IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`JP MORGAN CHASE & CO. and JP MORGAN CHASE BANK, N.A.,
`Petitioner,
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`MAXIM INTEGRATED PRODUCTS, INC.,
`Patent Owner.
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`Case No. CBM2014—00180
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`Patent No. 5,949,880
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`PETITIONER’S BRIEF ON STANDING
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`JP MORGAN CHASE & CO. and JP MORGAN CHASE BANK, N.A.,
`Petitioner,
`
`MAXIM INTEGRATED PRODUCTS, INC.,
`Patent Owner.
`
`Case No. CBM2014—00180
`
`Patent No. 5,949,880
`
`PETITIONER’S BRIEF ON STANDING
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`CBM2014—00180
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`02035 8.0206-USO6
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`In accordance with the Board’s Order dated January 29, 2015 (Paper 9), JP
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`Morgan Chase & Co. and JP Morgan Chase Bank, NA. (collectively “Petitioner”
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`or “JPMC”) submits the following brief with regard to developments in the related
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`District Court Case and Petitioner’s standing under Section 18(a)(1)(B) of the
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`Leahy—Smith America Invents Act (“AIA”) and 37 C.F.R. § 42.302(a).
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`I.
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`DISTRICT COURT LITIGATION STATUS
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`At the time of filing the Petition, US. Patent No. 5,949,880 (“the ’880
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`Patent”) was the subject of litigation against multiple defendants,
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`including
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`Petitioner, in the action captioned In re: Maxim Integrated Prods., Inc, MDL No.
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`2354, Misc. No. 12—244—JFC (W.D. Pa.) (“MDL Litigation”). Paper 1 at 4. On
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`September 26, 2014, counsel for Petitioner and Patent Owner filed a Stipulation
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`and Motion to Dismiss All Claims Regarding US. Patent No. 5,949,880. EX.
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`1017. On October 20, 2014, the court issued an Order Granting Stipulation and
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`Motion to Dismiss All Claims Regarding US. Patent No. 5,949,880 (“Order”).
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`Ex. 1018. The Order dismissed “[a]ll claims brought by Maxim against Chase”
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`with prejudice.
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`Id. at 1. “Maxim and Chase have agreed, in principle, to settle
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`their respective claims in this case, and expect to execute a definitive agreement in
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`the near future.” Ex. 1019 at 1.
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`l l i l i
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`CBM2014—00180
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`II.
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`STANDING
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`020358.0206-USO6
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`Petitioner had standing when the Petition was filed on August 21, 2014
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`because it had “been sued for infringement” on the ’880 Patent and was not barred
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`or estopped from filing the petition challenging the claims. AIA § 18(a)(1)(B);
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`Paper 1 at 8-11. Petitioner’s standing at the time of filing vested the Board with
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`jurisdiction over the present proceeding. That
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`the infringement claim in the
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`underlying litigation involving the ’880 Patent was thereafter resolved, does not
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`divest petitioner’s standing or the Board of its jurisdiction.
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`A. AIA§ 18(a)(1)(B) Requires Standing at the Time of Filing
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`Any statutory construction analysis begins with the language of the statute.
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`See, e.g., In re Swanson, 540 F.3d 1368, 1374—75 (Fed. Cir. 2008); Duncan v.
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`Walker, 533 US. 167, 172 (2001); Crandon v. United States, 494 US. 152, 158
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`(1990).
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`“In the absence of a clearly expressed legislative intention to the contrary,
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`the language of the statute itself must ordinarily be regarded as conclusive.”
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`United States v. James, 478 US. 597, 606 (1986) (internal quotation marks and
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`citations omitted). “It is well settled law that the plain and unambiguous meaning
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`of the words used by Congress prevails in the absence of a clearly expressed
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`legislative intent to the contrary.” Hoechst Aktiengesellschaft v. Qaigg, 917 F.2d
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`522, 526 (Fed. Cir. 1990).
