throbber
UNITED STATES PATENT AND TRADEMARK OFFICE
`________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`
`TERREMARK NORTH AMERICA LLC, VERIZON BUSINESS NETWORK
`SERVICES INC., VERIZON SERVICES CORP., TIME WARNER CABLE
`INC., ICONTROL NETWORKS, INC., AND COXCOM, LLC
`Petitioners,
`
`v.
`
`JOAO CONTROL & MONITORING SYSTEMS, LLC
`Patent Owner
`
`________________
`
`Cases:
`
`IPR2015-01485 (Pat. 7,397,363)
`________________
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`
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`PATENT OWNER’S JOINT OPPOSITION TO MOTIONS TO
`RECOGNIZE JUNE 23 FILING DATE OF PETITIONS
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`Exhibit No.
`2001
`2002
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`2003
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`2004
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`2005
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`2006
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`2007
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`2008
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`2009
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`2010
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`LIST OF EXHIBITS
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`
`Description
`Declaration of René A. Vazquez
`Proof of Service indicating that Verizon Communications, Inc. was
`served with a Complaint alleging infringement of the ’010 Patent on
`June 23, 2104 in the matter of JCMS v. Terremark North America
`LLC, C.A. No. 14-525-GMS (D. Del.)
`Terremark’s Rule 7.1 Disclosure Statement in the matter of JCMS v.
`Terremark North America LLC, C.A. No. 14-525-GMS (D. Del.)
`Substitution of Terremark North America LLC in place of Verizon
`Communications Inc. in the matter of JCMS v. Terremark North
`America LLC, C.A. No. 14-525-GMS (D. Del.)
`Proof of Service indicating that Time Warner Inc. was served with a
`Complaint alleging infringement of the ’010 Patent on June 23,
`2104 in the matter of JCMS v. Time Warner Cable, Inc., C.A. No.
`14-524-GMS (D. Del.)
`USPS Tracking data for package containing service copies of
`IPR2015-01482, -01485 and -01486, indicating shipment on June
`24, 2105
`FedEx Tracking data for package containing service copies of
`IPR2015-01466, -01477, -01478 and -01484, indicating shipment on
`June 24, 2105
`Email dated July 17, 2015 from Patent Owner’s counsel R. Vazquez
`to Petitioners’ counsel C. Holloway
`Email dated July 29, 2015 from Petitioners’ counsel C. Holloway to
`Patent Owner’s counsel R. Vazquez.
`Email dated July 31, 2015 from Petitioners’ counsel C. Holloway to
`Patent Owner’s counsel R. Vazquez.
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`ii
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`
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`I.
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`Introduction
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`In order to be accorded a filing date of June 23, 2015, Petitioners needed to
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`accomplish nine separate tasks for three separate petitions: 2015IPR-01482; -
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`01485; and -01486.1 Petitioners were required to complete the electronic filing of
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`each separate petition and all supporting exhibits; they needed to pay the required
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`fees for all each petition; and they needed to serve the petitions and supporting
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`documents on Patent Owner at its correspondence address of record. 37 C.F.R. §
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`42.106. Petitioners not only failed to accomplish any of these tasks on June 23,
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`2015, they did not even attempt to accomplish eight of the nine tasks until June 24.
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`In their motions, Petitioners’ effectively concede that these failures were not the
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`result of a “clerical or typographical error,” but instead resulted from deliberate
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`decisions made by Petitioners and their counsel. The Board has never accorded an
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`earlier filing date where petitioners failed to accomplish, much less even attempt,
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`any of the trial practice requirements for according a filing date. As such, the
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`Board should deny Petitioners’ motion.
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`1 Due to the common actors and issues involved, Patent Owner addresses facts for
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`each of these three petitions below. Because the -01482 Petition involves
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`aggravating facts, that petition is addressed separately.
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`1
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`II. Law
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`Petitions for inter partes review (IPR) may not be filed more than one year
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`after Petitioners were served with a complaint alleging infringement. 35 U.S.C. §
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`315(b). The same one-year time bar is found in the USPTO’s trial practice rules.
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`37 C.F.R. § 42.101(b).
