Filed on behalf of Patent Owner Network-1 Security Solutions, Inc.
`
`By: Robert G. Mukai, Esq.
`BUCHANAN INGERSOLL & ROONEY PC
`
`
`1737 King Street, Suite 500
`
`Alexandria, Virginia 22314-2727
`
`Telephone (703) 836-6620
`
`Facsimile (703) 836-2021
`robert.mukai@bipc.com
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________
`
`
`
`
`AVAYA INC. and DELL INC.
`Petitioners
`
`v.
`
`NETWORK-1 SECURITY SOLUTIONS, INC.
`Patent Owner
`
`____________________
`
`Case IPR2013-000711
`Patent 6,218,930
`Administrative Patent Judges Jameson Lee, Joni Y. Chang, and Justin T. Arbes
`____________________
`
`
`PATENT OWNER’S OPPOSITION TO PETITIONERS’ MOTION FOR
`JOINDER FILED IN IPR2013-00495
`
`
`_________________
`1 Case IPR2013-00385 has been joined with this proceeding.
`
`
`
`By: Robert G. Mukai, Esq.
`BUCHANAN INGERSOLL & ROONEY PC
`
`
`1737 King Street, Suite 500
`
`Alexandria, Virginia 22314-2727
`
`Telephone (703) 836-6620
`
`Facsimile (703) 836-2021
`robert.mukai@bipc.com
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________
`
`
`
`
`AVAYA INC. and DELL INC.
`Petitioners
`
`v.
`
`NETWORK-1 SECURITY SOLUTIONS, INC.
`Patent Owner
`
`____________________
`
`Case IPR2013-000711
`Patent 6,218,930
`Administrative Patent Judges Jameson Lee, Joni Y. Chang, and Justin T. Arbes
`____________________
`
`
`PATENT OWNER’S OPPOSITION TO PETITIONERS’ MOTION FOR
`JOINDER FILED IN IPR2013-00495
`
`
`_________________
`1 Case IPR2013-00385 has been joined with this proceeding.
`
`
`
`Case No. IPR2013-00071
`
`Sony and Axis filed an IPR Petition. IPR2013-00092. The Board rejected it
`
`on the merits. Sony and Axis brought a motion for rehearing. It was denied by the
`
`Board. Sony, Axis, and HP, tried to institute a second late-filed IPR (IPR2013-
`
`00386) and join it into the existing Avaya IPR (IPR2013-00071). Because their
`
`proposed IPR would dramatically expand the scope of the Avaya IPR, increase
`
`complexity, and cause significant delays, the Board denied their motion and IPR
`
`Petition. Sony and HP are now petitioning a third time and again moving to join
`
`their proposed IPR with the existing Avaya IPR. As the moving party, Petitioners
`
`have the burden of establishing that they are entitled to the requested relief. 37
`
`C.F.R. § 42.20(c). Petitioners cannot satisfy this burden and their Motion and
`
`Petition should be denied for at least two reasons.1
`
`I.
`
`Reason 1: Petitioners’ Motion is time barred.
`
`A.
`
`Petitioners’ Motion is time barred because it was filed more than
`one month after the institution date of the IPR for which joinder
`is requested.
`
`The controlling regulation states that a “request for joinder must be filed …
`
`no later than one month after the institution date of any inter partes review for
`
`which joinder is requested.” 37 C.F.R. § 42.122(b) (emphasis added). Petitioners
`
`are requesting to join the Avaya ‘071 IPR. Mot. at 1. The institution date of the
`
`Avaya ‘071 IPR was May 24, 2013. Petitioners’ pending motion was filed August
`
`
`1
`Avaya may identify additional reasons in its opposition to this Motion.
`
`
`
`
`
`Case No. IPR2013-00071
`
`6, 2013. Accordingly, Petitioners’ filing is “later than one month after the
`
`institution date of [the IPR] for which joinder is requested” and is time barred
`
`under Rule 42.122(b).
`
`B.
