`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`
`FORD MOTOR COMPANY
`Petitioner
`
`v.
`
`TRILOGY DEVELOPMENT GROUP, INC.
`Patent Owner
`
`
`
`
`Case IPR2017-00150
`Patent 7,882,057
`
`
`
`
`
`PATENT OWNER TRILOGY DEVELOPMENT GROUP, INC.’S
`PRELIMINARY RESPONSE
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`

`

`
`
`
`
`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`
`TABLE OF CONTENTS
`
`I.
`II.
`
`B.
`
`C.
`
`INTRODUCTION ........................................................................................... 1
`FORD’S PETITION IS UNTIMELY ............................................................. 5
`A.
`For more than a year, Versata and Ford have
`continuously been involved in a patent-infringement
`dispute.................................................................................................... 5
`Ford’s IPR petition is time barred under 35 U.S.C. §
`315(b). ................................................................................................... 9
`The Board, in its discretion, should deny institution
`because Ford improperly used its first petition as a
`roadmap for drafting its second. ..........................................................15
`III. TECHNICAL OVERVIEW ..........................................................................21
`A. Versata is a pioneer in configuration technology, and the
`’057 patent represents a significant advance. ......................................21
`Overview of the ’057 Patent ................................................................23
`B.
`Overview of Loomans .........................................................................29
`C.
`D. Overview of Stahl ................................................................................31
`IV. ARGUMENT .................................................................................................33
`A.
`Ford does not show that the cited references teach or
`suggest every claim feature. ................................................................33
`1.
`Ford does not show that the cited references teach
`“dividing one or more configuration queries” such
`that “the multiple configuration sub-queries
`represent the one or more configuration queries” as
`recited in every independent claim. ..........................................35
`a.
`Stahl’s disclosure that “we can interpret the different leaf
`nodes of the query” does not disclose the claimed
`“dividing.” ......................................................................37
`Stahl does not disclose dividing such that “the multiple
`configuration sub-queries represent the one or more
`configuration queries” as claimed. .................................41
`Ford provides no reason explaining why a skilled artisan
`would incorporate Stahl’s “interpretation” into Loomans’
`system. ............................................................................44
`
`b.
`
`c.
`
`
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`- i -
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`

`

`
`
`V.
`
`
`
`2.
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`Ford does not show that the cited references teach
`that “each configuration sub-model includes data
`to define compatibility relationships between
`parts” as recited in every independent claim. ...........................47
`Ford does not show that the cited references teach
`that “each configuration sub-model collectively
`models the configurable product” as recited in
`every independent claim. ..........................................................53
`Ford does not show that the cited references teach
`“processing of each sub-query using at least one
`configuration sub-model per sub-query” as recited
`in every independent claim. ......................................................56
`The Board should reject Ford’s means-plus-function
`analysis. ...............................................................................................57
`Ford’s obviousness analysis is inadequate, because Ford
`never ascertains the differences between the references
`and the claims. .....................................................................................59
`CONCLUSION ..............................................................................................61
`
`
`
`3.
`
`4.
`
`B.
`
`C.
`
`
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`- ii -
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`

`

`
`
`Cases
`
`
`
`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`
`TABLE OF AUTHORITIES
`
`Apple Inc. v. Rensselaer Polytechnic Institute
`
`IPR2014-00319, Paper no. 12 (PTAB June 12, 2014) ............................. 9, 10, 12
`
`Coalition for Affordable Drugs (Adroca) LLC v. Acorda Therapeutics, Inc.
`
`IPR2015-01853, Paper no. 13 (PTAB Mar. 11, 2016) ........................................20
`
`Conopco, Inc. v. Proctor & Gamble Co.
`
`IPR2014-00506, Paper no. 25 (PTAB Dec. 10, 2014) ........................................15
`
`Conopco, Inc. v. Proctor & Gamble Co.
`
`IPR2014-00628, Paper no. 21 (PTAB Oct. 20, 2014) .........................................16
`
`CQG, Inc. v. Trading Techs. Int’l, Inc.