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`Moreover, the Board’s governing statute provides that a petition “may be
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`considered only if … the petition is accompanied by payment of the fee established
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`by the Director under section 311.” 35 U.S.C. § 312(a)(1). The same statute
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`provides that an IPR petition may be considered only if “the petitioner provides
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`copies of any of the documents required under paragraphs (2), (3), and (4) to the
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`patent owner or, if applicable, the designated representative of the patent owner.”
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`35 U.S.C. § 312(a)(5). These statutory requirements cannot be waived by the
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`Board. In addition, the Board’s trial practice rules provide that a petition is only
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`accorded a filing date once a petition has been filed, payment has been made, and
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`the complete petition is served on the patent owner. 37 CFR 42.106(a). The Board
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`has discretion to excuse certain late actions “on a showing of good cause” or “in
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`the interests of justice.” 37 C.F.R. 42.5(c)(3). The trial practice rules also include
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`provisions for correcting a “clerical or typographical mistake”. 37 C.F.R. §
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`2
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`42.104(c). The burden of proving that such a correction is appropriate rests with
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`Petitioners. 37 C.F.R. § 42.20(c).
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`III. Facts
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`In spite of well-known risks and in the face of clear warnings, Petitioners
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`intentionally engaged in a deliberate course of conduct that should have, and
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`properly did, result in their petitions being accorded a filing date of June 24, 2015
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`– one day after the statutory bar period. Now, by their motions, Petitioners seek to
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`have this panel save them from the consequences flowing directly from their
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`decisions.
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`Two of the filing Petitioners (Terremark and Time Warner) were served with
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`complaints for infringement of the ’363 and ’130 Patents on June 23, 2014.
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`(Vazquez Decl., ¶¶ 1-4, Exh. 2002-2005). Over the last year, the parties have
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`engaged in extensive discovery in the District of Delaware. This discovery
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`includes Initial Disclosures, interrogatories and requests for documents directed to
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`each Defendant, production and review of more than 4,600 pages of “core
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`technical documents,” and initial scheduling of depositions. Initial infringement
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`and invalidity contentions have also been exchanged. In February 2015, the parties
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`jointly requested, and the Court entered, a case progression schedule with
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`significant dates including: Claim Construction Opening Brief (October 23, 2015);
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`3
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`Answering Brief (November 20); and Markman Hearing (December 21). The
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`Court also set dates for fact and expert discovery, summary judgment, and trial.
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`In late June 2015, without warning, Petitioners here filed seven petitions
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`seeking IPR.2 On June 22, these Petitioners filed, but intentionally did not serve,
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`IPR2015-1466. Then on June 23, Petitioners filed, but intentionally did not serve,
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`IPR2015-1476 and 1477. Then on June 24, a day after the one year bar, Petitioners
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`finally filed IPR2015-1482, 1484, 1485 and 1486, finally payed for IPR2015-
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`1482, 1484, 1485 and 1486, and finally served all seven petitions. Vazquez Decl.,
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`¶¶ 7-8, Exh. 2006-2007. Each of these filings has been marred by errors, as well as
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`repeated, intentional misrepresentations to Patent Owner and the PTAB, including
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`the filing of false certificates of service (COS) for all seven petitions. Revised
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`COSs were filed with respect to only four IPR petitions, and only after Patent
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`Owner discovered and raised the false statements.
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`2 In addition to the seven petitions filed by Petitioners regarding five of Patent
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`Owner’s patents, Cox has now filed two additional IPR petitions purportedly
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`seeking review of the ’130 Patent (IPR2015-01760), the ’363Patent (IPR2015-
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`01762) and the ‘010 Patent (IPR2015-01765). Counsel for Petitioner Cox has also
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`filed four additional petitions regarding Patent Owner’s patents for a different
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`client, Nissan North America, Inc.
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`4
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`A. The Petitions Were Not Timely Filed, Fees Were Not Timely
`Paid and the Petitions Were Not Timely Served
`
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`Lawyers have long known of the risks of delaying filings until the last
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`minutes. In fact, large law firms have warned each other of these risks for many
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`years. See, e.g., “New Risks Every Litigator Should Know,” W. Kelly Stewart,
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`Jeffrey L. Mills, Jones Day (2011). Such warnings routinely include descriptions
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`of cases where filing parties have been denied the ability to pursue claims because
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`of missed deadlines. See, e.g., id., p. 29, citing PHL Variable Ins. Co. v. U.S. Bank
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`Nat’l Ass’n, Civ. No. 10-1197 (D. Minn. Oct. 4, 2010). Known risks include
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`improperly converting documents, filing the wrong document, and trying to file
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`documents that exceed file-size limits. Id. Moreover, courts have advised
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`attorneys
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`that “[c]omputer failures, not unlike human failures, must be
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`anticipated.” Martinelli v. Farm-Rite, 785 A. 2d 33, 36 (2001). See also Graves v.
