Paper No. ___
`Filed: November 2, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`______________
`
`JT INTERNATIONAL S.A.,
`Petitioner,
`
`v.
`
`FONTEM HOLDINGS 1 B.V.,
`Patent Owner.
`______________
`
`
`
`
`
`
`
`Case IPR2015-01587
`Patent No. 8,365,742
`
`______________________________________________________________
`
`PATENT OWNER’S PRELIMINARY RESPONSE TO PETITION FOR
`INTER PARTES REVIEW OF U.S. PATENT NO. 8,365,742
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`128408208.4
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`TABLE OF CONTENTS
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`Page
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`1.
`
`2.
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`3.
`
`INTRODUCTION .......................................................................................... 1
`1.1 The Prior Petition By VMR ................................................................. 1
`1.2 The New Petition By JTI ...................................................................... 2
`THE IPR PETITION IS TIME-BARRED BECAUSE PETITIONER
`JTI AND LOGIC ARE IN PRIVITY FOR PURPOSES OF § 315(b) .......... 3
`2.1
`35 U.S.C. § 315(b)................................................................................ 3
`2.2 Timeline ................................................................................................ 5
`2.3 Petitioner JTI Is In Privity With Logic ................................................ 7
`CLAIM CONSTRUCTION ........................................................................... 8
`3.1 Porous Component ............................................................................... 9
`3.2 Liquid Supply And Liquid Storage Component ................................ 10
`3.3 Frame .................................................................................................. 11
`3.4 Heating Wire Wound On A Part Of The Porous Component ............ 11
`3.5 Run-Through Hole ............................................................................. 12
`3.6 Atomizer ............................................................................................. 13
`The broadest reasonable interpretation of the term “atomizer” is
`a “component that converts liquid into aerosol or vapor.” ...... 13
`Claims 1, 2 and 3 recite an “atomizer” that includes a “frame,”
`“porous body,” and a “heating wire.” ...................................... 13
`Thus, the broadest reasonable interpretation of the term
`“atomizer” is a “component that converts liquid into
`aerosol or vapor.” ..................................................................... 14
`OBVIOUSNESS ........................................................................................... 14
`THE ’742 PATENT FILE HISTORY .......................................................... 15
`RESPONSE TO GROUND 1: THE PETITION SHOWS NO
`REASONABLE LIKELIHOOD THAT CLAIMS 1–3 ARE
`UNPATENTABLE OVER TAKEUCHI ..................................................... 16
`6.1 Takeuchi Is Missing Numerous Claim 1 Elements ............................ 16
`6.2 Takeuchi Does Not Meet The Elements Of Claim 2 ......................... 19
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`5.
`6.
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`7.
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`8.
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`9.
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`6.3 Takeuchi Does Not Meet The Elements Of Claim 3 ......................... 20
`6.4 Conclusion .......................................................................................... 21
`RESPONSE TO GROUND 2: THE PETITION SHOWS NO
`REASONABLE LIKELIHOOD THAT CLAIMS 1–3 ARE
`UNPATENTABLE OVER TAKEUCHI IN VIEW OF COX ..................... 21
`7.1 Overview Of Cox ............................................................................... 21
`7.2 Petitioner’s Takeuchi-Cox Combination Has Multiple Flaws ........... 21
`7.3 Conclusion .......................................................................................... 29
`RESPONSE TO GROUND 3: THE PETITION SHOWS NO
`REASONABLE LIKELIHOOD THAT CLAIMS 1 AND 3 ARE
`UNPATENTABLE OVER BROOKS ......................................................... 30
`8.1 Brooks Has No Heating Wire Wound On A Porous Component ...... 30
`8.2 Brooks Has No Detachable Cigarette Bottle Assembly And No
`Liquid Supply In Contact With The Porous Component ................... 33
`8.3 The Record Does Not Support Petitioner’s Modification Of