`
`Petitioners’ argument that their Motion is timely fails.
`
`Petitioners argue that their Motion is timely because it was filed within one
`
`month of the date that the Dell ‘385 IPR was instituted. Mot. at 9. The controlling
`
`rule clearly states that “request for joinder must be filed . . . no later than one
`
`month after the institution date of any inter partes review for which joinder is
`
`requested.” 37 C.F.R. § 42.122(b) (emphasis added). The institution date of the
`
`Dell IPR would only be relevant if the Petitioners were moving to join the Dell
`
`IPR. Petitioners cannot move to join the Dell IPR because it was terminated. Mot.
`
`at 3 (“the Board noted that the Dell IPR was terminated”). Because they are not
`
`moving to join the Dell IPR, their argument fails.
`
`Petitioners’ argument would only have merit if the Rule were redrafted to
`
`include the following addendum: “…or that has been terminated and joined with
`
`the inter partes review for which joinder is requested.” Petitioners’ attempt to
`
`redraft the Rule fails. As with statutes, if a reading of a rule is not found in the text
`
`of the rule and is contrary to the purpose of the rule, then that reading is incorrect.
`
`See United States v. James, 478 U.S. 597, 606 (1986) (“the language of the statute
`
`itself must ordinarily be regarded as conclusive” unless there is “a clearly
`
`2
`
`
`
`Case No. IPR2013-00071
`
`expressed legislative intention to the contrary”); Alaska Trojan P’ship v. Gutierrez,
`
`425 F.3d 620, 628 (9th Cir. 2005) (“An agency’s interpretation of a regulation must
`
`conform with the wording and purpose of the regulation.”); Pfizer, Inc. v. Heckler,
`
`735 F.2d 1502, 1507 (D.C. Cir. 1984) (finding that a reading of a rule was
`
`incorrect because it followed neither the text nor purpose of the rule). Petitioners’
`
`reading of Rule 42.122(b) is not found in the text and is contrary to its purpose.
`
`First, Petitioners’ reading is not found in the text of Rule 42.122(b). The
`
`Rule clearly states that the relevant institution date is “the institution date of any
`
`inter partes review for which joinder is requested.” The text of the Rule makes no
`
`reference to terminated IPRs or IPRs that were previously joined to an IPR for
`
`which joinder is requested.
`
`Second, Petitioners’ reading is contrary to the purpose of Rule 42.122(b).
`
`Deadlines provide predictability in an IPR and ensure the timely and efficient
`
`administration of the proceeding, consistent with the purpose of the regulations.
`
`35 U.S.C. § 316(b). Under Petitioners’ reading, future petitioners in multi-
`
`defendant litigation could prolong IPRs by joining another party’s IPR every
`
`month, ignoring the deadlines, adding costs, and reducing efficiency – all of which
`
`are contrary to the purpose of the deadlines. Accordingly, Petitioners’ redraft of
`
`Rule 42.122(b) is incorrect.
`
`3
`
`
`
`Case No. IPR2013-00071
`
`C. Rule 42.5(b) is not a basis for waiving the Rule 42.122(b) time bar
`in this case.
`
`Petitioners argue that the Board, under Rule 42.5(b), should waive the time
`
`bar. Mot. at 1-2. Rule 42.5(b) provides: “The Board may waive or suspend a
`
`requirement of parts 1, 41, and 42 ...” 37 C.F.R. § 42.5(b). In general, it might be
`
`appropriate for an agency to waive a promulgated rule if there are (1) “special
`
`circumstances” that (2) “warrant a deviation from the general rule” and (3) “such
`
`deviation will serve the public interest.” Northeast Cellular Tel. Co., L.P. v. FCC,
`
`897 F.2d 1164, 1166 (D.C. Cir. 1990). Here, none of these three conditions exist.
`
`1.
`
`Petitioners’ circumstances are not “special circumstances.”
`
`In general, “special circumstances” are circumstances that would not have
`
`been contemplated during the creation of a rule and therefore justify an exception.
