UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`SkyHawke Technologies, LLC
`Petitioner
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`v.
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`L&H Concepts, LLC
`Patent Owner
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`Case IPR2014-01485
`Patent 5,779,566
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`PATENT OWNER’S RESPONSE TO
`MOTION FOR JOINDER
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`SkyHawke Technologies, LLC
`Petitioner
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`v.
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`L&H Concepts, LLC
`Patent Owner
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`Case IPR2014-01485
`Patent 5,779,566
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`PATENT OWNER’S RESPONSE TO
`MOTION FOR JOINDER
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`Case IPR2014-01485
`Attorney Docket No: 30912-0003IP3
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`TABLE OF CONTENTS
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`I. Material Facts in Dispute ................................................................................... 1
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`II. L&H asserts that joinder is inappropriate and should be denied. ...................... 2
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`A. L&H will be unduly prejudiced if the concurrently filed 1485
`Petition is joined with the instituted 438 Petition, because joinder
`will substantially increase costs and likely delay resolution of the
`instituted IPRs .................................................................................. 3
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`B. SkyHawke will not suffer undue prejudice if joinder is denied,
`because SkyHawke had sufficient knowledge, information, and
`resources at the outset of these proceedings to raise validity
`challenges against all claims of the ’566 patent in the 437/438
`Petitions. ........................................................................................... 7
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`C. The Board should deny joinder as a matter of public policy,
`because granting joinder in this instance may encourage future
`Petitioners to withhold claim validity challenges
`opportunistically. ........................................................................... 10
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`III. Conclusion ........................................................................................................ 11
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`Case IPR2014-01485
`Attorney Docket No: 30912-0003IP3
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`TABLE OF AUTHORITIES
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`CASES
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`Sony Corp. and Hewlett-Packard Co. v. Network-1 Security Solutions,
`Inc.,
`IPR2013-00495 (September 16, 2013), Paper 13 ........................................... 2, 10
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`ZTE Corp. and ZTE (USA) Inc. v. ContentGuard Holdings Inc.,
`IPR2013-00454 (September 25, 2013), Paper 12 ................................................. 9
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`OTHER AUTHORITIES
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`37 C.F.R. § 15(a)(3) ................................................................................................... 8
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`37 C.F.R. § 42.1(b) .................................................................................................... 3
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`37 C.F.R §42.24(a) ..................................................................................................... 8
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`Case IPR2014-01485
`Attorney Docket No: 30912-0003IP3
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`Pursuant to 37 C.F.R. § 42.23(a), the patent owner, L&H Concepts, LLC
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`(“L&H” or “Patent Owner”), hereby submits the following Opposition in response
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`to the Petitioner’s motion for joinder (“SkyHawke’s Motion”) of the concurrently
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`filed petition, SkyHawke Technologies, LLC v. L&H Concepts, LLC, Case No.
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`IPR2014 01485 (“the 1485 Petition”), for inter partes review of claims 6, 15, and 16
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`of U.S. Patent No. 5,779,566 (“the ʼ566 patent”) with the instituted inter partes
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`review styled SkyHawke Technologies, LLC v. L&H Concepts, LLC, Case No.
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`IPR2014-00438 concerning the same patent (“the 438 Petition”).
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` Patent Owner respectfully requests that this Board deny SkyHawke’s
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`Motion. For the reasons set forth below, Patent Owner considers the 1485 Petition
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`and motion for joinder to be unnecessary and inappropriate.
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`I. MATERIAL FACTS IN DISPUTE
`With regard to the Statement of Material Facts presented by SkyHawke (see
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`SkyHawke’s Motion, Pages 1-4), L&H disputes the characterization of the
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`previously challenged claims as “materially identical” to the newly challenged
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`claims 6, 15, and 16. See SkyHawke’s Motion, Page 4. Additionally, SkyHawke’s
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`statement of material facts claims that no initial status conference was held in the
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`Southern District of Mississippi. In fact, the parties did confer with Magistrate Judge
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`Anderson on May 14, 2014. Though the conference was continued for further
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`discussion at a later date, its commencement served to reopen discovery, allowing
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`1
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`Attorney Docket No: 30912-0003IP3
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`L&H to amend its interrogatory responses to identify additional claims of the ’566
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`patent which L&H had recently determined to be infringed.