` CBM2015-00057, Paper no. 13 (PTAB July 10, 2015) ......................... 10, 13, 14
`
`Cyanotech Corp. v. Bd. of Trustees of the Univ. of Illinois
`
`IPR2013-00401, Paper no. 17 (PTAB Dec. 19, 2013) ........................................13
`
`eBay, Inc. v. Advanced Auctions LLC
`
`IPR2014-00806, Paper no. 14 (PTAB Sept. 25, 2014) ............................. 9, 10, 12
`
`Ericsson Inc. and Telefonaktiebolaget LM Ericsson v. Intellectual Ventures II LLC
`
`IPR2014-01170, Paper no. 9 (PTAB Feb. 17, 2015) ...........................................59
`
`Gordon * Howard Associates, Inc. v. LunarEye, Inc.
`
`IPR2014-01213, Paper no. 11 (PTAB Feb. 3, 2015) ...........................................12
`
`Graham v. John Deere Co.
` 383 U.S. 1 (1966) .................................................................................................60
`
`Histologics, LLC v. CDX Diagnostics, Inc.
`
`IPR2014-00779, Paper no. 6 (PTAB Sept. 12, 2014) ............................... 9, 10, 12
`
`In re Magnum Oil Tools Int'l, Ltd.
` 829 F.3d 1364 (Fed. Cir. July 25, 2016) ....................................................... 44, 58
`
`
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`- iii -
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`
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`
`Nautique Boat Co. v. Malibu Boats, LLC
`
`IPR2014-01045, Paper no. 13 (PTAB Nov. 26, 2014) ........................................13
`
`Nvidia Corp. v. Samsung Elecs. Corp.
`
`IPR2016-00134, Paper no. 9 (PTAB May 4, 2016) ............................................20
`
`Oracle Corp. v. Click-to-Call Techs. LP
`
`IPR2013-00312, Paper no. 26 (PTAB Oct. 30, 2013) .........................................11
`
`Toyota Motor Corp. v. Cellport Sys., Inc.
`
`IPR2015-01423, Paper no. 7 (PTAB Oct. 28, 2015) .................................... 15, 16
`
`Travelocity.com L.P. v. Cronos Technologies LLC
` CBM2014-00082, Paper no. 12 (PTAB Oct. 16, 2014) ......................................60
`
`
`Statutes
`
`35 U.S.C. § 314(a) ...................................................................................................14
`
`35 U.S.C. § 315(a) ...................................................................................................13
`
`35 U.S.C. § 315(b) ........................................................................................... passim
`
`35 U.S.C. § 316(e) ...................................................................................................58
`
`35 U.S.C. § 325(d) ...................................................................................................15
`
`
`Rules
`
`37 C.F.R. § 42.108 ...................................................................................................14
`
`
`
`
`
`
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`- iv -
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`

`

`Exhibit No.
`2301
`
`2302
`
`2303
`
`2304
`
`2305
`
`2306
`
`2307
`
`2308
`
`2309
`
`2310
`
`2311
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`
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`
`EXHIBIT LIST
`
`Description
`Excerpts from Microsoft Dictionary of Computer Terms, Fifth
`Edition (2002).
`Excerpts from IBM Dictionary of Computer Terms, Tenth
`Edition (1994).
`Excerpts from Webster’s New World Dictionary of Computer
`Terms, Sixth Edition (1997).
`Versata website, “About Us”, available at
`http://cpq.versata.com/about-us.
`Ford Starts Firm to Manage Its Web Sites, ComputerWorld, Feb.
`28, 2000, available at
`http://www.computerworld.com/article/2592825/it-
`management/ford-starts-firm-to-manage-its-web-sites.html.
`McCartney, Laton, “Trilogy Making A Name For Itself,” ZDNet,
`July 28, 2000.
`Versata Software Inc. Company Report, May 18, 2016, via
`Thomson Reuters.
`Field, Tom, Suit Yourself, CIO Magazine, Apr. 15, 1997, Vol.
`10, p. 108.