`
`Here, the circumstances (as identified by Petitioners) are that Petitioners “have
`
`tried multiple times to participate in an inter partes review” but the Board denied
`
`their Petitions. Mot. at 2. The Rules contemplate that some petitions would be
`
`denied. 37 C.F.R. 42.71(a) (“The Board …may . . . deny . . . any petition”). The
`
`Rules also contemplate that losing petitioners may still want to participate in an
`
`IPR. See 37 C.F.R. 42.71(d) (rehearing rule). The legislative history also
`
`demonstrates that late-filed motions for joinder were specifically considered and
`
`addressed. 157 Cong. Rec. §5429 (daily ed. Sept. 8, 2011) (“[T]he Office has
`
`made clear that it intends to use this authority to encourage early requests for
`
`4
`
`
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`Case No. IPR2013-00071
`
`joinder and to discourage late requests.”). The circumstances at issue here were
`
`contemplated by the Rules and are therefore not “special circumstances.”
`
`Moreover, if the Board treats denied petitions as “special circumstances”
`
`that justify waiving deadlines, then losing petitioners could always avoid
`
`deadlines. Accordingly, the circumstances here are not “special circumstances.”
`
`2.
`
`Petitioners’ circumstances do not warrant deviations
`from the general rule.
`
`Petitioners make three arguments why their “unique circumstances” warrant
`
`deviation from Rule 42.122. None are valid.
`
`
`
`Petitioners’ First Argument: Petitioners “have tried multiple times to
`
`participate in an inter partes review of the ’930 patent.” Mot. at 2. Petitioners’
`
`failed attempts do not justify discarding Rule 42.122. Petitioners assert (id.):
`
`First, Petitioners completely ignore their first failed Petition – they provide
`
`no reason why they could not have timely filed an initial petition that met the
`
`
`
`5
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`Case No. IPR2013-00071
`
`requisite threshold. As this Board previously recognized: “Petitioners provide no
`
`reason as to why they could not have asserted the prior art in Case IPR2013-00092,
`
`filed on December 19, 2012, or in another petition at that time.” Paper No. 16,
`
`IPR2013-00386 at 9. Their failure to do so does not justify disregarding the
`
`controlling Rule.
`
`Second, Petitioners’ argument does not pass the smell test. Petitioners
`
`understood that, in deciding a motion for joinder, the Board would be more likely
`
`to grant the motion if joinder would not (i) increase complexity, (ii) significantly
`
`affect the schedule, or (iii) prejudice the existing parties. See Paper No. 5,
`
`IPR2013-00386 (stating, among their reasons for relief: “Joinder will not impact
`
`the Board’s ability to complete the review in a timely manner … Joinder will
`
`promote efficiency … Joinder will not prejudice Network-1 or Avaya.”). Yet, as
`
`justification for disregarding the controlling the Rule, the Petitioners assert that
`
`they reasonably “understood” that the Board would be more likely to join to the
`
`existing Avaya IPR:
`
`• Option 2: a Petition that would (i) dramatically increase the complexity and
`
`scope of the existing IPR (by challenging a new claim, asserting three new
`
`grounds of unpatentability, asserting five new references, and including a
`
`new declaration), (ii) require dramatic modifications to the schedule, and
`
`(iii) prejudice the parties; than
`
`6
`
`
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`Case No. IPR2013-00071
`
`• Option 1: a Petition that mirrored the existing Avaya IPR and, as a result,
`
`would not (i) increase complexity or expand the scope of the existing IPR,
`
`(ii) require modifying the schedule dramatically, or (iii) significantly
`
`prejudice the parties.
`
`And they assert that while they considered Option 1, they believed that Option 2
`
`“was more likely to succeed” because it included one ground already at issue in the
`
`Avaya IPR (Matsuno). But Option 1 not only included, but was limited to, both
`
`grounds already at issue in the Avaya IPR. Petitioners’ position is not credible.
