throbber
UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.
`Petitioner
`v.
`PERSONALIZED MEDIA COMMUNICATIONS, LLC
`Patent Owner
`
`Case No.: IPR2016-00755
`Patent No.: 8,191,091
`
`PETITIONER’S PRELIMINARY REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`
`
`
`

`
`Petitioner’s Preliminary Reply: IPR2016-00755
`
`In its Preliminary Response, PMC argues for the first time that the ’091
`
`patent is entitled to a November 3, 1981 priority date, contrary to numerous
`
`representations it made during prosecution and litigation that the patent is only
`
`entitled to priority to a CIP application filed on September 11, 1987. PMC makes
`
`its new priority argument the centerpiece of its Preliminary Response, contending
`
`the issue is dispositive because it would mean four of the five references relied
`
`upon are not prior art to the ’091 patent. Paper 7 at 7-16, 33-34.
`
`Not only do the facts undermine PMC’s new priority claim, but PMC is in
`
`fact barred from asserting this earlier priority as a matter of law. Federal Circuit
`
`case law confirms that PMC must be held to its express disclaimer of priority to the
`
`1981 application, and its repeated claims of priority only to the 1987 CIP, made
`
`during prosecution and never retracted. And even if PMC is not legally barred
`
`from claiming the 1981 priority date, there is good reason why PMC consistently
`
`claimed priority only to the 1987 CIP throughout prosecution and in litigation – the
`
`challenged claims are simply not supported by the 1981 disclosure.
`
`I.
`
`PMC DISCLAIMED PRIORITY TO THE 1981 SPECIFICATION
`
`Throughout prosecution of the ’091 patent (U.S. Patent Appl. No.
`
`08/485,507), PMC made numerous explicit statements that the ’091 patent only
`
`claimed priority to the 1987 CIP. In an IDS dated December 5, 1995, PMC
`
`unequivocally stated “this application only claims priority to the September 11,
`
`1
`
`

`
`Petitioner’s Preliminary Reply: IPR2016-00755
`
`1987 filing date.” Ex. 1042 at 2. In a later Amendment, PMC reiterated that “[t]he
`
`present application asserts priority based on the 1987 disclosure.” Ex. 1043 at 11.
`
`In multiple IDSs, PMC listed the applications to which the ’091 patent claims
`
`priority as tracing back only to the 1987 CIP (U.S. Patent No. 4,965,825). Ex.
`
`1042 at 1; Ex. 1044 at 1; Ex. 1045 at 1; Ex. 1046 at 1; see also Ex. 1043 at 33.
`
`Noticeably absent from these lists are any reference to the two PMC patents based
`
`on the 1981 application (U.S. Patent Nos. 4,694,490 and 4,704,725).
`
`In addition to these affirmative statements claiming priority only to 1987,
`
`PMC expressly disclaimed priority to the 1981 date. The Examiner rejected the
`
`pending ’091 claims for double patenting, stating that “there is no apparent reason”
`
`why PMC could not have presented the ’091 claims in patents claiming priority to
`
`the 1981 application. Ex. 1047 at 11. In response, PMC stated that the examiner’s
`
`double patenting rejection based on patents having the 1981 specification “is
`
`improper because the present application does not claim the benefit of those
`
`applications under 35 U.S.C. § 120.” Ex. 1043 at 21.1 PMC successfully argued
`
`that “there could never have been a basis for claiming the present subject matter in
`
`[the 1981] applications.” Id.; see Ex. 1031. As this panel ruled in IPR2014-01527
`
`(Amazon v. PMC) regarding the same statement, “in addition to not seeking
`
`priority during prosecution, [PMC] conceded ‘a basis for claiming the present
`
`
`1 All emphasis added unless otherwise noted.
`
`2
`
`

`
`Petitioner’s Preliminary Reply: IPR2016-00755
`
`subject matter’ in its earlier filed ’490 patent specification.” Ex. 1048 at 30.
`
`The Federal Circuit addressed very similar circumstances in Bradford Co. v.
`
`Conteyor N. Am., Inc. and ruled that the patentee was estopped from claiming
`
`priority to an earlier application based on the prosecution disclaimer. 603 F.3d
`
`1262 (Fed. Cir. 2010). In Bradford, when prosecuting a CIP application, the
`
`patentee responded to a double patenting rejection by stating that the earlier
`
`application did not disclose certain claimed elements. Id. at 1263-64. Later, in
`
`litigation, the patentee asserted priority to the earlier application that had been the
`
`basis for the double patenting rejection. Id. at 1267. The Federal Circuit held that
`
`the patentee was “estopped from arguing for an earlier priority date … by the
`
`prosecution history of [the asserted] patent” because “arguments made to persuade
`
`an examiner to allow an application trump an ambiguous disclosure that otherwise
`
`might have sufficed to obtain an earlier priority date.” Id. at 1269.
`
`PMC argued in IPR2014-01527 that the Examiner would not have relied on
`
`its disclaimer because priority is “irrelevant to an In re Schneller analysis.” Ex.
`
`1048 at 30. PMC’s position is legally incorrect, contradicted by the record and its
`
`own argument that its disclaimer would overcome the rejection, and ignores
`
`PMC’s unambiguous statement that the 1981 application “could never have been a
`
`basis for claiming the present subject matter.” Ex. 1043 at 21. Having disclaimed
`
`priority to 1981, PMC is now estopped from taking a contradictory position.
`
`3
`
`

