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 8,365,742 B2
`
`___________________________________
`
`
`
`JOINT MOTION TO TERMINATE
`PURSUANT TO 35 U.S.C. § 317
`
`
`
`
`
`
`
`111971-0003.0001/128728229.1
`
`
`
`___________________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`___________________________________
`
`JT International, S.A.,
`Petitioner,
`
`v.
`
`FONTEM HOLDINGS 1 B.V.,
`Patent Owner.
`
`___________________________________
`
`
`
`Case IPR2015-01587
`Patent 8,365,742 B2
`
`___________________________________
`
`
`
`JOINT MOTION TO TERMINATE
`PURSUANT TO 35 U.S.C. § 317
`
`
`
`
`
`
`
`111971-0003.0001/128728229.1
`
`
`
`IPR2015-01587
`U.S. Patent No. 8,365,742
`Pursuant to 35 U.S.C. § 317(a) and 37 C.F.R. § 42.74, Petitioner JT Interna-
`
`tional, S.A. (“JTI”) and Patent Owner Fontem Holdings 1 B.V. (“Patent Owner”)
`
`jointly move the Patent Trial and Appeal Board (“Board”) to terminate the
`
`IPR2015-01587 proceeding.1
`
`On December 1, 2015, Patent Owner and Petitioner JTI notified the Board
`
`that they reached a settlement agreement, including a license agreement, resolving
`
`all disputes between them involving the patent-at-issue in the IPR2015-01587 pro-
`
`ceeding, and further requested guidance and permission to file a motion to termi-
`
`nate the IPR2015-01587 proceeding. On December 1, 2015, the Board authorized
`
`Patent Owner and Petitioner JTI to file a joint motion to terminate and a joint re-
`
`quest to treat the settlement agreement as business confidential.
`
`Pursuant to 35 U.S.C. § 317(b) and 37 C.F.R. § 42.74(b), a true copy (in-
`
`cluding counterparts) of the confidential settlement agreement and license agree-
`
`ment is filed herewith. Because the settlement agreement and license agreement
`
`are confidential, Patent Owner and Petitioner JTI respectfully request that it be
`
`treated as business confidential information and kept separate from the underlying
`
`patent file, as provided in 35 U.S.C. § 317(b) and 37 C.F.R. § 42.74(c).
`
`As stated in 35 U.S.C. § 317(a), because Petitioner JTI and Patent Owner are
`
`
`The Board has not yet issued a decision as to whether trial will be instituted;
`1
`therefore, the IPR2015-01587 proceeding is still in its preliminary proceeding
`stage. 37 C.F.R. § 42.2.
`
`111971-0003.0001/128728229.1
`
`1
`
`
`
`IPR2015-01587
`U.S. Patent No. 8,365,742
`jointly requesting termination of the IPR2015-01587 proceeding, no estoppel under
`
`35 U.S.C. § 315(e) shall attach to Petitioner JTI.
`
`I.
`
`TERMINATION OF THE INTER PARTES REVIEW PROCEEDING
`IS APPROPRIATE
`
`An inter partes review (IPR) “shall be terminated with respect to any peti-
`
`tioner upon the joint request of the petitioner and the patent owner, unless the Of-
`
`fice has decided the merits of the proceeding before the request for termination is
`
`filed.” 35 U.S.C. § 317(a). “If no petitioner remains in the inter partes review, the
`
`Office may terminate the review or proceed to a final written decision under sec-
`
`tion 318(a).” Id.
