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`By: Robert G. Mukai, Esq.
`Charles F. Wieland, Esq.
`BUCHANAN INGERSOLL & ROONEY PC
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`1737 King Street, Suite 500
`Alexandria, Virginia 22314-2727
`Telephone (703) 836-6620
`Facsimile (703) 836-2021
`robert.mukai@bipc.com
`charles.Wie1and@bipc.com
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`SONY CORPORATION OF AIVIERICA; AXIS COMMUNICATIONS AB;
`AXIS COMMUNICATIONS INC.; and I—IEWLETT—PACKARD CO. Petitioner
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`V.
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`NETWORK-1 SECURITY SOLUTIONS, INC.
`Patent Owner
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`Patent 6,218,930
`Administrative Patent Judges Jameson Lee, Joni Y. Chang and Justin T. Arbes
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`Case IPR2013-00071
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`PATENT OWNER’S OPPOSITION TO PETITIONER’S MOTION FOR
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`JOINDER FILED IN IPR2013-00386
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR2013—00071
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`Sony and Axis filed an IPR petition. The board rejected it. Rather than just
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`relying on their motion for reconsideration, Sony, Avaya, and HP (“Defendants”)
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`want a second bite of the apple, attempting to correct the flaws in their first petition
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`by adding additional art and a declaration that they failed to include in their
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`original petition. Defendants seek to (a) institute a new IPR based on their second
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`petition filed six months after the one-year statutory deadline, and (b) join their
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`proposed IPR into the existing Avaya IPR (IPRZO13-00071).
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`The controlling statute, 35 U.S.C. Section 315(0), provides:
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`If the Director institutes an inter partes review, the Director, [3] in his or her
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`discretion, may join as a party to that inter partes review any person who [1]
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`properly files a petition under section 311 that the Director, after receiving a
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`preliminary response under section 313 or the expiration of the time for
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`filing such a response, determines [2] warrants the institution of an inter
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`partes review under section 314.
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`35 U.S.C. 315 §(c) (enumeration and emphasis added). Based on this statute,
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`Defendants’ motion (and petition) should be denied for three independent reasons:
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`Reason 1: Defendants did not “properly file[] a petition under Section 311”
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`because their petition was “filed more than 1 year after y)n petitioner [was] served
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`with a complaint.” 35 U.S.C. §315(b).
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`Reason 2: Had Defendants’ late—f1led petition been permitted, factors that
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`the Board should consider before exercising “his or her discretion” demonstrate
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`that the Board should not exercise its discretion here.
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR2013-00071
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`Reason 3: As will be demonstrated in the Preliminary Response,
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`Defendants’ new petition still does meet the threshold of Section 314 and therefore
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`does not “warrant[] the institution of an inter partes review under section 314.”
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`Each independent reason is addressed in turn.
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`1.
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`Independent Reason 1: Defendants did not properly file a petition.
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`As (a) outlined in Network—1’s Opposition to Dell’s Motion for Joinder
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`(Paper 28 at 2-3), (b) explained in AVaya’s Opposition to Dell’s Motion for Joinder
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`(Paper 30 at 1-5), and (c) will be addressed in detail in Network-1’s Preliminary
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`Response, a motion and corresponding petition should be denied if the petition is
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`filed “more than 1 year after ncn petitioner is served with a complaint.” 35 U.S.C.
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`§315(b). Because Defendants were served on December 14, 2011 (Exhibits N1-
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`2011-13), Defendants’ recently-filed petition was filed more than six months after
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`the statutory deadline. As a result, their motion and petition should be denied. See
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`also, IPR2013—0O3 19, Paper 16, June 11, 2013 and AVaya’s Opposition, Paper 30,
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`in this IPR2013-00071.
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`II.
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`Independent Reason 2: Defendants cannot meet their burden of
`demonstrating that the Board should exercise its discretion to allow
`joinder based on their second petition.
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`If (a) the statutory requirements are satisfied, and (b) the circumstances
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`justify joinder, the Board may exercise “his or her discretion” and join a party to an
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`IPR. 35 U.S.C. 315§(c). See also, IPR2013—O0O07 Paper 15 at 3 (“the decision to
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR20l3-00071
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`grant joinder is discretionary”) (citing 35 U.S.C. § 315(c)).
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`As the moving party, Defendants have the burden of demonstrating that
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`j cinder is justified and that the Board should exercise its discretion. 37 C.F.R. §
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`42.20(c) (“The moving party has the burden of proof”). Based on factors that the
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`Board should consider when evaluating whether to exercise its discretion here,
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`there are four reasons why Defendants cannot satisfy their burden.
