Case CBM2014-00180
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
`
`
`
`
`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 CBM2014-00180
`Patent 5,949,880
`
`____________
`
`PATENT OWNER MAXIM INTEGRATED PRODUCTS, INC.’S
`PRELIMINARY RESPONSE TO PETITION FOR COVERED BUSINESS
`METHOD PATENT REVIEW OF UNITED STATES PATENT NO.
`5,949,880 PURSUANT TO 35 U.S.C. § 321, 37 C.F.R. § 42.304
`
`
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`

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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`
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`TABLE OF CONTENTS
`
`C.  
`
`2.  
`3.  
`
`INTRODUCTION ........................................................................................ 1  
`THIS SECOND PETITION SHOULD BE DENIED BECAUSE IT IS
`BASED ON A FIRST PETITION BARRED BY 35 U.S.C. § 325(A)(1). 5  
`A.  
`The Board Held That § 325(a)(1) Bars Initiation Of The Petition. ........................ 9  
`B.  
`The Board’s Determination That § 325(a)(1) Barred Initiation Of The First
`Petition Applies To The Re-Filed Petition As Well. ............................................ 12  
`The Changed Participation Level Of Barred Co-Constituent PNC Does Not
`Change Its Real Party-In-Interest Status. .............................................................. 14  
`PNC Exerted Substantial Control Over The First And Re-Filed
`1.  
`Petitions. ....................................................................................................15  
`PNC Contributed To Both The First And Re-Filed Petitions. ...................16  
`Exempting The Second Petition From § 325(a)(1) Would Open The
`Door To Easy Evasion Of The Statutory Bar. ............................................20  
`Even If The Bar Did Not Still Apply, The Board Should Exercise Its Discretion
`To Deny This Re-Filed Petition Under § 325(d). ................................................. 25  
`Even If Initiation Were Appropriate, Petitioner’s Bolstering Of The Re-Filed
`Petition With Waived Arguments Is Not Permitted. ............................................ 27  
`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 ................................ 28  
`The Petition Fails To Show That Review Of Patent-Eligibility Under § 101
`A.  
`Should Be Granted. ............................................................................................... 30  
`Petitioner Fails To Show That The Claims Are More Likely Than Not
`1.  
`Patent-Ineligible Under § 101. ..................................................................31  
`a)  
`The Claims Are Not Drawn To Abstract Ideas. ............................ 31  
`b)  
`Even If The Claims Were Drawn To An Abstract Idea, The Claim
`Elements Transform The Nature Of The Claims Into A Patent-
`Eligible Application. ..................................................................... 36  
`
`D.  
`
`E.  
`
`i
`
`I.  
`II.  
`
`III.  
`
`
`
`

`

`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`
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`2.  
`
`The Board Lacks Authority To Review The Patent-In-Suit Under Section
`101 In This Proceeding. .............................................................................38  
`Petitioner Fails To Set Forth A Prima Facie Case of Anticipation. ...................... 42  
`B.  
`IV.   CONCLUSION ........................................................................................... 42  
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`ii
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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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) ............................................ 31, 35, 36, 37
`
`Bilski v. Kappos,
`561 U.S. 593 (2010) .................................................................................... 32, 35
`
`Diamond v. Chakrabarty,
`447 U.S. 303 (1980) .......................................................................................... 32
`Diamond v. Diehr,
`450 U.S. 175 (1981) .......................................................................................... 35
`Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
`132 S. Ct. 1289 (2012) ................................................................................. 31, 32
`
`MySpace, Inc. v. GraphOn Corp.,
`672 F.3d 1250 (Fed. Cir. 2012) ................................................................... 39, 40
`
`
`
`ADMINISTRATIVE DECISIONS
`
`Conopco, Inc. v. Procter & Gamble Co.,
`Case No. IPR2014-00507, Paper No. 17 (P.T.A.B. Jul, 7, 2014) (per Obermann,
`ALJ) ....................................................................................................... 24, 26, 27
`
`Customplay, LLC v. Clearplay, Inc.,
`Case No. IPR2014-00783, Paper No. 9 (P.T.A.B. Nov. 7, 2014) (per Grossman,
`ALJ) ....................................................................................................... 24, 25, 26
`
`
`
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`
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`iii
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`First Data Corp. v. Cardsoft, LLC,
`Case No. IPR2014-00715, Paper No. 9 (P.T.A.B. Oct. 17, 2014)
`(per curiam) ........................................................................................... 17, 18, 19
`
`PNC Bank, N.A., JP Morgan Chase & Co. and JP Morgan Chase Bank, N.A. v.