`
`There is an expectation that an IPR will be terminated after the filing of a
`
`settlement agreement because “[t]here are strong public policy reasons to favor set-
`
`tlement between the parties to a proceeding. . . .” Office Patent Trial Practice
`
`Guide, 77 Fed. Reg. 48,756, 48,768 (Aug. 14, 2012) (“The Board expects that a
`
`proceeding will terminate after the filing of a settlement agreement, unless the
`
`Board has already decided the merits of the proceeding.”). The expectation of ter-
`
`mination in connection with settlement is due to the adjudicatory nature of IPR
`
`proceedings, as contrasted with the examinational nature of the inter partes reex-
`
`amination proceedings they replaced. See, e.g., Idle Free Systems Inc. v. Berg-
`
`strom Inc., IPR2012-00027, Paper 26 at 6 (June 11, 2013) (“An inter partes review
`
`is more adjudicatory than examinational, in nature.”); Abbott Labs v. Cordis Corp.,
`
`111971-0003.0001/128728229.1
`
`2
`
`
`
`IPR2015-01587
`U.S. Patent No. 8,365,742
`710 F.3d 1318, 1326 (Fed. Cir. 2013) (“In 2011, Congress replaced inter partes
`
`reexamination with a new proceeding called inter partes review.… The purpose of
`
`this reform was to ‘convert[] inter partes reexamination from an examinational to
`
`an adjudicative proceeding,’ ….”) (citations omitted).
`
`Here, the IPR2015-01587 proceeding should be terminated in its entirety be-
`
`cause of the strong public policy and expectation that IPRs will terminate upon set-
`
`tlement prior to a decision on the merits. The IPR2015-01587 proceeding is still in
`
`its preliminary stage as the Board has not yet issued a decision as to whether a trial
`
`will be instituted. As such, termination would save significant further expenditures
`
`of resources by the Board and the parties.
`
`The IPR2015-01587 proceeding should also be terminated because the par-
`
`ties jointly request termination. Patent Owner and Petitioner JTI have resolved the
`
`IPR2015-01587 proceeding and related litigation through settlement.
`
`Termination of the IPR2015-01587 proceeding in view of settlement also
`
`provides a measure of certainty as to the outcome, promoting settlements and cre-
`
`ating a timely, cost-effective alternative to litigation. And such termination is con-
`
`sistent with the adjudicatory nature of IPRs. Once termination is effected, there
`
`will be no counter-party in this proceeding and no need for an adjudicatory pro-
`
`ceeding.
`
`111971-0003.0001/128728229.1
`
`3
`
`
`
`IPR2015-01587
`U.S. Patent No. 8,365,742
`For at least those reasons discussed above, Patent Owner and Petitioner JTI
`
`respectfully request that the Board terminate the IPR2015-01587 proceeding.
`
`II. MATTERS RELATED TO THE INTER PARTES REVIEW PRO-
`CEEDING
`
`The patent-at-issue in the IPR2015-01587 proceeding is the subject of sever-
`
`al federal district court litigations, including one matter that involves Patent Owner
`
`and Logic Tech. Dev. LLC (“Logic”). Logic was acquired by Petitioner JTI on Ju-
`
`ly 27, 2015. There is one other petition for IPR of the patent-at-issue. See
`
`IPR2015-00859. The settlement agreement and license agreement have resolved
`
`all disputes involving the patent-at-issue between Patent Owner and Petitioner JTI,
`
`and Patent Owner and Logic.
`
`A. Case No. 2:14-CV-01645 (C.D. Cal.) Relates to the Inter Partes
`Review Proceeding
`
`Patent Owner filed a patent infringement suit against Logic in the United
`
`States District Court for the Central District of California, captioned Fontem Ven-
`
`tures BV et al. v. Logic Technology Development LLC, Case No. 2-14-cv-01654.
`
`Patent Owner accused Logic of infringing the patent-at-issue in the IPR2015-
`
`01587 proceeding in addition to four other patents. This litigation was consolidat-
`
`ed with several related cases asserting four additional patents against Logic. As a
`
`result, a total of nine patents have been asserted against Logic in the consolidated
`
`111971-0003.0001/128728229.1
`
`4
`
`
`
`IPR2015-01587
`U.S. Patent No. 8,365,742
`action (Case No. 2-14-cv-01645). Those litigations are covered by Patent Owner
`
`and Petitioner JTI’s settlement agreement and license agreement.
`
`Patent Owner also filed patent infringement suits against other entities as-
`
`serting the patent-at-issue in the United State District Court for the Central District
`
`of California, captioned Fontem Ventures BV et al. v. LOEC, Inc. et al., Case No.
