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`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`------------------------
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`------------------------
`
`International Business Machines Corporation,
`Petitioner,
`v.
`
`EnvisionIT, LLC,
`Patent Owner
`------------------------
`
`Case No.: IPR2017-01247
`Patent 8,438,221
`------------------------
`
`PATENT OWNER’S PRELIMINARY RESPONSE TO PETITION FOR
`INTER PARTES REVIEW OF U.S. PATENT NO. 8,438,221
`
`
`
`
`

`

`TABLE OF CONTENTS
`
`
`
`Page
`
`V. 
`
`I. 
`U.S. Patent No. 8,438,221 ............................................................................... 1 
`II. 
`Claim Construction .......................................................................................... 3 
`III.  The Petition is time barred under 35 U.S.C. § 315(b) ..................................... 4 
`A. 
`Background ........................................................................................... 5 
`B. 
`The Complaint in the Litigation Qualifies under Section 315(b) ......... 7 
`C. 
`The Government is a “Privy” of Petitioner ........................................... 8 
`IV.  The Board should exercise its authority to deny institution under 35 U.S.C.
`§ 325(d) .......................................................................................................... 12 
`The Board should not institute on Ground I, because Petitioner has failed to
`establish that a central reference is prior art. ................................................. 15 
`A. 
`Petitioner bears the burden of showing that alleged prior art was
`authentic and publically accessible. .................................................... 15 
`Petitioner has not authenticated CAP 0.5 or established that it
`was publicly accessible. ...................................................................... 16 
`1. 
`The Internet Archive capture of the incident web page
`does not establish authenticity or public accessibility. ............. 17 
`The Botterell Declaration does not establish authenticity
`or public accessibility of CAP 0.5. ........................................... 18 
`The web page comments document does not establish
`authenticity or public accessibility of CAP 0.5. ....................... 19 
`The PPW Report does not establish authenticity or public
`accessibility of CAP 0.5. ........................................................... 21 
`VI.  There is no reasonable likelihood that Petitioner will prevail on Ground I. . 23 
`A. 
`The combination does not disclose, suggest, or teach the
`limitation of claim 19[a]. ..................................................................... 24 
`The combination does not disclose, suggest, or teach the
`limitation of claim 19[b]. .................................................................... 31 
`The combination does not disclose, suggest, or teach the
`limitation of claim 19[c]. ..................................................................... 38 
`
`2. 
`
`3. 
`
`4. 
`
`B. 
`
`B. 
`
`C. 
`
`
`
`i
`
`

`

`
`
`VII.  There is no reasonable likelihood that Petitioner will prevail on Ground II. 41 
`A. 
`Rieger does not disclose the limitation of claim 19[pre]. ................... 42 
`B. 
`Rieger does not disclose the limitation of claim 19[c]. ....................... 46 
`VIII.  There is no reasonable likelihood that Petitioner will prevail on Ground III.52 
`A. 
`The combination of Rieger and NSTC does not disclose,
`suggest, or teach the limitation of claim 19[c]. ................................... 52 
`IX.  Conclusion ..................................................................................................... 54 
`
`
`
`
`
`ii
`
`

`

`
`
`TABLE OF AUTHORITIES
`
`Cases
`Alcon Research, Ltd. v. Neev,
`Case No. IPR2014-00217, slip op. (PTAB May 9, 2014) .................................... 7
`
`Page(s)
`
`AM General LLC v. UUSI, LLC,
`Case No. IPR2016-01049, slip op. (PTAB Nov. 7, 2016) ........................... 10, 11
`
`In re Baxter Travenol Labs.,
`952 F.2d 388 (Fed. Cir. 1991) ...................................................................... 30, 37
`
`Bruckelmyer v. Ground Heaters, Inc.,
`445 F.3d 1374 (Fed. Cir. 2006) .......................................................................... 18
`
`Conopco Inc. v. Proctor & Gamble Co.,
`Case No. IPR2014-00628, slip op. (PTAB Mar. 20, 2015) .......................... 12, 13
`
`Cordis Corp. v. Boston Scientific Corp.,
`561 F.3d 1319 (Fed. Cir. 2009) .......................................................................... 16
`
`In re Cronyn,
`890 F.2d 1158 (Fed. Cir. 1989) .......................................................................... 15
`
`Groupon, Inc. v. Blue Calypso, LLC,
`Case No. CBM2013-00033, slip op (PTAB Dec. 17, 2014) .............................. 18
`
`In re Hoch,
`428 F.2d 1341 (CCPA 1970) .............................................................................. 29
`
`In re Kahn,
`441 F.3d 988 (Fed. Cir. 2006) ............................................................................ 29
`
`Karsten Mfg. Corp. v. Cleveland Golf Co.,
`242 F.3d 1376 (Fed. Cir. 2001) .......................................................................... 42
`
`Lake Cable v. Windy City,
`Case No. IPR2013-00528, slip op (PTAB Feb. 19, 2014) ........................... 29, 36
`
`Microsoft Corp. v. Proxyconn, Inc.,
`Case No. IPR2012-0002, slip op. (PTAB Dec. 21, 2012) .................................. 23
`
`
`
`iii
`
`