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`II. L&H ASSERTS THAT JOINDER IS INAPPROPRIATE AND
`SHOULD BE DENIED.
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`While joinder may be appropriate in some cases, the facts of this case strongly
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`indicate that joinder is not appropriate here. See Sony Corp. and Hewlett-Packard
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`Co. v. Network-1 Security Solutions, Inc., IPR2013-00495 (September 16, 2013),
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`Paper 13 at 8 (clarifying that joinder is not automatic, and “the fact that joinder is
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`permitted in one case under one set of facts does not mean it will be allowed in
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`another case under a different set of facts.”). First, L&H will be required to expend
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`considerable additional costs and suffer unilateral prejudice if the concurrently filed
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`petition for inter partes review is joined with the 438 IPR. Second, SkyHawke will
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`not suffer undue prejudice if the concurrently filed petition for inter partes review is
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`not joined to the 438 IPR. Finally, the Board should deny joinder as a matter of
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`public policy and take a position that advocates the filing of procedurally efficient
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`and concise petitions. Granting joinder in this instance will encourage future
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`Petitioners to withhold claim validity challenges opportunistically, only to raise
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`them in a procedurally disruptive manner.
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`A. L&H will be unduly prejudiced if the concurrently filed 1485
`Petition is joined with the instituted 438 Petition, because joinder
`will substantially increase costs and likely delay resolution of the
`instituted IPRs
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`37 C.F.R. § 42.1(b) states that the rules governing the Patent Trial and Appeal
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`Board – including those governing joinder - should be construed to secure the just,
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`speedy, and inexpensive resolution of every proceeding. These rules apply to both
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`the Petitioner and the Patent Owner equally. SkyHawke, however, has adopted a
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`serial petition strategy that has multiplied and will further multiply the costs, trouble,
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`and expense of L&H defending its single patent. Rather than facing a single—and
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`potentially efficient—proceeding, L&H has already been forced to have its counsel
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`review and preliminarily respond to two IPR petitions in the 437 and 438 IPRs. It
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`now faces the requirement of preparing two responses in those IPRs, including the
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`need to depose SkyHawke’s expert. If joinder is granted, L&H will then need to file
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`yet another preliminary response, conduct yet another deposition, and prepare yet
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`another response. As described below, while this serial filing may not trouble a large
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`entity such as SkyHawke, the substantial additional costs and procedural complexity
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`prejudice L&H and undermine the fundamental requirements of 37 C.F.R. § 42.1(b).
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`First, if SkyHawke’s motion for joinder is granted, L&H will be required to
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`prepare a preliminary response to the 1485 IPR petition. L&H has already been
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`required to prepare preliminary responses to two separate IPR petitions (the 437 IPR
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`Attorney Docket No: 30912-0003IP3
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`and 438 IPR) and now faces the specter of having to prepare a third lengthy response.
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`Moreover, because the full response in the 437 and 438 IPR is due prior to
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`preliminary response deadline for the 1485 IPR, Patent Owner will be required to
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`prepare three full responses as well as three preliminary responses. Notably,
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`Petitioner was only willing to agree to postpone the due dates for the full responses
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`in the 437 and 438 IPRs if L&H agreed to shorten its preliminary response deadline
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`in the 1485 IPR to less than one month.
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`Given the due dates for the full response in the 437 and 438 IPRs in
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`November, L&H has incurred substantial costs, including significant travel costs,
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`preparing for an upcoming deposition of Petitioner’s expert on October 15, 2014 for
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`the already-instituted 437/438 Petitions. Patent Owner also expects to be required
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`to expend considerable costs on an expert in support of the 437 and 438 response.
