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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`PETROLEUM GEO-SERVICES INC.
`and
`ION GEOPHYSICAL CORPORATION
`AND ION INTERNATIONAL S.A.R.L.
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`Petitioners,
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`v.
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`WESTERNGECO L.L.C.
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`Patent Owner.
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`____________
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`Case IPR2014-006891
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`U.S. Patent No. 7,293,520
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`____________
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`PATENT OWNER’S REQUEST FOR REHEARING
`UNDER 37 C.F.R. § 42.71
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`1 Case IPR2015-00565 has been joined with this proceeding. This Request for
`Rehearing is being concurrently filed in IPR2015-00565.
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`Pursuant to 37 C.F.R. § 42.71(d), Patent Owner, WesternGeco L.L.C.
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`(“Patent Owner” or “WesternGeco”), requests rehearing of the Board’s Order
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`granting Petitioners’, ION Geophysical Corporation’s and ION International
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`S.A.R.L.’s (collectively, “Petitioners” or “ION”), Motion for Joinder (Paper No.
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`54, “the Joinder Order”).
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`I.
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`INTRODUCTION
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`The Board exceeded its statutory authority when it granted joinder of
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`IPR2015-00565 (“the ’565 IPR”) to this proceeding. Section 315(c) is clear on its
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`face—the Board cannot grant joinder until “after receiving a preliminary response
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`under section 313 or the expiration of the time for filing such a response.” 35
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`U.S.C. § 315(c). The Board’s failure to follow this controlling statute renders its
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`joinder improper.
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`Moreover, the Board’s Joinder Order violates due process because it
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`prevents Patent Owner from raising any petitioner-specific defense against ION.
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`In addition to depriving Patent Owner of its statutorily required preliminary
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`response, the Board compounded that error by providing that the Scheduling Order
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`“remains unchanged, and shall govern the joined proceedings.” Paper No. 54.
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`Because the Board joined ION after Patent Owner filed its Patent Owner Response,
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`Patent Owner also lost its opportunity to raise any petitioner-specific defenses
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`against ION in a Patent Owner Response. In other words, the Board’s ruling
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`1
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`precludes Patent Owner from ever raising any defenses against ION. This denial
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`of due process is all the more troubling in that the Patent Owner previously
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`informed the Board that it intended to raise such defenses. See, e.g., IPR2015-
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`00565, Paper No. 10.
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`Accordingly, Patent Owner respectfully requests that this Board (1) vacate
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`its Joinder Order and (2) provide Patent Owner with a reasonable opportunity to
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`file a preliminary response as mandated by § 315(c). If, after considering Patent
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`Owner’s preliminary response, the Board nevertheless decides to grant joinder
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`(which Patent Owner maintains should be denied), Patent Owner also respectfully
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`requests (3) the opportunity to file a Patent Owner Response to raise petitioner-
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`specific defenses against ION.
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`II. LEGAL STANDARD
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`“A party dissatisfied with a decision may file a request for rehearing,
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`without prior authorization from the Board.” 37 C.F.R. § 42.71(d). “The request
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`must specifically identify all matters the party believes the Board misapprehended
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`or overlooked, and the place where each matter was previously addressed in a
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`motion, an opposition, or a reply.” Id.
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`Under 37 C.F.R. § 42.71(c), “[w]hen rehearing a decision on petition, a
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`panel will review the decision for an abuse of discretion.” An abuse of discretion
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`“occurs where the decision is based on an erroneous interpretation of the law, on
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`2
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`factual findings that are not supported by substantial evidence, or represents an
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`unreasonable judgment in weighing relevant factors.” Star Fruits S.N.C. v. United
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` States, 393 F.3d 1277, 1281 (Fed. Cir. 2005); see also Japanese Found. For
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`Cancer Research v. Lee, 773 F.3d 1300, 1304 (Fed. Cir. 2014) (“An agency abuses
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`its discretion where the decision is based on an erroneous interpretation of the
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`law.”) (internal quotations omitted).
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`III. The Board’s Grant of Joinder Was Based On An Erroneous
`Interpretation of 35 U.S.C. § 315(c)
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`The Board’s decision to grant joinder exceeded the Board’s statutory
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`authority. The plain language of 35 U.S.C. § 315(c) requires that a Patent Owner
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`be given the opportunity to submit a preliminary response prior to the Board
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`granting joinder. The Board here, however, denied Patent Owner such an
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`opportunity in direct violation of the statute.
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`“[T]he starting point in every case involving construction of a statute is the
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`language itself.” Gilead Scis., Inc. v. Lee, 778 F.3d 1341,1347 (Fed. Cir. 2015)
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`(quoting U.S. v. Hohri, 482 U.S. 64, 70 (1987)) (internal quotations omitted); see
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`also Target Corp. v. Destination Maternity Corp., Case IPR2014-00508, Paper 28
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`(Feb. 12, 2015) (“Statutory interpretation begins with the language of the statute
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`itself.”). “In construing a statute . . . [courts] begin by inspecting its language for
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`plain meaning. If the words are unambiguous, no further inquiry is usually
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`3
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`required.” Medrad, Inc. v. Tyco Healthcare Grp. LP, 466 F.3d 1047, 1051 (Fed.
