UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`PALO ALTO NETWORKS, INC.,
`Petitioner,
`v.
`FINJAN, INC.,
`Patent Owner.
`_______________
`
`Patent No. 8,141,154 B2
`
`_______________
`Inter Partes Review No. IPR2015-01979
`____________________________________________________________
`
`PETITIONER PALO ALTO NETWORKS, INC.’S BRIEF ON ESTOPPEL
`
`
`
`
`
`
`
`
`_______________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`PALO ALTO NETWORKS, INC.,
`Petitioner,
`v.
`FINJAN, INC.,
`Patent Owner.
`_______________
`
`Patent No. 8,141,154 B2
`
`_______________
`Inter Partes Review No. IPR2015-01979
`____________________________________________________________
`
`PETITIONER PALO ALTO NETWORKS, INC.’S BRIEF ON ESTOPPEL
`
`
`
`
`
`
`
`
`
`IPR2016-01979
`
`
`
`Patent No. 8,141,154 B2
`
`Petitioner Palo Alto Network (“PAN”) hereby submits this brief in response
`
`to the Board’s October 20, 2016 Order (Paper 24) requesting supplemental briefing
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`on the potential impact of estoppel under 35 U.S.C. § 315(e)(1) on this proceeding
`
`in view of the earlier due date for a final written decision in IPR2015-01979.
`
`If the Board issues a final decision in IPR2015-01979 prior to issuing a final
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`decision in this case, no estoppel should apply. At the time of the first final
`
`decision, PAN’s role in the proceedings will have been completed, and thus PAN
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`would not be taking further action “maintaining” this proceeding. Under its plain
`
`language, the provisions of § 315(e)(1) would therefore not be applicable.
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`Alternatively, to the extent that the Board determines there is an estoppel, the
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`Board can and should proceed to render a final written decision in this case,
`
`furthering the PTAB’s policy goal of maintaining judicial economy. Finally, the
`
`Board in its discretion could issue a final decision on both IPR proceedings on the
`
`same day, so as to avoid the estoppel issue altogether.
`
`I.
`
`ARGUMENT
`PAN Should Not Be Estopped Under 35 U.S.C. § 315(e)(1)
`A.
`Because It Would Not Be “Maintain[ing] a Proceeding Before the
`Office”
`Estoppel attaches only when an inter partes review reaches a final written
`
`decision. 35 U.S.C. § 315(e)(1). Thus, no estoppel effect could be triggered until
`
`the final written decision in Case IPR2015-01979, due by March 21, 2017, issues.
`
`1
`
`
`
`IPR2016-01979
`
`
`
`Patent No. 8,141,154 B2
`
`The estoppel provisions restrict a Petitioner from performing only two
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`actions with respect to inter partes reviews: (1) requesting a proceeding, and (2)
`
`maintaining a proceeding on grounds that were raised or could have been raised in
`
`a prior petition for which a final written decision has been issued. A plain reading
`
`of the phrase “maintain a proceeding” means that the Petitioner must be actively
`
`participating in the proceedings in order for the estoppel provision to apply. The
`
`statute doesn’t state that a party cannot “remain a party to a proceeding.” It instead
`
`estops a Petitioner from performing actions that maintain the proceeding. Thus, a
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`Petitioner cannot be said to be “maintaining” a proceeding where the evidentiary
`
`record has closed, the oral hearing has concluded, and the proceeding is simply
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`awaiting the Board’s decision.
`
`Given the current schedule, as of March 2017, when a final decision in
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`IPR2015-01979 is due, the final hearing in this proceeding will have been
`
`completed approximately two months earlier, as it is currently set for January 24.
`
`Thus, if the PTAB issues a final decision in IPR2015-01979 in March 2017, the
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`record will be complete, oral argument completed, and by that point PAN will need
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`to take no additional action in this proceeding.
