.  
`PNC Exerted Control Over The First And Re-Filed Petitions. ................. 16  
`2.  
`PNC Contributed To Both The First And Refiled Petitions. ..................... 17  
`3.  
`Exempting The Second Petition From § 325(a)(1) Would Open The Door
`To Easy Evasion Of The Statutory Bar. ..................................................... 22  
`Even If The Bar Did Not Still Apply, The Board Should Exercise Its Discretion
`To Deny This Re-Filed Petition Under § 325(d). .................................................. 27  
`Even If Initiation Were Appropriate, Petitioner’s Bolstering Of This Re-Filed
`Petition With Waived Arguments Is Not Permitted. ............................................. 30  
`III.   REVIEW IS BARRED BECAUSE PETITIONER FAILED TO SHOW
`THE PATENT IS A “COVERED BUSINESS METHOD” PATENT. . 31  
`Petitioner Has Taken Advantage Of The Rejection Of The First Petition To
`A.  
`Unfairly Try To Bolster Its Standing Arguments. ................................................. 32  
`Petitioner Fails To Show That The Patent “Claims A Method Or Corresponding
`Apparatus For Performing Data Processing Or Other Operations Used In The
`Practice, Administration, Or Management Of A Financial Product Or Service.” . 34  
`The Claims Challenged In The First Petition Contain No Financial
`1.  
`Product Or Service Limitations. ................................................................ 35  
`The Belated Addition Of Claim 2 Is Improper. ......................................... 37
`
`C.  
`
`D.  
`
`E.  
`
`B.  
`
`2.  
`
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`C.  
`
`Even If The Patent Claimed A Method Or Apparatus For Performing Data
`Processing Or Other Operations Used In The Practice, Administration, Or
`Management Of A Financial Product Or Service, Petitioner Fails To Demonstrate
`That The Patent Is Not A “Patent[] For [A] Technological Invention[].” ............. 39  
`The Claimed Subject Matter Of The Patent As A Whole Recites Novel And
`1.  
`Unobvious Technological Features. .......................................................... 42  
`Counsel Has Told The Court, On Petitioner’s Behalf, That The
`a.  
`Patent Claimed “New” Hardware. ................................................. 42  
`
`b.  
`
`c.  
`
`Petitioner Ignores The Claims As A Whole. ................................. 45  
`
`The Intrinsic Evidence Confirms That The Patent Claims Novel
`And Unobvious Features. .............................................................. 46  
`
`D.  
`
`IV.  
`
`2.  
`
`3.  
`
`The Claimed Subject Matter Solves A Technical Problem Using A
`Technical Solution. .................................................................................... 52  
`The Office’s Own Official Guidance Shows That The Patent Is For
`Technological Inventions. .......................................................................... 56  
`The Board Should Not Consider Petitioner’s Belated, Improperly Augmented
`Standing Arguments. ............................................................................................. 59  
`IF INSTITUTION OF REVIEW WERE NOT BARRED UNDER 35
`U.S.C. § 325 AND AIA § 18, THE PETITION WOULD STILL FAIL
`TO SATISFY THE 35 U.S.C. § 324 THRESHOLD ................................ 60  
`The Petition Fails To Show That Review Of Patent-Eligibility Under § 101
`A.  
`Should Be Granted. ............................................................................................... 62  
`1.  
`The Petition Makes No Showing Of Ineligible Subject Matter. ................. 63  
`a.  
`The Claims Are Not Drawn To Abstract Ideas. ............................ 64  
`
`b.  
`
`Even If The Claims Were Drawn To An Abstract Idea, The Claim
`Elements Transform The Nature Of The Claim Into A Patent-
`Eligible Application. ...................................................................... 69  
`
`2.  
`
`The Board Lacks Authority To Review The Patent-In-Suit Under Section
`101 In This Proceeding. ............................................................................ 73  
`Petitioner Fails To Set Forth A Prima Facie Case Of Obviousness. ..................... 77  
`
`B.  
