`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`DELL INC.; EMC CORPORATION; HEWLETT-PACKARD
`ENTERPRISE CO.; HP ENTERPRISE SERVICES, LLC; TERADATA
`OPERATIONS, INC.; and VERITAS TECHNOLOGIES, LLC;
`
`Petitioners,
`
`v.
`
`REALTIME DATA LLC,
`Patent Owner.
`____________________
`
`Case IPR2017-001761
`Patent No. 7,161,506
`____________________
`
`
`PATENT OWNER’S OPPOSITION
`
`RE: EX PARTE SCHULHAUSER
`
`
`
`
`
`1 Case IPR2017-00806 has been consolidated with this proceeding. Case
`
`IPR2017-01688 has been joined with this proceeding.
`
`
`
`IPR2017-00176 & -00806 & -01688
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
`
`Ex Parte Schulhauser (“Schulhauser”) does not support a finding of
`
`unpatentability as to any claim at issue in this proceeding for five reasons.2
`
`First, Petitioner did not timely present any argument or theory based
`
`on Schulhauser, and has waived the ability to do so. The Board is legally
`
`foreclosed from now finding unpatentability based on Schulhauser sua
`
`sponte. Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., 821 F.3d
`
`1359, 1369 (Fed. Cir. 2016) (“[T]he expedited nature of IPRs bring with it
`
`an obligation for petitioners to make their case in their petition to institute.”);
`
`In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364, 1381 (Fed. Cir. 2016)
`
`(rejecting the Board’s reliance on unpatentability arguments that “could have
`
`been included” in the petition but were not); Wasica Finance GMBH v.
`
`Continental Auto. Systems, 853 F.3d 1272, 1286 & n.9 (Fed. Cir. 2017)
`
`(holding that a petitioner cannot establish unpatentability based on new
`
`theories presented in its reply brief and that “[s]hifting arguments in this
`
`fashion is foreclosed by statute, our precedent, and Board guidelines.”)
`
`(internal citations omitted); Ariosa Diagnostics v. Verinata Health, Inc., 805
`
`
`
`2 Patent Owner objects to the Board’s requirement of simultaneous
`
`briefing. Petitioner bears the burden of proof, and Patent Owner is not fairly
`
`heard where it cannot know of arguments before being asked to rebut them.
`
`
`
`1
`
`
`
`IPR2017-00176 & -00806 & -01688
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
`
`F.3d 1359, 1367 (Fed. Cir. 2015) (because Petitioner bears the burden in IPR
`
`proceedings, “a challenge can fail even if different evidence and arguments
`
`might have led to success”); 5 U.S.C. § 554(b)(3); 77 Fed. Reg. 48,756,
`
`48,768; 37 C.F.R. § 42.23(b). Schulhauser’s precedential designation pre-
`
`dates the Petition. Yet the Petition did not raise it, and Patent Owner did not
`
`have a full and fair opportunity to develop responsive evidence or argument.
`
`Second, applying Schulhauser in the context of this proceeding would
`
`be arbitrary and capricious, and unconstitutional. The Schulhauser decision
`
`arose in the context of a pending prosecution. In that setting, a patentee can
`
`work around Schulhauser by simply amending claims to avoid limitations
`
`that will not be given patentable weight. By contrast, during prosecution
`
`Realtime had no notice from the PTO of Schulhauser or the prospect that
`
`certain limitations of its claims would be given no patentable weight. Rather,
`
`during reexamination of the ’506 patent, the Office gave the limitations at
`
`issue patentable weight. See Ex. 1007 at 27-28, 32-33, 35; Ex. 1012 at 27-28
`
`(agreeing with Realtime that LBX, Lafe, Reynar, and French failed to teach
`
`the same limitations at issue in this briefing). Realtime maintained the
`
`limitations on that basis, and made significant investments and expenditures
`
`to enforce and defend the claims. Moreover, whereas the PTO must
`
`undertake notice and comment rulemaking to apply the rule of Schulhauser
`
`
`
`2
`
`
`
`IPR2017-00176 & -00806 & -01688
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
`
`to IPRs, the PTO has not issued any rule, regulation, or policy complying
`
`with the requirements of the Administrative Procedure Act that extends
`
`Schulhauser to issued claims later challenged through IPR. See Aqua
`
`Products v. Matal, 872 F.3d 1290, 1319-1322, 1328 (Fed. Cir. 2017) (en
`
`banc) (requiring notice and comment rulemaking for substantive PTO
`
`positions that would impact final decisions on patentability). Notably,
`
`Schulhauser itself is entirely directed to prosecution, not IPR. Nor could the
`
`PTO apply the rule of Schulhauser retroactively to issued claims. There is
`
`no express Congressional grant to support such retroactive rulemaking, and
`
`it is thus foreclosed by the APA and Supreme Court precedent. Bowen v.
`
`Georgetown Univ. Hospital, 488 U.S. 204, 208-09 (1988). Applying
`
`Schulhauser here would also violate the Due Process Clause. For instance,
`
`Schulhauser only arose here after the time to bring a motion to amend had
`
`passed. Finally, depriving Patent Owner of the weight that the Office once
`
`afforded to its issued claim limitations would constitute an unlawful taking.