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`Here, by the time IPR2015-01979 reaches a final written decision, PAN’s
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`role in the proceedings will have come to an end and the trial will have been
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`completed. See CBS Interactive Inc. v. Helferich Patent Licensing, LLC, IPR2013-
`
`2
`
`
`
`IPR2016-01979
`
`
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`Patent No. 8,141,154 B2
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`00033, Paper 118 at 2-3 (Oct. 23, 2013) (holding that by time proceeding reaches
`
`final oral hearing, trial is complete). All that would remain is for the Board to
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`issue a final written decision. Indeed, by that point, as discussed below, the Board
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`may even continue the proceeding without any Petitioners. Petitioners cannot be
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`said to be “maintain[ing]” the proceeding if the proceeding can continue without it.
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`The issue of what action constitutes “maintaining a proceeding” has been
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`previously considered by other panels. In Apple Inc. v. Smarthflash LLC,
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`CBM2015-00015, Paper 49 at 4-5 (Nov. 4, 2015), although the evidentiary record
`
`had closed, the oral hearing had not yet occurred. There, the Board found that
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`‘maintain[ing] a proceeding’ includes presenting argument at the hearing.” Id. at
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`5. Here, by contrast, the oral hearing, scheduled for January 24, 2017, will have
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`already concluded. By the time a Final Written decision is issued in IPR2015-
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`01979, there will be no further participation required of PAN in this proceeding—
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`“presenting argument at the hearing” or otherwise. Thus, because there will be
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`nothing more for PAN to do, PAN would not be “maintain[ing]” the proceeding
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`and should thus not be estopped under Section 315(e)(1).
`
`3
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`
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`IPR2016-01979
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`
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`Patent No. 8,141,154 B2
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`B.
`
`The Board Should Proceed to a Final Written Decision Even If
`PAN Is Estopped from This Proceeding
`1. Without PAN, the Petition Lives On Because Symantec
`Remains a Petitioner in This Proceeding
`The Board has discretion to terminate an inter partes review only “[i]f no
`
`Petitioner remains in the inter partes review.” 35 U.S.C. § 317(a). Here, PAN is
`
`not the sole Petitioner. On May 19, 2016, Symantec filed a petition requesting
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`inter partes review of the same claims of U.S. Patent No. 8,141,154 and
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`concurrently filed a motion for joinder to join this proceeding. Symantec Corp. v.
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`Finjan, Inc., IPR2016-01071, Paper 1 and 3 (May 19, 2016). On
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`September 8, 2016, the Board granted that request.
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`The reasons set forth above for why Palo Alto Networks should not be
`
`estopped are equally applicable to Symantec. Symantec should not be estopped for
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`one additional reason, that Symantec could not have raised the Ross-based grounds
`
`upon which trial was instituted in this proceeding in its petition in case no.
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`IPR2016-00919 (which was subsequently joined to IPR2015-01979, see IPR2016-
`
`00919, Paper No. 10). Specifically, Symantec filed its petition in IPR2016-00919
`
`more than one year after Finjan filed a complaint asserting the ‘154 patent against
`
`Symantec. Accordingly, absent joinder to another instituted petition, Symantec’s
`
`petition in IPR2016-00919 would have been time barred. However, if Symantec
`
`had attempted to raise grounds not raised in IPR2015-01979 in its petition in
`
`4
`
`
`
`IPR2016-01979
`
`
`
`Patent No. 8,141,154 B2
`
`IPR2016-00919 (like the Ross-based grounds instituted in this proceeding),
`
`Symantec’s motion for joinder in IPR2016-00919 would have been denied, and
`
`Symantec’s petition in IPR2016-00919 would have then been denied as time-
`
`barred pursuant to Section 315(b). See Harmonix Music Systems, Inc. v. Princeton
`
`Digital Image Corp., IPR2015-00271, Paper 15 at 4 (“the Petition includes a new
`
`challenge to both a claim not instituted in the ’635 IPR, claim 14, and claims
`
`instituted in the ’635 IPR, claims 5–7 and 16–18, based on a new combination of
`
`references considered in the ’635 IPR”); id. at 11 (denying motion for joinder);
`
`Harmonix Music Systems, Inc. v. Princeton Digital Image Corp., IPR2015-00271,
`
`Paper 14 at 8 (denying institution because the Board “denie[d] the Motion for
`
`Joinder”); IPR2016-00919, Paper No. 10 (in granting Symantec’s motion for
`
`joinder, noting that “[t]he Petition here is substantially identical to the Petition in
`
`the PAN IPR”). Accordingly, because Symantec could not have raised the Ross-
`
`based grounds upon which this proceeding were instituted in the IPR2015-
`
`01979/IPR2016-00919 proceeding, Symantec should not be estopped from
`
`maintaining this proceeding.
