Trials@uspto.gov
`571.272.7822
`
`Paper 20
`Entered: February 28, 2017
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`UNIFIED PATENTS INC.,
`Petitioner,
`
`v.
`
`DIGITAL AUDIO ENCODING SYSTEMS, LLC,
`Patent Owner.
`____________
`
`Case IPR2016-01710
`Patent 7,490,037 B2
`____________
`
`
`
`Before MICHAEL J. FITZPATRICK, STACEY G. WHITE, and
`MICHELLE N. WORMMEESTER, Administrative Patent Judges.
`
`Opinion of the Board filed by Administrative Patent Judge
`WORMMEESTER.
`
`Opinion Concurring filed by Administrative Patent Judge FITZPATRICK.
`
`WORMMEESTER, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Institution of Inter Partes Review
`37 C.F.R. §§ 42.107(e), 42.108
`
`
`
`
`
`

`

`IPR2016-01710
`Patent 7,490,037 B2
`
`
`I. INTRODUCTION
`
`Unified Patents Inc. (“Petitioner”) filed a Petition (Paper 1, “Pet.”)
`
`requesting inter partes review of claims 1–32 of U.S. Patent No. 7,490,037
`
`B2 (Ex. 1001, “the ’037 patent”). Digital Audio Encoding Systems, LLC
`
`(“Patent Owner”) filed a Preliminary Response (Paper 10, “Prelim. Resp.”).
`
`We have jurisdiction under 35 U.S.C. § 314 and 37 C.F.R. § 42.4(a). For
`
`the reasons that follow, we decline to institute an inter partes review.
`
`
`
`II. BACKGROUND
`
`A. Related Proceedings
`
`The parties identify more than twenty federal district court cases
`
`involving the ’037 patent. Pet. 1–4; Paper 8; Paper 9.
`
`
`
`B. The ’037 Patent
`
`The ’037 patent, titled “Method and Apparatus for Encoding Signals,”
`
`relates to encoding digitized audio signals and processing the encoded
`
`signals. Ex. 1001, [54], [57]. Given the procedural posture of this
`
`proceeding, we need not discuss further the substance of the patent.
`
`
`
`III. ANALYSIS
`
`In a motion to expunge its Preliminary Response, Patent Owner
`
`represents that it “believes that the patent claims of the subject patent, U.S.
`
`Patent No. 7,490,037 (the ‘’037 patent’) are invalid in light of recently-
`
`developed information, specifically, a break in the continuity in the chain of
`
`priority applications due to failure to pay an extension fee,” and that it
`
`therefore “expect[s] to take steps to seek an adverse judgment on the above-
`
`2
`
`

`

`IPR2016-01710
`Patent 7,490,037 B2
`
`identified IPR, and/or dedicate the patent to the public.” Paper 15, 1. Since
`
`filing its motion to expunge, Patent Owner filed both a Request for Adverse
`
`Judgment (Paper 16) and a statutory disclaimer (Paper 17) disclaiming all
`
`thirty-two claims of the ’037 patent. In addition, during a conference call
`
`between the panel and respective counsel for the parties in related cases1
`
`held on January 24, 2017, counsel for Patent Owner indicated that it did not
`
`believe that any continuing prosecution associated with the ’037 patent
`
`exists.
`
`The Director has delegated to the Board authority to determine
`
`whether to institute an inter partes review. 37 C.F.R. § 42.4(a). The
`
`Director has determined that:
`
`The patent owner may file a statutory disclaimer under 35
`U.S.C. 253(a), in compliance with § 1.321(a) of this chapter,
`disclaiming one or more claims in the patent. No inter partes
`review will be instituted based on disclaimed claims.
`
`37 C.F.R. § 42.107(e). Pursuant to 35 U.S.C. § 253(a), “[s]uch disclaimer
`
`shall be in writing, and recorded in the Patent and Trademark Office; and it
`
`shall thereafter be considered as part of the original patent.” Given the
`
`phrase “considered as part of the original patent,” “[a] statutory disclaimer
`
`under 35 U.S.C. § 253 has the effect of canceling the claims from the patent
`
`and the patent is viewed as though the disclaimed claims had never existed
`
`in the patent.” Vectra Fitness, Inc. v. TNWK Corp., 162 F.3d 1379, 1383
`
`(Fed. Cir. 1998); Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996); see
`
`
`1 The conference call was held between the panel and respective counsel for
`the parties in the cases IPR2017-00208, IPR2017-00209, and IPR2017-
`00212, all of which involve the ’037 patent. Counsel for Petitioner in the
`instant case was notified of the call, but did not participate.
`
`3
`
`