`
`Petitioner’s Preliminary Reply: IPR2016-00755
`
`PMC may also argue that the claims pending at the time of the June 10, 1997
`
`Amendment were later cancelled, and that the statements made in that Amendment
`
`do not apply to the claims at issue. Not only were PMC’s statements applicable to
`
`the “application” being prosecuted, but a comparison of the then-pending 30
`
`claims and the challenged claims shows they have tremendous overlap. For
`
`instance, both prosecution claim 3 and issued claim 13 recite “receiving” an
`
`“information
`
`transmission” containing “[disabled/encrypted]
`
`information”;
`
`“detecting” “the presence of an instruct-to-enable signal”; “passing said instruct-to-
`
`enable signal to” a “processor”; “[modifying/determining] a fashion in which said
`
`receiver station locates [said enabling information/a first decryption key]”;
`
`“locating said [enabling information/first decryption key]”; “[enabling/decrypting]
`
`said [disabled/encrypted] information”; and “outputting said programming based
`
`on said step of [enabling/decrypting].” Compare Ex. 1043 at 2-9 with Ex. 1003 at
`
`claims 13, 20, 26. Any argument that the 1981 specification did not support the
`
`then-pending claims but supports the issued claims would not be credible.
`
`If PMC believed the circumstances had changed, or its repeated statements
`
`claiming priority to 1987 were in error, Federal Circuit law demands that the
`
`patentee clearly inform the Examiner of any rescission. See Hakim v. Cannon
`
`Avert Grp., PLC, 479 F.3d 1313, 1318 (Fed. Cir. 2007) (“Although a disclaimer
`
`made during prosecution can be rescinded, … the prosecution history must be
`
`4
`
`

`
`Petitioner’s Preliminary Reply: IPR2016-00755
`
`sufficiently clear to inform the examiner that the previous disclaimer … may need
`
`to be revisited.”); Spring Willow Fashions LP v. Novo Indus., LP, 323 F.3d 989,
`
`995 (Fed. Cir. 2003) (“The public notice function of a patent and its prosecution
`
`history requires that a patentee be held to what he declares during the prosecution
`
`of his patent. … If the applicant mistakenly disclaimed coverage of the claimed
`
`invention, then the applicant should have amended the file to reflect the error, as
`
`the applicant is the party in the best position to do so.”).
`
`There is no indication whatsoever that PMC rescinded its disclaimer at any
`
`time. In fact, when prosecution resumed years later, PMC continued to assert
`
`priority to the 1987 CIP. PMC added the claims that issued in the ’091 patent in an
`
`Amendment dated April 11, 2011, explaining that it had consolidated claims from
`
`related pending applications “separated based on whether priority was claimed to
`
`[the 1981 specification] or [the 1987 CIP].” Ex. 1035 at 1-2. PMC stated that the
`
`“instant application” represented the “DECR 87 group ‘B’” application, which
`
`included rejected claims from the “DECR 87 group ‘A’” so that the “A”
`
`application could issue. Id. at 2-4. Documents filed during prosecution of the
`
`“DECR 87 group ‘A’” application (U.S. Patent. Appl. No. 08/474,145) confirm
`
`that the “DECR” group relates to “decryption of broadcast information” and that
`
`“87” designates a priority claim to the 1987 CIP. See Ex. 1049 at 9, 13.
`
`Furthermore, throughout prosecution the Examiner rejected the claims based
`
`5
`
`