`Maxim Integrated Prods., Inc., Case No. CBM2014-00039, 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) ............................................................................. 31, 33, 34, 35
`
`Reloaded Games, Inc. v. Parallel Networks LLC,
`Case No. IPR2014-00950, Paper No. 12 (P.T.A.B. Oct. 22, 2014)
`(per Jung, APJ) .................................................................................................. 24
`
`RPX Corp. v. Virnetx Inc.,
`Case No. IPR2014-00171, Paper No. 49 (P.T.A.B. Jun. 5, 2014)
`(per Easthom, J.) ................................................................................................ 23
`
`
`
`STATUTES AND RULES
`
`Leahy-Smith America Invents Act,
`Pub. L. No. 112-29, 125 Stat. 284 (2011), § 18 ............................................ 1, 40
`
`35 U.S.C. § 101 ............................................................... 5, 30, 31, 36, 38, 39, 40, 41
`
`35 U.S.C. § 102 ...................................................................................................... 39
`
`35 U.S.C. § 103 ...................................................................................................... 39
`
`35 U.S.C. § 112 ...................................................................................................... 41
`
`35 U.S.C. § 251 ...................................................................................................... 41
`
`35 U.S.C. § 282 ................................................................................................. 38, 41
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`iv
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`35 U.S.C. § 312 ..................................................................................................... 4, 8
`
`35 U.S.C. § 321 ....................................................................................................... 38
`
`35 U.S.C. § 323 ................................................................................................... 1, 29
`
`35 U.S.C. § 324 ................................................................................................. 28, 30
`
`35 U.S.C. § 325 ................................................................................................ passim
`
`35 U.S.C. § 326 ....................................................................................................... 30
`
`
`
`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) ............................................................................................................................. 29
`
`Office Patent Trial Practice Guide; Rule, 77 Fed. Reg. 48,756 (Aug. 14, 2012) (to
`be codified at C.F.R. pt. 42) .................................................................................... 29
`
`37 C.F.R. § 42.207 .............................................................................................. 1, 29
`
`37 C.F.R. § 42.208 .................................................................................................... 1
`
`
`
`LEGISLATIVE HISTORY
`
`Leahy-Smith America Invents Act,
`157 Cong. Rec. S5428 (daily ed. Sept. 8, 2011) ................................................ 24
`
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`v
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
`
`
`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
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`Morgan Chase Bank, N.A. (collectively, “Chase” or “Petitioner”) against United
`
`States Patent No. 5,949,880 (“the ’880 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.
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`CBM2014-00039, Paper 3, at i, 3. The Board ruled that, because PNC had
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`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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`1
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`Chase now re-files the petition, claiming it is acting alone, and that PNC is
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`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
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`also took advantage of the earlier denial under the statutory bar to rearrange and
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`rewrite the petition in an attempt to fix flaws that were pointed out last time by
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`Patent Owner and the Board.
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`Chase’s re-filed petition should be denied for three independent reasons.
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`First, the § 325(a)(1) bar and the Board’s prior order continue to govern.
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`The language of § 325(a)(1) is clear: once a petitioner or real party-in-interest files
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`a civil action challenging the validity of the patent, a covered business method
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`patent review may not be instituted. The Board already held that the bar is in
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`effect because PNC, Chase’s co-real party-in-interest, filed a prior action
`
`challenging the Patent’s validity. Id. As a result, a petition challenging the Patent
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`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
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`participation level, or a re-filing claiming that Chase is now the lone Petitioner
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`constituent and lone real party-in-interest, cannot change the bar already in effect.
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`2
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`Second, even if changes to these facts could change the adjudicated
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`application of the bar, on the facts here the bar would still apply. The plan for
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`Chase to “re-file” PNC’s and Chase’s joint Petition was hatched (and detailed in a
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`joint PNC/Chase motion) even before the petition was denied—when PNC and
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`Chase were still formally acting together as Petitioner, and still jointly urging the
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`Board to reconstitute the Petitioner and change the named real parties-in-interest in
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`an attempt to get around the bar. PNC Bank, CBM2014-00039, Paper 11 (joint
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`PNC/Chase Motion for Adverse Judgment Against PNC) at 5; id., Paper 19, at 4
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`(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
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`Chase said was the plan all along—PNC’s prior control and contributions remain.