`

`IPR2016-01710
`Patent 7,490,037 B2
`
`also Altoona Publix Theatres v. American Tri–Ergon Corp., 294 U.S. 477,
`
`492 (1935) (“Upon the filing of the disclaimers, . . . the public was entitled
`
`to manufacture and use the device originally claimed as freely as though [the
`
`claim] had been abandoned.”).
`
`As discussed above, Patent Owner here disclaimed all thirty-two
`
`claims of the ’037 patent under section 253. Accordingly, Patent Owner
`
`“effectively eliminated those claims from the original patent.” See Vectra,
`
`162 F.3d at 1383. In light of such elimination of all thirty-two claims from
`
`the ’037 patent, as well as Patent Owner’s belief that all those claims were
`
`already invalid and that no continuing prosecution associated with the
`
`’037 patent exists, we deny as moot the Petition, which requests inter partes
`
`review of claims 1–32 of the ’037 patent. In addition, we also dismiss as
`
`moot Patent Owner’s Request for Adverse Judgment.
`
`
`
`IV. CONCLUSION
`
`For the foregoing reasons, we decline to institute an inter partes
`
`review of U.S. Patent No. 7,490,037 B2.
`
`
`
`For the reasons given, it is
`
`V. ORDER
`
`ORDERED that the Petition is denied as moot and no trial is
`
`instituted; and
`
`FURTHER ORDERED that Patent Owner’s Request for Adverse
`
`Judgment (Paper 16) is dismissed as moot.
`
`4
`
`

`

`Trials@uspto.gov
`571.272.7822
`
`Paper 20
`Entered: February 28, 2017
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`UNIFIED PATENTS INC.,
`Petitioner,
`
`v.
`
`DIGITAL AUDIO ENCODING SYSTEMS, LLC,
`Patent Owner.
`____________
`
`Case IPR2016-01710
`Patent 7,490,037 B2
`____________
`
`
`
`Before MICHAEL J. FITZPATRICK, STACEY G. WHITE, and
`MICHELLE N. WORMMEESTER, Administrative Patent Judges.
`
`
`FITZPATRICK, Administrative Patent Judge, concurring.
`
`
`
`
`
`
`
`
`

`

`IPR2016-01710
`Patent 7,490,037 B2
`
`
`I join the majority’s decision to deny the Petition to institute an inter
`
`partes review, and I concur with the majority’s decision to dismiss Patent
`
`Owner’s Request for Adverse Judgment.
`
`I write separately to state that I would dismiss the Request for
`
`Adverse Judgment, not because it is moot,2 but because there exists no inter
`
`partes review between the parties in which to enter such a judgment. Absent
`
`an instituted inter partes review, we may not enter a judgment.
`
`With our authorization, Petitioner filed a brief, arguing that we have
`
`the authority to enter adverse judgment without instituting a review.
`
`Paper 19 (“Pet. Brief”). With respect to our regulations, Petitioner relies on
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`37 C.F.R. § 42.73(b), which states that “[a] party may request judgment
`
`against itself at any time during a proceeding,” and 37 C.F.R. § 42.2, which
`
`defines “proceeding” as a “a trial or preliminary proceeding,” the latter of
`
`which it further defines as the period that “begins with the filing of a petition
`
`for instituting a trial and ends with a written decision as to whether a trial
`
`will be instituted.” Pet. Brief at 1. With respect to the America Invents Act,
`
`
`2 I do not view the Request for Adverse Judgement as moot. If adverse
`judgment were granted, Patent Owner would be estopped “from taking
`action inconsistent with the adverse judgment, including obtaining in any
`patent: (i) A claim that is not patentably distinct from a finally refused or
`canceled claim.” 37 C.F.R. § 42.73(d)(3). For example, if adverse judgment
`were granted, and Patent Owner were to present a non-patentably distinct
`claim in a new application, the Examiner could reject the claim on that basis
`alone. Cf. Ex Parte Aoki, Appeal 2012-010117, 2015 WL 3827164 (PTAB
`June 15, 2015) (affirming Examiner’s final rejection of claims not patentably
`distinct from claims on which adverse judgment had been entered against
`applicant in a prior interference proceeding). But, because adverse judgment
`is not being granted, § 42.73(d)(3) will not apply.
`
`2
`
`