`Brooks Based On Whittemore ............................................................ 35
`8.4 Conclusion .......................................................................................... 36
`RESPONSE TO GROUND 4: NO REASONABLE LIKELIHOOD
`THAT CLAIMS 1-3 ARE UNPATENTABLE OVER THE
`COMBINATION OF BROOKS IN VIEW OF WHITTEMORE .............. 36
`9.1 Whittemore And The Prior VMR Decision ....................................... 36
`9.2 No Reasoning With Rational Underpinnings Why One Of
`Ordinary Skill Would Modify Brooks To Include A Heater Coil
`Wrapped Porous Component Of Whittemore Based On
`Petitioner’s Asserted Reasoning That It Would Permit One To
`“Independently Optimize The Properties” Of The Heater Coil
`And Porous Component ..................................................................... 37
`9.3 No Reasoning With Rational Underpinnings Why One Of
`Ordinary Skill Would Modify Brooks To Include The Liquid
`Supply Of Whittemore Based On Petitioner’s Asserted
`Reasoning That It Would Increase The Number Of Available
`Puffs .................................................................................................... 40
`9.4 Petitioner’s Rationale And Proposed Modifications To Brooks
`Are Fundamentally Flawed ................................................................ 41
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`9.5 Conclusion .......................................................................................... 42
`10. RESPONSE TO GROUND 5: THE PETITION SHOWS NO
`REASONABLE LIKELIHOOD THAT CLAIMS 1-3 ARE
`UNPATENTABLE OVER THE COMBINATION OF LIU IN VIEW
`OF SUSA ...................................................................................................... 43
`10.1 The Board Has Previously Determined In IPR2015-00859 That
`Susa’s “Formed Body 92” Is Not A “Porous Component” Or
`“A Heating Wire Wound On A Porous Component” Within The
`Meaning The ‘742 Patent Claims ....................................................... 43
`10.2 No New Argument Or Evidence That Would Warrant A
`Different Outcome From The Board’s Decision In IPR2015-
`00859 .................................................................................................. 46
`10.3 Conclusion .......................................................................................... 47
`11. RESPONSE TO GROUND 6: THE PETITION SHOWS NO
`REASONABLE LIKELIHOOD THAT CLAIMS 1-3 ARE
`UNPATENTABLE AS ANTICIPATED BY SUSA ................................... 48
`12. RESPONSE TO GROUND 7: THE PETITION SHOWS NO
`REASONABLE LIKELIHOOD THAT CLAIM 3 IS
`UNPATENTABLE AS OBVIOUS OVER SUSA ...................................... 49
`12.1 The Proposed Modification ................................................................ 49
`12.2 The Embodiments Of Figures 12 & 13, And “Formed Body 92” ..... 50
`12.3 Petitioner’s Proposed Modification Is Flawed ................................... 52
`12.1 Conclusion .......................................................................................... 54
`13. RESPONSE TO GROUND 8: THE PETITION SHOWS NO
`REASONABLE LIKELIHOOD THAT CLAIMS 1-3 ARE
`UNPATENTABLE OVER THE COMBINATION OF SUSA IN
`VIEW OF WHITTEMORE .......................................................................... 55
`13.1 Elements Missing From Combination Of Susa And Whittemore ..... 55
`13.2 Whittemore Is Not Reasonably Combined With Susa ....................... 56
`13.3 Petitioner’s Proposed Combinations Redesign The Device Of
`Susa Figure 13 And Change Susa’s Basic Operating Principles ....... 57
`13.4 There Is No Basis In The Evidence Of Record For Petitioner’s
`Alleged Motivations To Modify Susa ................................................ 58
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`13.5 Petitioner’s Reconstruction Of Susa Does Not Produce A
`Combination That Meets All Of The Elements Of The ‘742
`Patent Claims 1-3 ............................................................................... 59
`13.6 Conclusion .......................................................................................... 60
`14. CONCLUSION ............................................................................................. 60
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`TABLE OF AUTHORITIES
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`
`Page
`
`CASES
`ActiveVideo Networks, Inc. v. Verizon Comm., Inc.,
`649 F.3d 1312 (Fed. Cir. 2012) ............................................................................ 2
`
`Estee Lauder Inc. v. L'Oreal,S.A.,