`“Ford and Trilogy Launch Web Company - Information Week,”
`InformationWeek News, February 23, 2000, available at
`http://www.informationweek.com/ford-and-trilogy-launch-web-
`company/d/d-id/1008183.
`Unopposed Application for Extension of Time to Answer
`Complaint, Versata Development Group, Inc. et al. v. Ford
`Motor Co., Civ. No. 4:15-cv-00316 (E.D. Tex.), D.I. 6.
`Transcript re Motion to Stay, Ford Motor Co. v. Versata
`Software, Inc. et al., Civ. No. 2:15-cv-10628 (E.D. Mich.), D.I.
`139.
`
`- v -
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`

`

`
`
`I.
`
`
`
`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`
`INTRODUCTION
`This is Ford’s second round of inter partes review petitions against
`
`Versata’s1 patents and represents nothing but Ford’s attempt to delay resolution of
`
`the parties’ dispute that has been pending in the district courts for well over a year.
`
`Ford’s first two IPR petition against U.S. Patent No. 7,882,0572 were filed on
`
`May 9, 2016—the next business day exactly one year after Ford was served with
`
`Versata’s patent-infringement complaint in the Eastern District of Texas. In fact,
`
`Ford must have known—or at the very least previously thought—that May 7,
`
`20163 marked the statutory deadline under 35 U.S.C. § 315(b) for filing IPR
`
`petitions, because Ford filed not just one but seven, IPR petitions against Versata’s
`
`patents on the following business day. See IPR2016-01012, IPR2016-01013,
`
`IPR2016-01014, IPR2016-01015, IPR2016-01016, IPR2016-01017, and IPR2016-
`
`01019. All of those petitions, including the two against the ’057 patent were
`
`
`1 Trilogy Software acquired Versata in 2006. (Ex. 2307, Thomson report.)
`
`To avoid confusion, both companies will be referred to as Versata.
`
`2 U.S. Patent No. 7,882,057 is marked as Petitioner’s exhibit 1301. Patent
`
`Owner will refer to this patent as the “’057 patent.”
`
`3 May 7, 2016 was a Saturday.
`
`
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`- 1 -
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`ultimately denied because Ford failed to establish that all of its applied references
`
`
`
`were prior art. Ford’s second round of petitions filed on October 28, 2016 against
`
`the ’057 patent are not only substantively deficient like its first ones but are also
`
`time barred under § 315(b).
`
`In particular, this deficient petition should be denied for at least five reasons.
`
`First, Ford’s petition violates § 315(b)’s one-year time bar. With papers filed
`
`in the Eastern District of Texas, Ford acknowledged that it was served with
`
`Versata’s complaint on May 7, 2015. More than one year later (on October 28,
`
`2016), Ford filed this petition. To avoid the § 315(b) time bar, Ford argues that
`
`Versata’s Texas complaint did not start the one-year clock because that action was
`
`later dismissed. But Versata’s Texas action was “DISMISSED without prejudice to
`
`[Versata’s] ability to assert its claims” in an already pending Michigan action. (Ex.
`
`1327, Order of Dismissal, Case No. 4:15-cv-00316 (E.D. Tex. Dec. 3, 2015).) And
`
`that dismissal occurred after Versata filed infringement counterclaims in the
`
`already pending Michigan action. So at all times since May 7, 2015, Versata’s
`
`infringement claims have been continuously pending against Ford—first in
`
`Versata’s Texas action and then later in Ford’s Michigan action. Under facts like
`
`these, the PTAB has repeatedly held that the first-filed action—i.e., Versata’s
`
`Texas action—starts the § 315(b) one-year clock. Because this petition was filed
`
`
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`- 2 -
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`more than one year after Ford was served with Versata’s Texas complaint, Ford’s
`
`
`
`petition is time barred and should be denied.
`
`Second, because Ford used prior institution decisions as a roadmap to draft
`
`its Petition and because Ford has provided no reason why it could not have
`
`presented its new evidence earlier, the Board should do what it has done in similar
`
`situations and use its discretion to deny institution.