`

`IPR2016-01710
`Patent 7,490,037 B2
`
`Petitioner relies on 35 U.S.C. § 316(a)(3)–(4), which mandate the Director to
`
`provide regulations:
`
`the submission of
`(3) establishing procedures for
`supplemental information after the petition is filed; [and]
`
`(4) establishing and governing inter partes review under
`this chapter and the relationship of such review to other
`proceedings under this title[.]
`
`35 U.S.C. § 316(a)(3)–(4). See Pet. Brief at 2. Petitioner argues that these
`
`statutory provisions:
`
`provided the statutory power to the USPTO to create regulations
`in 37 C.F.R. Part 42, such as 37 C.F.R. § 42.73(b), which allows
`for adverse judgment prior to an institution decision. See, e.g.,
`Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1335-36 (Fed. Cir.
`2008) (stating that the USPTO is authorized to establish
`“procedural” rules). And it is Section 316 that in turn provides
`the statutory power to the Board to use those regulations to enter
`adverse judgment under facts like those here. See, e.g.,
`Intellectual Ventures II LLC v. JP Morgan Chase & Co., 781
`F.3d 1372, 1378 (Fed. Cir. 2015) (stating that the Federal Circuit
`“may give deference to the PTO with respect to procedural rules
`of conduct before the PTO itself”).
`
`Pet. Brief at 2–3.
`
`I am not persuaded. Section 42.73(b) does not, on its face, empower
`
`us to enter adverse judgment at any time. Rather, it explicitly permits a
`
`party to request adverse judgment at any time. In that regard, I interpret the
`
`language in § 42.73(b) that “[a] party may request judgment against itself at
`
`any time during a proceeding” as providing a mechanism by which a party
`
`may concede the patentability or unpatentability of the challenged claims,
`
`thereby avoiding the expense and time of a contested inter partes review. If
`
`that mechanism is employed and an inter partes review has been instituted,
`
`the presiding panel would be empowered to enter judgment adverse to the
`
`3
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`

`

`IPR2016-01710
`Patent 7,490,037 B2
`
`party requesting the same, pursuant to its authority under 35 U.S.C.
`
`§§ 6(b)(4), 6(c), 316(c), and 318(a).
`
`Although § 42.73(b) clearly contemplates that we may enter adverse
`
`judgment in certain circumstances, I do not interpret it as implicitly
`
`empowering us to do so when no review is instituted. Nor am I persuaded
`
`by Petitioner’s arguments that the Director could issue such a regulation
`
`pursuant to 35 U.S.C. § 316(a)(3) and (4). Indeed, the ability to enter
`
`judgment without instituting would undermine the concept of institution
`
`being required for an inter partes review. See 35 U.S.C. § 314(a)
`
`(“Threshold.—The Director may not authorize an inter partes review to be
`
`instituted unless the Director determines that the information presented in
`
`the petition filed under section 311 and any response filed under section 313
`
`shows that there is a reasonable likelihood that the petitioner would prevail
`
`with respect to at least 1 of the claims challenged in the petition.”).
`
`I would dismiss Patent Owner’s Request for Adverse Judgment
`
`because the Petition is being denied and, thus, there exists no inter partes
`
`review between the parties in which to enter such a judgment.
`
`
`
`
`
`
`
`
`
`
`4
`
`

`

`IPR2016-01710
`Patent 7,490,037 B2
`
`PETITIONER:
`
`Vincent Galluzzo
`vgalluzzo@crowell.com
`
`Teresa Rea
`trea@crowell.com
`
`Jonathan Stroud
`jonathan@unifiedpatents.com
`
`
`PATENT OWNER:
`
`Timothy Devlin
`tdevlin@devlinlawfirm.com
`
`
`5
`
`