`
`2-14-cv-01648; Fontem Ventures B.V. et al. v. NJOY, Inc., Case No. 2:14-cv-
`
`01645; Fontem Ventures BV et al. v. Ballantyne Brands, LLC, Case No. 2-14-cv-
`
`01652; Fontem Ventures BV et al. v. CB Distributors, Inc. et al., Case No. 2-14-cv-
`
`01649; Fontem Ventures BV et al. v. Spark Industries, LLC, Case No. 2-14-cv-
`
`01653; Fontem Ventures BV et al. v. Vapor Corp., Case No. 2-14-cv-01650; Fon-
`
`tem Ventures BV et al. v. VMR Products, LLC, Case No. 2-14-cv-01655; Fontem
`
`Ventures BV et al. v. FIN Branding Group, LLC et al., Case No. 2-14-cv-01651.
`
`B. Board Proceedings
`
`As mentioned above, there is one other petition for IPR of the patent-at-
`
`issue. Petitioner VMR Products, LLC filed IPR2015-00859 on March 10, 2015
`
`against the patent-at-issue. That petition for IPR2015-00859 was denied and no
`
`IPR was instituted. IPR2015-00859, Pap. 9 at 32 (September 16, 2015). Petitioner
`
`JTI was not a party to that IPR.
`
`III. CONCLUSION
`
`Patent Owner and Petitioner JTI respectfully request that the Board grant the
`
`111971-0003.0001/128728229.1
`
`5
`
`
`
`IPR2015-01587
`U.S. Patent No. 8,365,742
`parties’ joint motion to terminate the IPR2015-01587 proceeding in its entirety and
`
`grant the accompanying request to treat the settlement agreement and license
`
`agreement between Patent Owner and Petitioner JTI as business confidential in-
`
`formation.
`
`Patent Owner and Petitioner JTI are available at the Board’s convenience to
`
`discuss these related matters in more detail or answer any additional questions
`
`raised by this joint motion.
`
`
`
`
`
`
`
`December 4, 2015
`
`By: /Erik G. Swenson/
`Erik G. Swenson (Lead Counsel)
`Reg. No. 45,147
`NORTON ROSE FULBRIGHT US
`LLP
`3100 RBC Plaza, 60 South 6th St.
`Minneapolis, MN 55402
`Phone: 612-321-2266
`Facsimile: 612-321-2288
`erik.g.swenson@nortonrosefulbright.com
`
`
`
`Lead Counsel for Petitioner
`
`
`
`
`
`
`Respectfully submitted,
`
`By: /Michael J. Wise/ _______
`Michael J. Wise
`Reg. No. 34,047
`PERKINS COIE LLP
`1888 Century Park East, Suite 1700
`Los Angeles, CA 90067
`Phone: 310-788-3210
`Facsimile: 310-788-3399
`MWise@PerkinsCoie.com
`
`
`
`Lead Counsel for Patent Owner
`
`
`
`111971-0003.0001/128728229.1
`
`6
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that a copy of the following document has
`
`
`
`been served in its entirety by filing the JOINT MOTION TO TERMINATE PUR-
`
`SUANT TO 35 U.S.C. § 317 through the Patent Review Processing System, as
`
`well as by causing the aforementioned document to be electronically mailed, pur-
`
`suant to the parties’ agreement, to the following attorneys of record for Petitioner
`
`
`
`
`
`
`
`listed below:
`
`Erik G. Swenson, Lead Counsel
`George W. Jordan III, Backup Counsel
`Norton Rose Fulbright US LLP
`erik.g.swenson@nortonrosefulbright.com
`george.jordan@nortonrosefulbright.com
`
`
`
`Dated:
`
`
`
`
`
`December 4, 2015
`
`
`
`
`
`
`
`/Amy Candeloro/
`Paralegal
`PERKINS COIE LLP
`
`
`
`
`
`111971-0003.0001/128728229.1
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