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`Case CBM2014-00179
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`Attorney Docket No. 140828-003USCBM
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`V.   CONCLUSION ............................................................................................ 77  
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`TABLE OF AUTHORITIES
`
`
`
`COURT DECISIONS
`
`Page(s)
`
`Alice Corp. Pty. Ltd. v. CLS Bank International,
`573 U.S. ___, 134 S. Ct. 2347 (2014) ........................................ 63, 65, 68-70, 72
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) ............................................................................... 64, 68-69
`
`Diamond v. Chakrabarty,
`447 U.S. 303 (1980) ........................................................................................... 64
`
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) ........................................................................... 63, 65, 72
`
`MySpace, Inc. v. GraphOn Corp.,
`672 F.3d 1250 (Fed. Cir. 2012) .................................................................... 74-75
`
`
`
`ADMINISTRATIVE DECISIONS
`
`Bloomberg Inc., et al. v. Markets-Alert PTY LTD.,
`Case No. CBM2013-00005 Paper No. 18 (P.T.A.B. Mar. 29, 2013)
`(per Medley, APJ) ....................................................................................... 50, 51
`
`Conopco, Inc. v. Procter & Gamble Co.,
`Case No. IPR2014-00507, Paper No. 17 (P.T.A.B. Jul, 7, 2014)
`(per Obermann, ALJ) ................................................................. 26, 28, 30-31, 59
`
`Customplay, LLC v. Clearplay, Inc.,
`Case No. IPR2014-00783, Paper No. 9 (P.T.A.B. Nov. 7, 2014)
`(per Grossman, ALJ) .................................................................................... 27, 59
`
`
`
`iv
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`E*Trade Fin. Corp. v. Droplets, Inc.,
`Case No. CBM2014-00123, Paper No. 15 (P.T.A.B. Oct. 30, 2014)
`(per Gaudette, APJ) .......................................................................... 41, 46, 49, 51
`
`Ex Parte Reexamination, Control No. 90/013,063, Order (Feb. 19, 2014) ............. 47
`
`First Data Corp. v. Cardsoft, LLC,
`Case No. IPR2014-00715, Paper No. 9 (P.T.A.B. Oct. 17, 2014)
`(per curiam) .................................................................................................. 20-22
`
`Google Inc. v. Unwired Planet, LLC,
`Case No. CBM2014-00005, Paper No. 10 (P.T.A.B. Apr. 8, 2014)
`(per Parvis, APJ) ................................................................................................ 60
`
`Groupon, Inc. v. Blue Calypso, LLC,
`Case No. CBM2013-00033 Paper No. 10 (P.T.A.B. Dec. 19, 2013)
`(per Benoit, APJ) ................................................................................................ 50
`
`Interthinx, Inc. v. Corelogic Solutions, LLC,
`Case No. CBM2012-00007 Paper No. 15 (P.T.A.B. Jan. 31, 2013)
`(per McNamara, APJ) ........................................................................................ 49
`
`Liberty Mutual Insurance Co. v. Progressive Casualty Insurance Co.,
`Case No. CBM2012-00003 Paper No. 15 (P.T.A.B. Feb. 12, 2013)
`(per Lee, APJ.) ................................................................................................... 49
`
`Medtronic, Inc. v. Nuvasive, Inc.,
`Case No. IPR2014-00487, Paper No. 8 (P.T.A.B. Sep. 11, 2014)
`(per Green, APJ) ................................................................................................. 59
`
`Motorola Mobility LLC v. Intellectual Ventures I LLC,
`Case No. CBM2014-00083, Paper No. 17 (P.T.A.B. Aug. 6, 2014)
`(per Kokoski, APJ) ................................................................................. 35, 45, 50
`
`v
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`PNC Bank, N.A., JP Morgan Chase & Co. and JP Morgan Chase Bank, N.A. v.
