`
`
`
`
`
`
`
`
`
`
`
`
`
`Filed: September 28, 2017
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`COSTCO WHOLESALE CORPORATION,
`Petitioner,
`
`v.
`
`ROBERT BOSCH LLC,
`Patent Owner.
`____________
`
`Case IPR2016-00041
`Patent 8,099,823
`____________
`
`PETITIONER’S OPPOSITION TO PATENT OWNER’S MOTION
` FILED PURSUANT TO PAPER NO. 67
`
`
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`
`TABLE OF AUTHORITIES
`
`Cases
`Aqua Marine Supply v. AIM Machining, Inc.,
`247 F.3d 1216 (Fed. Cir. 2001) ............................................................................ 6
`
`Page(s)
`
`Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co.,
`324 U.S. 806 (1945) .............................................................................................. 9
`
`In re Robert Bosch LLC,
`No. 17-2239 (Fed. Cir. Sept. 18, 2017) ........................................................ 1, 6, 7
`
`Robert Bosch LLC v. Pylon Mfg. Corp., No. 08-542-SLR
`(D. Del. Apr. 23, 2010), vacated per stipulation,
`No. 08-542-SLR (D. Del. October 31, 2013). ...................................................... 9
`
`U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership,
`513 U.S. 18 (1994) ........................................................................................ 5, 6, 8
`
`Statutes and Rules
`
`35 U.S.C. § 141(c) ..................................................................................................... 3
`
`35 U.S.C. § 143 .......................................................................................................... 6
`
`35 U.S.C. § 317(a) ............................................................................................. 4, 5, 8
`
`35 U.S.C. § 318(b) ................................................................................................. 2, 8
`
`35 U.S.C. § 319 .......................................................................................................... 3
`
`35 U.S.C. § 327(a) ..................................................................................................... 4
`
`37 C.F.R. § 42.5(a) ..................................................................................................... 7
`
`37 C.F.R. § 42.74 ....................................................................................................... 3
`
`
`
`
`
`i
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`
`TABLE OF AUTHORITIES
`
`Administrative Decisions
`Costco Wholesale Corp. v. Robert Bosch LLC, IPR2016-00040,
`Paper No. 67 (PTAB Mar. 30, 2017) .................................................................... 1
`
`Page(s)
`
`Salesforce.com v. VirtualAgility, Inc., CBM2013-00024, Paper No. 52
`(PTAB Nov. 24, 2014) .......................................................................................... 4
`
`
`
`
`
`ii
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`
`On April 25, 2016, on Petition of Costco Wholesale Corporation (“Costco”
`
`or “Petitioner”), the Board instituted inter partes review of claims 1, 6, 9, and 10 of
`
`U.S. Patent No. 8,099,823 (the “’823 Patent”; Ex. 1001). See Paper No. 20. On
`
`April 12, 2017, the Board issued a Final Written Decision holding claims 1, 9, and
`
`10 to be unpatentable, but finding that Petitioner did not show claim 6 to be un-
`
`patentable. Paper No. 70 at 36. On May 12, 2017, Petitioner requested rehearing
`
`of the Board’s decision as to claim 6 because the Board had held the exact opposite
`
`with respect to the exact same claim limitation challenged on the exact same
`
`grounds in a related proceeding involving the parent patent. See Paper No. 71; see
`
`also Final Written Decision, Costco Wholesale Corp. v. Robert Bosch LLC,
`
`IPR2016-00040, Paper No. 67 (PTAB Mar. 30, 2017).
`
`Patent Owner subsequently filed appeals from this Board’s Final Written
`
`Decisions entered in all six parallel inter partes review proceedings, including this
`
`proceeding. The appeal from IPR2016-00034 (Appeal No. 2017-2239) is currently
`
`active and pending before the Federal Circuit, with opening briefs due October 6,
`
`20171; the appeals from IPR2016-00036, IPR2016-00038, IPR2016-00039,
`
`
`1 Patent Owner has moved to stay this appeal or alternatively to extend the deadline
`
`for opening briefs. Motion of Appellant to Stay Appeal, In re Robert Bosch LLC,
`
`No. 17-2239 (Fed. Cir. Sept. 13, 2017), Dkt. 22.
`
`1
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`IPR2016-00040 have been consolidated into Appeal No. 2017-2122 and are stayed
`
`pending the Board’s decision on Petitioner’s Request for Rehearing in this pro-
`
`ceeding; and all that remains to be done in order to terminate the instant proceed-
`
`ing, IPR2016-00041, is for the Board to render a decision on Petitioner’s Request
`
`for Rehearing. See Paper No. 73.
