`
`
`
`
`
`
`
`
`
`Paper No. ___
`
`Filed on behalf of Petitioners
`By: Elisabeth H. Hunt
`Richard F. Giunta
`Randy Pritzker
`WOLF, GREENFIELD & SACKS, P.C.
`600 Atlantic Ave
`Boston, MA 02210
`Tel:
`(617) 646-8000
`Fax: (617) 646-8646
`EHunt-PTAB@wolfgreenfield.com
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`RPX CORPORATION,
`Petitioner
`
`v.
`
`DIGITAL AUDIO ENCODING SYSTEMS, LLC,
`Patent Owner
`
`_________________
`
`Case IPR2017-00212
`Patent No. 7,490,037
`________________
`
`PETITIONER’S BRIEF IN SUPPORT OF ADVERSE JUDGMENT
`AGAINST PATENT OWNER
`
`
`
`
`
`
`
`
`CONTENTS
`
`I. DAE EXPRESSLY REQUESTED ADVERSE JUDGMENT ......................... 1
`II. THE DEFINITION IN RULE 42.2 APPLIES TO RULE 42.73 ...................... 1
`III. STATUTORY AUTHORITY ........................................................................... 4
`
`
`
`
`The Board authorized this briefing to address “whether we have the power to
`
`enter adverse judgment in these proceedings, where no instituted review of the
`
`patent exists.” Paper 9 at 3. The Board asked that this Brief “elaborate as to why
`
`the definition set forth in §42.2 applies in §42.73” and “identify the statutory
`
`source of our power to enter adverse judgement when no review is instituted.” Id.
`
`I.
`
`DAE EXPRESSLY REQUESTED ADVERSE JUDGMENT
`Rule 42.73(b) states that “[a] party may request judgment against itself at
`
`any time during a proceeding.” 37 C.F.R. § 42.73(b). Prior Board decisions have
`
`addressed whether to enter adverse judgment under Rule 42.73(b)(2) when the
`
`patent owner merely disclaims all challenged claims pre-institution, and different
`
`panels have ruled differently. See Smith & Nephew v. Athrex, IPR2016-00917,
`
`Paper 12 and the cases cited therein. The Board had discretion in those cases,
`
`because the Patent Owners did not expressly request entry of adverse judgment,
`
`but took other action (e.g., cancellation of all challenged claims) that Rule 42.73(b)
`
`provides “may” be construed as requesting adverse judgment.
`
`The facts here are more straightforward. DAE expressly requested entry of
`
`adverse judgment, and that request can be acted upon irrespective of whether DAE
`
`disclaims all claims. The discretion addressed by other panels does not apply.
`
`II. THE DEFINITION IN RULE 42.2 APPLIES TO RULE 42.73
`37 C.F.R. § 42.2 states that it provides “Definitions” that “apply to this part”
`
`
`
`1
`
`
`
`42 of C.F.R. Title 37. Rule 42.2 includes definitions for numerous terms in Rule
`
`42.73: “Proceeding means a trial or preliminary proceeding”; “Preliminary
`
`Proceeding 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;” “Trial” is “a contested
`
`case instituted by the Board based upon a petition. A trial begins with a written
`
`decision notifying the petitioner and patent owner of the institution of the trial;”
`
`“Judgment means a final written decision by the Board, or a termination of a
`
`proceeding.” Smith & Nephew, IPR2016-00917, Paper 12 at 3.
`
`Given that “proceeding” and other terms in Rule 42.73 are expressly defined
`
`in Rule 42.2, and that Rule 42.2 states that its definitions apply to all sections of
`
`“this part [42],” the definition of “proceeding” in Rule 42.2 applies to Rule 42.73.
`
`The Federal Circuit’s decision in Intellectual Ventures v. JP Morgan Chase,
`
`781 F. 3d 1375 (Fed. Cir. 2015) (“IV”) is not to the contrary. There, the court
`
`interpreted “proceeding” as used in the statute (not the Rules), for the purpose of
`
`deciding whether the court had Article III jurisdiction to hear an interlocutory
`
`appeal on a stay of litigation prior to institution of a CBM review. Id. at 1376
`
`(citing AIA § 18(a)). The court only considered the Rules among a number of
`
`“non-statutory arguments” were found not to affect the meaning of “proceeding” in
`
`the statute. Id. at 1378. The court’s holding did not turn on the meaning of
`
`“proceeding” as defined in Part 42 of 37 C.F.R., and any statement in IV about the
`
`
`
`2
`
`
`
`meaning of “proceeding” in the Rules (rather than the statute) is not binding on the
`
`Board. What is binding on the Board are the PTO’s Rules, which expressly define
`
`“proceeding” (Rule 42.2) within Part 42 as including a preliminary proceeding like
`
`this one, and authorize adverse judgment at any time during a “proceeding” so
`
`defined (Rule 42.73). Torrington Co. v. United States, 82 F.3d 1039, 1049 (Fed.
`
`Cir. 1996) (“agencies are required to follow their own regulations.”).
`
` IV proposed that “the PTO’s own regulations are inconsistent on [the
`
`meaning of ‘proceeding’].” A closer look reveals no inconsistency in 37 C.F.R.