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`Instituting and joining the 1485 Petition will require L&H to expend additional
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`resources and incur additional costs to depose SkyHawke’s expert a second time as
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`well as retain an expert in support of the response in the third IPR.1
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`1 Although Petitioner agrees in its motion to allow Patent Owner to depose its
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`expert on claims 6, 15, and 16 at the October deposition, this concession will most
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`likely not alleviate the need to take another deposition in the 1485 IPR. This is the
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`Attorney Docket No: 30912-0003IP3
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`Notably, SkyHawke’s serial petition strategy is solely the result of
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`SkyHawke’s litigation decisions—not L&H’s. In its motion, SkyHawke alleges that
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`it filed the 1485 Petition in response to L&H’s infringement assertions against claims
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`6 and 16 after the parties’ litigation was transferred to the Southern District of
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`Mississippi (“S.D. Miss.”). However, SkyHawke omits mention of several critical
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`facts. First, SkyHawke filed the 438 IPR (as well as the 437 IPR) with full
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`knowledge of both its own products and the asserted claims. SkyHawke also knew
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`which claims it infringed—and more importantly—the claims for which its
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`infringement had not yet been uncovered during discovery. SkyHawke also knew
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`that the District of Mississippi—its home district—allowed parties to add additional
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`assertions of infringement as discovery proceeded, were additional evidence to be
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`uncovered. However, rather than risk L&H discovering SkyHawke’s concern over
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`claims 6, 15, and 16, which would have compelled additional focus on these claims
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`by L&H in litigation, SkyHawke chose to withhold them from either of its first two
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`IPRs – even though they could have been included for no additional PTO fees.
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`case at least because Patent Owner will be unable to question Petitioner’s expert in
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`view of the Board’s institution decision in October – thus most likely requiring a
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`another deposition and all of the accompanying costs if the joinder is granted.
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`The request for claim 15 is particularly telling, as L&H did not believe that it
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`had sufficient discovery in the litigation to assert claim 15. Yet, SkyHawke’s
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`decision to include it in the 1485 IPR shows that SkyHawke believes that it is an
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`infringement risk. Patent Owner asserts that SkyHawke knew that all three of the
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`claims challenged in the 1485 IPR could be raised in the litigation yet chose to
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`withhold them from the two timely IPRs. Now, with the one-year deadline past,
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`SkyHawke seeks to use joinder to escape the consequences of its decision to not seek
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`review of claims 6, 15, and 16. However, the 1485 IPR will result in considerable
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`additional costs to the Patent Owner—costs which, despite the general statements
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`about cooperation made in Petitioner’s motion, Petitioner will have needlessly
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`forced Patent Owner to bear if the 1485 IPR is joined.
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`SkyHawke also alleges that there will be no prejudice to L&H from joining
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`the proceedings because L&H is already defending its patent against the same
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`ground and arguments in the 437/438 Petitions as set forth in the 1485 Petition. See
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`SkyHawke’s Motion, Page 7. This assertion wholly ignores the fact that claims 6,
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`15, and 16 are separately issued claims, using some different claim terms which must
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`be separately considered and differentiated from the cited prior art. The 1485
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`Petition is over 40 pages long and took Petitioner almost three weeks to prepare after
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`the 437 and 438 IPRs were instituted—undermining Petitioner’s assertion that the
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`1485 patent is essentially the same as the previous two petitions.
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`Attorney Docket No: 30912-0003IP3
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`Moreover, joinder will likely not secure a speedy resolution to the proceedings
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`without disadvantaging L&H. It is likely that joinder will force the Board to modify
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`the current inter partes review schedule to accommodate the 1485 Petition.
