Trials@uspto.gov
`571-272-7822
`
` Paper 12
`
`
` Entered: June 14, 2016
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`AMIT AGARWAL,
`Petitioner,
`
`v.
`
`IMMERSION CORPORATION,
`Patent Owner.
`____________
`
`Case IPR2016-00807
`Patent 8,773,356 B2
`____________
`
`
`
`Before MICHAEL R. ZECHER, BEVERLY M. BUNTING, and
`MINN CHUNG, Administrative Patent Judges.
`
`CHUNG, Administrative Patent Judge.
`
`
`
`ORDER
`Conduct of the Proceeding
`37 C.F.R. § 42.5
`
`
`
`
`571-272-7822
`
` Paper 12
`
`
` Entered: June 14, 2016
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`AMIT AGARWAL,
`Petitioner,
`
`v.
`
`IMMERSION CORPORATION,
`Patent Owner.
`____________
`
`Case IPR2016-00807
`Patent 8,773,356 B2
`____________
`
`
`
`Before MICHAEL R. ZECHER, BEVERLY M. BUNTING, and
`MINN CHUNG, Administrative Patent Judges.
`
`CHUNG, Administrative Patent Judge.
`
`
`
`ORDER
`Conduct of the Proceeding
`37 C.F.R. § 42.5
`
`
`
`
`
`IPR2016-00807
`Patent 8,773,356 B2
`
`
`
`Petitioner, Mr. Amit Agarwal, filed a Petition (“Pet.”) as a pro se
`petitioner, requesting an inter partes review of claims 1–3, 5, 7, 9–13, 15,
`17, 19–23, 25, and 26 of U.S. Patent No. 8,773,356 B2 (Ex. 1001, “the ’356
`patent”). On May 20, 2016, a telephone conference call was held between
`counsel for Patent Owner Immersion Corporation (“Patent Owner” or
`“Immersion”), Mr. Agarwal, and Judges Zecher, Bunting, and Chung.
`Patent Owner was represented by Michael Fleming and Joseph Lipner of
`Irell & Manella LLP. Patent Owner initiated the conference call to seek
`authorization to file a motion for termination of this proceeding based on an
`alleged ethical violation by Mr. Agarwal. A transcript of the telephone
`conference (Ex. 2004) was arranged and filed by Patent Owner.1
`As discussed during the conference call, Patent Owner asserts that Mr.
`Agarwal filed a Petition in this case to depress Immersion’s stock and profit
`by shorting Immersion stock. Ex. 2004, 5:9–15. In addition, Patent Owner
`alleges that, while Mr. Agarwal was employed as an attorney at the Irell
`firm, he received confidential Immersion information relevant to the
`Petition. Id. at 5:16–22. Patent Owner argues that Immersion is Mr.
`Agarwal’s former client and that, by filing the Petition, Mr. Agarwal
`violated his ethical obligations to his former client under 37 C.F.R. § 11.109
`and California Rule of Professional Conduct § 3-310(e). Id. at 7:5–10.
`Patent Owner asserts that Mr. Agarwal’s filing of the Petition, therefore,
`constitutes an abuse of process or an improper use of the proceeding under
`
`
`1 We refer to the redacted, public version of the transcript in this Order.
`
`2
`
`
`
`IPR2016-00807
`Patent 8,773,356 B2
`
`
`
`37 C.F.R. § 42.12(a)(6) or (7), which warrants a sanction of termination
`under § 42.12(b)(8). Id. at 6:18–25; 8:6–14; 26:14–23.
`Mr. Agarwal admits that he filed the Petition in this case as part of his
`investment strategy in Immersion stocks. Id. at 16:1–3; 20:19–24; 27:17–
`28:3. He denies, however, he ever represented Immersion (id. at 21:8–16) or
`that he received Immersion’s confidential information during his
`employment at the Irell firm (id. at 16:12–16; 22:10–12).
`To clarify at the outset the ultimate remedy sought by Patent Owner,
`under 37 C.F.R. § 42.12, sanctions imposed against a party for misconduct
`may include entry of “[j]udgment in the trial or dismissal of the petition.”
`37 C.F.R. § 42.12(b)(8). Since no trial has been instituted in this case, a
`motion for judgment in the trial is premature. Hence, for the remainder of
`our analysis, we will consider Patent Owner’s request to be a request for
`authorization to file a motion for dismissal of the Petition.