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`CBM2014-00180
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`020358.0206—U806
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`Section 18(a)(1)(B) of the AIA states (emphasis added):
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`A person may not file a petition for a transitional
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`proceeding with respect to a covered business method
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`patent unless the person or the person’s real party in
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`interest or privy has been sued for infringement of the
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`patent or has been charged with infringement.
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`If Congress intended to limit the availability of the covered business method
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`patent review as being contingent on ongoing litigation, it could have used the
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`terms “file or maintain” and “sued for and continues to be sued for” in place of the
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`italicized terms file and sued for above. It did not.
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`Section 18(a)(1)(B) of the AIA sets forth a single time at which the standing
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`requirements are determined, which is at the time a party may “file a petition.”
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`Therefore, if a petitioner has standing at
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`the time a covered business method
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`proceeding is filed, subsequent developments in the underlying litigation do not
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`thereafter divest that petitioner of its “filing standing.”
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`Petitioner finds nothing in the legislative history, or other parts of the AIA,
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`that would require the Board to deviate from the plain meaning of the criteria set
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`forth in § 18(a)(1)(B) with regard to filing a covered business method petition.
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`In
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`fact, the legislative history confirms that AIA § 18(a)(1)(B) pertains to standing at
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`CBM2014-00180
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`020358.0206—USO6
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`the time of filing the petition.1 From the outset, the PTAB has also affirmed the
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`literal meaning of § 18(a)(1)(B).2 Moreover, Petitioner does not find any statutory
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`provision or legislative history that even suggests divesting a petitioner’s standing,
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`subsequent to standing being established at the time of filing.
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`Importantly, the present administrative agency proceeding is distinct from
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`civil actions in federal district courts where Article III’s “case or controversy”
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`requirement limits the court’s jurisdiction and where certain events that occur
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`after commencement of the proceeding may divest the court of jurisdiction. Susan
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`1 “A petition to initiate a review will not be granted unless the petitioner is first sued
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`for infringement or is accused of infringement. The program otherwise generally
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`functions on the same terms as other post-grant proceedings initiated pursuant to the
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`bill.” HR. Rep. No. 112—98, at 54 (2011); see also id. at 80—81.
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`2 “We give § 18(a)(1)(B) its literal meaning and conclude that a party sued for
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`infringement of a patent, and not otherwise estopped from challenging validity, may
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`file a petition for a transitional proceeding with respect to a covered business method
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`patent.” CBM2012-00001, Paper 36 at 18; see also CBM2014-00119, Paper 17 at 4-
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`5 (“Our jurisdiction stems from the fact that Patent Owner ACN is the record owner
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`of the ’211 Patent and has sued Petitioner for infringement. AIA §18 (a)(1)(B).
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`Having been sued for infringement by the record owner of the ’211 Patent, Petitioner
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`has the right to challenge the patentability of the claims”).
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`-4-
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`CBM2014~00180
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`02035 8.0206—USO6
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`B. Anthony List v. Driehaus, 134 S. Ct. 2334, 2341 (2014) (“Article III of the
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`Constitution
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`limits
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`the
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`jurisdiction of
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`federal
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`courts
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`to
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`‘Cases’
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`and
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`‘Controversies.’”). The jurisdiction of an administrative body such as the Board,
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`in contrast, is defined strictly by the enabling statute. See City of Arlington v.
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`FCC, 133 S. Ct 1863, 1868-70 (2013) (explaining distinctions between agency
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`jurisdiction and district court jurisdiction).
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`B.
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`AIA § 18(a)(1)(A) Confirms that Resolution of the Infringement
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`Claim Does Not Divest the Board of Jurisdiction
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`Section 18(a)(1)(A) of the AIA states:
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`Section 321(0) of title 35, United States Code, and
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`subsections (b), (e)(2), and (f) of section 325 of such title
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`shall not apply to a transitional proceeding.