`
`Third, Ford does not establish that Stahl and Loomans teach or suggest key
`
`claim features related to the ’057 patent’s sub-queries and sub-models as recited in
`
`the independent claims. A key to the claimed invention is “dividing” the query into
`
`sub-queries. That dividing feature is what persuaded the examiner to allow the
`
`’057 patent during the original prosecution. For this feature, Ford points to Stahl’s
`
`“interpretation” of a query. But interpretation is not the same as dividing, and, even
`
`if it were, the analysis from Dr. Greenspun—Ford’s own expert—shows that the
`
`alleged divided sub-queries still do not represent the original input configuration
`
`query as claimed. Moreover, Stahl does not process each alleged sub-query “using
`
`at least one configuration sub-model per sub-query” as claimed. Instead, Stahl
`
`requires that additional logic be present outside of the alleged sub-queries in order
`
`to process them. For the sub-models, Ford heavily relies on Loomans. But because
`
`Loomans’ sub-models at best only describe a part’s features and its compatibility
`
`with the overall product, Loomans’ sub-models do not “define compatibility
`
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`- 3 -
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`relationships between parts” as claimed. Still further, the claimed “compatibility
`
`
`
`relationships between parts” is merely a list, without requiring a hierarchical
`
`structure. In contrast, Loomans determines whether parts are compatible by
`
`modeling a product into a hierarchy involving a parent model and child sub-
`
`models, and traversing the hierarchy to determine whether a configuration is valid.
`
`Because Loomans vests some of the product configuration with a parent model and
`
`not with its sub-model, Loomans’ sub-models do not “collectively model[] the
`
`configurable product” as claimed.
`
`Fourth, Ford’s theories are lacking not only for the independent claims, but
`
`also for the dependent claims. For example, Ford fails to establish that the
`
`references render obvious certain claim features relating to sub-model structures
`
`(e.g., claim 46).
`
`Fifth and finally, Ford fails to conduct the requisite factual inquiries in any
`
`obviousness analysis. In particular, Ford fails to ascertain the differences between
`
`the prior art and the claims, leaving Patent Owner and the Board to guess at its
`
`theories.
`
`For the reasons summarized above and explained in more detail below,
`
`Ford’s petition should be denied.
`
`
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`- 4 -
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`
`II.
`
`FORD’S PETITION IS UNTIMELY
`
`Ford filed its second IPR petition against the ’057 patent more than one year
`
`after being served with a complaint from Versata alleging infringement of that
`
`patent. Thus, Ford’s second petition is time barred under 35 U.S.C. § 315(b).
`
`Moreover, Ford used Versata’s response to and the Board’s institution decision on
`
`Ford’s first petition as a roadmap for drafting its second petition. For both of these
`
`reasons, Ford’s second petition should be denied.
`
`A.
`
`For more than a year, Versata and Ford have continuously
`been involved in a patent-infringement dispute.
`
`Between 1998 and 2014, Ford licensed Versata’s patented Automotive
`
`Configuration Management (ACM) software and used this software as the
`
`backbone of its worldwide data infrastructure. (Ex. 1323, pp. 1-2.) Versata
`
`develops enterprise software that helps large corporations manage complex
`
`business operations. (Ex. 2304.) One of Versata’s most innovative areas of focus is
`
`product-configuration software. (See Ex. 2305, p. 2.) Although Versata has
`
`marketed product-configuration solutions in a variety of industries, this software
`
`has been particularly useful in the automotive industry. (Ex. 2306; Ex. 2308.)
`
`In 2014, when Ford and Versata met to renegotiate the software licensing
`
`agreement for ACM, Versata requested a modest increase in its annual licensing
`
`fee. Ford refused. Instead, Ford began to use replacement software that it contends
`
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`to have developed internally. Versata contends that this replacement software is a
`
`
`
`copy of ACM. (See Ex. 1323, ¶¶ 32-56, 139-49.)