`
`Third, Schulhauser rests entirely on two non-precedential Federal
`
`Circuit decisions that do not support its holding, and it is legally incorrect. In
`
`Applera v. Illumina, the Federal Circuit held that all limitations of claim 1—
`
`including 1(c)—are met once the sequence of nucleotides is determined. 375
`
`F. App’x. 12, 21 (Fed. Cir. 2010). Applera did not hold that claim 1 could be
`
`
`
`3
`
`
`
`IPR2017-00176 & -00806 & -01688
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
`
`met without determining the sequence of nucleotides, or by ignoring
`
`limitation 1(c). To the contrary, it stated that the requirement of limitation
`
`1(c) was “[t]he distinguishing feature of the invention. . . .” Id. Applera thus
`
`held that all limitations of claim 1 were practiced, not that the claim could be
`
`met even if some limitations were never practiced. In Cybersettle v. Nat’l
`
`Arbitration Forum, the court expressly noted that the claim at issue
`
`contained “no conditional language.” 243 F. App’x. 603, 607 (Fed. Cir.
`
`2007). So the language Schulhauser quotes from Cybersettle is merely
`
`fleeting dicta. It is also not supported by any internal citations. By contrast,
`
`Federal Circuit precedent holds that even the “broadest reasonable
`
`interpretation” standard forbids a construction that reads out limitations
`
`explicitly recited in a claim, or that causes the claim to read onto prior art
`
`approaches expressly taught away from in the specification. In re Suitco
`
`Surface, 603 F.3d 1255, 1260-1261 (Fed. Cir. 2010); In re Smith, 871 F.3d
`
`1375, 1382-84 (Fed. Cir. 2017); In re NTP, Inc., 654 F.3d 1279, 1287-88
`
`(Fed. Cir. 2011). Here, the specification specifically teaches against using
`
`only content dependent compression. Ex. 1001 at 2:54-3:45. Instead, the
`
`specification teaches methods “for providing fast and efficient data
`
`compression using a combination of content independent data compression
`
`and content dependent data compression.” Paper 19 at 2. Interpreting the
`
`
`
`4
`
`
`
`IPR2017-00176 & -00806 & -01688
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
`
`claims to be met based on a purely content dependent approach—i.e.,
`
`ignoring limitations 104[c] and 105[d2]—would be precisely what the
`
`specification taught against, and cannot be correct even under BRI.
`
`Fourth, applying Schulhauser would not support a finding of
`
`unpatentability as to any challenged claim because the Petition fails for other
`
`reasons. Petitioner’s theory relies on a combination that includes Sebastian,
`
`and the Board instituted on that basis. Petitioner’s motivation to combine
`
`Franaszek with Sebastian is based on the premise that Franaszek can face
`
`situations where it has a data type, but does not have an encoder associated
`
`with that data type. POR at 15; Pet. at 42-43; Oral Hearing Demonstratives
`
`(“Demonstratives”) at Slide 89. But the testimony of both Dr. Creusere and
`
`Dr. Zeger establishes that a POSA would know that Franaszek does not have
`
`that problem. POR at 15-17; Demonstratives at 90-91. Accordingly, the
`
`Petition’s motivation to combine with respect to Sebastian fails, and the
`
`Petition thus fails as a whole. POR at 16-17. Moreover, the testimony of
`
`both experts also establishes that Sebastian does not teach or suggest what
`
`Petitioner purports. POR at 17-19; Demonstratives at 93-98.
`
`Fifth, the only expert testimony of record demonstrates that all of the
`
`limitations of claims 104 and 105 must be met under Petitioner’s
`
`obviousness theory, or else obviousness cannot be found. Ex. 2004 ¶¶ 32-38.
`
`
`
`5
`
`
`
`IPR2017-00176 & -00806 & -01688
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
`
`
`
`
`
`
`
`Date: March 5, 2018
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`/s/ Kayvan Noroozi
`
`William P. Rothwell, Reg. No. 72,522
`NOROOZI PC
`2245 Texas Drive, Suite 300
`Sugar Land, TX 77479
`
`Kayvan B. Noroozi, Admitted Pro Hac Vice
`NOROOZI PC
`1299 Ocean Ave., Suite 450
`Santa Monica, CA 90401
`
`
`Counsel for Patent Owner
`
`
`
`
`6
`
`
`
`IPR2017-00176 & -00806 & -01688
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
`
`CERTIFICATION OF SERVICE
`
`The undersigned hereby certifies that the foregoing PATENT
`
`OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER was served
`
`electronically via e-mail on March 5, 2018, to the following counsel of
`
`record for Petitioner:
`
`IPR2017-00176
`Andrew R. Sommer
`Thomas M. Dunham
`Garth A. Winn
`Vivek V. Krishnan
`Lisa K. Nguyen
`Robert Steinberg
`
`
`
`IPR2017-00806
`Eliot D. Williams
`Jamie R. Lynn
`Andrew Wilson
`Michelle Eber
`
`IPR2017-01688
`Jonathan Link
`Lisa Nguyen
`
`
`
`
`
`IPR2017-00176@winston.com
`
`garth.winn@klarquist.com
`
`Lisa.Nguyen@lw.com
`bob.steinberg@lw.com
`
`
`eliot.williams@bakerbotts.com
`jamie.lynn@bakerbotts.com
`andrew.wilson@bakerbotts.com
`michelle.eber@bakerbotts.com
`DLTeradata@bakerbotts.com
`
`
`Jonathan.Link@lw.com
`Lisa.Nguyen@lw.com
`
`Respectfully submitted,
`
`/s/ Kayvan Noroozi
`
`Kayvan B. Noroozi, Admitted Pro Hac Vice
`NOROOZI PC
`1299 Ocean Ave., Suite 450
`Santa Monica, CA 90401
`
`Counsel for Patent Owner
`
`7
`
`
`
`IPR2017-00176 & -00806 & -01688
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
`
`
`Date: March 5, 2018
`
`
`
`
`8
`
`