`
`2.
`
`The Board Has the Authority to Proceed to a Final Written
`Decision Without Any Petitioners
`Even if the Board were to determine that an estoppel applied, the Board
`
`retains the authority to continue to a final written decision. Section 315(e)(1)
`
`defines limitations on the actions of the Petitioner (or its real party in interest or
`
`5
`
`
`
`IPR2016-01979
`
`
`
`Patent No. 8,141,154 B2
`
`privy): “[t]he Petitioner in an inter partes review . . . may not request or maintain
`
`a proceeding before the Office.” 35 U.S.C. § 315(e)(1) (emphasis added). The
`
`statute, however, does not proscribe actions that the Board may take. Apple Inc. v.
`
`Smartflash LLC, CBM2015-00015, Paper 49 at 5 (Nov. 4, 2015). Indeed, the
`
`Federal Circuit has so confirmed. In Progressive Casualty Insurance Co. v.
`
`Liberty Mutual Insurance Co., the Federal Circuit held that 35 U.S.C. § 325(e)(1),
`
`an analogous estoppel statute for covered business method patent reviews, “by its
`
`terms does not prohibit the Board from reaching decisions. It limits only certain
`
`(requesting or maintaining) actions by a Petitioner.” No. 2014-1466, 2015 WL
`
`5004949, at *2 (Fed. Cir. Aug. 24, 2015). Accordingly, Section 315(e)(1) likewise
`
`does not prohibit the Board from reaching a final written decision. The Board is
`
`thus free to reach the merits and issue a final written decision in this proceeding,
`
`even if PAN were dismissed from the case.
`
`Indeed, neither the statute nor the Board rules mandate the Board to
`
`terminate an IPR trial when no Petitioner remains as a result of estoppel. To the
`
`contrary, the Board remains authorized to “proceed to a final written decision
`
`under section 318(a),” even “[i]f no Petitioner remains in the inter partes review.”
`
`35 U.S.C. § 317(a); see also 37 C.F.R. § 42.74. The Federal Circuit has also
`
`indicated that the Board is free to reach the merits and issue a final written decision
`
`when no Petitioner remains, either as a result of settlement or estoppel.
`
`6
`
`
`
`IPR2016-01979
`
`
`
`Patent No. 8,141,154 B2
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`No. 2014-1466, 2015 WL 5004949, at *2 (discussing “Board authority to enter a
`
`decision” “even after Petitioner settles and drops out of the proceeding”). Various
`
`panels of the Board have done just so and proceeded to reach the merits and issue a
`
`final written decision when no Petitioner remained as a result of settlement.
`
`BlackBerry Corp. v. MobileMedia Ideas LLC, IPR2013-00016, Paper 31
`
`(Dec. 11, 2013); InterThinx, Inc. v. CoreLogic Solutions, LLC, CBM2012-00007,
`
`Paper 47 (Nov. 12, 2013).
