IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`_________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_________________
`
`Paper No. 23
`
`
`
`
`TARGET CORPORATION
`Petitioner
`
`v.
`
`DESTINATION MATERNITY CORPORATION
`Patent Owner
`
`__________________
`
`Case IPR2014-00509
`Patent No. RE43,531 E
`__________________
`
`
`
`
`
`Filed: November 6, 2014
`
`Before LORA M. GREEN, THOMAS L. GIANNETTI,
`JENNIFER S. BISK, MICHAEL J. FITZPATRICK, and
`MITCHELL G. WEATHERLY, Administrative Patent Judges.
`
`
`
`PETITIONER’S REPLY IN SUPPORT OF ITS
`MOTION FOR REHEARING PURSUANT TO 37 C.F.R. § 42.71(d)
`
`
`
`_________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_________________
`
`Paper No. 23
`
`
`
`
`TARGET CORPORATION
`Petitioner
`
`v.
`
`DESTINATION MATERNITY CORPORATION
`Patent Owner
`
`__________________
`
`Case IPR2014-00509
`Patent No. RE43,531 E
`__________________
`
`
`
`
`
`Filed: November 6, 2014
`
`Before LORA M. GREEN, THOMAS L. GIANNETTI,
`JENNIFER S. BISK, MICHAEL J. FITZPATRICK, and
`MITCHELL G. WEATHERLY, Administrative Patent Judges.
`
`
`
`PETITIONER’S REPLY IN SUPPORT OF ITS
`MOTION FOR REHEARING PURSUANT TO 37 C.F.R. § 42.71(d)
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`I.
`
`ARGUMENT ................................................................................................... 1
`
`A. DMC Fails to Show that Target’s Analysis of § 315(c) Is
`Incorrect ................................................................................................. 1
`
`B.
`
`C.
`
`D.
`
`E.
`
`The PTO’s Rules in 37 C.F.R. Chapter 42 Already Address and
`Mitigate Undue “Harassment of Patent Owners” ................................. 1
`
`The Stage of the Related Instituted Proceedings Is Not an
`Absolute Barrier to Joinder ................................................................... 2
`
`The PTAB Has Full Authority to Seat an Expanded Panel .................. 3
`
`Target Identified What It Believes the PTAB
`“Misapprehended” ................................................................................. 5
`
`II.
`
`CONCLUSION ................................................................................................ 5
`
`US.55176349.01
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`-i-
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`I.
`
`ARGUMENT
`A. DMC Fails to Show that Target’s Analysis of § 315(c) Is Incorrect
`Target has not sought, and is not seeking, to file serial joinder motions or use
`
`joinder to obtain review of wholly unrelated patents or claims. Far short of
`
`showing particularly how or why Target’s analysis of § 315(c) is incorrect, DMC
`
`merely labels the “results” of that analysis “untenable.” (Paper 22, at 2-4.) But
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`§ 315(c) itself provides the PTAB with full authority—“discretion”—to police and
`
`prevent the “untenable” scenarios DMC prophesizes. See 35 U.S.C. § 315(c).
`
`Moreover, DMC does not claim that any of those scenarios are present here.
`
`B.
`
`The PTO’s Rules in 37 C.F.R. Chapter 42 Already Address and
`Mitigate Undue “Harassment of Patent Owners”
`
`DMC’s claim that “harassment” was “one of Congress’s greatest concerns”
`
`in enacting the AIA, (Paper 22, at 4), is an overstatement. As evidenced by the
`
`AIA’s post-grant review processes, such as IPR, Congress was far more concerned
`
`with “improving patent quality.” H.R. REP. NO. 112-98, pt. 1, at 39-40 (2011).
`
`Moreover, even if “harassment” was one of many Congressional concerns, the
`
`PTO’s rules already address it. As the Final Committee Report notes, “the
`
`Committee intends for the USPTO to address potential abuses . . . under its
`
`expanded procedural authority.” Id. at 48; see also 35 U.S.C. § 316. The PTO
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`used that authority to draft the rules in 37 C.F.R. Chapter 42, which are designed to
`
`prevent various “abuses,” including by imposing sanctions for misconduct, see 37
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`US.55176349.01
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`C.F.R. § 42.12; see also 35 U.S.C. § 316(a)(6), and time limits for taking certain
`
`actions, such as seeking joinder, see 37 C.F.R. § 42.122(b); see also 35 U.S.C. §
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`316(a)(12). DMC does not claim that any of these rules have been breached.