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`Deutsche Bank Sec., Inc., Case No. 07 cv 05471, p. 4 (S.D.N.Y. Mar. 4, 2011).
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`Here, Petitioners’ motions and supporting exhibits demonstrate that
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`Petitioners deliberately waited until the eleventh hour to finalize their petitions for
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`filing. Petitioners admit that they did not finalize the “petitions, exhibits, powers of
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`attorney and payment means” until 10:45 pm on June 23, 2015. IPR2015-01482,
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`Paper 6 at 3. Despite the late hour, and despite representation by five attorneys
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`from three different large law firms, Petitioners deliberately decided to have one
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`5
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`paralegal file the petitions serially, rather than have multiple people file the
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`petitions simultaneously. Id. at 4. Petitioners now contend that “the petitions were
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`done in sequential order to avoid having to reload any previously submitted
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`exhibits.” Id. But this explanation does not make sense, as the PRPS system
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`requires separate uploading and filing of documents in each separate petition.
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`Vazquez Decl., ¶¶ 9-11. Moreover, Petitioners own filings demonstrate this did not
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`happen. Petitioners did not cross-reference earlier-filed documents in later-filed
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`petitions, but instead re-filed numerous duplicative exhibits in each of the three
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`petitions at issue. See, e.g., “Curriculum Vitae of Richard Bennet,” filed as Exh.
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`1003 in IPR2015-01482, -01485 and -01486; “U.S. Patent Application No.
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`08/622749,” filed as Exh. 1004 in IPR2015-01482, -01485 and -01486.
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`Petitioners’ argument that “the second … and third petition … could not be filed
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`until the first filing was completed” cannot be true. Vazquez Decl., ¶¶ 9-11.
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`Petitioners easily could have had multiple persons upload these petitions and
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`supporting documents simultaneously. They simply chose not to do so. As a result,
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`they did not accomplish any of the tasks required for according their IPRs a filing
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`date of June 23, and did not even attempt eight of those nine tasks until June 24.
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`Defendants also deliberately decided not to serve the petitions and
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`supporting documents on June 23. Petitioners allege that “Copies of the three
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`6
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`petitions, corresponding exhibits and powers of attorney were printed no later than
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`11:15 pm est and were prepared for service.” See, e.g., IPR2015-01482, Paper 7,
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`Robinson Decl. at ¶ 4. Petitioners further allege that their counsel “was prepared to
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`serve the three petitions and accompanying documents” by driving them to an
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`unidentified U.S. Post Office that is purportedly open until midnight. Id. Crucially,
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`however, this service did not happen. Rather than serve the documents on June 23
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`as required by the governing statute and trial practice rules, Petitioners’ counsel
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`made a deliberate decision to forego even attempting such service until June 24.
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`Petitioners have not offered the Board a declaration from the attorney involved,
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`instead relying on their paralegal’s hearsay statement that Petitioners’ counsel
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`“remained in the office to focus on solving the problems we were experiencing
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`with filing the petitions with the PRPS system.” Id. But Petitioners offer no
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`explanation as to why their alleged filing problems prevented timely service. Filing
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`and service are independent events, as evidenced by the fact that Petitioners printed
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`the documents for service before completing the electronic filing. Id. There is no
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`legitimate reason Petitioners could not have at least attempted service before
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`midnight on June 23 as they now claim they planned to do. Petitioners’ counsel
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`simply chose not to do so.
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`7
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`Finally, although Petitioners acknowledge that they chose not to serve the
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`petitions until June 24, they nevertheless filed a COS with the Board in each
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`petition attesting that the documents “ha[d] been served via U.S. Postal Service
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`Express Mail on June 23, 2015.” See IPR2015-01482, Paper 1 at 44; IPR2015-
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`01485, Paper 1 at 42; IPR2015-01486, Paper 1 at 60. Each COS is false, as the
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`documents were admittedly not mailed until the next morning, June 24, 2015. See,
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`e.g., Paper 7, Robinson Decl. at Att. B; Vazquez Decl., ¶¶ 7, 13, Exh. 2006.