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`Reason 1: Defendants’ motion should be denied because permitting
`joinder for a late-filed petition without a valid justification
`would allow defendants to circumvent the policy behind the
`one-year statutory bar.
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`The statutory one-year window establishes the appropriate balance between:
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`(a) “ensur[ing] the nn speedy n-nn resolution of a proceeding” (Office Patent Trial
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`Practice Guide, 77 Fed. Reg. 48756, 48758 (Aug. 14, 2012)) that is co-pending
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`with underlying litigation, and (b) “afford[ing] defendants a reasonable opportunity
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`to identify and understand the patent claims.” Exh. N1—201O (Defendants’ Motion
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`to Stay the Pending Litigation), at 12. (emphasis added) quoting 157 Cong. Rec.
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`S5429 (daily ed. Sept. 8, 2011).
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`To maintain this proper balance, to the extent that Section 315(0) allows the
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`Board to exercise its discretion to allow late—filed petitions and joinders, the Board
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`should only do so if there is a change of circumstance that justifies a petitioner’s
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`delay. For example, if a patent owner asserts new claims in the co-pending
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`litigation and the petitioner is “diligent and timely in filing the motion” for joinder
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR2013-00071
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`after the changed circumstance, such changed circumstance and diligence may
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`justify the exception (e. g. , to allow the new claims to be included in an IPR).
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`IPR20l3-00109 Paper 15 at 4; id. at 3 (“Petitioner proceeded expeditiously in
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`filing a second Petition after learning that additional claims were being asserted by
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`Patent Owner in concurrent district court litigation”)
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`Here, Defendants have no valid justification for their late-filed petition (e.g.,
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`a change in circumstances). Nothing prevented Defendants from filing a timely
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`petition — they did, and it was rejected. Defendants’ attempt to correct the flaws in
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`their rejected petition is not a valid justification for their late—filed second petition.
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`Reason 2: Defendants’ late—filed petition introduces substantial new
`grounds of unpatentability.
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`If a late—filed petition is limited to the same grounds in a pending IPR, the
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`Board may exercise its discretion because delay can be avoided. See IPR2013-
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`00256 Paper 10 at 5 (“joinder does not introduce new grounds of unpatentablity”).
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`Conversely, if a late-filed petition introduces new grounds, the Board should not
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`exercise its discretion. See IPR20l3—OOO07 Paper 15 at 3 (“Joining a third party
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`could result in delaying the schedule already in place for the ongoing inter partes
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`review, particularly if Apple’s petitions raise grounds of unpatentabilityf’).
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`Here, Defendants’ late-filed petition (a) includes three additional grounds of
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`unpatentability (expanding the number of grounds from 2 to 5); (b) includes five
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`new references (expanding the number of references from 2 to 7); and (c)
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR20l3—0007l
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`challenges a claim (claim 8) not at issue in the Avaya IPR. See Petition at 8.
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`Because Defendants’ late—filed IPR is not “limited to the same claims and the same
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`grounds of unpatentability” (IPRZOI3-00256 Paper 10 at 2) but instead would
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`more than double the scope of the pending IPR, the Board should not exercise its
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`discretion to grant Defendants’ motion for joinder.
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`Reason 3: Defendants’ proposed joinder would delay the Avaya IPR.
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`If a late—filed joinder would delay a pending IPR, the Board should not
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`exercise its discretion to permit joinder because the rules are to be construed to
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`“secure the ...speedy” resolution of an IPR.
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`IPR2013—0OOO7 Paper 15 at 3 (citing
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`37 C.F.R. 42.l(b)). The Avaya petition was filed over seven months earlier than
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`Defendants’ new petition. As a result, if Defendants’ motion is granted,
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`Defendants “acknowledged that the dates set forth in the Scheduling Order (Paper
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`19) for this proceeding would need to be extended.” Order Paper 27 at 2. Because
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`of this unavoidable delay, the Board should not exercise its discretion.
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`Defendants assert that “given the litigation history of the ’93O patent, the
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`new grounds of unpatentability submitted in the Petition will not unduly
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`complicate the proceedings or cause more than six months delay.” Mot. at 7.