`
`To avoid liability and to establish venue in Michigan, Ford filed a
`
`declaratory-judgment action in Michigan on February 19, 2015—alleging that
`
`Versata’s patents relating to ACM were not infringed. On May 7, 2015, Versata
`
`filed its own action in the Eastern District of Texas, alleging among other things
`
`that Ford infringed Versata’s portfolio of patents that protect ACM, including the
`
`’057 patent. (See Ex. 1323.) With papers filed in the Texas action, Ford requested
`
`an extension of time for responding to Versata’s complaint and acknowledged that
`
`it was served with that complaint on May 7, 2015. (Ex. 2310 (“Date of Service of
`
`Summons: 05/07/2015”).)
`
`Because actions were pending in both Michigan and Texas, Versata moved
`
`in Michigan to have Ford’s action dismissed or transferred to Texas—where
`
`Versata’s action was pending. (Ex. 1324, Order Denying Motion to Dismiss or
`
`Transfer, p. 6.) On October 14, 2015, the Michigan court denied Versata’s motion
`
`to dismiss or transfer, noting that Versata’s Texas action could be “made part of”
`
`Ford’s Michigan action. (Id., p. 2.) Two weeks later, on October 28, 2015, Versata
`
`answered Ford’s declaratory judgment complaint and filed infringement
`
`counterclaims in the Michigan action. (See Ex. 1322.) Versata’s Answer reasserted
`
`infringement claims against Ford under the ’057 patent, preserving the claims in
`
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`the event that the Texas court dismissed Versata’s case in favor of the Michigan
`
`
`
`forum. (Id., ¶¶ 103-107.)
`
`The Texas court was aware that the Michigan court had denied Versata’s
`
`motion to dismiss or transfer (See Ex. 1325.) So, more than five weeks after
`
`Versata filed its infringement counterclaims in the Michigan action, the Texas
`
`court (on December 3, 2015) dismissed Versata’s action “without prejudice to
`
`[Versata’s] ability to assert its claims in the Michigan court.” (Ex. 1327, Order
`
`Dismissing Texas Action.)
`
`Since then, the Michigan court has acted as though Versata’s Texas action
`
`was essentially merged into Ford’s Michigan action. (See, e.g., Ex. 2311,
`
`Transcript re Motion to Stay, 40:2-6 (The Court: “It seems to me that given that I
`
`kept the case here it is a relevant factor for me to try to keep the timing where it
`
`would be in the Eastern District of Texas, not dispositive, but something I ought to
`
`consider and keep my eye on?”).) The table below presents a timeline of the
`
`pendency of the ’057 infringement claim:
`
`Date
`
`’057 Patent - Continuous Dispute Timeline
`Elapsed time
`from Versata’s
`’057
`Infringement
`Complaint.
`
`Action
`
`
`
`
`
`-
`
`May 7,
`2015
`
`Versata files and serves its
`infringement complaint
`against Ford in the Texas
`
`
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`
`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`
`’057 Patent
`Infringement
`Claims Against
`Ford
`Continuously
`Pending
`
`
`
`5 months, 7 days
`
`5 months, 21 days
`
`6 months, 26 days
`
`1 year
`
`1 year, 5 months,
`21 days
`
`action, including the ’057
`patent.
`The Michigan court denies
`Versata’s motion to dismiss
`or transfer Ford’s suit and
`notes that “Versata’s Texas
`action could be “made part
`of” Ford’s Michigan action.
`Versata answers Ford’s
`declaratory judgment
`complaint in Michigan.
`Versata files counterclaims
`including reasserting
`infringement of the ’057
`Patent.
`The Texas court, aware of the
`Ford v. Versata patent
`infringement action in
`Michigan, dismisses
`Versata’s Texas action
`“without prejudice to
`[Versata’s] ability to assert
`its claims in the Michigan
`court.”
`Ford files petitions in
`IPR2016-01012 (’057
`Patent), IPR2016-01013
`(’057 Patent), IPR2016-
`01014, IPR2016-01015,
`IPR2016-01016, IPR2016-
`01017, and IPR2016-01019.