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`Rescheduling the Board’s review will likely either (1) delay determination of the
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`patentability of the ’566 patent, thus precluding a speedy resolution; or (2) require
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`that the 1485 Petition proceed at an accelerated pace, thus disadvantaging L&H in
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`defending those claims. The 437 and 438 IPRs are currently scheduled for hearing
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`in April 2015. The preliminary response date for the 1485 IPR (if joined) would not
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`occur until December 26, 2014 with an institution decision not due until late March
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`2015. Even if the Board reaches accelerated institution decision, it is unlikely that
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`the April hearing date could be maintained without significantly shortening the
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`periods for responses, depositions, and motions – which prejudices Patent Owner.
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`B.
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`SkyHawke will not suffer undue prejudice if joinder is denied,
`because SkyHawke had sufficient knowledge, information, and
`resources at the outset of these proceedings to raise validity
`challenges against all claims of the ’566 patent in the 437/438
`Petitions.
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`Any prejudice to SkyHawke will be of its own making, and, thus, not “undue.”
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`First, as SkyHawke concedes in its motion, it purposefully waited almost the entire
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`allowed statutory period before seeking the first IPRs (over eleven months from the
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`filing of the district court complaint against it). Had SkyHawke been diligent in
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`seeking an IPR, the parties might not even be in this situation.
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`Attorney Docket No: 30912-0003IP3
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`Second, SkyHawke again waited almost the entire allowed period before
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`filing the 1485 IPR. If that filing was truly as similar to the 437 and 438 IPRs as
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`Skyhawke claims, it should not have taken three weeks to file. SkyHawke chose to
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`file when it did, though.
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`Third, as described above, SkyHawke has no excuse for failing to raise
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`validity challenges against claims 6, 15, and 16 before this late stage in the
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`proceedings. First, SkyHawke had sufficient pages left in the 437 Petition to assert
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`challenges against claims 6, 15, and 16 of the ’566 patent. See generally,
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`SkyHawke’s 437 Petition; see also 37 C.F.R §42.24(a). Moreover, the 16 currently-
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`challenged claims could have been challenged within the claim limits of a single
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`petition. 37 C.F.R. § 15(a)(3). In fact, validity challenges against all claims to the
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`’566 patent would have fallen well within the 20 claims per petition threshold. See
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`id. Thus, any prejudice is of SkyHawke’s own making, because SkyHawke had
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`ample opportunity to assert validity challenges against claims 6, 15, and 16 before
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`the statutory time limit for doing so had expired.
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`In addition, SkyHawke alleges that if the 1485 Petition is not joined with the
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`instituted 438 Petition, SkyHawke will face a higher burden before the district court
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`of proving invalidity of claims 6 and 16 (clear and convincing), as opposed to the
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`lower burden (preponderance of the evidence) that will be used during inter partes
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`review proceedings of the other challenged claims. See SkyHawke’s Motion,
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`Attorney Docket No: 30912-0003IP3
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`Page 9. Whether SkyHawke will face a higher burden of proof before the district
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`court, as opposed to the lower burden in inter partes review proceedings, is
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`immaterial to the appropriateness of joinder in this instance. The Board has stated
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`that the primary interest in conducting its procedures “pertains to the just, speedy,
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`and inexpensive resolution of proceedings before the Patent Trial and Appeal Board,
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`and not to the just, speedy, and inexpensive resolution of the parties' disputes
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`generally.” See ZTE Corp. and ZTE (USA) Inc. v. ContentGuard Holdings Inc.,
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`IPR2013-00454 (September 25, 2013), Paper 12 at 7. SkyHawke’s assertion—that
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`the evidentiary standard applied in district court can somehow be used to support a
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`claim of undue prejudice against them during inter partes review proceedings, and
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`that such prejudice can only be cured by joinder—is misplaced.
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`Certainly, SkyHawke had sufficient resources and information available to
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`assert its challenges to the validity of at least all of the now-challenged claims to the
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`’566 patent in the 437/438 Petitions, if not all of the claims to the patent. SkyHawke
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`will not suffer undue prejudice is joinder is denied, whereas L&H will suffer undue
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`prejudice if joinder is granted. Thus, the Board, in weighing costs and benefits,
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`should deny SkyHawke’s motion for joinder.