`Maxim Integrated Prods., Inc., Case No. CBM2014-00038, Paper No. 19
`(P.T.A.B. Jun. 3, 2014) (per Weatherly, APJ) ............................................ passim
`
`PNC Bank Nat’l Assoc. v. Secure Axcess, LLC,
`Case No. CBM2014-00100 Paper No. 10 (P.T.A.B. Sep. 9, 2014)
`(per Benoit, APJ) .............................................................................. 63, 65-66, 68
`
`PNC Fin. Servs. Group, Inc. v. Intellectual Ventures I LLC,
`Case No. CBM2014-00032, Paper 13 (P.T.A.B. May 22, 2014)
`(per Jung, APJ) ................................................................................................... 37
`
`
`Reloaded Games, Inc. v. Parallel Networks LLC,
`Case No. IPR2014-00950, Paper No. 12 (P.T.A.B. Oct. 22, 2014)
`(per Jung, APJ) ....................................................................................... 27, 30, 32
`
`RPX Corp. v. Virnetx Inc.,
`Case No. IPR2014-00171, Paper No. 49 (P.T.A.B. Jun. 5, 2014)
`(per Easthom, APJ) ............................................................................................ 25
`
`Salesforce.com, Inc. v. VirtualAgility, Inc.,
`Case No. CBM2013-00024 Paper No. 16 (P.T.A.B. Nov. 19, 2013)
`(per Braden, APJ) ............................................................................................... 50
`
`
`
`STATUTES AND RULES
`
`Leahy-Smith America Invents Act,
`Pub. L. No. 112-29, 125 Stat. 284 (2011), § 18 ........................... 1, 34-35, 73, 76
`
`35 U.S.C. § 101 ................................................................................................. 64, 75
`
`35 U.S.C. § 102 ....................................................................................................... 74
`
`35 U.S.C. § 103 ................................................................................................. 74-75
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`35 U.S.C. § 112 ....................................................................................................... 76
`
`35 U.S.C. § 251 ....................................................................................................... 76
`
`35 U.S.C. § 282 ....................................................................................................... 73
`
`35 U.S.C. § 312 ................................................................................................... 4, 10
`
`35 U.S.C. § 321 ....................................................................................................... 73
`
`35 U.S.C. § 323 ................................................................................................... 1, 61
`
`35 U.S.C. § 324 ....................................................................................................... 62
`
`35 U.S.C. § 325 ................................................................................................ passim
`
`35 U.S.C. § 326 ....................................................................................................... 62
`
`
`
`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) ........................................................................................................................ 35, 61
`
`Transitional Program for Covered Business Method Patents—Definitions of
`Covered Business Method Patent and Technological Invention; Final Rule, 77 Fed.
`Reg. 48,734 (Aug. 14, 2012) (codified at C.F.R. tit. 37, ch. 1) ............. 34, 37, 39, 53
`
`Office Patent Trial Practice Guide; Rule, 77 Fed. Reg. 48,756 (Aug. 14, 2012) (to
`be codified at C.F.R. pt. 42) .................................................................. 39, 57-58, 62
`
`37 C.F.R. § 42.207 .............................................................................................. 1, 61
`
`37 C.F.R. § 42.208 .................................................................................................... 1
`
`37 C.F.R. § 42.301 ...................................................................................... 39, 42, 51
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`Case CBM2014-00179
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`37 C.F.R. § 42.304 .................................................................................................. 34
`
`
`
`LEGISLATIVE HISTORY
`
`Leahy-Smith America Invents Act,
`157 Cong. Rec. S5428 (daily ed. Sept. 8, 2011) ................................................ 26
`
`
`Leahy-Smith America Invents Act,
`157 Cong. Rec. 1363, 1364 (daily ed. Mar. 8, 2011) ......................................... 50
`
`
`
`
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`
`
`Hearing Transcript, In re Maxim Integrated Products,
`Inc., Misc. No. 12-244 (MDL No. 2354) (W.D. Pa.
`Mar. 20, 2013) (excerpt)
`
`2010-12-30 Notice of Allowance and Fees Due
`Application No. 10/415,022
`
`Memorandum Opinion, In re Maxim Integrated
`Products, Inc., Misc. No. 12-244 (MDL No. 2354)
`(W.D. Pa. Dec. 17, 2013)  
`
`EXHIBIT LIST
`
`Exhibit 2001
`
`Exhibit 2002
`
`Exhibit 2003  
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`
`
`
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, Virginia 22313-1450
`
`
`Pursuant to 35 U.S.C. § 323, America Invents Act of 2011 (“AIA”)
`
`§ 18(a)(1), and 37 C.F.R. §§ 42.207-208, the undersigned, on behalf of and acting
`
`in a representative capacity for patent owner, Maxim Integrated Products, Inc.