`
`Petitioner’s Preliminary Reply: IPR2016-00755
`
`on references that post-dated 1981. PMC never once asserted the references were
`
`not prior art, or gave any indication that its 1987 priority claim was in question.
`
`See Exs. 1036, 1037, 1039. Indeed, in the concurrent litigation, until PMC filed its
`
`Preliminary Response, PMC repeatedly asserted the ’091 patent claimed priority to
`
`1987 rather than 1981, and that the challenged claims were conceived and reduced
`
`to practice in 1987 rather than 1981. Ex. 1019 at 6; Ex. 1050 at 7; Ex. 1051 at 6-7.
`
`II. THE CHALLENGED CLAIMS OF THE ’091 PATENT ARE NOT
`SUPPORTED BY THE 1981 SPECIFICATION
`
`Independent of PMC’s disclaimer, the challenged claims of the ’091 patent
`
`are not entitled to claim priority to the 1981 specification under 35 U.S.C. § 120.
`
`Section 120 permits a patent application to rely on the filing date of an earlier
`
`application “only if the disclosure of the earlier application provides support for
`
`the claims of the later application, as required by 35 U.S.C. § 112.” PowerOasis,
`
`Inc. v. T-Mobile USA, Inc., 522 F. 3d 1299, 1306 (Fed. Cir. 2008). Claims that
`
`depend on “[s]ubject matter that arises for the first time in [a] CIP application do[]
`
`not receive the benefit of the filing date of the parent application.” Id.
`
`In the ’091 patent, independent challenged claims 13, 20, and 26 recite
`
`decrypting and outputting “programming.” As this panel explained in IPR2014-
`
`01527, “the term ‘programming’ was initially described in the [1981] specification
`
`as ‘mean[ing] everything transmitted over television or radio’ and thereafter was
`
`broadened in the [1987 specification] to include ‘everything that is transmitted
`
`6
`
`

`
`Petitioner’s Preliminary Reply: IPR2016-00755
`
`electronically.’” Ex. 1048 at 33; compare Ex. 1009 at Abstract with Ex. 1003 at
`
`6:31-34. Because the broader 1987 definition of “programming” expands the
`
`scope of the subject matter, claims 13, 20, and 26 are not entitled to the 1981
`
`priority date as a matter of law. See PowerOasis, 522 F.3d at 1310-11 (where a
`
`claim term would receive a broader construction in view of the later filing, the
`
`claim is not entitled to the benefit of the earlier filing). This panel came to the
`
`same conclusion in IPR2014-01527. Ex. 1048 at 34.
`
`In addition, the 1981 specification does not provide sufficient disclosure to
`
`support various elements claimed in the ’091 patent – consistent with PMC’s prior
`
`statements. For example, there is no support in the 1981 specification for the claim
`
`13 elements that require “detecting in said encrypted digital information
`
`transmission the presence of an instruct-to-enable signal” and “determining a
`
`fashion in which said receiver station locates a first decryption key by processing
`
`said instruct-to-enable signal.” Ex. 1003 at claim 13. Rather, the 1981
`
`specification describes “preinformed” receivers, explaining that “the pattern of the
`
`composition, timing, and location of the signals [to prevent unauthorized use] may
`
`vary in such ways that only receiving apparatus that are preinformed regarding the
`
`patterns that obtain at any given time will be able to process the signals correctly.”
`
`Ex. 1009 at 4:31-40. Similarly, the terms “decryption key” (claims 13, 20) and
`
`“instruct-to-enable signal” (claims 13, 20, 26) are never used in the ’490 patent.
`
`7
`
`

`
`Petitioner’s Preliminary Reply: IPR2016-00755
`
`Date: July 20, 2016
`
`
`
`
`
`Respectfully submitted,
`
`/s/ Marcus E. Sernel
`Marcus E. Sernel (Reg. No. 55,606)
`Joel R. Merkin (Reg. No. 58,600)
`KIRKLAND & ELLIS LLP
`300 North LaSalle Street
`Chicago, Illinois 60654
`P: 312.862.2000; F: 312.862.2200
`marc.sernel@kirkland.com
`joel.merkin@kirkland.com
`
`Attorneys For Petitioner
`
`
`
`8
`
`

`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that a copy of the foregoing Petitioner’s
`
`Preliminary Reply to Patent Owner’s Preliminary Response was served on July 20,
`
`2016 to attorneys of record for Patent Owner by electronic transmission:
`
`Douglas J. Kline
`GOODWIN PROCTER LLP
`100 Northern Avenue
`Boston, Massachusetts 02210
`DG-PMC-Apple@goodwinprocter.com
`
`
`Thomas J. Scott (Reg. No. 27836)
`PERSONALIZED MEDIA
`COMMUNICATIONS, LLC
`14090 Southwest Freeway, Suite 450
`Sugar Land, TX 77478
`
`Jennifer Albert
`Stephen Schneiner
`GOODWIN PROCTER LLP
`901 New York Avenue N.W.
`Washington, D.C. 20001
`jalbert@goodwinprocter.com
`sschreiner@goodwinprocter.com
`
`
`
`
`
`/s/ Marcus E. Sernel
`Marcus E. Sernel

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