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`There are two problems with Defendants’ argument. First, Defendants’ fail to
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`explain how the fact that the ‘93O Patent has been litigated before has any impact
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`on the complexity or delay resulting from more than doubling the scope of the
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR2013-00071
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`Avaya IPR. Second, even if the delay is only six months, such a delay is
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`unreasonable because (a) it could have been avoided by Defendants had they
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`included their new grounds in their first petition, and (b) prejudices Network-l by
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`further postponing its day in Court, since the underlying action is stayed pending
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`the Avaya IPR. Defendants’ proposed six—month delay would be directly contrary
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`to the representations they made in their motion to stay the underlying action, e. g.:
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`“[t]he PTO will then face an obligation under 35 U.S.C. § 3 l6(a)(l l) to issue a
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`final determination within one year @pn there is no chance of undue prejudice due to
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`delay given the one-year statutory timeline for IPRs.” Exh. N1-2010 at 2, 3.
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`Reason 4: Defendants’ proposed joinder will impact procedural
`matters.
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`If a late-f1ledIPR will affect procedural matters (scheduling, briefing, or
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`deposition discovery), the Board should not exercise its discretion to permit joinder
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`and the IPR proceeding. See IPR2013—00256 Paper 10 at 8 (“to assure that the
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`schedule is not affected, we also consider whether joining the instant proceeding
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`and Kyocera IPR will affect the parties’ briefing obligations or deposition
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`discoveryf’) (emphasis added). Here, Defendants’ late-filed IPR would affect all
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`procedural matters, including scheduling, briefing, and deposition discovery.
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`scheduling: Defendants’ delay in filing its petition will not only affect the
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`schedule but makes it impossible to adjust the Scheduling Order to accommodate
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`joinder. This is because a new Scheduling Order cannot be entered before the
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR20l3-00071
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`Board determines whether to initiate the new proceeding which will not take place
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`until after Network-1 files its Preliminary Response in late August. See Paper 7.
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`See also IPR20l3-00007 Paper 15 at 3-4 (“Apple’s petitions would trigger a time
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`for filing a Patent Owner’s Preliminary Response and additional time for this
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`Board to issue a decision concerning the grounds of unpatentability raised in
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`Apple’s petitions”) By the time the Board determines whether to initiate
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`Defendants’ proposed IPR, key dates in the Avaya IPR will have already passed
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`(e. g. , the deposition of Petitioner’s expert and the Patent Owner’s Response).
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`Defendants assert: “[T]he Board may order Avaya and Petitioners to
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`consolidate their submissions and to conduct joint discovery where appropriate
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`[to] minimize complication or delay.” Mot. at 7. During the June 26, 2013
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`conference call with the Board, the Board specifically asked Defendants to explain
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`how the schedule could be consolidated to allow for joinder. Defendants could not
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`provide a consolidated schedule because no possible consolidated schedule exists.
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` : Because the proposed IPR includes more references, different
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`grounds, and an additional claim, Defendants could not rely on a consolidated a
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`filing. See, e.g., IPR20l3—0O256 Paper 10, at 9 (to avoid delay and undue burden,
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`petitioner “would not be permitted any arguments in furtherance of those advanced
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`in Kyocera’s consolidated fi1ing.”).
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`deposition discovery: Joinder would introduce new deposition discovery,
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPRZOI3-00071
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`specifically from Defendants’ new expert witness (who is different from Avaya’s
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`expert). This at least doubles the amount of deposition discovery Network-l must
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`take. IPR20l3—O0256 Paper 10 at 9 (“undue burden ...[could] result[] from
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`additional deposition testimony associated with joinder.”).
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`Because Defendants’ late—filed IPR would dramatically affect procedural
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`matters (scheduling, briefing, and deposition discovery), the Board should not
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`exercise its discretion to permit joinder and the proposed IPR proceeding.1
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`*
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`*
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`>l=
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`Defendants make two additional arguments, each of which fails.
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`Defendants’ argument 1: “Absent joinder, Petitioners may be prejudiced
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`because their interests will not be adequately represented in the Avaya IPR.”
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`Mot. at 1. If a party has the opportunity to timely make an argument but
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`voluntarily chooses not to do so, it is not prejudiced if it is precluded from later
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`attempting to make that argument. This is not prejudice — it is waiver. Here,
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`Defendants had every opportunity to include, in their first petition, the art and
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`arguments that they want to include in their late-filed petition. They are not
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`prejudiced as a result of their own failure to include such art and arguments in their
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`‘
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`“Joinder would also increase costs of the proceeding, since time and effort
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`would be required to review additional briefs and pleadings.” IPR20l3-00004
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`Paper 15 at 4.