`
`Notwithstanding that Patent Owner has taken an appeal (or sought to take an
`
`appeal, see Paper No. 73) from these proceedings, Patent Owner now moves to va-
`
`cate the Final Written Decision in this proceeding based on what it calls “Costco’s
`
`abandonment of the contest.” Paper No. 75 at 1.2 But circumventing the appellate
`
`process is not the appropriate mechanism for avoiding this Board’s reasoned judg-
`
`ments.3
`
`
`2 Patent Owner incongruously uses the word “terminate” to characterize two other
`
`forms of relief in the alternative: (i) non-issuance of “any certificate cancelling
`
`claims is issued pursuant to 35 U.S.C. § 318(b)” and (ii) entry of “adverse judge-
`
`ment against Costco.” Paper No. 75 at 1–2.
`
`3 Although the Board specifically denied authorization for similar motions in the
`
`parallel proceedings (see Paper No. 74), Patent Owner has indicated that it will file
`
`such motions if the Board later grants authorization to do so. Paper No. 75 at 1
`
`n.1. The Board recognized that it may perform only “purely ministerial functions”
`
`2
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`
`ARGUMENT
`
`Vacatur is not a proper or statutorily authorized remedy for Patent Owner’s
`
`dissatisfaction with the Board’s Final Written Decision. Patent Owner is free to
`
`appeal that decision as soon as the Board decides the pending Request for Rehear-
`
`ing. Appeal to the Federal Circuit is specifically contemplated by the statutory
`
`scheme governing inter partes review. 35 U.S.C. § 319 provides:
`
`A party dissatisfied with the final written decision of the Patent Trial
`and Appeal Board under section 318(a) may appeal the decision pur-
`suant to sections 141 through 144. Any party to the inter partes review
`shall have the right to be a party to the appeal.
`
`See also 35 U.S.C. § 141(c) (noting that appeal of a final written decision under
`
`section 318(a) may be appealed “only to the United State Court of Appeals for the
`
`Federal Circuit”). Whether or not the Petitioner in the inter partes review remains
`
`a party to the appeal, “the Board is not a party to the settlement and may inde-
`
`pendently determine any question of jurisdiction, patentability.” 37 C.F.R.
`
`§ 42.74.
`
`
`
`Thus, settlement between the parties does not justify deviating from the spe-
`
`
`while those cases are before the Federal Circuit. Paper No. 74 at 3. Vacating the
`
`final written decisions in those cases while appeals are pending would constitute
`
`far more than ministerial functions.
`
`3
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`cifically contemplated appellate mechanisms for review of a final written decision.
`
`In Salesforce.com v. VirtualAgility, Inc., CBM2013-00024, Paper No. 52 (PTAB
`
`Nov. 24, 2014), Patent Owner sought authorization to file a motion to vacate the
`
`final written decision and terminate the proceeding based on alleged “abandon-
`
`ment” as a result of a settlement agreement between the parties. See id. at 2. The
`
`Board rejected this request for substantially the same reasons that it should reject
`
`Patent Owner’s request here:
`
`At this stage of the proceeding, where Petitioner already has proven
`by a preponderance of the evidence that claims 1–21 of the ’413 pa-
`tent are unpatentable, and where a Final Written Decision already has
`been rendered, lack of further participation by Petitioner in this pro-
`ceeding and in any subsequent appeal is inconsequential to the merits
`or legitimacy of the Final Written Decision. Such “abandonment,” if
`even appropriate to be referred to as “abandonment,” does not undo
`the work Petitioner already has done in completing trial and obtaining
`an adverse judgment against Patent Owner. No more participation by
`Petitioner is either necessary or required. The claims already have
`been proven unpatentable. . . .
`
`We note 35 U.S.C. § 327(a), which applies to covered business meth-
`od reviews, under which the Board may continue to completion of tri-
`al to render judgment even if the parties have settled and the proceed-
`ing is terminated with respect to each petitioner. If the Board can pro-
`ceed to issuance of a Final Written Decision despite settlement be-
`tween the parties and termination of the proceeding with respect to
`
`4
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`
`each petitioner, an already issued Final Written Decision should not
`be vacated based on settlement between the parties.