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`These sections respectively pertain to the post grant review filing deadline,
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`preliminary injunctions, estoppel
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`in civil actions and other proceedings, and
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`reissue patents.3 Notably absent from the statutory provisions exempt from
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`3 “Section 18(a)(1) of the Leahy—Smith America lnvents Act provides that a CBM
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`review proceeding shall employ all the standards and procedures of a post—grant
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`review under Chapter 32 of title 35 of the United States Code (122., 35 U.S.C. §§ 321—
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`29) except for those expressly carved out (116., 35 U.S.C. §§ 321(c) and 325(b),
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`(e)(2), and (f)).” CBM20l4—00038, Paper 19 at 3, n.1.
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`-5-
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`CBM2014-00180
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`02035 8.0206—USO6
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`applicability to CBM proceedings is § 325(e)(1), which identifies circumstances
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`under which proceedings may not be maintained before the Office.
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`Section 325(e)(1) states (emphasis added):
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`PROCEEDINGS BEFORE THE OFFICE—«The
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`petitioner in a post-grant review of a claim in a patent
`
`under this chapter that results in a final written decision
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`under section 328(a), or the real party in interest or privy
`
`of the petitioner, may not request or maintain a
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`proceeding before the Office with respect to that claim
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`on any ground that the petitioner raised or reasonably
`
`could have raised during that post-grant review.
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`Congress specifically provided for the applicability of § 325(c)(1) to CBM
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`proceedings, and this section explicitly enumerates the circumstances when a
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`CBM proceeding cannot be maintained. This section identifies no circumstances
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`relating to being “sued for infringement” or “charged with infringement” as set
`
`forth in § 18(a)(1)(B). Nor does this section identify any circumstance that relates
`
`to resolution of the underlying infringement claim. Congress knew how to
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`identify circumstances that divest the Board of jurisdiction, and did not include
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`resolution of the underlying infringement claim as one of those circumstances.
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`CBM2014—00180
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`02035 8.0206-USO6
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`C.
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`Congress Did Not Divest Petitioner Standing or Office
`
`Jurisdiction Based on Triggering Events in Related District
`
`Court Litigation
`
`Section 327(a) states (emphasis added):
`
`IN GENERAL—A post—grant review instituted under
`
`this chapter shall be terminated with respect to any
`
`petitioner upon the joint request of the petitioner and the
`
`patent owner, unless the Office has decided the merits
`
`of the proceeding before the request for termination is
`
`filed. If the post-grant review is terminated with respect
`
`to a petitioner under this section, no estoppel under
`
`section 325(e) shall attach to the petitioner, or to the real
`
`party in interest or privy of the petitioner, on the basis of
`
`that petitioner’s institution of that post-grant review. If
`
`no petitioner remains in the post-grant review, the Office
`
`may terminate the post-grant review or proceed to a final
`
`written decision under section 328(a).
`
`Congress knows how to divest the Office of jurisdiction based on triggering
`
`events in related district court litigation, and has previously done so. Pre-AIA §
`
`317(b)4 required that an inter partes reexamination proceeding “may not thereafter
`
`be maintained by the Office” if a civil action involving the inter partes requester
`
`resulted in a “final decision” that is “favorable to patentability.” This provision—-
`
`4 See 35 U.S.C. § 317(b) (2006).
`
`
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`CBM2014-00180
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`02035 8.0206-USO6
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`or any similar provision—«was not included in the AIA for inter partes or post—
`
`grant review proceedings.5 Had Congress wanted to divest petitioner standing or
`
`divest the Board of jurisdiction over AIA proceedings based on triggering events
`
`(e.g., settlement posture) in related district court litigation, it would have done so.
`
`It did not.
`
`Instead, in § 327(a), Congress defined the circumstances under which a post—
`
`grant review proceeding such as a CBM may be terminated upon settlement by the
`
`parties: that is, upon a “joint request of the petitioner and the patent owner” before
`
`the Board has “decided the merits.” Thus, unlike pre-AIA § 317(b), which is not
`
`triggered by settlement of the parties and expressly addressed the circumstances in
`
`a “civil action” under which the PT0 may not maintain proceedings, § 327(a)
`
`permits the petitioner and patent owner to jointly request termination, even when
`
`there is no co-pending litigation.
`
`D.