`
`(“Patent Owner” or “Maxim”), submits the following Preliminary Response to the
`
`Petition (“Second Petition”) for covered business method (“CBM”) patent review
`
`filed in the above-captioned proceeding by JP Morgan Chase & Co. and JP
`
`Morgan Chase Bank, N.A. (collectively, “Chase” or “Petitioner”) against United
`
`States Patent No. 5,940,510 (“the ’510 patent” or “the Patent”).
`
`I.
`
`INTRODUCTION
`
`When the first version of this petition was filed, PNC Bank, N.A. (“PNC”)
`
`and Chase prepared and filed it acting as one. PNC Bank, N.A., JP Morgan Chase
`
`& Co. and JP Morgan Chase Bank, N.A. v. Maxim Integrated Prods., Inc., No.
`
`CBM2014-00038, Paper 3, at i, 2. The Board ruled that, because PNC had
`
`previously filed a civil action challenging the validity of the Patent, initiation was
`
`barred under 35 U.S.C. § 325(a)(1). Id., Paper 19, slip op. at 3 (P.T.A.B. Jun. 3,
`
`2014) (per Weatherly, APJ).
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`Case CBM2014-00179
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`Chase now re-files the petition, claiming it is acting alone and that PNC is
`
`no longer a real party-in-interest because PNC did not overtly participate in the re-
`
`filing. Chase asserts that this change erases the § 325(a)(1) statutory bar. Chase
`
`also took advantage of the earlier denial under that statutory bar to rearrange,
`
`bolster and rewrite the petition, in an attempt to fix flaws that were pointed out last
`
`time by Patent Owner and the Board.
`
`Chase’s re-filed petition should be denied for four independent reasons.
`
`First, the § 325(a)(1) bar and the Board’s prior order continue to govern.
`
`The language of § 325(a)(1) is clear: once a petitioner or real party in interest files
`
`a civil action challenging the validity of the patent, a covered business method
`
`patent review may not be instituted. The Board already held that the bar is in
`
`effect because PNC, Chase’s co-real party-in-interest, filed a prior action
`
`challenging the Patent’s validity. PNC Bank, CBM2014-00038, Paper 19 at 3. As
`
`a result, a petition challenging the Patent may not be instituted because PNC
`
`remains a real party-in-interest—regardless whether Petitioner included PNC as a
`
`constituent, and regardless whether PNC ceased participating in the petition. Id. at
`
`3-4. Under § 325(a)(1)’s plain language and the Board’s earlier determination
`
`denying the petition, a change in PNC’s participation level, or a re-filing claiming
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`2
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`Case CBM2014-00179
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`that Chase is now the lone Petitioner constituent and lone real party-in-interest,
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`cannot change the bar already in effect.
`
`Second, even if changes to these facts could change the already-adjudicated
`
`application of the § 325(a)(1) bar, on the facts here the bar would still apply. The
`
`plan for Chase to “re-file” PNC’s and Chase’s joint Petition was hatched (and
`
`detailed in a joint PNC/Chase motion) even before the petition was first denied—
`
`when PNC and Chase were still formally acting together as Petitioner, and still
`
`jointly urging the Board to reconstitute the Petitioner and change the named real
`
`parties-in-interest in an attempt to get around the bar. PNC Bank, CBM2014-
`
`00038, Paper 11 (joint PNC/Chase Motion for Adverse Judgment Against PNC) at
`
`5; id., Paper 19, at 4 (order denying joint motion as moot). Even though Chase
`
`“re-filed” the petition a few weeks after it was ruled to be barred—consistent with
`
`what both PNC and Chase said was the plan all along—PNC’s prior control and
`
`contributions remain throughout the petition. Arguments and prior art included in
`
`the original petition co-funded and co-prepared by PNC remain in the Second
`
`Petition. The expert declarant is still the same. All Chase has done is re-edit the
`
`petition and change the expert declaration in an unfair attempt to bolster it and fix
`
`the other flaws identified last time—without, however, substantially changing the
`
`overall petition already presented. Nor are there facts providing any potential
`
`3
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`Case CBM2014-00179
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`justification for distinguishing the second petition from the first petition for
`
`purposes of the statutory bar. For example, this is not a case where an unrelated
`
`third party has independently filed a freshly drafted petition that merely borrows
`
`arguments from an earlier petition denied on other grounds. Here, Chase and PNC
`
`worked together to draft the petition on which this one was based; and if that were
`
`not enough, the re-filed petition re-uses the same declarant and numerous prior art
`
`references, and Chase and PNC announced, while they were still working together,
`
`that Chase was going to re-file the petition if the initial filing was found barred.