`
`Judicial economy favors reaching the merits and issuing a final written
`
`decision in this case. By the time Section 315(e)(1) could apply, the evidentiary
`
`record will be complete, and significant will have already been done by the Board
`
`and the parties. In view of the fully developed record, the resources expended, and
`
`the district court case stayed in reliance on this proceeding, there is a strong public
`
`interest in resolving the issues raised by this IPR. Yahoo! Inc. v. CreateAds LLC,
`
`IPR2014-00200, Pap. 40 at 2 (Feb. 26, 2015). Indeed, in similarly postured cases,
`
`the Board has issued a final written decision even when no Petitioner remained, in
`
`light of the advanced stage of the proceeding and especially where “trial issues had
`
`been briefed fully.” BlackBerry Corp., IPR2013-00016, Paper 31 at 3; also Inter-
`
`thinx, Inc., CBM2012-00007, Paper 47 at 2-3; cf. also Google Inc. v. Unwired
`
`Planet, LLC, IPR2014-00037, Paper 20 at 2-3 (June 12, 2014).
`
`7
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`
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`IPR2016-01979
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`
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`Patent No. 8,141,154 B2
`
`3.
`
`Alternatively, the Board Should Exercise Its Discretion to
`Avoid the Estoppel Effect of Section 315(e)(1) by Issuing
`Both Final Written Decisions on the Same Date
`Finally, given that the final written decisions in IPR2015-01979 and this
`
`proceeding are due to be issued approximately one month from each other, the
`
`Board could opt to issue its final decision in both cases concurrently, thus avoiding
`
`the potential estoppel issue. If the Board were to issue both final decisions on the
`
`same date on or before March 27, 2017, for example, no estoppel issue would
`
`exist. Alternatively, the Board has the discretion to modify the schedule to permit
`
`both decisions to issue on the same date after March 27. See 37 C.F.R. § 42.100(c)
`
`(giving Board discretion to change deadline for final written decision by six
`
`months). If the Board determines that an earlier oral argument in this case would
`
`assist it in any way, PAN is fully willing to agree to such an adjustment.
`
`II. CONCLUSION
`For the foregoing reasons, the Board should find that PAN is not estopped
`
`under 35 U.S.C. § 315(e)(1). Even if the Board determines that an estoppel
`
`applies, the Board should not terminate this proceeding. Rather, the Board should
`
`reach the merits and issue a final written decision, in view of the fact that the
`
`record will have been fully developed and the oral hearing concluded.
`
`Alternatively, the Board can exercise its discretion to issue its decisions in both
`
`IPR proceedings concurrently, avoiding the estoppel issue entirely.
`
`8
`
`
`
`IPR2016-01979
`
`
`
`Patent No. 8,141,154 B2
`
`Respectfully submitted,
`
`
`
`By: /s/ Matthew I. Kreeger
`Matthew I. Kreeger
` Registration No.: 56,398
`MORRISON & FOERSTER LLP
`425 Market Street
`San Francisco, CA 94105
`Tel: (415) 268-6467
`Attorney for Petitioner
`
`Dated: November 15, 2016
`
`
`9
`
`
`
`IPR2016-01979
`
`
`
`Patent No. 8,141,154 B2
`
`CERTIFICATE OF SERVICE (37 C.F.R. § 42.6(e)(4))
`
`
`
`I hereby certify that a copy of the foregoing Petitioner Palo Alto Networks,
`
`Inc.’s Brief on Estoppel was served as of the below date on Patent Owner via e-
`
`mail (by agreement) to the following counsel of record for Patent Owner:
`
`James Hannah
`KRAMER LEVIN NAFTALIS &
`FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`Phone: (650) 752-1712
`Fax: (650) 752-1812
`jhannah@kramerlevin.com
`jprice@kramerlevin.com
`svdocketing@kramerlevin.com
`mkim@finjan.com
`
`PETITIONER’S COUNSEL OF RECORD IN IPR2016-01071:
`Nathaniel A. Hamstra (Lead Counsel)
`nathanhamstra@quinnemanuel.com
`
`PETITIONER'S COUNSEL OF RECORD IN IPR2015-01979:
`Orion Armon
`Christopher Max Colice
`Jennifer Volk
`Brian Eutermoser
`COOLEYLLP
`oarmon@cooley.com
`mcolice@cooley.com
`jvolkfortier@cooley.com
`beutermoser@cooley.com
`
`Dated: November 16, 2016
`
` /s/ Joy Spalding
`Joy Spalding
`
`
`
`10
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