`129 F.3d 588 (Fed. Cir. 1997) .............................................................................. 2
`
`Gen. Electric Co. v. Transdata, Inc.,
`IPR2014-01380 (PTAB April 15, 2015) .......................................................... 3, 4
`
`Gonzalez v. Banco Cent. Corp.,
`27 F.3d 751 (1st Cir. 1994) ................................................................................... 4
`
`In re Kahn,
`441 F.3d 977 (Fed. Cir. 2006) ...................................................................... 15, 39
`
`In re Ratti,
`270 F.2d 810 (CCPA 1959) .......................................................................... 53, 58
`
`Kinetic Tech., Inc. v. Skyworks Solutions, Inc.,
`IPR2014-00529 (PTAB September 23, 2014) ...................................................... 2
`
`KSR lnt'l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ....................................................................14, 15, 24, 27, 39
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) ............................................................ 9
`
`Taylor v. Sturgell,
`553 U.S. 880 (2008) .......................................................................................... 3, 7
`
`Tempo Lighting v. Tivoli,
`742 F.3d 973 (2013) .............................................................................................. 8
`
`Velander v. Garner,
`348 F.3d 1359 (Fed. Cir. 2003) ............................................................................ 2
`
`VMWare v. Good Tech. Software, Inc.,
`IPR2015-00031 (PTAB Mar. 6, 2015) ................................................................. 4
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`STATUTES
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`35 U.S.C. § 135 .......................................................................................................... 4
`
`35 U.S.C. § 314 .......................................................................................................... 1
`
`35 U.S.C. § 315 .................................................................................... 1, 3, 4, 5, 8, 60
`
`35 U.S.C. § 325 ........................................................................................................ 43
`
`OTHER AUTHORITIES
`
`37 C.F.R. § 42.100 ............................................................................................... 8, 47
`
`37 C.F.R. § 42.107 ..................................................................................................... 1
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`
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`LIST OF EXHIBITS
`
`Petitioner’s Exhibits
`
`Exhibit
`
`Description
`
`1001
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`
`1013
`
`1014
`
`1015
`
`1016
`
`1017
`
`1018
`
`U.S. Patent No. 8,365,742 (“’742 patent”)
`
`Declaration of Jeffrey A. Schuster, Ph.D.
`
`U.S. Patent No. 6,155,268 (“Takeuchi”)
`
`U.S. Patent No. 6,234,167 (“Cox”)
`
`U.S. Patent No. 4,947,874 (“Brooks”)
`
`U.S. Patent No. 2,057,353 (“Whittemore”)
`
`EP 0 845 220 (“Susa”)
`
`WO 2007/078273 A1 (“Liu”)
`
`‘742 Prosecution History, Preliminary Amendment
`
`‘742 Prosecution History, Non-final Office Action
`
`‘742 Prosecution History, Amendment
`
`‘742 Prosecution History, Supplemental Amendment
`
`‘742 Prosecution History, Examiner Interview Summary
`
`‘742 Prosecution History, Notice of Allowance
`
`‘742 Prosecution History, Certificate of Correction
`
`Fontem Litigation Joint Claim Construction Chart
`
`Claim Construction Rulings in CV 14-1645
`
`Webster’s New World Collegiate Dictionary (“detach”)
`
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`
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`1019
`
`1020
`
`1021
`
`1022
`
`1023
`
`Oxford American Dictionary & Thesaurus (“frame”)
`
`McGraw-Hill Dictionary of Scientific and Technical Terms
`(5th ed.
`
`Academic Press Dictionary (“permeability”) (“solid”)
`
`American Heritage Dictionary (“atomize”) (“end”)
`(“substantial”)
`
`Merriam-Webster.com (“aerosol”) (“atomizer”) (“permeable”)
`(“porous”)
`
`Patent Owner’s Exhibits
`
`Exhibit
`
`Description
`
`2001
`
`
`
`IPR2015-00859, Paper 9, Decision Denying Institution -
`September 16, 2015
`
`2002
`
`2003
`
`2004
`
`2005
`
`2006
`
`Kinetic Tech, Inc. v. Skyworks Solutions, Inc., Case IPR2014-
`00529, Paper 8, Decision Denying Institution of Inter Partes
`Review - September 23, 2014
`
`Fontem v. Logic Tech. Dev. LLC, Case No.14-cv-01654 (C.D.
`Cal.), Dkt. 20, Proof of Service of Complaint – March 12, 2014
`
`Fontem v. Logic Tech. Dev. LLC, Case No.14-cv-01654 (C.D.
