Case No. IPR2016-00041
`U.S. Patent No. 8,099,823
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`_____________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`______________________
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`COSTCO WHOLESALE CORPORATION,
`Petitioner,
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`v.
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`ROBERT BOSCH LLC,
`Patent Owner.
`______________________
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`CASE NO. IPR2016-00041
`U.S. Patent No. 8,099,823
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`MOTION FILED PURSUANT TO PAPER NO. 67
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`U.S. Patent No. 8,099,823
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`_____________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`______________________
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`COSTCO WHOLESALE CORPORATION,
`Petitioner,
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`v.
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`ROBERT BOSCH LLC,
`Patent Owner.
`______________________
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`CASE NO. IPR2016-00041
`U.S. Patent No. 8,099,823
`______________________
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`MOTION FILED PURSUANT TO PAPER NO. 67
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`Patent Owner Robert Bosch LLC (“Bosch”) submits this motion in response
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`Case No. IPR2016-00041
`U.S. Patent No. 8,099,823
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`to the Board’s September 14, 2017 order authorizing Bosch to file a motion
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`seeking to vacate the final written decision in IPR2016-00041 or, in the alternative,
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`to otherwise prevent the Office from issuing a certificate pursuant to 35 U.S.C. §
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`318(b).
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`Costco Wholesale Corporation (“Costco”) and Bosch have reached a
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`settlement of the IPRs (IPR2016-00034, IPR2016-00036, IPR2016-00038,
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`IPR2016-00039, IPR2016-00040, and IPR2016-00041) and of the district-court
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`litigation relating to the patents that are the subject of the IPRs.
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`In view of the parties’ settlement and Costco’s abandonment of the contest,
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`and pursuant to, e.g., 37 C.F.R. § 42.5(a), Bosch moves the Board to vacate the
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`final written decision and terminate IPR2016-00041.1
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`If that motion is denied,
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`(i) Bosch moves the Board to terminate this IPR pursuant to, e.g., 37 C.F.R.
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`§ 42.5(a); such a termination would end the proceedings before any certificate
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`cancelling claims is issued pursuant to 35 U.S.C. § 318(b), and obviate the
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`Director’s authority to issue such a certificate, and
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`1 Bosch anticipates that in the other IPRs it will file similar motions to those set
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`forth in this paper, if the Board authorizes Bosch to do so.
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`(ii) Bosch also moves the Board to terminate this IPR and enter adverse
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`Case No. IPR2016-00041
`U.S. Patent No. 8,099,823
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`judgment against Costco pursuant to 37 C.F.R. § 42.73(b)(4).
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`Bosch expects that Costco will join in this motion, or, if it does not actively
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`join, will no longer participate, which will evidence its “abandonment of the
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`contest.” Costco’s “abandonment of the contest” is also evidenced by its successful
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`motion to the United States Court of Appeals for the Federal Circuit to “withdraw
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`as appellee and as a party from” the pending appeal of the final written decision in
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`IPR2016-00034. Again, entry of such a judgment would end the proceedings
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`before any certificate cancelling claims is issued pursuant to 35 U.S.C. § 318(b),
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`and obviate the Director’s authority to issue such a certificate.
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`In further support of this motion, Bosch notes that neither 37 C.F.R. §
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`42.5(a) nor § 42.73(d) contains any limitation preventing the Board from acting
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`after a final written decision is issued (or during the pendency of an appeal from a
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`final written decision). Both regulations use the word “proceeding,” which is
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`defined to include a “trial.” 37 C.F.R. § 42.2. “Trial” in turn is defined as “a
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`contested case instituted by the Board based upon a petition,” and while the
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`definition specifies when a “trial” begins, the definition does not state or suggest
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`that a “trial” ends with entry of a final written decision. Id.
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`With respect to this IPR, there are no considerations of finality or
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`jurisdiction per, e.g., In re Allen, 115 F.2d 936 (C.C.P.A. 1940). This IPR is, as a
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`whole, still pending before the Board in all senses, as illustrated by the decision of
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`Case No. IPR2016-00041
`U.S. Patent No. 8,099,823
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`the Court of Appeals of the Federal Circuit to dismiss, for lack of jurisdiction,
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`Bosch’s appeal of the portions of the final written decision that were adverse to
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`Bosch in view of Costco’s pending motion to reconsider the portion of the final
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`written decision that was adverse to Costco.
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`With respect to the other IPRs, Bosch respectfully submits that the
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`“ministerial function” doctrines of, e.g., the Allen decision do not apply to inter
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`partes review proceedings in which an appeal of a final written decision has been
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`taken to the Court of Appeals for the Federal Circuit. When appeals from ex parte
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`original prosecution rejections—the context in Allen—are taken, there is nothing
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`remaining for the Director to do unless the rejections are reversed. Absent a
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`contrary instruction from the Court of Appeals, the Office does nothing. In an inter
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`partes review, by contrast, 35 U.S.C. § 318(b) specifically requires the Director to
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`take action after any appeal is completed: issue a certificate cancelling claims
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`determined to be unpatentable.
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`This is in specific contrast to, for example, the procedure Congress
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`prescribed for a derivation proceeding. See 35 U.S.C. § 135. In a derivation
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`proceeding, like in ex parte original prosecution and unlike in an IPR, the Board’s
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`final written decision is self-executing: “The final decision of the Patent Trial and
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`Appeal Board, if adverse to claims in a patent, shall, if no appeal or other review of
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`the decision has been or can be taken or had, constitute cancellation of those
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`Case No. IPR2016-00041
`U.S. Patent No. 8,099,823
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`claims, and notice of such cancellation shall be endorsed on copies of the patent
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`distributed after such cancellation.”