`
`Public Policy and Common Sense Also Weigh In Favor of Using
`
`the Plain and Unambiguous Meaning of the Words Used by
`
`Congress
`
`There are public policy and common sense reasons for maintaining
`
`petitioner standing and PTAB jurisdiction once a patent owner has sued a
`
`petitioner for infringement. First, divesting a petitioner’s standing and the Board’s
`
`jurisdiction upon resolution of the underlying infringement claim would inevitably
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`5 See H.R. Rep. No. 112-98, pt. 1, at 145 (2011).
`
`_ 8 _
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`CBM2014-00180
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`02035 8.0206-USO6
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`lead to gamesmanship and manipulation of the system. For example, if a petition
`
`for CBM review was filed by a defendant after being sued for infringement, the
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`patent owner could stipulate to dismissal of the infringement claim, purportedly
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`divesting the Board of jurisdiction over the CBM proceeding. The patent owner
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`could later re—file the infringement claim, and, in order to get review by the Board,
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`the defendant would have to re~file a CBM petition, restarting the six-month period
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`between filing a petition and receiving an institution decision, prejudicing the
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`defendant’s ability to get a stay in the underlying litigation.
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`Second, the “litigate, file CBM petition, and dismiss” process could continue
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`seriatim. Allowing such a course of action would contravene the clearly expressed
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`legislative intent of reducing “the burden on the courts of dealing with the
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`backwash of invalid business—method patents.”6
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`Third, a policy of divesting a petitioner’s standing upon resolution of the
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`underlying infringement
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`claim would result
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`in duplication of work and
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`inefficiencies within the Office.
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`If resolution of an underlying litigation would
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`divest a petitioner’s standing, the Board could not issue a Final Written Decision
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`even at an advanced stage of a CBM trial, such as after oral argument when the
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`Board may already have decided the merits of the case. A subsequent litigation
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`asserting the same patent against new defendants and attendant CBM petition
`
`
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`6 157 Cong. Rec. S1367 (Mar. 8, 2011) (statement of Sen. Kyl).
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`_ 9 _
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`CBM2014—00180
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`020358.0206—USO6
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`would result in a duplication of work within the Office, and particularly within the
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`Board. This process could also continue seriatim, leaving the Office as a hapless
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`bystander, watching its resources repeatedly wasted.
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`III. CONCLUSION
`
`The plain meaning ofthe statute should control. The statute sets forth as a
`filing requirement
`that the petitioner has been “sued for” or “charged with”
`infringement of the challenged patent. Other provisions of the AIA confirm that
`such a reading is correct, and a reading that would allow subsequent resolution of
`the underlying infringement claim to divest the Board ofjurisdiction automatically
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`would contravene Congressional intent, allow for gamesmanship, and waste Board
`
`resources.
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`In the present case, Petitioner has met the standing requirements for filing
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`with respect to the ’880 Patent. The subsequent Order dismissing Patent Owner’s
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`claims against Petitioner with respect to the ‘880 Patent does not, by itself, divest
`
`Petitioner of its standing, nor the Board of its jurisdiction.
`
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`020358.0206-U806
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`Date: February 4, 2015
`
`Respectfully Submitted,
`
`By
`Andrea G.
`
`ei ter
`
`Registration N0.: 36,253
`Gregory S. Discher
`Registration N0.: 42,488
`Jay 1. Alexander
`Registration No.: 32,678
`COVINGTON & BURLING LLP
`
`One CityCenter
`850 Tenth Street, NW
`Washington, DC 20001
`(202) 662-6000
`Attorneys for Petitioner
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`
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`-11-
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6, I hereby certify that on this 4th day of February 2015,
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`the foregoing Petitioner’s Brief on Standing was served via electronic mail by
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`agreement of the parties on the following counsel of record for Patent Owner.
`
`Kenneth J. Weatherwax
`
`Parharn Hendifar
`
`Goldberg, Lowenstein & Weatherwax LLP
`weatherwax@glwllp.com
`hendifar@glwllp.com
`
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`Date: February4, 2015
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`Greg ry S. Discher,
`Registration No.: 42,488
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`5:
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