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`Petitioners have not filed a corrected COS for any of these Petitions. Vazquez
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`Decl., ¶ 14, Exh. 2008.
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`IV. Analysis
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`Three sophisticated law firms engaged in a scheme to inundate Patent Owner
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`with a flurry of IPRs at the last possible moment while simultaneously obtaining
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`and pursuing an aggressive litigation schedule in district court. Their plan clearly
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`risked missing the statutory one year bar, and they should not now be saved,
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`especially as they have now come forward with unclean hands.
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`A. Petitioners Have Engaged In A Course Of Conduct That Has
`Deprived The PTAB Of Jurisdiction Over These Petitions
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`As explained below, the Petitions were not timely filed, paid for or served.
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`These Petitions cannot now be “corrected” under 37 CFR § 42.104(c) because
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`Petitioners have not identified any “clerical or typographical error” that prevented
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`8
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`them from even timely attempting, much less timely accomplishing, any of the
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`nine tasks required for according their Petitions an earlier filing date.
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`i. Petitioners’ Intentionally Delayed Completing the Filing
`of the -01485 and -01486 Petitions Until June 24, 2015
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`Petitioners’ counsel claim they experienced some unknown “issue” with the
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`electronic filing of the -01482 petition. Even if their arguments regarding the -
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`01482 petition are credited, Petitioners still chose to make no effort to file, pay
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`for, or serve the -01485 and -01486 Petitions until June 24, 2015. The facts
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`demonstrate Petitioners’ counsel made a choice to not meet, or even attempt to
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`meet, any of the statutory requirements. No clerical error exists – it was a lapse in
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`professional judgment resulting in loss of jurisdiction that cannot now be
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`corrected.
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`Of concern, none of these facts were presented by Petitioners to the panel
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`when they sought leave to file the instant motions. Nor were these facts presented
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`to the Board paralegal who was contacted ex parte by Petitioners’ counsel. See,
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`e.g., IPR2015-01482, Paper 7, Robinson Decl. at Exh. 2 (6/26 email from C.
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`Holloway to trials@uspto.gov). But for this paralegal, Petitioners may have gotten
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`away with their deceit.
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`ii. The -01482 Petition
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`The -01482 Petition suffers from all of the defects identified above.
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`However, the significant, aggravating difference is that Petitioners admit they did
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`not serve a critical document – their expert declaration (the “Bennett Declaration”)
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`– until more than five weeks after expiration of the one year bar date, and did not
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`file the correct declaration until they filed the present motion. The Bennett
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`Declaration provides essential information missing from the Petition itself – both
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`direct “support” for Petitioners’ arguments and critical conclusions and
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`interpretations reached and relied upon by Petitioners’ expert.
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`The failure to properly file and serve the Bennet Declaration has
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`undoubtedly prejudiced Patent Owner. In fact, Patent Owner has suffered undue
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`prejudice from Petitioners’ numerous failures to follow Board rules and
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`misrepresentations. Specifically, time and resources have been redirected away
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`from preparing the preliminary responses, and instead, Patent Owner is now forced
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`to ferret out
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`the real facts regarding Petitioners’ failed attempts and
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`misrepresentations regarding the filing, serving and paying for the IPRs and to
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`prepare these oppositions to Petitioners’ numerous motions regarding same.
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`iii. Petitioners’ Counsel Have Breached Their Duties Of
`Candor And Good Faith
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`Practitioners before the Board owe a duty of candor, which is codified in 37
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`C.F.R. § 42.11: “Parties and individuals involved in the proceeding have a duty of
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`candor and good faith to the Office during the course of a proceeding.” This duty
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`of candor is continuing. “[P]ractitioners ... understand that they are under a
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`continuing duty of candor to update any changes in the representations that they
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`have made.” Innolux Corp. v. Semiconductor Energy Lab. Co., Ltd. IPR2013-0028
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`(May 21, 2013). The Board further requires that practitioners exhibit a duty of
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`good faith by following proper procedure in each of its filings, which may be
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`evaluated using the “totality of the circumstances.” For example, in CBS
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`Interactive Inc. v. Helferich Patent Licensing, the patentee requested a rehearing of
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`an order expunging filed non-compliant papers. CBS Interactive Inc., IPR2013-
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`00033, 2013 WL 5970154, at *1 (Patent Tr. & App. Bd. Aug. 30, 2013). The
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`patentee argued that it had acted “in good faith” when it “mistakenly” filed papers
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`that did not follow proper procedure. Id. In rejecting the motion, the Board noted
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`that the patentee had previously filed three other papers in violation of the rules.