`
`Rather, Petitioners made a strategic decision in an attempt to significantly expand
`
`the scope of the existing Avaya IPR and failed. Petitioner’s calculated risk does
`
`not justify disregarding the controlling Rule.
`
`
`
`Petitioners’ Second Argument: “Petitioners will be greatly prejudiced if not
`
`joined” because they “will have to meet a much higher standard” before the court
`
`than before the Board. Mot. at 3. This argument fails at every level.
`
`First, if a party has the opportunity to timely file a proper petition but
`
`voluntarily chooses not to do so for strategic reasons, it is not prejudiced if it is
`
`precluded from later attempting to file such a petition – this is not prejudice but
`
`rather waiver. Here, Petitioners had every opportunity to include in both of their
`
`earlier petitions the arguments that they are currently presenting: “Petitioners
`
`provide no reason as to why they could not have asserted the prior art in Case
`
`7
`
`
`
`Case No. IPR2013-00071
`
`IPR2013-00092, filed on December 19, 2012, or in another petition at that time.”
`
`Paper No. 16, IPR2013-00386 at 9. They are not prejudiced because, based on
`
`strategic reasons, they previously chose to take different approaches that were
`
`rejected by the Board.
`
`Second, Petitioners’ potential exposure to a higher standard does not
`
`constitute prejudice. Petitioners cannot cite any authority suggesting that it is.
`
`There are hundreds of defendants challenging patents in district courts at the higher
`
`standard. None are suffering “great prejudice” based on the higher standard.
`
`Third, the actions of the majority of other defendants demonstrate that
`
`precluding a defendant from participating in IPR does not result in “great
`
`prejudice.” If an action would avoid “great prejudice,” one would expect most
`
`parties to perform that action, given the opportunity. All of the defendants in the
`
`district court litigation involving the ‘930 Patent had the opportunity to participate
`
`in an IPR of the ‘930 Patent. Most voluntarily chose not to. Therefore,
`
`challenging a patent in a court rather than before the Board is not “great prejudice.”
`
`Fourth, to the extent that any change in burden constitutes prejudice, in an
`
`adversarial proceeding such as this one, a change in burden for one party results in
`
`an equal-but-opposite change in burden for the opposing party. Accordingly,
`
`disregarding the Rule would increase any prejudice to Network-1 to the same
`
`extent that it would reduce any prejudice to Petitioners. Petitioners assert:
`
`8
`
`
`
`Case No. IPR2013-00071
`
`“Having to overcome a higher burden to get the same result is by definition
`
`prejudicial to Petitioners.” Mot. at 14. Turning Petitioners’ argument around,
`
`waiving a rule that would result in subjecting Network-1 to a lower standard to get
`
`the same result (invalidate its patent) is by definition prejudicial to Network-1,
`
`especially when it is Petitioners that are seeking the extraordinary relief of
`
`disregarding a controlling Rule.
`
`
`
`Petitioners’ Third Argument: “Joinder would enhance efficiency by avoiding
`
`duplicate efforts and inconsistencies.” Mot. at 13. This factor is only relevant
`
`when there are two related pending IPRs and joining the related IPRs (rather than
`
`having the two IPRs proceed separately) would avoid duplicate efforts and
`
`inconsistencies. Here, because Petitioners do not have a pending IPR (but instead
`
`have a proposed IPR that would only proceed if this motion is granted),
`
`Petitioners’ argument relating to duplicate efforts and inconsistencies is irrelevant.
`
`3. Waiving the Rule 42.122 time bar will not serve but rather is
`contrary to the public interest.
`
`Waiving a rule will not serve but rather is contrary to the public interest if it
`
`would discourage rather than encourage a strong public policy. There is a “strong
`
`public policy” to promote settlement in IPRs:
`
`There are strong public policy reasons to favor settlement between the
`
`parties to a proceeding. The Board will be available to facilitate
`
`settlement discussions, and where appropriate, may require a
`
`settlement discussion as part of the proceeding.