`Cal.), Dkt. 24, Answer to First Amended Complaint - May 2,
`2015
`
`Press Release – JT Acquires Logic, April 30, 2015,
`http://www.jti.com/media/news-releases/jt-acquires-logic-
`leading-independent-us-e-cigarette-company/ (last visited
`October 20, 2015)
`
`Press Release – JT Completes Acquisition of Logic, July 28,
`2015, http://www.jti.com/media/news-releases/jt-completes-
`acquisition-leading-us-e-cigarette-company-logic/ (last visited
`October 20, 2015)
`
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`
`
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`2012
`
`2013
`
`2014
`
`2015
`
`2016
`
`2017
`
`IPR2015-01299 Paper 5 Petitioners’ Updated Mandatory
`Notices - August 17, 2015
`
`IPR2015-01301 Paper 6 Petitioners’ Updated Mandatory
`Notices - August 17, 2015
`
`IPR2015-01302 Paper 5 Petitioners’ Updated Mandatory
`Notices - August 17, 2015
`
`IPR2015-01304 Paper 5 Petitioners’ Updated Mandatory
`Notices - August 17, 2015
`
`Fontem v. NJOY, Case No.14-cv-01645 (C.D. Cal.), Dkt. 231
`Application to Appear Pro Hac Vice - George Jordan,
`September 4, 2015
`
`Fontem v. NJOY, Case No.14-cv-01645 (C.D. Cal.), Dkt. 232
`Application to Appear Pro Hac Vice - Eric Swenson,
`September 4, 2015
`
`Fontem v. NJOY, Case No.14-cv-01645 (C.D. Cal.), Dkt. 251
`Defendants’ Motion to Exclude Expert Testimony – September
`17, 2015
`
`Fontem v. NJOY, Case No.14-cv-01645 (C.D. Cal.), Dkt. 257
`Logic’s Motion for Summary Judgment of Non Infringement –
`September 17, 2015
`
`Fontem v. NJOY, Case No.14-cv-01645 (C.D. Cal.), Dkt. 254
`Defendants’ Motion for Summary Judgment of Invalidity -
`Sept. 17, 2015
`
`Gen. Electric Co. v. Transdata, Inc., Case IPR2014-01380,
`Paper 34, Decision Denying Institution of Inter Partes Review
`PTAB – April 15, 2015
`
`VMWare v. Good Tech. Software, Inc., Case IPR2015-00031,
`Paper 11, Decision Denying Institution of Inter Partes Review
`PTAB – March 6, 2015
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`
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`2018
`
`New Oxford American Dictionary, 2001
`
`2019
`
`IPR2015-00859, Paper 5, Patent Owner’s Preliminary
`Response to Petition for Inter Partes Review of U.S. Patent No.
`8,365,742, June 20, 2015
`
`2020
`
`Reserved
`
`Fontem v. NJOY, Case No.14-cv-01645 (C.D. Cal.), Dkt. 34,
`Revised Joint Claim Construction and Prehearing Statement,
`September 30, 2014
`
`Fontem v. Logic Tech. Dev. LLC, Case No.14-cv-01654 (C.D.
`Cal.), Dkt. 47, Order re Consolidation, January 22, 2015
`
`Fontem v. Logic Tech. Dev. LLC, Case No.14-cv-01654 (C.D.
`Cal.), Dkt. 1, Complaint, March 5, 2014
`
`2021
`
`2022
`
`2023
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`1.
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`INTRODUCTION
`JT INTERNATIONAL S.A., (“JTI” or “Petitioner”) filed a Petition for Inter
`
`Partes Review of U.S. Patent No. 8,365,742 (the “’742 patent”) on July 14, 2015.
`
`Petition (Paper 1). The Patent Trial and Appeal Board (the “Board”) mailed a
`
`Notice of Filing Date Accorded to Petition on July 31, 2015. Notice of Filing
`
`(Paper 4).
`
`Pursuant to 37 C.F.R. § 42.107, Fontem Holdings 1 B.V. (“Patent Owner”)
`
`submits this Preliminary Patent Owner Response requesting that the petition be
`
`denied because (i) the Petitioner has failed to establish “that there is a reasonable
`
`likelihood that the petitioner would prevail with respect to at least 1 of the claims
`
`challenged in the petition” under 35 U.S.C. § 314(a), and (ii) the Petition is barred
`
`under 35 U.S.C. § 315(b).