`Considering the Petition itself, Patent Owner does not dispute that the
`prior art Mr. Agarwal relies upon in the Petition, U.S. Patent Application
`No. 09/487,737 (“the ’737 application”), is available to the public. See
`Ex. 2004, 9:18–19; 10:21–11:5. We observe that U.S. Patent No. 6,429,846
`B2, which issued from the ’737 application, is cited as a relevant piece of
`prior art in the ’356 patent itself. Ex. 1001, 2. Hence, Mr. Agarwal’s
`Petition based on the prior art reference listed in the challenged patent
`cannot be, in and of itself, a paper presented to the Office for an improper
`purpose. In other words, had the Petition been filed by an unrelated third
`party, Patent Owner would not be justified to seek dismissal of the Petition
`based on the content of the Petition itself. Indeed, Patent Owner’s
`
`3
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`IPR2016-00807
`Patent 8,773,356 B2
`
`
`
`arguments for dismissal are all directed to who filed the Petition, namely,
`Mr. Agarwal, and his reason for doing so.
`To the extent Patent Owner argues that Mr. Agarwal’s filing of the
`Petition as an investment strategy is by itself an abuse of process or an
`improper use of the proceeding, we disagree. Another panel of this Board
`addressed similar arguments in a prior case, and we adopt the reasoning
`presented in that case in declining to dismiss the Petition in this case. See
`Coalition for Affordable Drugs VI, LLC v. Celgene Corp., Case IPR2015-
`01092, Paper 19 (PTAB Sept. 25, 2015) (denying Patent Owner’s motions
`for sanctions seeking dismissal of petitions); id. at 3 (“Profit is at the heart of
`nearly every patent and nearly every inter partes review. As such, an
`economic motive for challenging a patent claim does not itself raise abuse of
`process issues. We take no position on the merits of short-selling as an
`investment strategy other than it is legal, and regulated.”).
`Patent Owner’s argument for dismissal of the Petition based on an
`alleged ethical violation by Mr. Agarwal presents the issue of whether Mr.
`Agarwal’s filing of the Petition in this case constitutes a violation of ethics
`rules relating to his duties to a former client—specifically, 37 C.F.R.
`§ 11.109 or California Rule of Professional Conduct § 3-310(e). We decline
`to consider this issue at this time for the reasons discussed below.
`As for 37 C.F.R. § 11.109, we note that § 11.109, titled “Duties to
`former clients,” specifies the obligations of a “practitioner” arising from his
`or her former representation of a client. Under § 11, a “practitioner” is
`defined as “[a]n attorney or agent registered to practice before the Office in
`patent matters,” an individual authorized to practice before the Office in
`
`4
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`IPR2016-00807
`Patent 8,773,356 B2
`
`
`
`trademark matters or other non-patent matters, or an individual authorized to
`practice before the Office in limited circumstances specified in § 11.9(a) or
`(b). 37 C.F.R. § 11.1. Mr. Agarwal, however, has not even been registered
`to practice before the Office. Ex. 2004, 20:1–4. Hence, Mr. Agarwal cannot
`and could not have represented Immersion or any other client in patent
`matters before the Office as a “practitioner” under 37 C.F.R. § 11. See
`37 C.F.R. § 11.10(a) (“Only practitioners who are registered under § 11.6
`. . . are permitted to . . . represent others in any proceedings before the
`Office.”) (emphases added). Thus, any alleged representation of Immersion
`by Mr. Agarwal in the past was not before the Office as a “practitioner.”
`As discussed above, Mr. Agarwal filed the Petition as a pro se
`petitioner based on the prior art reference cited in the ’356 patent itself.
`Based on the record before us, we decline to apply the Office’s Rules of
`Professional Conduct, of which § 11.109 is a part, to Mr. Agarwal and
`Mr. Agarwal’s filing of the Petition. By doing so, we do not intend to
`suggest that a pro se petitioner is categorically immune from the rules of
`practice before the Office, including § 11.109, in all circumstances. In the
`present record, however, all alleged facts point to the conclusion that the
`dispute brought to our attention is a matter for another jurisdiction, i.e., the
`State Bar of California. Indeed, the alleged ethical violation arose because
`Mr. Agarwal is a California-licensed attorney, was employed at the Irell firm
`as a California-licensed attorney, and allegedly represented Immersion and
`allegedly received Immersion’s confidential information while being
`employed at the Irell firm as a California-licensed attorney. See Ex. 2004,
`5:16–22; 20:12–15. Thus, at its core, Patent Owner’s allegations are
`
`5
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`IPR2016-00807
`Patent 8,773,356 B2
`
`
`
`fundamentally about the duties of a California-licensed attorney to a former
`client under the California Rules of Professional Conduct. Therefore, the
`issue presented by Patent Owner’s argument—i.e., whether Mr. Agarwal’s
`conduct of filing the Petition in this case to short Immersion’s stock
`constitutes a violation of Mr. Agarwal’s obligations to his former client—is
`best evaluated according to the California Rules of Professional Conduct,
`not the Office’s Rules of Professional Conduct.