`
`9
`
`
`
`Case No. IPR2013-00071
`
`48768 Federal Register /Vol. 77, No. 157 (emphasis added). Waiving the Rule
`
`42.122 time bar to allow joinder would discourage settlement. Avaya and
`
`Network-1 are currently engaging in settlement discussions based on the premise
`
`that Avaya and Dell are the only petitioners. If the Petitioners are permitted to
`
`join, they would discourage settlement because settling with Avaya and Dell could
`
`not eliminate the Avaya IPR. In fact, during the conference with the Board,
`
`Petitioners stated that their purpose for moving to join the Avaya IPR in an
`
`“understudy” role is to prevent a settlement of the Avaya IPR. Accordingly,
`
`waiving the Rule 42.122 time bar is contrary to a strong public policy.
`
`II. Reason 2: Petitioners’ Motion should be denied because the
`accompanying Petition fails to meet the requisite threshold under
`Section 314.
`
`Joinder is only appropriate if the Board determines that the new Petition
`
`“warrants the institution of an inter partes review under section 314.” 35 U.S.C.
`
`§315(c). As demonstrated in Network-1’s (a) Preliminary Response to the Dell
`
`IPR Petition (Paper No. 14, IPR2013-00385), and (b) Response in the Avaya IPR
`
`(Paper No. 42, IPR2013-00071), Petitioners fail to meet the requisite threshold
`
`under Section 314.
`
`III. Conclusion.
`
`For the reasons set forth above, Petitioners’ Motion should be denied.
`
`10
`
`
`
`Case No. IPR2013-00071
`
`Respectfully submitted,
`
`BUCHANAN INGERSOLL & ROONEY PC
`
`
`
`
`
`
`
`By: /Robert G. Mukai/
`Robert G. Mukai, Esq.
`Registration No. 28,531
`Counsel for NETWORK-1 SECURITY
`
` SOLUTIONS, INC.
`
`
`
`
`
`Date: August 13, 2013
`
`1737 King Street, Suite 500
`Alexandria, VA 22314
`Telephone (703) 836-6620
`
`
`
`
`
`11
`
`
`
`Case No. IPR2013-00071
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that a true and correct copy of the foregoing PATENT
`
`OWNER’S OPPOSITION TO PETITIONERS’ MOTION FOR JOINDER
`
`FILED IN IPR2013-00495 is being served upon counsel for Petitioners this 13th
`
`day of August, 2013, via electronic mail, as follows:
`
`Jeffrey D. Sanok
`Jonathan Lindsay
`CROWELL & MORING LLP
`1001 Pennsylvania Avenue, NW
`Washington, DC 20004
`AV1-PRPS@Crowell.com
`Counsel for Avaya Inc.
`
`Lionel M. Lavenue, Esq.
`Erika Arner, Esq.
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`Two Freedom Square
`11955 Freedom Drive
`Reston, VA 20190-5675
`(571) 203-2700
`lionel.lavenue@finnegan.com
`erika.arner@finnegan.com
`Counsel for Sony in IPR2013-00495
`
`Michael J. Scheer
`Thomas M. Dunham
`WINSTON & STRAWN LLP
`200 Park Ave.
`New York, NY 10166
`(212) 294-4700
`mscheer@winston.com
`tdunham@winston.com
`Counsel for Dell Inc.
`
`Robert J. Walters, Esq.
`Charles J. Hawkins, Esq.
`MCDERMOTT WILL & EMERY LLP
`500 North Capitol Street, N.W.
`Washington, DC 20001
`(202) 756-8019
`rwalters@mwe.com
`chawkins@mwe.com
`Counsel for HP in IPR2013-00495
`
`
`
`
`Date: August 13, 2013
`
`
`
`
`
`
`
`
`
`
`
`
`
`/Robert G. Mukai/
`Robert G. Mukai, Esq.
`Registration No. 28,531
`Counsel for NETWORK-1 SECURITY
` SOLUTIONS, INC.
`
`
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