`
`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 expert declaration in an unfair
`
`attempt to bolster it and fix the flaws identified last time without substantially
`
`changing the overall petition already presented. Furthermore, to allow this re-
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`edited Petition to escape the statutory bar would open the door wide to evasion of
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`§ 325(a)(1), for it would allow barred persons to use simple strategies to contribute
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`to petitions—filed with the aid of nominally non-barred helpers—and even to gain
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`3
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`an advantage from having their petitions barred because they could then be
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`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
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`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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`Third, even if PNC’s contributions and control were not enough to bar the
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`re-filed petition, the Board should still exercise its broad discretion to “reject the
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`petition because[] the same or substantially the same prior art arguments
`
`previously were presented to the Office,” and to prevent evasion of the statutory
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`bar and unjust burden on patent owners and the Board as described above. 35
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`U.S.C. § 325(d). Chase’s re-edit does not substantially change the petition, and to
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`the extent it changes “prior art arguments,” they remain substantially similar to
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`arguments that were either already in the petition or were presented in at least one
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`of the four inter-related petitions against related patents, including this Patent, that
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`the Board rejected the first time under § 325(a)(1). PNC Bank, CBM2014-00038, -
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`00039, -00040, -00041. The Board should further apply its discretion under
`
`§ 325(d) to not consider the “improvements” that Chase improperly adds
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`throughout the re-filed petition (using Patent Owner’s and the Board’s rebuttals to
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`
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`4
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`the first petition as a “how-to guide”) in an attempt to bolster its arguments since
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`the first time the petition was denied.
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`Finally, even if the petition were not ineligible for institution of review,
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`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
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`II. THIS SECOND PETITION SHOULD BE DENIED BECAUSE IT IS
`BASED ON A FIRST 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
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`PNC, acting together as Petitioner and co-real parties-in-interest, filed a first
`
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`1 As detailed below, this Petition was re-filed along with three other Petitions
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`challenging three related patents, in Case Nos. CBM2014-00177, -00178, and -
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`00179. 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
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`case No. CBM2014-00179, which will have the longest Preliminary Response.
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`5
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`petition (the “First Petition”) against this Patent. Similarly, they also filed first
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`petitions against three other patents sharing the same or related specifications
`
`asserted with the Patent against Chase in pending litigation.2 The Board denied the
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`first petitions against all four patents (including the First Petition against this
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`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
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`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
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`the same expert declarant as the First Petition, challenges all the claims that were
`
`challenged in the First Petition, raises §§ 101 and 102 grounds like the First
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`Petition, and relies on the same prior art reference raised in the First Petition
`
`2 The four patents are U.S. Pat. Nos. 5,940,510, 5,949,880 (the “Patent”),
`
`6,105,013, and 6,237,095. Except for the Patent in this case, these patents all
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`continue to be asserted in the litigation against Chase.
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`3 PNC Bank N.A., JP Morgan Chase & Co. and JP Morgan Chase Bank, N.A. v.
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`Maxim Integrated Prods., Inc., No. CBM2014-00038, -00039 (against the Patent),
`
`-00040 & -00041, Paper No. 19 (P.T.A.B. Jun. 3, 2014) (per Weatherly, APJ).
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`6
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`(Akiyama—Petitioner has dropped all of its other references in the Second
`
`Petition).
`
`Petitioner, hoping to avoid the § 325(a)(1) statutory bar this time, no longer
`
`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
`
`applied when PNC and Chase co-filed the First Petition. That should be all that is
`
`needed to establish that Chase’s re-filing of substantially the same petition, against
`
`the same patent, is also barred.
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`Chase argues that the § 325(a)(1) bar no longer applies because PNC did not
`
`participate in or control “the filing of this [Second] Petition” and has settled Patent
`
`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
`
`and re-filing of the petition makes no difference under the statute. Moreover, the
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`Board has already held that PNC cannot change its real party-in-interest status by
`
`settling with Patent Owner or ceasing its further participation in challenging the
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`Patent. PNC Bank, CBM2014-00039, Paper 19 at 4. Indeed, PNC and Chase
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`jointly told the Board in a Motion related to the First Petitions that Chase alone
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`would file Second Petitions if PNC were barred. Id., Paper 11 at 3, 5.