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`Case IPR2014-01485
`Attorney Docket No: 30912-0003IP3
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`C. The Board should deny joinder as a matter of public policy,
`because granting joinder in this instance may encourage future
`Petitioners to withhold claim validity challenges opportunistically.
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`The Board should deny joinder as a matter of public policy and take a position
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`that advocates the filing of procedurally efficient and concise petitions in a timely
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`fashion. The Board has articulated that it is particularly mindful of instances where
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`permitting joinder may encourage a “possible infinite string of follow-on IPR
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`petitions” as well as filing additional “petitions and motions for joinder with
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`complete disregard for the promulgated time periods for doing so.” See Sony Corp.
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`and Hewlett-Packard Co. v. Network-1 Security Solutions, Inc., IPR2013-00495
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`(September 16, 2013), Paper 13 at 7. Granting joinder in this instance will encourage
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`future Petitioners to withhold claim validity challenges opportunistically, only to
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`potentially raise them in a procedurally disruptive manner.
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`As described above, SkyHawke knew or had reason to know that it had
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`infringed claims 6, 15, and 16 when it filed the 437/438 Petition. Even so,
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`SkyHawke now seeks to assert validity challenges to these claims (via the 1485
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`Petition) in complete disregard for the promulgated time period for doing so.
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`Furthermore, SkyHawke concedes that no new prior art or grounds for patentability
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`for validity challenges against claims 6, 15, and 16. See SkyHawke’s Motion, Page
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`3. However, L&H has neither identified claim 15 as infringed, nor taken any action
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`Attorney Docket No: 30912-0003IP3
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`to bring claim 15 to SkyHawke’s attention. This further establishes that SkyHawke
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`consciously chose not to challenge all of the claims it knew it had infringed.
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`The facts indicate that SkyHawke strategically withheld validity challenges
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`from the 437/438 Petitions only to raise them at a time that was opportunistic for
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`SkyHawke, yet procedurally
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`inefficient for
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`these proceedings and L&H.
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`SkyHawke’s 1485 Petition and motion for joinder do not conform to the Board’s
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`mandate to conduct proceedings in a just, speedy, and inexpensive manner.
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`Therefore, joinder should be denied.
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`III. CONCLUSION
`The Petitioner has the burden to show that joinder is appropriate, and as
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`described above, it has not done so. Therefore, the Board should deny this motion
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`for joinder of the 438 and 1485 IPRs.
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`11
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`Dated: October 14, 2014
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`Case IPR2014-01485
`Attorney Docket No: 30912-0003IP3
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`Respectfully submitted,
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`By: /David M. Hoffman/
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` David M. Hoffman
`Reg. No. 54,174
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`Fish & Richardson P.C.
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`T: (512) 226-8154
`F: (512) 320-8935
`Email: IPR30912-0003IP3@fr.com
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`Counsel for Patent Owner
`L&H Concepts, LLC
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`Case IPR2014-01485
`Attorney Docket No: 30912-0003IP3
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 CFR §§ 42.6(e)(4) and 42.205(b), the undersigned certifies that
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`on October 14, 2014, a complete and entire copy of this Patent Owner’s Response
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`to Motion for Joinder was provided via email to the Petitioner by serving the
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`correspondence email address of record as follows:
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`Thomas J. Fisher
`Oblon Spivak
`1940 Duke Street
`Alexandria, VA 22314
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`E-mail: CPDocketFisher@oblon.com
` CPDocketMcKeown@oblon.com
` CPDocketRicciuti@oblon.com
` CPDocketEnglehart@oblon.com
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`/Jessica K. Detko/
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`Jessica K. Detko
`Fish & Richardson P.C.
`60 South Sixth Street, Suite 3200
`Minneapolis, MN 55402
`(612) 337-2516
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