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`Cir. 2006). Additionally, when interpreting statutes, courts “must give effect to
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`every word of a statute wherever possible.” Leocal v. Ashcroft, 543 U.S. 1, 12
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`(2004).
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`The statute governing joinder guarantees the Patent Owner the right to
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`submit a preliminary response:
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`If the Director institutes an inter partes review, the Director, in his or
`her discretion, may join as a party to that inter partes review any
`person who properly files a petition under section 311 that the
`Director, after receiving a preliminary response under section 313 or
`the expiration of the time for filing such a response, determines
`warrants the institution of an inter partes review under section 314.
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`35 U.S.C. § 315(c) (emphasis added).
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`35 U.S.C. § 313 in turn provides that “the patent owner shall have the right
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`to file a preliminary response to the petition, within a time period set by the
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`Director,” which the PTO has established to be “no later than three months after
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`the date of a notice indicating that the request to institute an inter partes review has
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`been granted a filing date.” See 37 C.F.R. § 42.107(b) (emphasis added).
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`The Board accorded ION’s petition a filing date on February 4, 2015. See
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`IPR2015-00565, Paper No. 6 (“Filing Date Notice”). That Filing Date Notice set a
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`deadline of May 4, 2015 for Patent Owner to file its preliminary response. Id. at 2.
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`4
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`On April 23, 2015, however, the Board reversed course and improperly terminated
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`the ’565 IPR and joined it with this proceeding, effectively barring any preliminary
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`response. Because Patent Owner had not filed a preliminary response and the time
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`for doing so had not yet lapsed, the Board accordingly abused its discretion. 35
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`U.S.C. § 315(c).
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`Patent Owner respectfully requests that the Board vacate its joinder decision
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`and provide Patent Owner with four weeks to file its statutorily guaranteed
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`preliminary response before deciding whether to grant joinder.
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`IV. The Board’s Grant of Joinder Deprives Patent Owner of its Due Process
`Rights
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`The Board deprived Patent Owner of its due process rights by preventing it
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`from ever presenting any petitioner-specific defenses against ION. Not only did
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`the Board’s decision deprive Patent Owner of its statutory right to filing a
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`preliminary response, but the Board also deprived Patent Owner from filing a
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`Patent Owner Response after joinder.2 The Patent Owner Response in this
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`proceeding was filed prior to joinder. Thus Patent Owner did not—and could
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`not—raise any ION-specific defenses or arguments. Because the Joinder Order
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`requires that the Scheduling Order for this proceeding “remain[] unchanged,” it
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`2 Under 35 U.S.C. § 316(a)(8), Patent Owner must be provided the opportunity to
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`file a response to the petition after an inter partes review has been instituted.
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`5
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`precludes Patent Owner from filing a Patent Owner Response to ION’s Petition in
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`the joined proceeding. Thus, Patent Owner has absolutely no opportunity to raise
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`any petitioner-specific defenses against ION.
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`“The fundamental requirement of due process is the opportunity to be heard
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`at a meaningful time and in a meaningful manner.” Matthews v. Eldridge, 424
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`U.S. 319, 333 (1975)(internal quotations omitted). Thus, “[t]he indispensable
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`ingredients of due process are notice and an opportunity to be heard by a
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`disinterested decision-maker.” Abbott Labs. v. Cordis Corp., 710 F.3d 1318, 1328
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`(Fed. Cir. 2013). When assessing the requirements of due process, courts consider
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`“[f]irst, the private interest that will be affected by the official action; second, the
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`risk of an erroneous deprivation of such interest through the procedures used, and
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`the probable value, if any of additional or substitute procedural safeguards; and
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`finally, the Government’s interest, including the function involved and the fiscal
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`and administrative burdens that the additional or substitute procedural requirement
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`would entail.” Matthews, 424 U.S. at 335.
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`Due process applies to the improper taking of property rights, and courts
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`have routinely held that patents are considered property for the purpose of due
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`process analysis. Fla. Prepaid Postsecondary Educ. Expense Bd. v. College Sav.
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`Bank, 527 U.S. 627, 642 (1999) (“Patents . . . have long been considered a species
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`of property”); see also Abbott Labs., 710 F.3d at 1327 (“a patent is a property right
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`6
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`protected by the Due Process Clause”). Validly issued U.S. Patent No.7,293,520
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`(“the ’520 patent”) is considered Patent Owner’s property, and Patent Owner
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`therefore has a significant interest in retaining its rights in it. The Board’s Joinder
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`Order, however, impermissibly deprives Patent Owner of these rights by
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`preventing Patent Owner from ever raising petitioner-specific defenses against
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`ION.