`We, however, decline to step into California State Bar’s shoes to
`determine whether an ethical violation has occurred under California Rule of
`Professional Conduct § 3-310(e). Based on the arguments and evidence
`presently before us, it would not be an appropriate use of our time and
`resources to engage in an analysis of duties of a California-licensed attorney
`to his former client under the California Rules of Professional Conduct. See
`37 C.F.R. § 42.1 (discussing policy considerations for proceedings before
`the Board, including the directive to take into account “the just, speedy, and
`inexpensive resolution of every proceeding”) (emphasis added).
`Nonetheless, we consider Patent Owner’s assertion that, if Mr.
`Agarwal represented another person or a company in this case, Patent Owner
`would be making a motion for disqualification, which the Office or the
`Board has considered and even granted in some circumstances in the past.
`Ex. 2004, 7:1–4; 24:19–25:20. Patent Owner argues that, because Mr.
`Agarwal has filed as a pro se petitioner, Patent Owner is instead seeking
`dismissal of the Petition. See id. at 25:21–22. Patent Owner further argues
`that Mr. Agarwal is a licensed-attorney with an active California Bar
`membership and should not be allowed to sidestep his obligations to his
`
`6
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`IPR2016-00807
`Patent 8,773,356 B2
`
`
`
`former client under the California ethical rules simply by filing pro se. Id. at
`7:15–8:5.
`As discussed above, however, whether a California-licensed attorney
`has violated his duties to a former client under the California Rules of
`Professional Conduct is a matter best addressed by the State Bar of
`California. Although Patent Owner had notice of Mr. Agarwal’s Petition at
`least since April 19, 2016, when Patent Owner filed its mandatory notice
`under 37 C.F.R. § 42.8, Patent Owner had not, prior to this conference call,
`filed an ethics complaint with the State Bar of California regarding Mr.
`Agarwal’s alleged conduct. See Ex. 2004, 8:21–25. Clearly, Patent Owner
`can ensure Mr. Agarwal does not avoid his obligations to his former client
`under the California ethical rules by bringing this matter to the attention of
`the State Bar of California.
`We have reviewed the disqualification cases mentioned by Patent
`Owner. See Ex. 2004, 24:19–25:16. In each of these cases, the issue relates
`to representation of a client before the Office by an attorney or agent who is
`registered to practice before the Office or by a firm associated with such an
`attorney or agent. See Anderson v. Eppstein, 59 U.S.P.Q.2d 1280, 1286
`(BPAI 2001) (informative); Halcon Int’l, Inc. v. Werbow, 1980 WL 39027
`(Com’r Pat. & Trademarks Aug. 30, 1980). We, however, are not aware of
`an instance where the Board has considered and decided any issue relating to
`the duties of a state-licensed attorney under that state’s rules, i.e., the duties
`of a California-licensed attorney to a former client under California’s Rules
`of Professional Conduct. We decline to do so in this case for the reasons
`discussed above.
`
`7
`
`
`
`IPR2016-00807
`Patent 8,773,356 B2
`
`
`
`Because we decline to consider whether Mr. Agarwal may have
`violated any duty to Immersion under the California Rules of Professional
`Conduct, we deny Patent Owner’s request for authorization to file a motion
`for dismissal of the Petition.2
`In consideration of the foregoing, it is hereby
`ORDERED that Patent Owner’s request for authorization to file a
`motion for dismissal of the Petition is denied without prejudice.
`
`
`
`
`
`
`2 We do not, however, exclude the possibility of authorizing a similar
`motion in the future should the State Bar of California find that Mr. Agarwal
`has violated his duties under the California Rules of Professional Conduct.
`
`8
`
`
`
`9
`
`IPR2016-00807
`Patent 8,773,356 B2
`
`
`
`PETITIONER:
`Amit Agarwal
`ama7386@gmail.com
`
`PATENT OWNER:
`Michael Fleming
`ImmersionIPR@irell.com
`
`Babak Redjaian
`bredjaian@irell.com
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