`
`Moreover, DMC cannot reasonably claim any “harassment” here. Target is
`
`simply seeking to do now what DMC could have done itself, but failed to do—to
`
`have the validity of DMC’s patents reviewed by the PTO in view of a significant
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`prior art reference, Asada (see Exs. 1034, 1035), which DMC knew of yet withheld
`
`both from the PTO, during reissue proceedings, and Target, during litigation. (See
`
`Paper 3, at 10-11.) If DMC were truly concerned with “assum[ing] quiet title”
`
`over its patents, (Paper 22, at 4), DMC would have allowed either the PTO or the
`
`PTAB to assess their validity in view of Asada. DMC has done neither.
`
`C. The Stage of the Related Instituted Proceedings Is Not an
`Absolute Barrier to Joinder
`
`DMC argues that the stage of the related proceedings (IPR2013-00530–533)
`
`should preclude joinder. (Paper 22, at 6.) DMC is incorrect. The PTAB’s final
`
`decisions in those proceedings are not “due” until mid-February 2015. See 35
`
`U.S.C. § 316(a)(11). But the PTAB has discretion to extend that time period “by
`
`not more than six months” in any case and further “adjust” the statutory “time
`
`periods . . . in the case of joinder.” Id.; 37 C.F.R. § 42.100(c). The PTAB also has
`
`broad discretion to “determine a proper course of conduct” in proceedings in which
`
`unique issues arise. Id. § 42.5(a). And although the PTAB construes its rules “to
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`US.55176349.01
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`
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`secure the just, speedy, and inexpensive resolution of every proceeding,” id. §
`
`42.1(b), it should not elevate “speedy” over “just” in matters, such as this one,
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`where the mere passage of time—after Target timely filed its joinder motion—
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`could undermine Target’s ability to obtain joinder and, thus, institution of IPR.
`
`Given the inequity and injustice that would arise if, on rehearing, Target’s joinder
`
`motion is considered on its merits but denied simply because of the stage of the
`
`related proceedings, this is precisely the situation in which the PTAB can and
`
`should exercise its authority to withhold its final decisions in—or, pursuant to 37
`
`C.F.R. § 42.122(a), stay—those proceedings for a short time, both to effect joinder
`
`and, assuming institution of IPR, allow the parties to complete trial.
`
`D. The PTAB Has Full Authority to Seat an Expanded Panel
`DMC’s arguments that creating an expanded panel “would violate due
`
`process, the APA, and 35 U.S.C. § 2(b)(2),” (Paper 22, at 7-13), are overwrought.
`
`Target makes its request pursuant to the PTAB’s Standard Operating Procedure 1,
`
`§ III (Rev. 13, Feb. 12, 2009) (“SOP 1”). As DMC admits, the PTAB’s
`
`predecessor, the BPAI, used SOP 1 to create “expanded panels.” (Paper 22, at 11.)
`
`DMC does not argue that SOP 1 is improper per se,1 just that “Target provides no
`
`legal authority” showing that it “applies here.” (Id.) SOP 1 does apply here,
`
`1 Indeed, it is not. In In re DBC, 545 F.3d 1373, 1379 (Fed. Cir. 2008), the Court
`
`quoted the prior version of SOP 1 without questioning its authority or validity.
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`US.55176349.01
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`
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`because the PTAB stepped into the shoes of the BPAI in all respects, including in
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`“any document of or pertaining to” the BPAI, such as SOP 1. 35 U.S.C. § 6(a).
`
`And as DMC points out, the PTAB has already “enlarged” the panel in this
`
`proceeding from three to five judges, (Paper 22, at 7), but DMC ignores that the
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`PTAB did so based on having authority to do so. SOP 1 is that authority.
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`Even if, arguendo, SOP 1 is somehow inapplicable to IPRs, § 6(c) makes
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`clear that each IPR “shall be heard by at least 3 members” of the PTAB. 35 U.S.C.