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`Patent Owner informed the Board in its Joinder Opposition Brief (IPR2015-
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`00565, Paper No. 10), as well as in conference calls (Ex. 10643), that ION’s
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`petition raises serious petitioner-specific issues regarding, inter alia, real party in
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`interest (“RPII”), collateral estoppel, and res judicata. Despite this knowledge, the
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`Board nevertheless joined the proceedings, depriving Patent Owner of any formal
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`opportunity to raise and brief these issues, even though the Board’s own rules
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`provide such an opportunity. See 37 C.F.R. § 42.107 (providing for a preliminary
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`response); see also 37 C.F.R. § 42.120 (providing for a Patent Owner Response).
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`As it stands now, Patent Owner will never be able to argue its case against
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`ION because it is prevented under the Board’s rules from raising any new evidence
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`or arguments at the oral hearing. 77 Fed. Reg. 48756, 48768 (Aug. 14, 2012) (“No
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`new evidence or arguments may be presented at the oral argument.”).
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`Accordingly, Patent Owner has had no opportunity to defend its property rights in
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`3 Filed as Ex. 2007 in IPR2015-00565.
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`7
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`the ’520 patent against ION’s challenge. Because the government cannot take
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`Patent Owner’s property rights away without the opportunity to be heard, the
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`Board’s joinder decision is a violation of Patent Owner’s due process rights.
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`V. The Board’s Grant of Joinder Overlooks the Complications Joinder
`Raises
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`Patent Owner alerted the Board to the many procedural difficulties that
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`would arise if ION were joined. See IPR2015-00565, Paper No. 10 at 11-12.
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`Patent Owner now sees these difficulties playing out to its detriment. For example,
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`on the eve of an important deposition, despite already having designated a lead and
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`back-up counsel in this proceeding, ION filed an emergency motion for an
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`admission pro hac vice so that an attorney other than those of record for ION could
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`attend—but not participate—in the deposition. Rather than focusing on the
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`impending deposition, this forced Patent Owner to engage in rounds of
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`communications and expedited briefing to address a procedural issue instead of the
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`merits of this review. For example, the Patent Owner was given only two and a
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`half hours to draft and file an opposition to the pro hac vice motion. See Ex.
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`2136.4
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`This is but one example of the many complexities and prejudices that Patent
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`Owner will suffer if ION remains joined to this IPR. Should the Board vacate its
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`4 Filed as Ex. 2006 in IPR2015-00565.
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`8
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`Joinder Order as Patent Owner hereby requests, the Board should further
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`reconsider the delay, timing, and complexities that ION’s joinder raises as well as
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`the ensuing prejudice to Patent Owner, and deny Joinder.
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`VI. CONCLUSION
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`This Board exceeded its statutory authority under 35 U.S.C. § 315(c) and
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`denied Patent Owner due process when it joined ION to this proceeding. The
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`Joinder itself was unnecessary and will prejudice Patent Owner, and the means by
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`which it was effectuated have denied Patent Owner the right to raise ION-specific
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`defenses and otherwise protect its property interests. For these reasons, Patent
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`Owner respectfully requests that the Board:
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`1. Vacate its Joinder Order;
`2. Provide Patent Owner with a reasonable opportunity to file a preliminary
`response; and
`3. Deny ION’s motion for joinder.
`While Patent Owner believes the Board should deny joinder, should the Board
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`nevertheless grant joinder, Patent Owner respectfully requests that the Board:
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`4. Provide a reasonable opportunity to file a Patent Owner Response.
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`Respectfully submitted,
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`Oblon, McClelland, Maier &
`Neustadt, LLP
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`
`
`/Michael L. Kiklis/
`Michael L. Kiklis (Reg. No. 38,939)
`Attorney for Patent Owner
`WESTERNGECO L.L.C.
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`10
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`Dated: May 7, 2015
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`
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`Customer Number
` 22850
`Tel. (703) 413-3000
`Fax. (703) 413-2220
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`Patent Owner’s Request for Rehearing
`Case IPR2014-00689
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6(e), the undersigned certifies service of
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`PATENT OWNER’S REQUEST FOR REHEARING UNDER 37 C.F.R. § 42.71
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`AND EXHIBIT 2136 on the counsel of record for the Petitioners by filing this
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`document through the Patent Review Processing System as well as delivering a
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`copy via electronic mail to the following address:
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`
`David Berl
`dberl@wc.com
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`Jessamyn Berniker
`jberniker@wc.com
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`Thomas S. Fletcher
`tfletcher@wc.com
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`Christopher Suarez
`csuarez@wc.com
`
`W. Karl Renner
`Roberto Devoto
`IPR37136-0004IP1@fr.com
`
`
`
`
`
`/Michael L. Kiklis/
`Michael L. Kiklis (Reg. No. 38,939)
`Attorney for Patent Owner
`
`WESTERNGECO L.L.C.
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`
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`11
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`Dated: May 7, 2015