`
`1.1 The Prior Petition By VMR
`This is the second Petition for IPR that has been filed for the ’742 patent.
`
`The first was filed on March 10, 2015 by VMR Products LLC, and was denied on
`
`September 16, 2015. See, Case IPR2015-00859, Decision Denying Institution of
`
`Inter Partes Review (Paper 9) (the “VMR Decision”), provided as Ex. 2001 hereto.
`
`As discussed in the Decision, the seven grounds of unpatentability advanced in the
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`VMR Petition were deficient in multiple respects.
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`1.2 The New Petition By JTI
`The instant Petition suffers from the same fatal flaws as the earlier petition,
`
`including most notably the conclusory reasoning provided by Petitioner and its
`
`expert, Dr. Schuster. Petitioner resorts to attorney argument that the missing
`
`elements were “well known” and “obvious to one of ordinary skill.” But,
`
`“[a]rgument of counsel cannot take the place of evidence lacking in the record.”
`
`Estee Lauder Inc. v. L'Oreal, S.A., 129 F.3d 588, 595 (Fed. Cir. 1997). See also
`
`Velander v. Garner, 348 F.3d 1359, 1371 (Fed. Cir. 2003) (attorney argument and
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`conclusory statements, absent evidence, are entitled to little, if any, weight).
`
`Petitioner’s expert, Dr. Schuster submits a declaration (Ex. 1002) that verbatim
`
`repeats the assertions set forth in the copy of the Petition (Paper 1). ActiveVideo
`
`Networks, Inc. v. Verizon Comm., Inc., 649 F.3d 1312, 1327 (Fed. Cir. 2012)
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`(rejecting “conclusory and factually unsupported” expert testimony regarding
`
`obviousness). See also Kinetic Tech., Inc. v. Skyworks Solutions, Inc., IPR2014-
`
`00529, Paper 8, September 23, 2014, Decision Denying Institution of Inter Partes
`
`Review, p. 15 (PTAB 2014) (Ex. 2002) (“Merely repeating an argument from the
`
`Petition in the declaration of a proposed expert does not give that argument
`
`enhanced probative value.”).
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`2.
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`THE IPR PETITION IS TIME-BARRED BECAUSE PETITIONER
`JTI AND LOGIC ARE IN PRIVITY FOR PURPOSES OF § 315(b)
`2.1
`Under 35 U.S.C. § 315(b), an IPR trial will not be instituted if the petition is
`
`35 U.S.C. § 315(b)
`
`filed by a party to an earlier infringement suit, or a real-party-in-interest or a privy
`
`of a party to an earlier infringement suit, and more than one year has passed
`
`between the date the complaint in the suit was served and the date the IPR petition
`
`was filed. By its terms, the preclusive effect of §°315(b) extends beyond the
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`parties in an earlier-filed litigation to encompass certain nonparties, i.e., real-
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`parties-in-interest for, and privies of, the parties to the earlier-filed litigation.
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`"Whether a party who is not a named participant in a given proceeding
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`nonetheless constitutes a … 'privy' to that proceeding is a highly fact-dependent
`
`question." 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) (citing generally Taylor v.
`
`Sturgell, 553 U.S. 880 (2008)). Taylor enumerates a number of reasons to apply
`
`non-party preclusion, including when: (1) there is an agreement to be bound; (2)
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`there is a substantive legal relationship, such as between predecessor and successor
`
`or assignor and assignee; (3) there was adequate representation by a party with the
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`same interests; and (4) a non-party "assumed control" over the litigation involving
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`the party to be bound. Taylor, 553 U.S. at 893-95. The Board has found that
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`"assuming control" does not require "absolute control;" rather, "the opportunity to
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`exert the appropriate level of control is sufficient." Gen. Electric Co. v. Transdata,
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`Inc., IPR2014-01380, Paper 34 at 7-8 (PTAB April 15, 2015) (Ex. 2016) ("Gen.