`Ford files IPR2017-00150
`petition.
`
`
`
`October
`14, 2015
`
`October
`28, 2015
`
`December
`3, 2015
`
`May 9,
`2016
`
`October
`28, 2016
`
`
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`Ford’s IPR petition is time barred under 35 U.S.C. § 315(b).
`B.
`At all times since May 7, 2015, the parties have continuously been involved
`
`in a patent-infringement dispute—first in Texas where Versata’s suit was pending
`
`and then later in Michigan where Ford’s suit was pending. As a result, the first-
`
`filed suit—i.e., Versata’s Texas action, served on Ford on May 7, 2015—starts
`
`§ 315(b)’s one-year clock. See eBay, Inc. v. Advanced Auctions LLC, IPR2014-
`
`00806, Paper no. 14 (PTAB Sept. 25, 2014); Histologics, LLC v. CDX Diagnostics,
`
`Inc., IPR2014-00779, Paper no. 6 (PTAB Sept. 12, 2014); Apple Inc. v. Rensselaer
`
`Polytechnic Institute, IPR2014-00319, Paper no. 12 (PTAB June 12, 2014), aff’d
`
`on rehr’g Paper no. 14 (PTAB July 31, 2014). Because Ford’s petition was filed
`
`more than one year after it was served with Versata’s Texas complaint asserting
`
`infringement of the ’057 patent, Ford’s petition is time barred under § 315(b) and
`
`should be denied.
`
`The Apple case, IPR2014-00319, is particularly instructive. There, the PTAB
`
`found that an earlier-filed case started the § 315(b) one-year clock, even though
`
`that earlier-filed case was dismissed without prejudice and consolidated into a
`
`later-filed case. Apple, IPR2014-00319, Paper no. 12 at 6-7. As a result, the PTAB
`
`held that the IPR petition was time barred under § 315(b) because it was filed more
`
`than one year after the earlier-filed case. Id. The petitioner requested rehearing. In
`
`a decision denying rehearing, the PTAB emphasized that the “relevant fact” was
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`Case IPR2017-00150 of
`U.S. Pat. No. 7,882,057
`that the earlier-filed case was immediately continued in the later-filed case. Apple,
`
`
`
`IPR2014-00319, Paper no. 14 at 4. In other words, “there was no interval during
`
`which no action was pending.” Id. at 5.
`
`The same continuity is true here—since Ford was served with Versata’s
`
`Texas complaint on May 7, 2015, a patent-infringement action has continuously
`
`been pending against Ford. In fact, the Texas court explicitly said that Versata’s
`
`Texas action was dismissed without prejudice to Versata’s ability to pursue its
`
`claims against Ford in the Michigan action. (Ex. 1327.) And the Michigan court
`
`has “tr[ied] to keep the timing where it would [have been] in the Eastern District of
`
`Texas . . . .” (Ex. 2311, 40:2-6.) As a result, § 315(b)’s one-year clock started
`
`ticking on May 7, 2015—when Ford was served with Versata’s complaint in the
`
`Texas action. See Apple, IPR2014-00319, Paper no. 12 at 6-7; see also eBay,
`
`IPR2014-00806, Paper no. 14; Histologics, IPR2014-00779, Paper no. 6.
`
`Ford’s attempt to distinguish Apple, eBay, and Histologics (Pet., pp. 3-4.) is
`
`unavailing. According to Ford, these cases should not apply here because, unlike in
`
`those cases, here “the Versata lawsuit and the Ford lawsuit were never
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`consolidated under Rule 42 . . . .” (Id., p. 4.) But consolidation—standing alone—
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`is not the operative fact to determine whether a first-filed, but later dismissed, case
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`starts the § 315(b) one-year clock. Instead, the Apple court emphasized that the
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`“relevant fact” in answering this question is the “immediate continuation of the
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`case.” Apple, IPR2014-00319, Paper no. 14 at 4; see also CQG, Inc. v. Trading
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`Techs. Int’l, Inc., CBM2015-00057, Paper no. 13 at 7 (PTAB July 10, 2015) (“The
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`Board panel in the Apple case made clear on rehearing that it was the immediate
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`continuation of the first action into the second action, including the legal positions
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`taken by the parties, that was the dispositive factor for determining that the
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`dismissal without prejudice of the first case did not have the effect as if the first
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`case never existed.”) (emphasis added) (citing Apple, IPR2014-00319, Paper no.