`
`Chase cannot wipe away its collaboration with PNC by re-wording and re-
`
`shuffling the arguments over which PNC already exerted control. To allow this re-
`
`edited Petition to escape the statutory bar would open the door wide to evasion of
`
`§ 325(a)(1), for it would allow barred persons to use simple strategies to contribute
`
`to petitions, filed with the aid of nominally non-barred helpers—and even to gain
`
`an advantage from having their petitions barred, because they could then be
`
`bolstered, re-edited and re-filed after the patent owner was obliged to reveal its
`
`rebuttal arguments. For all these reasons, PNC remains a real party-in-interest, and
`
`the § 325(a)(1) bar applies. (Indeed, because the petition fails to identify a real
`
`party-in-interest, initiation of review is also barred under 35 U.S.C. § 312(a)(2).)
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`4
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`Third, even if PNC’s contributions and control were not enough to bar the
`
`re-filed petition, the Board should still exercise its broad discretion to “reject the
`
`petition . . . because[] the same or substantially the same prior art arguments
`
`previously were presented to the Office,” and to prevent evasion of the statutory
`
`bar and unjust burden on patent owners and the Board as described above. 35
`
`U.S.C. § 325(d). Chase’s re-edit does not substantially change the overall petition,
`
`and to the extent it changes “prior art arguments,” they remain substantially similar
`
`to arguments that were either already in the petition or were presented in at least
`
`one of the four inter-related petitions against related patents, including this Patent,
`
`that the Board rejected the first time under § 325(a)(1). PNC Bank, CBM2014-
`
`00038, -00039, -00040, -00041; and also to prior art or arguments already of
`
`record before the Office in an ongoing reexamination of the same patent. The
`
`Board should further apply its discretion under § 325(d) to not consider the
`
`“improvements” that Chase improperly adds throughout the re-filed petition (using
`
`Patent Owner’s and the Board’s rebuttals to the first petition as a “how-to guide”)
`
`in an attempt to bolster its arguments since the first time the petition was denied.
`
`Fourth, the petition must also be denied because the patent cannot be shown
`
`to be a “covered business method” patent eligible for Transitional Program review.
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`5
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`Chase does not show that the patent is drawn to financial products or services, or
`
`that it is not a patent for technological inventions.
`
`Finally, even if the petition were not ineligible for institution of review,
`
`Chase fails to show a likelihood that any challenged claims are ineligible for
`
`patenting under 35 U.S.C. § 101.
`
`For all these reasons, the Board should deny institution of review, as it did
`
`the first time.1
`
`II. THIS RE-FILED PETITION SHOULD BE DENIED BECAUSE IT IS
`A RE-FILING OF A PETITION BARRED BY 35 U.S.C. § 325(A)(1).
`
`This petition (the “Second Petition”) is the second that Petitioner Chase has
`
`filed as petitioner or co-petitioner for review of this Patent. Previously, Chase and
`
`PNC, acting together as Petitioner and co-real parties-in-interest, jointly filed a first
`
`1 As detailed below, this Petition was re-filed along with three other Petitions
`
`challenging three related patents, in case Nos. CBM2014-00177, -00178 and -
`
`00180. Although the Board will naturally address the four cases in whatever way
`
`it finds best, if it wishes to address them together for any reason, it is respectfully
`
`suggested that the Board may find it easiest to begin its review with the filings in
`
`the present case, which has the longest Preliminary Response.