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`Electric"), citing 77 Fed. Reg. at 48,759 ("A common consideration is whether the
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`non-party . . . could have exercised control . . . ."). See also Gonzalez v. Banco
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`Cent. Corp., 27 F.3d 751, 758 (1st Cir. 1994) ("[C]ontrol means . . . the power—
`
`whether exercised or not—to call the shots."). The Board in Gen. Electric Co.,
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`further held that the § 315(b) bars “institution of a later proceeding when the later
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`proceeding’s petitioner and an entity involved in the earlier litigation are privies
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`with respect to the earlier litigation.” Id. at 12.
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`The Board does not limit the privity inquiry to the date the litigation was
`
`filed or the date of the involved IPR petition. Rather, privity may be based on
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`events that occur after the start of the involved litigation. Gen. Electric at 7-8 et
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`seq. (privity established on Dec. 30, 2011 after lawsuit filed Sept. 21, 2011 was
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`sufficient to implicate 35 U.S.C. § 135(b)). (Ex. 2016). See also, e.g., VMWare v.
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`Good Tech. Software, Inc., IPR2015-00031, Paper 11 at 3-4 (PTAB Mar. 6, 2015)
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`(Ex. 2017) ("VMWare") (§ 315(b) bar applied where petitioner became privy of
`
`litigant more than one year after the litigation was filed). In VMWare, the Board
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`held that the plain language of § 315(b) did not preclude consideration of "events
`
`and activities" after the complaint was served in the action against AirWatch,
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`including VMWare's acquisition of AirWatch after the one-year bar date of §
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`315(b). Id. Importantly, the Board found that VMWare's subsequent relationship
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`of privity with AirWatch was sufficient to invoke the one-year bar of § 315(b). Id.
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`2.2 Timeline
`On March 5, 2014, Fontem filed a complaint in the Central District of
`
`California (“CACD”) against Logic Technology Development, LLC (“Logic”) for
`
`infringement of the ‘742 patent. Ex. 2023; Fontem Ventures B.V. et al. v. Logic
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`Tech. Dev. LLC, CACD case no. 2:14-cv-01654 (the “Logic Litigation”). The
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`complaint was served on Logic on March 12, 2014. Ex. 2003. Logic’s counsel at
`
`the outset of the Logic Litigation was Victor de Gyarfas of Foley & Lardner.
`
`Following an agreement to extend time to answer, and the filing of an amended
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`complaint, Mr. de Gyarfas answered the amended complaint on May 2, 2014, and
`
`alleged, inter alia, invalidity, non-infringement and unenforceability of the ‘742
`
`patent. Ex. 2004.
`
`Under 35 U.S.C. § 315(b), the one-year bar for Logic or a real-party-in-
`
`interest or privy of Logic to file an IPR petition on the ‘742 patent was triggered on
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`March 12, 2015. On April 30, 2015, Petitioner JTI announced it had reached
`
`agreement to acquire Logic. Ex. 2005. On June 26, 2015, JTI’s attorneys
`
`Swenson and Jordan III from the firm Norton Rose Fulbright US LLP (“NRF”)
`
`filed the instant Petition. These same NRF attorneys also filed two additional
`
`petitions against patents in the Logic Litigation, namely, 8,375,957 and 8,689,805,
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`filed on June 26 and July 15, 2015, respectively. See IPR2015-01513 (’957) and
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`IPR2015-01578 (’805).
`
`On July 27, 2015, JTI completed its acquisition of Logic, and the closing
`
`was publicized by JTI the next day. (Ex. 2006). On August 17, 2015, Logic and
`
`its co-petitioners in four pending IPRs against Fontem patents filed notices styled
`
`as “Petitioners’ Updated Mandatory Notices,” stating that as a result of being
`
`acquired, “JT International S.A. is a real party-in-interest for Logic Technology
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`Development LLC….” Exs. 2007-2010.
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`On September 4, 2015, JTI’s NRF attorneys Swenson and Jordan III (and
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`two other NRF attorneys) applied to appear pro hac vice in the Logic Litigation.