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`Id. at *1-*2. Given the totality of the circumstances, the Board was not convinced
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`that the patentee acted “in good faith” when submitting the non-compliant papers.
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`Id. at *3 (“We are not persuaded by Helferich’s arguments in view of the totality of
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`the circumstances. At best, Helferich’s arguments possibly could have merit if
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`each noncompliant paper was viewed individually as a first improper filing.”)
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`Courts have joined with the Board in emphasizing the importance of these
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`fundamental obligations. See, e.g., Virginia Innovation Sciences, Inc. v. Samsung,
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`983 F.Supp.2d 713 (E.D. Va. May 2, 2014). The Virginia Innovation Sciences
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`court addressed the duties of candor and good faith in detail:
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`Our adversary system for the resolution of disputes rests on the
`unshakable foundation that truth is the object of the system’s process
`which is designed for the purpose of dispensing justice. However,
`because no one has an exclusive insight into truth, the process
`depends on the adversarial presentation of evidence, precedent, and
`custom, and argument to reasoned conclusions–all directed with
`unwavering effort to what, in good faith, is believed to be true on
`matters material to the disposition.
`Id. at 755; see generally, id. at 51-61.
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`Petitioners’ and their counsel have failed to meet their duties of candor and
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`good faith. First, they knowingly filed a false COS in each of the three Petitions at
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`issue. Second, they contacted the Board ex parte to seek a new filing date without
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`disclosing their many false COSs. See, e.g., IPR2015-01482, Paper 7, Robinson
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`Decl. at Exh. 2 (6/26 email from C. Holloway to trials@uspto.gov). Third, despite
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`their continuing duty of candor, they did not correct their false COS even after
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`Patent Owner discovered the issue and brought it to Petitioners’ attention. Fourth,
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`and perhaps most surprisingly, Petitioners have continued to flout the Board’s rules
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`in their motion and supporting documents. For example, the Exhibits to
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`Petitioners’ Motion do not conform to 37 C.F.R. § 42.63(c), requiring all exhibits
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`to be separately and uniquely numbered within the range of 1001-1999, or 37
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`C.F.R. § 42.63(d)(1)(ii), requiring exhibits not filed with the petition to include
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`“the party’s name, followed by a unique exhibit number, the names of the parties,
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`and the trial number.” Instead, Petitioners have filed their Motions, the Robinson
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`declarations, and all supporting exhibits together as Paper 7. See, e.g., IPR2015-
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`01482, Paper 7. Petitioners have confusingly referred to their supporting exhibits
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`as Exhibits 1-4 (See, e.g., IPR2015-01482, Paper 7, Certificate of Service) and
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`included “Attachments” A & B within the Robinson declaration. It is surprising
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`that in a motion seeking relief for Petitioners’ inability to meet the statutory and
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`Board rules, Petitioners still cannot follow the Board’s rules.
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`iv. The PTAB’s Prior Decisions Are Distinguishable
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`There is no previous case in which the PTAB addressed the combination of
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`an intentional failure to meet all three the filing requirements with the manifest bad
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`faith demonstrated here. The PTAB addressed a Motion to Correct Filing Date
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`(Late Filing) in 2Wire, Inc. v. TQ Delta, IPR2015-00239. The motion granted was
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`based on very different facts. Counsel pressed “submit” button after midnight but
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`all other filing requirements had been met. Documents were uploaded on time, fees
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`were paid on time, and the documents were properly served on time. In Micron
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`Tech., Inc. v. e.Digital Corp., the Board denied a Motion to Deny Petition a Filing
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`Date based on Improper Service. IPR2015-00519. In that instance, Petitioner
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`served a courtesy copy of the petition and supporting documents on Patent
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`Owner’s litigation counsel via email more than two weeks prior to expiration of the
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`bar date. The Board found this was a good faith attempt at service. No such good
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`faith attempt at service was made here before the bar date. In ABB Inc. v. Roy-G-
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`Biv-Corp., the Board addressed a Motion to Correct Petition. IPR2013-00063.