`
`Id. at 3.4 Just as in Salesforce, and as authorized by 35 U.S.C. § 317(a), the Board
`
`may proceed to enter its final judgment (in this case, amend or reaffirm the Final
`
`Written Decision), so that its judgment will be appealable. Vacatur is not a statuto-
`
`rily authorized remedy for Patent Owner’s disappointment with the Final Written
`
`Decision.
`
`The Supreme Court has held that intervening mootness might justify vacatur
`
`of a final judgment that an aggrieved party cannot have an appellate court review,
`
`but not if the party seeking vacatur is equally responsible for the loss of its rights to
`
`appeal, for example, by entering into a settlement agreement. In U.S. Bancorp
`
`Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18 (1994) the Supreme Court
`
`held in no uncertain terms: “We hold that mootness by reason of settlement does
`
`not justify vacatur of a judgment under review.” Id. at 29. The Court reasoned
`
`that “Congress has prescribed a primary route, by appeal as of right and certiorari,
`
`through which parties may seek relief from the legal consequences of judicial
`
`judgments. To allow a party who steps off the statutory path to employ the sec-
`
`ondary remedy of vacatur as a refined form of collateral attack on the judgment
`
`4 For all intents and purposes, 35 U.S.C. § 327(a), analyzed in Salesforce, is equiv-
`
`alent to 35 U.S.C. § 317(a), which governs inter partes review proceedings.
`
`5
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`would—quite apart from any considerations of fairness to the parties—disturb the
`
`orderly operation of the federal judicial system.” Id. at 27; see also id. at 29 (not-
`
`ing that vacatur based on settlement would only be appropriate in “exceptional cir-
`
`cumstances”); Aqua Marine Supply v. AIM Machining, Inc., 247 F.3d 1216, 1221
`
`(Fed. Cir. 2001) (“Here, the defendants’ lack of continuing interest in the validity
`
`of the ’919 patent is the result of Aqua Marine’s own action entering into the
`
`Agreement. . . . There are no exceptional circumstances here that would support
`
`departure from the general rule against vacatur.”).
`
`In this case, moreover, there is no mootness because the Patent Owner re-
`
`mains free to appeal the Board’s decision whether or not Petitioner participates in
`
`the appeal. “The Director shall have the right to intervene in an appeal from a de-
`
`cision entered by the Patent Trial and Appeal Board . . . in an inter partes or post-
`
`grant review.” 35 U.S.C. § 143. In other words, the statute specifically contem-
`
`plates that a controversy exists between the Patent Owner, on one hand, and the
`
`Patent Office, who has determined the patent-at-issue to be invalid, on the other.
`
`Appeal No. 2017-2239 (from IPR2016-00034) is instructive of how the rele-
`
`vant statutory provisions intend for Patent Owner to address its dissatisfaction
`
`when Petitioner is no longer involved. In that related appeal, Petitioner submitted
`
`an unopposed motion to withdraw as a party. See Motion of Appellee to Withdraw
`
`as Party, In re Robert Bosch LLC, No. 17-2239 (Fed. Cir. Sept. 13, 2017),
`
`6
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`Dkt. 21-1. On September 18, 2017 the Federal Circuit granted this order, and fur-
`
`ther ordered that the caption be revised (from Robert Bosch LLC v. Costco Whole-
`
`sale Corporation to In re Robert Bosch LLC) and that the Patent Office inform the
`
`Federal Circuit within 30 days of “whether it intends to intervene” in the appeal.
`
`In re Robert Bosch LLC, No. 17-2239 (Fed. Cir. Sept. 18, 2017), Dkt. 23 at 1. The
`
`Federal Circuit made no suggestion that it was no longer appropriate for Patent
`
`Owner to maintain its appeal from this Board’s final written decision entered in
`
`IPR2016-00034.
`
`The supposed “authority” cited by Patent Owner does not justify short-
`
`circuiting the process of appellate review. Patent Owner first suggests the Board
`
`has the authority to vacate a final written decision pursuant to 37 C.F.R. § 42.5(a)
`
`or § 42.73(b). Paper No. 75 at 2. But § 42.5(a) only permits the Board to “enter
`
`non-final orders to administer the proceeding,” not final orders such as vacatur.
`
`Likewise, § 42.73(b) relates to requests for adverse judgments, including by
`
`“[a]bandonment of the contest,” but here a judgment has already been entered and
`
`Petitioner is plainly not requesting an adverse judgment against itself. See C.F.R.