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`Their applications state that these NRF attorneys were now also being retained to
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`represent Logic.1 See, Exs. 2011, 2012. On September 17, 2015, JTI’s attorneys
`
`Swenson and Jordan III filed motions in the Logic Litigation, including a motion to
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`exclude evidence (Ex. 2013), and summary judgment motions for non-
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`infringement (Ex. 2014) and invalidity (Ex. 2015). The cover page of Ex. 2014,
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`and the signature blocks of Exs. 2013 and 2015, show that Attys. Swenson and
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`Jordan III are now lead counsel in the Logic Litigation.
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`1 The NRF attorneys filed their appearances in the Logic Litigation in Case No.
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`CV14-1645-GW (MRWx) per the Court's order. Ex. 2022, p. 1.
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`2.3 Petitioner JTI Is In Privity With Logic.
`The successor-in-interest relationship is a strong indicator of privity. Taylor
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`at 894 (“Qualifying relationships include, but are not limited to, … succeeding
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`owners of property....”). As noted above, Logic informed the PTO on August 17,
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`2015 that, because of the acquisition, Petitioner had supplanted Logic as the real-
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`party-in-interest in Logic’s four IPRs against Fontem’s patents. Exs. 2007-2010.
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`After Petitioner agreed to acquire Logic, Petitioner’s NRF attorneys
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`Swenson and Jordan III (i) filed the instant Petition and two others directed to
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`Fontem’s patents in the Logic Litigation, and (ii) supplanted Logic’s other
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`attorney, Mr. de Gyarfas, as lead counsel in the Logic Litigation. Attys. Swenson
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`and Jordan III filed their IPR petitions as attorneys for Petitioner, and their
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`pleadings in the Logic Litigation as attorneys for Logic. As lawyers for Petitioner,
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`they are ethically obligated to represent the interests of Petitioner. Petitioner thus
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`not only has the “opportunity to exert the appropriate level of control in the [Logic
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`Litigation],” but is de facto playing a substantial role in the Logic Litigation by
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`virtue of having its own attorneys leading the defense. At minimum, Petitioner
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`“has the actual measure of control or opportunity to control that might reasonably
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`be expected between two formal coparties.”’ See, Gen. Electric, Paper 34 at 7-8.
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`(Ex. 2016). As such, Petitioner is in privity with Logic in the prior filed litigation
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`involving the ’742 Patent. Thus, like the Board held in Gen. Electric, Petitioner is
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`also barred from requesting IPR institution when Petitioner and Logic are admitted
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`to be privies with respect to the earlier litigation involving the ’742 Patent.
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`The facts of this case closely parallel those of VMWare. (Ex. 2017). In both
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`VMWare and this IPR, (i) the party in litigation was acquired after the § 315(b)
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`one-year bar expired, (ii) the IPR petition in issue was filed by the acquiring parent
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`corporation after the after the § 315(b) one-year bar expired, and (iii) privity arose
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`between the parent entity and its wholly owned subsidiary after the lawsuit was
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`filed. The result here should be no different than in VMWare. Since Petitioner
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`filed the instant Petition more than one year after its privy Logic was served with a
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`complaint alleging patent infringement, Petitioner’s petition is barred under
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`§ 315(b).
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`3.
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`CLAIM CONSTRUCTION
`In an inter partes review proceeding, “[a] claim in an unexpired patent shall
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`be given its broadest reasonable construction in light of the specification of the
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`patent in which it appears.” 37 C.F.R. § 42.100(b). Under that standard, primacy
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`is given “to the language of the claims, followed by the specification.
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`Additionally, the prosecution history, while not literally within the patent
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`document, serves as intrinsic evidence for purposes of claim construction.” Tempo
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`Lighting v. Tivoli, 742 F.3d 973, 977 (2013). Moreover, claims are construed from
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`the perspective of one of ordinary skill in the art at the time of the invention.
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`Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005) (en banc).
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`3.1 Porous Component
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`Patent Owner’s Construction
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`Petitioner’s Construction
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`A component of the atomizer assembly
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`A part which liquid or gas can pass
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`having pores providing for absorption or
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`through or be absorbed by.” Petition at
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`diffusion of liquid.
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`pp. 11-12 (Paper 1).
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`In denying the IPR Petition in IPR 2015-00859 involving the ’742 Patent,
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`the Board construed the term porous component to mean “a component of the
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`atomizer assembly in the electronic cigarette that includes pores and is permeable
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`to liquid, such as cigarette solution from the cigarette solution storage area.” Ex.