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`The motion was granted based on a finding that although Petitioner filed the wrong
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`documents, Petitioner timely served the correct documents on Patent Owner.
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`That obviously did not happen here. In Schott Gemtron Corp. v. SSW Holding Co.,
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`IPR2014-00367, the Board granted an unopposed motion to replace a document.
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`However, again, Petitioner timely served the correct document on Patent Owner.
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`Finally, in Syntroleum Corp. v. Nestle Oil OYJ, IPR2013-00178, the Board granted
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`a motion to correct its submission. In that case, Petitioner failed to both file and
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`serve the correct exhibits. Petitioner intended to file a published European
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`application, but inadvertently filed the patent that issued from the publication. The
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`motion was granted primarily because the Patent Owner did not argue prejudice.
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`V. Conclusion
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`Petitioners do not even argue that there was a typographical mistake. It
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`follows that Petitioners must be arguing there was a clerical mistake; however, the
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`facts they have presented in their motion demonstrate deliberate decisions, not
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`clerical mistakes, which they clearly now regret. First, Petitioners’ counsel made a
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`deliberate decision to wait until literally the eleventh hour to finalize the IPRs.
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`Second, despite the late hour, Petitioner’s counsel approved a serial (rather than
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`simultaneous) filing process, which meant that no filings were completed on time
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`and two of three were not even attempted before the one-year bar date. Third,
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`Petitioner’s counsel made a deliberate decision not to pay the filing fees until after
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`electronic filing was completed, meaning none of the statutorily required fees were
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`paid on time. Fourth, Petitioners’ counsel made a deliberate (and entirely
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`unnecessary) decision not to serve the petitions on June 23. These repeated
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`deliberate decisions simply cannot be dismissed as “clerical mistakes.”
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`In sum, Petitioners’ motions involve unique facts before the PTAB that have
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`never formed the basis for the relief requested. The Petitions were not timely filed
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`and jurisdiction cannot be restored pursuant to 37 CFR § 42.104.
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`Respectfully submitted,
`Heninger Garrison Davis, LLC
`
`/René A. Vazquez/
`BY:
`Raymond A. Joao (Lead Counsel)
`Reg. No. 35,907
`René A. Vazquez (Backup Counsel)
`Reg. No. 38,647
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`
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`Counsel for Patent Owner
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`15
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`Date: August 19, 2015
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`CERTIFICATION OF SERVICE
`Pursuant to 37 C.F.R. §§ 42.6(e) and 42.105(b), the undersigned certifies
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`that on August 19, 2015, a copy of the foregoing PATENT OWNER’S JOINT
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`OPPOSITION TO MOTIONS TO RECOGNIZE JUNE 23 FILING DATE OF
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`PETITIONS was served by electronic mail on the following:
`
`Vaibhav P. Kadaba (Lead Counsel), Reg. No. 45,865
`D. Clay Holloway (Backup Counsel), Reg. No. 58,011
`Kilpatrick Townsend & Stockton LLP
`1100 Peachtree Street NE, Suite 2800
`Atlanta, GA 30309-4528
`Phone: 404-532-6959; 404-815-6537
`Email: wkadaba@kilpatricktownsend.com;
`cholloway@kilpatricktownsend.com
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`
`
`Jackson Ho (Backup Counsel), Reg. No. 72,360
`K&L Gates LLP
`630 Hansen Way
`Palo Alto, CA 94304
`Phone: 650-798-6719
`Email: jackson.ho@klgates.com
`
`Frank C. Cimino (Backup Counsel), Reg. No. 39,945
`Megan S. Woodworth (Backup Counsel), Reg. No. 53,655
`VENABLE LLP
`575 7th Street, N.W.
`Washington, DC 20004
`Phone: 202-344-4000
`Email: FCCimino@fVenable.com; MSWoodworth@Venable.com
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`Dated: August 19, 2015
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`
`/René A. Vazquez/
`BY:
`Raymond A. Joao (Lead Counsel)
`Reg. No. 35,907
`René A. Vazquez (Backup Counsel)
`Reg. No. 38,647
`
`
`
`Counsel for Patent Owner
`
`17

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