`
`42. The court cited the TPG (quoting “[T]he Director may institute a proceeding
`
`where a petitioner meets the threshold standards,” 77 Fed. Reg. 48756 at 48765)
`
`and 37 C.F.R. § 42.101(b) (quoting “The petition requesting the proceeding…”) as
`
`potentially inconsistent with Rule 42.2’s definition of “proceeding.” The quoted
`
`statement in the TPG references “Statutory Threshold Standards,” thus dealing
`
`with the use of “proceeding” in the statute, and not in 37 C.F.R. 42. Similarly
`
`Rule 42.101(b)’s reference to a “petition requesting the proceeding” is not
`
`inconsistent with Rule 42.2’s definition that a “Preliminary Proceeding begins with
`
`the filing of a petition,” as the petition requests both the trial and the preliminary
`
`proceeding that are both part of the “proceeding” under Rule 42.2.
`
`This panel is empowered to follow the PTO’s Rules and apply the express
`
`definitions in Rule 42.2 to Rule 42.73. Nothing in IV compels a different result or
`
`
`
`3
`
`
`
`warrants the Board not applying the express definitions Rule 42.2 requires.
`
`III. STATUTORY AUTHORITY
`Congress directed that the PTO “shall prescribe regulations” for
`
`“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)(4). Congress required the PTO to “consider the effect of any such
`
`regulation on … the integrity of the patent system, [and] the efficient
`
`administration of the Office.” 35 U.S.C. §316(b). The PTO did so in 37 C.F.R. 42.
`
`
`
`First, the PTO, complying with its Congressional directive
`
`to “prescribe regulations,” defined two types of “judgments” the PTAB may
`
`enter during an IPR proceeding. 37 C.F.R. §42.2 (defining “Judgment” as “a final
`
`written decision by the Board, or a termination of a proceeding.”).
`
`Second, the PTO provided for one type of “termination of the proceeding,”
`
`by adopting regulations providing that “[a] party may request judgment against
`
`itself at any time during a proceeding” (37 C.F.R. § 42.73), and defining a
`
`“proceeding” in that Rule as including a preliminary proceeding pre-institution (37
`
`C.F.R § 42.2). The PTO further provided that a patent owner “is precluded from
`
`taking action inconsistent with the adverse judgment, including obtaining in any
`
`patent: (i) [a] claim that is not patentably distinct from a … canceled claim.” 37
`
`C.F.R. § 42.73(d)(3). These regulations are consistent with Congress’s directive to
`
`
`
`4
`
`
`
`prescribe regulations “establishing and governing” the relationship between inter
`
`partes review and other proceedings under Title 35, as they establish an estoppel
`
`relationship with patent prosecution proceedings. 35 U.S.C. § 316(a)(4).
`
`
`
`As the Board has found, an IPR petition involves expenditure of significant
`
`resources, and it would be inequitable and inconsistent with “policies of finality
`
`and repose” to terminate an IPR proceeding on admittedly unpatentable claims in a
`
`manner that allows the Patent Owner to pursue patentably indistinct claims. Smith
`
`& Nephew, IPR2016-00917, Paper 12 at 8-9. Prosecution of patentably indistinct
`
`claims would also result in inefficient administration of the Office. Whether DAE
`
`has current plans to pursue patentably indistinct claims is immaterial to the
`
`Board’s question about the statutory authority behind the Rules the PTO has
`
`promulgated. The PTO was well within its Congressionally-delegated authority in
`
`determining that entering adverse judgment during a preliminary proceeding is
`
`appropriate, and in enacting regulations to that end, as those regulations govern
`
`“the relationship of [inter partes] review to other proceedings [including patent
`
`prosecution] under this title” and have an “effect” on “the integrity of the patent
`
`system, [and] the efficient administration of the Office.” 35 U.S.C. § 316 (a)-(b).
`
`Dated: February 8, 2017
`
`
`By: /Elisabeth Hunt/
`Richard F. Giunta, Reg. No. 36,149
`Elisabeth H. Hunt, Reg. No. 67,336
`WOLF GREENFIELD & SACKS, P.C.
`600 Atlantic Ave., Boston, MA 02210-2206
`
`
`
`
`
`
`
`5
`
`
`
`CERTIFICATE OF SERVICE UNDER 37 C.F.R. § 42.6(e)(4)
`
`I certify that on February 8, 2017, I will cause a copy of the foregoing
`
`document to be served via electronic mail, as previously consented to by Patent
`
`Owner, upon the following:
`
`Devlin Law Firm LLC
`1306 N. Broom Street, 1st Floor
`Wilmington, DE 19806
`Phone: (302) 449-9010
`Fax: (302) 353-4251
`tdevlin@devlinlawfirm.com
`dwu@devlinlawfirm.com
`mmcclain@devlinlawfirm.com
`
`
`
`
`
`
`/Virginia L. Weeks/
`Virginia L. Weeks, Paralegal
`
`Date: February 8, 2017
`
`
`
`
`
`
`
`
`
`
`
`
`
`6
`
`