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`Even if new facts could theoretically have changed PNC’s real party-in-
`
`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
`
`Petition. The Second Petition challenges all the claims challenged in the First
`
`Petition, and Chase filed or co-filed both petitions. Perhaps more importantly,
`
`Chase and PNC were collaborating when the petition was drafted and the strategy
`
`to re-file it was decided. This is distinct from other possible situations such as, for
`
`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
`
`removing PNC from a list of real parties-in-interest, while still relying on the prior
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`contributions and strategy.
`
`PNC remains a real party-in-interest, and
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`initiation of review
`
`is,
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`consequently, barred under 35 U.S.C. § 325(a)(1). Moreover, PNC is not
`
`identified as a real party-in-interest, and initiation of review is therefore also barred
`
`under 35 U.S.C. § 312(a)(2).
`
`Finally, even if initiation were not statutorily barred, the Board should
`
`exercise its discretion to deny review under § 325(d) because the same or
`
`substantially the same prior art or arguments previously were presented to the
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`8
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`Office in the First Petition, and the Second Petition functions as nothing more than
`
`a successive pleading, unfairly taking advantage of Patent Owner’s rebuttals to add
`
`bolstering arguments that could and should have been raised in the First Petition.
`
`Indeed, this is the third time this Patent has been subject to a CBM petition by
`
`accused infringers in the parallel litigation collaborating in joint defense
`
`arrangements. The Patent was previously challenged by in CBM2013-00059 by
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`Branch Bank & Trust Co. (“BB&T”), one of Petitioner’s co-defendants in the
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`consolidated litigation against Patent Owner over the Patent. In that petition
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`BB&T challenged the same claims, as well as unpatentability under § 101.
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`BB&T’s petition was dismissed under 35 U.S.C. § 325(a)(1). The Board should
`
`exercise its discretion to end these repetitive attacks on the Patent.
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`A. The Board Held That § 325(a)(1) Bars Initiation Of The Petition.
`
`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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`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, CBM2014-00039, 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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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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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
`
`the [Patent]”).
`
`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 30-34. 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, it was obliged to set forth further arguments, refuting
`
`the First Petition’s flawed positions on standing and the merits. Id. at 34-59.
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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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`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. In
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`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
`
`the [First Petition] because PNC was a DJ plaintiff, then [Chase] will re-file the
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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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 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. The Board noted
`
`that granting the request for adverse judgment “would not obviate the control 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, and also re-filed its petitions against the other three
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`related patents—exactly as Chase and PNC’s joint motion had said was the plan all
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`along. Id., Paper 11 at 5. The second petitions rearrange the alleged prior art and
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`grounds of unpatentability somewhat compared to their arrangement in the first
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`petitions, and add and bolster arguments in response to arguments raised against
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`the first petitions before review was denied. Nonetheless, as noted above, the
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`second petitions raise the same or substantially similar arguments against each
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`patent as the first petitions. See supra at 4-5.
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`The Second Petition asserts that PNC “has settled the controversy with
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`Patent Owner over the validity of the subject patent and the civil litigation between
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`PNC and Patent Owner has been dismissed.” 2nd Pet. at 2. However, PNC’s and
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`Chase’s joint motion for adverse judgment against PNC as to the First Petition had
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`already told the Board that PNC had settled its controversy with Patent Owner, and
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`the Board had still denied PNC’s and Chase’s joint motion as moot and denied
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`institution of the First Petition as barred under § 325(a)(1). PNC Bank, CBM2014-
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`00039, Paper 19 at 3-4.
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`B.
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`The Board’s Determination That § 325(a)(1) Barred Initiation Of
`The First Petition Applies To The Re-Filed Petition As Well.
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`Despite the fact that the Second Petition is just a re-filing of a re-edited
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`version of the First Petition, Petitioner, hoping to avoid the § 325(a)(1) bar this
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`time, no longer names PNC as a petitioner constituent or real party-in-interest in
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`the second set of petitions. Nevertheless, the plain language of § 325(a)(1) still
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`bars initiation.