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`2001 at 10. While Patent Owner agrees that the porous component absorbs liquid,
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`not gas, the Board’s definition is too broad.
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`As described in the ’742 Patent, the porous component provides “liquid
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`absorption and diffusion, and the ability to absorb liquid stored in the cigarette
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`bottle assembly.” Ex. 1001-0013, ’742 Patent, 3:25–26. And, that it “absorbs the
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`cigarette liquid from the perforated component for liquid storage….” Ex. 1001-
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`0013, ’742 Patent, 3:66–67. The function of the porous component is to draw
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`liquid from the liquid storage to the atomizer for vaporization. That is why the
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`porous component is in the atomizer assembly, has a coil wrapped around it, and is
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`in contact with the liquid supply. It is not merely a component that has holes and
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`is therefore permeable to liquid.
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`Petitioner proposes a broader definition than the Board, specifically that the
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`porous component be permeable to liquid or gas. Petitioner’s construction is
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`unreasonably broad because, as explained above, based upon the claims and the
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`disclosure of the ‘742 patent, a porous component is not simply a component with
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`holes that is permeable to gas. It absorbs liquid from the liquid supply and delivers
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`it to the coil for atomization.
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`3.2 Liquid Supply And Liquid Storage Component
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`Patent Owner’s Construction
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`Petitioner’s Construction
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`A supply of liquid; a component that
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`None.
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`stores a supply of liquid.
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`Claims 2 and 3 of the ’742 patent recite a “liquid storage component” and a
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`“liquid supply,” respectively. “Liquid supply” needs no construction and means
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`exactly what it says: a supply of liquid. Similarly, a “liquid storage component”
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`needs no construction and is a component that stores a supply of liquid. The ’742
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`patent specification discloses “[a] component for liquid storage of the cigarette
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`bottle assembly stores the nicotine liquid.” Ex. 1001-012, ’742 Patent, 1:38–39.
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`“The perforated component for liquid storage (9) is made of such materials as PLA
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`fiber, terylene fiber or nylon fiber, which are suitable for liquid storage” and “[t]he
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`perforated component for liquid storage (9) of the cigarette bottle assembly and the
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`porous component (81) of the atomizer (8) contact each other to achieve the
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`capillary impregnation for liquid supply.” Ex. 1001-0013, ’742 Patent, 3:1–54,
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`4:36–40.
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`3.3 Frame
`In denying the IPR Petition in IPR 2015-00859 involving the ’742 Patent,
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`the Board construed the term frame to mean “a rigid structure.” Ex. 2001 at 8.
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`Petitioner adopts the Board’s construction. Patent Owner does not disagree but
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`notes that the frame need only be sufficiently rigid to support or hold up the porous
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`component.
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`3.4 Heating Wire Wound On A Part Of The Porous Component
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`Patent Owner’s Construction
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`Petitioner’s Construction
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`The heating wire is wrapped around and
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`None.
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`in contact with a part of the porous
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`component.
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`Claims 1–3 of the ’742 patent recite “a heating wire wound on a part of the
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`porous component.” The ’742 patent specification discloses and illustrates such an
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`embodiment in Figs. 17 and 18. The description of Figs. 17 and 18 includes: “The
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`porous component (81) is wound with heating wire (83) in the part that is on the
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`side in the axial direction of the run-through hole (821).” Ex. 1001-0014, ‘742
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`Patent at 5:47–49. Fig. 18 shows the heating wire is in contact with the part of the
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`porous component. Consistent with the above construction of the porous
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`component to draw liquid from the liquid supply to the atomizer for atomization,
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`the heating wire is “wound on a part of the porous component.” Emphasis added.
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`The word “on” further indicates that the wire touches the component. The New
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`Oxford American Dictionary defines “on” to mean “1. Physically in contact with
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`and supported by (a surface).” Ex. 2018 at 1194.
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`3.5 Run-Through Hole
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`Patent Owner’s Construction
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`Petitioner’s Construction
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`A hole extending through.
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`A passageway between surfaces of a
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`body or bodies. Petition, p. 9.
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`Cl