`
`§ 42.2 (“Judgment means a final written decision by the Board . . . .”). Neither the
`
`plain language of these provisions, nor any decision of this Board or any court,
`
`supports Patent Owner’s tortured interpretation that would permit vacatur in view
`
`7
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`of settlement.5
`
`Contrary to Patent Owner’s suggestion, denying its motion will not “dis-
`
`courag[e] settlements” (Paper No. 75 at 5), but encourage patent owners to enter
`
`settlement agreements early—before the Board invests its time and energy into de-
`
`termining a patent’s validity. See 35 U.S.C. § 317(a) (“An inter partes review in-
`
`stituted under this chapter shall be terminated with respect to any petitioner upon
`
`the joint request of the petitioner and the patent owner, unless the Office has decid-
`
`ed the merits of the proceeding before the request for termination is filed.”). But
`
`once the Board has reached a decision, the policy interests swing dramatically in
`
`the other direction: “the public interest lies in not having claims which have been
`
`proven unpatentable remain in an issued patent, whether or not all disputes be-
`
`tween two parties to a law suit with regard to that patent have been resolved.”
`
`Salesforce, Paper No. 52 at 4 (citing Bonner, 513 U.S. at 26 for the proposition that
`
`
`5 Similarly, Patent Owner does not explain how the Board can preempt the Direc-
`
`tor’s non-discretionary authority to issue, after the time for appeal has expired or
`
`any appeal has terminated, a certificate canceling patent claims that have been fi-
`
`nally determined to be unpatentable. See 35 U.S.C. § 318(b) (“[T]he Director shall
`
`issue and publish a certificate canceling any claim of the patent finally determined
`
`to be unpatentable.” (emphasis added)).
`
`8
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`“[j]udicial precedents are presumptively correct and valuable to the legal commu-
`
`nity as a whole. They are not merely the property of private litigants and should
`
`stand unless a court concludes that the public interest would be served by a vaca-
`
`tur”); see also Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S.
`
`806, 815–16 (1945) (“The far-reaching social and economic consequences of a pa-
`
`tent, therefore, give the public a paramount interest in seeing that patent monopo-
`
`lies . . . are kept within their legitimate scope.”).
`
`By denying Patent Owner’s motion, the Board will have done its part to en-
`
`sure that Patent Owner cannot, at some future date, assert the same claims that the
`
`Board has determined to be unpatentable. Indeed, Petitioner here was forced to
`
`waste time and money doing just that—litigating and again invalidating claims in
`
`U.S. Patent No. 6,292,974 (at issue in IPR2016-00038), which had previously been
`
`invalidated by judgment following a jury verdict that was vacated subsequent to a
`
`settlement. See Jury Verdict, Robert Bosch LLC v. Pylon Mfg. Corp., No. 08-542-
`
`SLR (D. Del. Apr. 23, 2010), Dkt. 229, vacated per stipulation, No. 08-542-SLR
`
`(D. Del. Oct. 31, 2013), Dkt. 418.
`
`CONCLUSION
`
`Under the statutes and rules governing inter partes review proceedings, all
`
`that remains to be done to terminate this proceeding is for the Board to render its
`
`decision on Petitioner’s Request for Rehearing. Then, precisely as Congress con-
`
`9
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`templated, Patent Owner may address any dissatisfaction by appealing to the Fed-
`
`eral Circuit. Patent Owner’s motion should be denied.
`
`
`
`Dated: September 28, 2017
`
`
`
`
`Respectfully Submitted,
`
`/James R. Klaiber/
`James R. Klaiber
`Registration No. 41,902
`Hughes Hubbard & Reed LLP
`One Battery Park Plaza
`New York, New York 10004
`james.klaiber@hugheshubbard.com
`(212) 837-6125
`Attorney for Petitioner
`Costco Wholesale Corporation
`
`10
`
`
`
`IPR2016-00041
`PETITIONER’S OPPOSITION TO MOTION FILED PURSUANT TO PAPER NO. 67
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on this 28th day of September, 2017, the foregoing Peti-
`
`tioner’s Opposition to Patent Owner’s Motion Filed Pursuant to Paper No. 67 was
`
`served in its entirety by email on the attorneys of record for Patent Owner:
`
`•
`
`•
`
`•
`
`Patrick R. Colsher (patrick.colsher@shearman.com)
`
`Mark Hannemann (mark.hannemann@shearman.com)
`
`Joseph Purcell (joseph.purcell@shearman.com)
`
`/James R. Klaiber/
`James R. Klaiber
`Registration No. 41,902
`
`80098934
`
`1
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