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`14 at 3-4). Here, there was no lapse in the ’057 infringement claims against Ford,
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`as Versata’s Texas action filed on May 7, 2015 continued into the counterclaims
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`filed in Ford’s Michigan action on October 28, 2015 before the dismissal of
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`Versata’s Texas action in favor of Ford’s Michigan action. Thus, there was
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`continuity between Versata’s Texas action and Ford’s Michigan action. So, here,
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`as in Apple, eBay, and Histologics, the first-filed action starts § 315(b)’s one-year
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`clock.
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`The cases that Ford cited in its petition (at pages 2-3) are all distinguishable.
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`First, in Oracle, IPR2013-00312, the first-filed case did not start the § 315(b)
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`clock because there was an almost nine-year hiatus between the first-filed case and
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`the later-filed case. See Oracle Corp. v. Click-to-Call Techs. LP, IPR2013-00312,
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`Paper no. 26 at 15 (PTAB Oct. 30, 2013). In particular, the first case was filed on
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`June 8, 2001 by an entity called Inforocket. Id. That case was later dismissed by
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`joint stipulation in 2003. Id. Then almost nine years later, on May 29, 2012, a
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`second case was filed by an entity called Ingenio that had acquired Inforocket. Id.
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`But here, unlike in Oracle, there has been absolutely no hiatus between
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`cases. In fact, Versata’s Texas action was not dismissed until after it filed its
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`counterclaims in Ford’s Michigan action. And the order expressly stated that the
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`Texas action was being “DISMISSED without prejudice to [Versata’s] ability to
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`assert its claims in the Michigan court.” (Ex. 1327.) So, unlike in Oracle, here a
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`patent-infringement action has been continuously pending against Ford since
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`Versata’s first-filed case. Thus, the service of Versata’s first-filed complaint
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`triggers § 315(b)’s one-year clock. See eBay, IPR2014-00806, Paper no. 14;
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`Histologics, IPR2014-00779, Paper no. 6; Apple, IPR2014-00319, Paper no. 12.
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`Second, the LunarEye case, IPR2014-01213, also does not apply here. In
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`that case, an earlier-filed complaint did not start the § 315(b) one-year clock
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`because the earlier-filed complaint was not properly served. See Gordon * Howard
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`Associates, Inc. v. LunarEye, Inc., IPR2014-01213, Paper no. 11 at 18 (PTAB Feb.
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`3, 2015) (“In sum, we determine on the present record that LunarEye’s July 8,
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`2013 attempted service of process on GH was insufficient to trigger the start of the
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`one-year filing period provided by § 315(b), and that § 315(b) does not bar
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`institution of the inter partes review requested by GH’s Petition.”). But unlike
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`LunarEye, it cannot be disputed here that the first-filed complaint was properly
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`served. Indeed, Ford acknowledged—in its request for an extension of time—that
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`it was served with Versata’s Texas complaint on May 7, 2015. (See Ex. 2310 (Ford
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`stating that the “Date of Service of Summons” was “05/07/2015”).)
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`Third, neither Cyanotech, IPR2013-00401, nor Nautique Boat, IPR2014-
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`01014, involve a § 315(b) time-bar issue; instead, the issue in those cases was
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`whether a later-dismissed declaratory-judgment action triggered the § 315(a) bar.