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`6
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`Case CBM2014-00179
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`petition (the “First Petition”) against this Patent. Similarly, they also filed first
`
`petitions against three other patents sharing the same or related specifications and
`
`asserted with the Patent against Chase in pending litigation.2 The Board denied the
`
`first petitions against all four patents (including the First Petition against this
`
`Patent) because PNC previously filed a civil action challenging the validity of the
`
`claims of the Patent, and 35 U.S.C. § 325(a)(1) precluded institution of review.3
`
`Petitioner does not seriously dispute that the second petitions (including this
`
`one) are merely re-edited versions of the first petitions that raise the same or
`
`substantially similar arguments. For example, the Second Petition is supported by
`
`the same expert declarant as the First Petition, challenges all the claims that were
`
`challenged in the First Petition, raises §§ 101 and 103 grounds like the First
`
`
`2 The four patents are U.S. Pat. Nos. 5,940,510 (the “Patent”), 5,949,880,
`
`6,105,013, and 6,237,095. Except for the ’880 patent, these patents all continue to
`
`be asserted in the litigation against Chase.
`
`3 PNC Bank N.A., JP Morgan Chase & Co. and JP Morgan Chase Bank, N.A. v.
`
`Maxim Integrated Prods., Inc., No. CBM2014-00038 (against the Patent), -00039,
`
`-00040 & -00041, Paper No. 19 (P.T.A.B. Jun. 3, 2014) (per Weatherly, APJ).
`
`7
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`Petition, and relies exclusively on prior art references that were raised in either the
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`First Petition itself (primary reference Cremin and secondary reference Rivest) or
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`in first petitions against other related patents (primary/secondary reference
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`Hawkes).4
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`Petitioner, hoping to avoid the § 325(a)(1) statutory bar this time, no longer
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`names PNC as a petitioner constituent or real party-in-interest. Nevertheless,
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`§ 325(a)(1) still bars initiation. The Board already held that § 325(a)(1)’s bar
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`applied when PNC and Chase co-filed the First Petition. That is all that is needed
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`to establish that Chase’s re-filing of substantially the same petition, against the
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`same patent, is also barred.
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`4 See PNC Bank, CBM2014-00038, Paper 3 (First Petition) at 21-37 (Cremin), 36
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`(Rivest); PNC Bank, CBM2014-00040, Paper 3 (first petition against related patent
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`6,105,013) at 34-38 (Hawkes as primary § 103 reference), 55-58 (Hawkes as
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`secondary § 103 reference); PNC Bank, CBM2014-00041, Paper 3 (first petition
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`against related patent 6,237,095) at 33-34 (Hawkes as primary § 103 reference),
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`50-51 (Hawkes as secondary § 103 reference).
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`Chase argues that the § 325(a)(1) bar no longer applies because PNC did not
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`participate in or control “the filing of this [Second] Petition” and has settled Patent
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`Owner’s claims against it, and so is no longer a “real party-in-interest.” 2nd Pet. at
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`2. That PNC’s level of ongoing participation has changed between the first filing
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`and re-filing of the petition should make no difference under the statutory
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`language. Moreover, the Board has already held that PNC cannot change its real
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`party-in-interest status by settling with Patent Owner or ceasing its further
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`participation in challenging the Patent. PNC Bank, CBM2014-00038, Paper 19 at
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`4. Indeed, PNC and Chase jointly told the Board in a Motion related to the First
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`Petitions that Chase alone would file Second Petitions if PNC were barred. Id,
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`Paper 11 at 5.
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`Even if new facts could theoretically have changed PNC’s real party-in-
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`interest status with respect to the Second Petition, they have not done so here. The
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`First Petition is substantially similar to the re-filed Second Petition, and PNC’s
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`barred contributions to the First Petition are also contributions to the Second
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`Petition. The Second Petition challenges all the claims challenged in the First
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`Petition, and Chase filed or co-filed both petitions. Perhaps more importantly,
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`Chase and PNC were collaborating when the petition was drafted and the strategy
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`to re-file it was decided. This is distinct from other possible situations such as, for
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`example, where an unrelated third party simply takes the PNC/Chase petition and
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`decides to file it. Chase cannot undo its collaboration with PNC by simply
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`removing PNC from a list of real parties in interest, while still relying on the prior
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`contributions and strategy.