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`Section 325(a)(1) provides that a covered business method patent review
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`“may not be instituted under this chapter if, before the date on which the petition
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`for such a review is filed, the petitioner or real party in interest filed a civil action
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`challenging the validity of a claim of the patent” (emphasis added). The statute is
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`clear. Once a petitioner or real party in interest files a civil action challenging the
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`validity of the patent, a covered business method patent review may not be
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`instituted. Here, the Board has already held that the statutory bar has taken effect,
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`because PNC, a real party-in-interest, had already filed a declaratory judgment
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`action challenging the validity of the patent. PNC Bank, CBM2014-00039, Paper
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`19 at 3. As a result, a petition challenging the patent filed by Chase, with PNC as a
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`real party in interest, cannot be instituted.
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`Contrary to the plain language of § 325(a)(1), Chase argues that the
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`§ 325(a)(1) bar no longer applies because PNC did not participate in or control
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`“the filing of this [Second] Petition” and has settled Patent Owner’s claims against
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`it in the pending litigation, so it is no longer a “real party-in-interest.” 2nd Pet. at
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`2. Chase assumes that, but fails to explain why, this is relevant under § 325(a)(1).
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`The ban on initiation under § 325(a)(1) has already been held to apply to Chase’s
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`co-filing of the First Petition. There is no language in § 325(a)(1) that provides
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`that Chase may successfully institute a second petition after it has already been
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`found to be barred. The fact that now, at the time of re-filing of substantially the
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`same petition, PNC’s level of ongoing participation has changed, simply makes no
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`difference under the statute.
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`Indeed, when the Board denied PNC’s and Chase’s joint motion for adverse
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`judgment with respect to the First Petition, it already held that PNC cannot change
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`its real party-in-interest status by settling with Patent Owner or ceasing its further
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`participation in challenging the Patent. PNC Bank, CBM2014-00039, Paper 19 at
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`4. As the Board explained, PNC has already exerted substantial control over the
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`petition, and the resolution of its dispute with Patent Owner does not “obviate the
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`control that PNC has already exerted.” Id. Thus, the Board itself has already
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`rejected Chase’s argument that these facts can lift the § 325(a)(1) bar.
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`C. The Changed Participation Level Of Barred Co-Constituent PNC
`Does Not Change Its Real Party-In-Interest Status.
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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 do not do so here. The First
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`Petition is substantially similar to the re-filed Second Petition, so PNC’s barred
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`contributions to the First Petition are also contributions to the Second Petition.
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`Moreover, the Second Petition challenges all the claims challenged in the First
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`Petition, and Chase filed or co-filed both petitions. The control that PNC exerted
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`over the First Petition continues to bar initiation of the Second Petition.
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`This is hardly a situation where an unrelated petition was filed later by
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`different persons raising different challenges against the same patent. Here,
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`substantially the same petition, persons, and challenges are involved, and Chase
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`has not satisfied its burden to show that new facts somehow lift the statutory bar.
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`
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`1.
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`PNC Exerted Substantial Control Over The First And Re-
`Filed Petitions.
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`In the Second Petition, Petitioner Chase asserts that “[n]o party other than
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`Chase has funded, directed or controlled the filing or the content of this Petition,”
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`particularly not PNC. 2nd Pet. at 3. Petitioner fails to prove this assertion. In fact,
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`the record facts are to the contrary.
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`The Board has already held that PNC is “a real party in interest” of the First
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`Petition and “exerted substantial control over th[at] case.” PNC Bank, CBM2014-
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`00039, Paper 19 at 3-4. Plainly, having collaborated with Chase in selecting
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`common counsel to prepare the First Petition, and selecting the prior art and
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`arguments in the First Petition, PNC provided funding and impetus to file the First
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`Petition. That exercise of control, and the opportunity for control, can hardly be
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`“obviate[d]” by removing PNC from the Petitioner’s constituents—as the Board
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`already found with respect to the First Petition. Id., Paper 19 at 4.
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`That is not all. PNC and Chase, while still joint constituents of Petitioner in
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`that case, jointly announced that the decision had been made that Chase would,
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`after PNC’s departure from the case, “maintain all the pending CBM petitions”
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`(including the First Petition), and, if the Board would not permit PNC to withdraw
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`from that case by adverse judgment, Chase would “re-file” the First Petition. Id.,
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`Case CBM2014-00880
`Patent 5,949,880
`Attorney Docket No. 140828-004USCBM
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`Paper 11 at 5 (emphasis added). Thus, PNC is on record, in the joint Motion it
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`filed with Chase with respect to the First Petition, stating that the plan, if
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`necessary, was for the First Petition to be “re-file[d]” as the Second Petition. Id. at
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`3, 5.
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`These facts contradict