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`Thus, in both ex parte original prosecution (Allen) and in derivation
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`proceedings, the Board’s final written decision is, in fact, final, in the sense that
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`nothing remains for the Office to do unless it receives a mandate from the Court of
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`Appeals.
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`Moreover, in both those contexts, Congress specified that a dissatisfied party
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`could commence a civil action against the Director, rather than appealing the
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`Board’s decision to the Court of Appeals. See 35 U.S.C. §§ 145 and 146. Unlike an
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`IPR, such a civil action would be governed by the usual rules of finality, by the
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`Constitutional requirement of an actual case or controversy, and by the other
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`requirements of federal litigation.
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`Thus, while the Board’s final written decisions are referred to as “final,”
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`they are not “final” in the sense that a District Court judgment of invalidity is final.
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`Under the enabling statutes, they have no effect unless and until a certificate is
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`issued. See 35 U.S.C. § 318(b). And so, for example, they do not have any
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`collateral estoppel effect before appeals are exhausted, even assuming, arguendo,
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`that final written decisions in IPRs could ever be given preclusive effect. See In re.
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`Innovasystems, Inc., Case No. 11–36228–ABA, 2014 WL 7235527, at *5 (Bankr.
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`D.N.J. Dec. 18, 2014) (citing cases). They are “final” only “for the purpose of
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`Case No. IPR2016-00041
`U.S. Patent No. 8,099,823
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`judicial review to the extent available.” 37 C.F.R. § 42.2 (defining “final”).
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`Bosch also notes that denial of its motion may well have the undesirable
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`policy effect of discouraging settlements and therefore increasing patent-litigation
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`volume, including increasing the docket of not only the Office but also the United
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`States Court of Appeals for the Federal Circuit. Having settled, Costco lacks
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`standing to appeal the Board’s decisions unfavorable to Costco, because there is no
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`live case or controversy between Costco and Bosch. See Consumer Watchdog v.
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`Wisconsin Alumni Research Found., 753 F.3d 1258 (Fed. Cir. 2014). Because of
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`the lack of live case or controversy between Costco and Bosch, the Federal Circuit
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`might therefore decide that Bosch too lacks standing to appeal, and thus deny
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`Bosch any opportunity to challenge the Board’s determination. Cf. Knowles v.
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`Matal, Appeal No. 16-1954, order docketed as document no. 61 (Fed. Cir. June 30,
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`2017) (ordering briefing on whether the Director must have standing to intervene
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`in an IPR appeal where the prevailing party declines to appeal; whether the
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`Director does have standing in such a case; and whether the Director must defend
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`the Board’s decision, and if not, “what are the ramifications” of the Director
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`declining to defend the Board’s decision). Denial of this motion will perpetuate
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`that risk and therefore discourage parties from settling their differences out of
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`court.
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`Moreover, refusing to terminate IPR proceedings under these circumstances
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`Case No. IPR2016-00041
`U.S. Patent No. 8,099,823
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`leaves patent owners no practical choice but to prosecute an appeal to completion,
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`even when there is no appellee (assuming they have standing to do so). Again, this
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`would serve unnecessarily to increase the volume of litigation before the Federal
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`Circuit.
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`Bosch’s adversary, Costco, has settled. There is no need for the Board to
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`perpetuate the inter partes dispute between Bosch and Costco by denying these
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`motions. The provisions of 35 U.S.C. § 317(a) concern the estoppel effect of a
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`merits decision on the petitioner, who, unlike the patent owner or the Office,
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`initiated the consumption of judicial resources by requesting the IPR.
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`And if there is now, de facto, a dispute between Bosch and the Board
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`concerning the patentability of Bosch’s claims, Bosch notes that vacating the final
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`written decisions and terminating the IPRs before any certificate is issued does not
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`deprive the Office of avenues to take back Bosch’s patent property. The Director
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`retains the ability to institute an ex parte reexamination granted by 35 U.S.C. §
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`303.
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`DATED: September 21, 2017
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`Case No. IPR2016-00041
`U.S. Patent No. 8,099,823
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`Respectfully submitted,
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`SHEARMAN & STERLING LLP
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`/Patrick R. Colsher/
`Patrick R. Colsher (Reg. No. 74,955)
`Mark A. Hannemann (pro hac vice)
`Joseph M. Purcell, Jr. (pro hac vice)
`599 Lexington Avenue
`New York, NY 10022
`Tel: (212) 848-4000
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`Counsel for Patent Owner
`Robert Bosch LLC
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`Certificate of Service
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`The undersigned hereby certifies that the foregoing Motion Filed Pursuant to
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`Case No. IPR2016-00041
`U.S. Patent No. 8,099,823
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`Paper 67 was served via electronic mail on September 21, 2017, on the following
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`counsel for Petitioner:
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`Richard M. Koehl (richard.koehl@hugheshubbard.com)
`James R. Klaiber (james.klaiber@hugheshubbard.com)
`David E. Lansky (david.lansky@hugheshubbard.com)
`Stefanie Lopatkin (stefanie.lopatkin@hugheshubbard.com)
`James Dabney (james.dabney@hugheshubbard.com)
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` /Patrick R. Colsher/
`Patrick R. Colsher
`Reg. No. 74,955
`Shearman & Sterling LLP
`599 Lexington Ave
`New York, NY 10022
`Tel: (212) 848-7708
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`Counsel for Patent Owner
`Robert Bosch LLC
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