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR20l3-00071
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`first petition. See IPRZOI3-0092 Paper 24 at 3-4 (discussing the flaws in
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`Defendants’ initial petition).
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`Defendants’ argument 2: “Joinder will promote efficiency by consolidating
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`issues, avoiding duplicate efforts, and preventing inconsistencies.” Mot. at 8.
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`Defendants’ argument is premised on the assumption that the Board will initiate a
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`trial based on its late—f1led petition whether or not it grants this motion for joinder.
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`First, as demonstrated above, if the Board properly denies this motion for joinder,
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`Defendants’ trial should not be instituted, there is nothing to consolidate, and no
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`potential for inconsistencies. Second, Defendants provide no authority supporting
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`their position that a late-filed petition may go forward even if its accompanying
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`joinder request is denied. During the June 26, 2013 conference call with the
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`Board, Defendants were directly asked for any such authority. Defendants
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`responded by submitting the following passage of legislative history (in an
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`improper e-mail submission rejected by the Board):
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`“The Director is given discretion, however, over whether to allow joinder.
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`This safety valve will allow the Office to avoid being overwhelmed if there
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`happens to be a deluge of joinder petitions in a particular case.”
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`Nl-2014, quoting l57 Cong. Rec. S1360, S1376 (daily ed. Mar. 8, 2011)
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`(statement of Sen. Kyl) (emphasis added). If the intent was to allow a “deluge” of
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`untimely petitions to go forward even if the accompanying joinder requests were
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR20l 3-00071
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`denied (Defendants’ position), then Congress would not have described denying
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`joinders as a “safety valve” that “allow[s] the Office from being overwhelmed.”
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`To the contrary, allowing IPR to move forward ifj oinders are denied lacks any
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`“valve” whatsoever and ensures that the Office would be overwhelmed. This
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`passage directly contradicts Defendants’ position.
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`III.
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`Independent Reason 3: Defendants’ Petition does not meet the
`threshold of Section 314.
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`Joinder is only appropriate if the Board first determines that the new petition
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`“warrants the institution of an inter partes review under section 3 l4.” 35 U.S.C.
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`§3 15 (c). As will be demonstrated in Network-l ’s Preliminary Response, despite
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`their attempt to upgrade their initial petition, Defendants’ new petition also fails to
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`meet the requisite threshold under Section 314. Accordingly, joinder is not
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`authorized under the statute.
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`IV. Conclusion.
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`For the reasons set forth above, Defendants’ motion for joinder should be
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`denied.
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`Date: July 3,2013
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`1737 King Street, Suite 500
`Alexandria, VA 22314
`Telephone (703) 836-6620
`
`Respectfully submitted,
`BUCHANAN INGERSOLL & ROONEY PC
`
`By: , W"
`
`Robert G. Mukai, Esq.
`Registration No. 28,531
`Counselfor NETWORK—I SECURITY
`SOL UTIONS, INC.
`
`10
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`Patent Owner’s Opposition to Motion for Joinder
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`Case No. IPR20l3-00071
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`CERTIFICATE OF SERVICE
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`I hereby certify that a true and correct copy of the foregoing PATENT
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`OWNER’S OPPOSITION TO PETITIONER’S MOTION FOR JOINDER
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`FILED IN IPR2013-00386 is being served upon the following this 3rd day of
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`July, 2013:
`
`Jeffrey D. Sanok
`Jonathan Lindsay
`CROWELL & MORING LLP
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`Counsel for Petitioner in this IPR20l3—00071
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`at AVl—PRPS@Crowel1.com
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`and is being served upon the following this 3rd day of July, 2013, via overnight
`UPS (an EXPRESS MAIL® equivalent) to:
`
`Lionel M. Lavenue
`C. Gregory Gramenopoulos
`Finnegan, Henderson, Farabow,
`Garrett & Dunner LLP
`Two Freedom Drive
`1 1955 Freedom Drive
`
`Reston, VA 20190
`Counsel for Petitioners Sony and Axis
`in IPR 2013-00386; and
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`Date: July 3, 2013
`
`Robert J . Walters
`Charles J. Hawkins
`McDermott Will & Emery LLP
`500 North Capitol Street, NW
`Washington, DC 20001
`Counsel for Petitioner HP in
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`IPR20l3-003 86
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`péNn
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`‘
`
`Robert G. Mukai, Esq.
`Registration No. 28,53 1
`Counselfor NETWORK—1 SECURITY
`SOL UTIONS, INC.