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`PNC remains a real party-in-interest, and
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`initiation of review
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`is,
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`consequently, barred under 35 U.S.C. § 325(a)(1). Moreover, PNC is not
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`identified as a real party-in-interest, and initiation of review is therefore also barred
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`under 35 U.S.C. § 312(a)(2).
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`Finally, even if initiation were not statutorily barred, the Board should
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`exercise its discretion to deny review under § 325(d) because the same or
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`substantially the same prior art or arguments previously were presented to the
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`Office in the First Petition, and the Second Petition functions as nothing more than
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`a successive pleading, unfairly taking advantage of Patent Owner’s rebuttals to add
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`bolstering arguments that could and should have been raised in the First Petition;
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`and, in addition, because substantially the same prior art or arguments are also
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`before the Office in an ongoing reexamination of the same patent.
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`A. The Board Held That § 325(a)(1) Bars Initiation.
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`It is helpful to recount some salient facts that led up to the filing of
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`Petitioner’s second petitions against these patents.
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`Chase and PNC jointly controlled, prepared and funded the first round of
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`petitions, were represented by common counsel in preparing and asserting them,
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`and were both members of a joint defense agreement with respect to the four
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`patents. See, e.g., PNC Bank, CBM2014-00038, Paper 7 (patent owner
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`preliminary response) at 31-33 (Mar. 6, 2014); 2nd Pet. at 2 (admitting that Chase
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`and PNC’s common counsel “prepared the [First] Petition”), 3 (admitting that
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`Chase and PNC were “co-signatories to [a] joint defense agreement with respect to
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`the [Patent]”).
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`After Chase and PNC filed their first petitions, Patent Owner filed
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`Preliminary Responses to those petitions (id.) (the “First Preliminary Response” or
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`“1st POPR”). In its First Preliminary Reponses, Patent Owner explained why
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`§ 325(a)(1) would continue to bar institution of review even if PNC were to
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`“forswear all further control and participation in this case.” Id. at 30-33. Also,
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`since Patent Owner could not absolutely guarantee that the Board would agree that
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`§ 325(a)(1) barred initiation, Patent Owner was obliged to set forth further
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`arguments, additionally refuting the First Petition’s flawed positions on standing
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`and the merits. Id. at 33-67.
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`After Chase and PNC reviewed Patent Owner’s First Preliminary Response
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`to the First Petition, they filed through their common counsel a joint Motion for
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`Case CBM2014-00179
`Patent 5,940,510
`Attorney Docket No. 140828-003USCBM
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`Adverse Judgment against PNC. Id., Paper 11 (Apr. 1, 2014). Chase and PNC
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`jointly stated that PNC had settled its litigation against Patent Owner and would
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`“expressly abandon[] . . . and no longer participate” in the First Petition. Id. at 3.
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`In addition, seeking to dissuade the Board from denying the motion or denying
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`institution of the First Petition, they jointly explained that “if the Board . . . denies
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`the [First Petition] because PNC was a DJ plaintiff, then [Chase] will re-file the
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`CBM petition[].” Id. at 5. Later, Chase and PNC jointly notified the Board that
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`PNC had settled Patent Owner’s litigation claims against it. Id., Paper 19 at 3-4.
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`When the Board denied initiation of the First Petition, it denied Chase’s and
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`PNC’s Motion for Adverse Judgment against PNC as moot. Id. at 4. The Board
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`noted that granting the request for adverse judgment “would not obviate the control
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`that PNC has already exerted in this proceeding by its filing of the Petition” with
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`Chase, for, despite PNC’s settlement and agreement to have no further part, “PNC
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`has already exerted substantial control over the case.” Id.
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`Less than three months later, Petitioner Chase “re-file[d] the CBM petition”
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`as the Second Petition here, a