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`§ 6(c) (emphasis added). Thus, while § 6(c) sets at three the statutory minimum
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`number of judges, it does not limit the PTAB’s authority to seat expanded panels
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`of more than three judges. The PTO’s IPR rules are consistent: “Panel means at
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`least three members of the Board.” 37 C.F.R. § 42.2 (second emphasis added). A
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`further expanded panel here does not require any new rule or rulemaking process.
`
`Furthermore, rehearing by an expanded panel, and rehearing generally, is
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`especially appropriate here, because there may be no meaningful route for
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`appellate review of the PTAB’s decision denying joinder in this or any other
`
`similar proceeding. Target cannot, as of right, appeal the PTAB’s decision
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`declining to institute IPR (which appeal would address the PTAB’s underlying
`
`joinder decision), see St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 749
`
`F.3d 1373, 1375-76 (Fed. Cir. 2014), and the Federal Circuit has declined to
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`address a non-institution decision by way of mandamus, see In re Dominion
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`US.55176349.01
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`Dealer Solutions, LLC, 749 F.3d 1379, 1381 (Fed. Cir. 2014). Moreover, at least
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`one district court has held that 35 U.S.C. § 314(d) deprives district courts of
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`subject matter jurisdiction to hear claims, brought under the Administrative
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`Procedure Act, attacking PTAB decisions declining to institute IPR. See Dominion
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`Dealer Solutions, LLC v. Lee, No. 3:13-cv-00699, 2014 WL 1572061 (E.D. Va.
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`Apr. 18, 2014). Thus, as a practical matter, a rehearing of this matter before an
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`expanded panel may be the only way for the both the PTAB and members of the
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`patent bar to obtain certainty on the issue of joinder practice presented here.
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`Target Identified What It Believes the PTAB “Misapprehended”
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`E.
`Target’s Motion clearly states Target’s position that the PTAB abused its
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`discretion in denying joinder based on an erroneous interpretation of § 315(c).
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`(Paper 20, at 1, 4-5.) DMC’s argument that Target’s Motion fails to meet 37
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`C.F.R. § 42.71(d) because it does not recite the words “misapprehended or
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`overlooked,” (Paper 22, at 13-15), misplaces form over substance. Further, that
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`Target seeks, on rehearing, the result backed by the dissent does not—contrary to
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`DMC’s conclusory assertions—mean that Target “only reiterates arguments made
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`by the dissent.” (See id. at 1, 14-15.) Target’s Motion complies with § 42.71(d).
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`II. CONCLUSION
`Target respectfully requests that the PTAB grant Target’s Motion.
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`Dated: November 6, 2014
`
`By:
`
`/Norman J. Hedges/
`Norman J. Hedges (Reg. No. 44,151)
`
`
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`US.55176349.01
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`-5-
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`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. § 42.6(e), I hereby certify that I caused a true and
`correct copy of the foregoing Petitioner’s Reply in Support of Its Motion for
`Rehearing Pursuant to 37 C.F.R. § 42.71(d) to be served via e-mail, as a PDF file
`attachment, on November 6, 2014, on the following:
`
`Paul A. Taufer
`Michael L. Burns
`DLA PIPER LLP (US)
`One Liberty Place
`1650 Market St., Ste. 4900
`Philadelphia, PA 19103-7300
`Telephone: (215) 656-3385
`Facsimile:
`(215) 606-3385
`Paul.Taufer@dlapiper.com
`Michael.Burns@dlapiper.com
`
`Stuart E. Pollack
`DLA PIPER LLP (US)
`1251 Avenue of the Americas
`27th Floor
`New York, NY 10020-1104
`Telephone: (212) 335-4964
`Facsimile:
`(212) 884-8464
`Stuart.Pollack@dlapiper.com
`
`By:
`
`
`
`/s/ Norman J. Hedges
`Norman J. Hedges (Reg. No. 44,151)
`FAEGRE BAKER DANIELS LLP
`300 N. Meridian St., Ste. 2700
`Indianapolis, IN 46204-1750
`Telephone: 317-237-0300
`Facsimile: 317-237-1000
`Norman.Hedges@FaegreBD.com
`
`
`
`Dated: November 6, 2014
`
`US.55176349.01
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