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`See Cyanotech Corp. v. Bd. of Trustees of the Univ. of Illinois, IPR2013-00401,
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`Paper no. 17 at 12 (PTAB Dec. 19, 2013) (“Excluding an action that de jure never
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`existed from the scope of § 315(a)(1) is consistent with both relevant case law and
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`legislative history.”); Nautique Boat Co. v. Malibu Boats, LLC, IPR2014-01045,
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`Paper no. 13 at 10-11 (PTAB Nov. 26, 2014) (“Thus, on the facts and on the record
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`before us at this time, Petitioner’s Florida [declaratory judgment] action for
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`invalidity, which was dismissed without prejudice, does not bar inter partes review
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`under 35 U.S.C. § 315(a).”). Because neither Cyanotech nor Nautique Boat
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`involved the § 315(b) time bar at issue here, those cases are inapposite.
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`And even if the § 315(a) bar has any relevance here, the Board’s treatment
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`of that issue in CQG Inc. v. Trading Techs. Int’l, Inc., CBM2015-00057, Paper no.
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`13 (PTAB July 10, 2015), is more applicable than either Cyanotech or Nautique
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`Boat. In CQG, the petitioner first filed a declaratory judgment action in Colorado,
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`and the patent owner later filed an infringement action in Illinois. Id. at 2-3. The
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`first-filed Colorado DJ action was transferred to Illinois and later dismissed
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`without prejudice. Id. at 3. After this dismissal, the patent owner was allowed to
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`file its infringement counterclaims in the Illinois action. Id. at 4. Under these facts,
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`the Board in CQG found that the first-filed Colorado DJ action continued into the
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`later-filed Illinois action to bar the CBM petition under § 325(a), which is
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`analogous to § 315(a). Id. at 8-9. The Board specifically noted that the “actions of
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`the Illinois Court were not made as if the Colorado DJ Action never existed.” Id. at
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`9. The reasoning from CQG applies with even more force here because Versata’s
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`infringement counterclaims were filed in the Michigan action before the Texas
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`action was dismissed (see supra Section II.A), not after the dismissal as in CQG.
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`* * *
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`In summary, Ford’s petition is time barred under § 315(b) because Ford was
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`served with Versata’s Texas complaint more than one year before this petition was
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`filed. (In fact, the dispute between the parties arose in 2014—nearly two years
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`before Ford filed its petition.) Although Versata’s Texas complaint was later
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`dismissed, this dismissal was without prejudice to Versata’s ability to pursue its
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`infringement claims against Ford in the already-pending Michigan action.
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`Accordingly, Ford’s petition is time barred under § 315(b) and should be denied.
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`C. The Board, in its discretion, should deny institution because Ford
`improperly used its first petition as a roadmap for drafting its
`second.
`Institution of inter partes review is discretionary. See 35 U.S.C. § 314(a); 37
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`C.F.R. § 42.108. The Board has considered at least the following factors when
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`deciding whether to exercise their discretion not to institute review:
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` (1) whether the same petitioner previously filed a petition directed to the
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`same claims of the same patent;
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`(2) whether the same or substantially the same prior art or arguments
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`previously were presented to the Office4;
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`(3) whether, at the time of filing of the earlier petition, the petitioner knew of
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`the prior art asserted in the later petition or should have known of it5;
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`4 See 35 U.S.C. § 325(d) (“In determining whether to institute or order a
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`proceeding under . . . chapter 31 [providing for inter partes review], the Director
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`may take into account whether, and reject the petition or request because, the same
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`or substantially the same prior art or arguments previously were presented to the
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`Office.”).
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`5 See Conopco, Inc. v. Proctor & Gamble Co., IPR2014-00506, Paper no. 25 at 4
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`(PTAB Dec. 10, 2014) (informative), and Paper no. 17 at 6 (PTAB July 7, 2014);
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`…Continued
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` (4) whether, at the time of filing of the later petition, the petitioner already
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`received the patent owner’s preliminary response to the earlier petition or received
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`the Board’s decision on whether to institute review in the earlier petition6;
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` (5) whether the petitioner provides adequate explanation for the time
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`elapsed between the filing dates of multiple petitions directed to the same claims of
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`the same patent. Alarm.com Inc., v. Vivint, Inc., IPR2016-01110, Paper no. 11 at 4-
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`5 (PTAB Nov. 28, 2016).
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`