`

`
`
`Neil Ziegman, N.P.Z., Inc. v. Stephens,
`Case No. IPR2015-01860, slip op. (PTAB Feb. 24, 2016) ................................ 13
`
`Novak v. Tucows, Inc.,
`No. 06-CV-1909 (JFB) (ARL), 2007 WL 922306 (E.D.N.Y. Mar.
`26, 2007), aff’d, 330 F. App’x 204 (2d Cir. 2009) ............................................. 17
`
`Servicenow, Inc., v. Hewlett-Packard Co.,
`Case No. IPR2015-00716, slip op. (PTAB Aug. 26, 2015) ......................... 15, 16
`
`Shenzhen Huiding Technology Co., Ltd. v. Synaptics Inc.,
`Case IPR2015-01741, slip op. (PTAB Aug. 7, 2015) ........................................ 25
`
`Specht v. Google Inc.,
`758 F.Supp.2d 570 (N.D. Ill. 2010) .............................................................. 17, 19
`
`SRI Int’l, Inc. v. Internet Security Sys., Inc.,
`511 F.3d 1186 (Fed. Cir. 2008) .......................................................................... 18
`
`Standard Innovation Corp. v. Lelo, Inc.,
`Case No. IPR2014-00148, slip op. (PTAB Apr. 23, 2015) ................................ 16
`
`Unified Patents v. PersonalWeb Technologies,
`Case No. IPR2014-00702, slip op. (PTAB July 24, 2014) ........................... 13, 15
`
`United States v. EnvisionIT, LLC,
`Case No. IPR2017-00160, slip op. (PTAB May 2, 2017) .................................... 7
`
`United States v. Iris Corp. Berhad,
`Case No. IPR2016-00497, slip op. (PTAB July 25, 2016) ................................... 7
`
`Verdegaal Bros. v. Union Oil Co. of California,
`814 F.2d 628 (Fed. Cir. 1987) ............................................................................ 42
`
`Statutes
`
`28 U.S.C. § 610 (2015) .............................................................................................. 7
`
`28 U.S.C. §1498(a) (2015) ................................................................................... 6, 15
`
`35 U.S.C. § 102(b) (2015) ....................................................................................... 20
`
`35 U.S.C. § 235 (2015) ............................................................................................ 12
`
`
`
`iv
`
`

`

`
`
`35 U.S.C. §311(b) (2015) ........................................................................................ 36
`
`35 U.S.C. § 315 (2015) .............................................................................................. 4
`
`Regulations
`37 C.F.R. § 42.104(b)(4) ...................................................................................passim
`
`37 C.F.R. § 42.107 ..................................................................................................... 1
`
`48 C.F.R. § 52.227-3(a) ............................................................................................. 6
`
`Other Authorities
`
`157 CONG. REC. S5402 at S5432 (daily ed. Sep. 8, 2011) (statement of
`Sen. Schumer) ....................................................................................................... 9
`
`
`
`
`
`
`
`v
`
`

`

`
`
`LISTING OF EXHIBITS
`
`Exhibit
`
`Description
`
`Ex. 2001
`
`Patent Owner’s Preliminary Response, Paper 7 in case IPR2017-
`00160
`
`Ex. 2002
`
`Complaint, Docket No. 1 in CellCast Techs., et al. v. United States, et
`al., C.A. No. 1:15-cv-1307-VJW (C.F.C.) (Nov. 2, 2015)
`
`Ex. 2003 United States’ Unopposed Motion to Notice Third Party, Docket No.
`10 in CellCast Techs., et al. v. United States, et al., C.A. No. 1:15-cv-
`1307-VJW (C.F.C.) (Mar. 4, 2016)
`
`Ex. 2004 Answer of International Business Machines Corp., Docket No. 21 in
`CellCast Techs., et al. v. United States, et al., C.A. No. 1:15-cv-1307-
`VJW (C.F.C.) (May 18, 2016)
`
`Ex. 2005
`
`Petition for Inter Partes Review by the United States, Paper 1 in case
`IPR2017-00160
`
`Ex. 2006 Defendants’ Motion to Stay Proceedings, Docket No. 39 in CellCast
`Techs., et al. v. United States, et al., C.A. No. 1:15-cv-1307-VJW
`(C.F.C.) (Nov. 15, 2016)
`
`Ex. 2007 Order Denying Motion for Stay, Docket No. 50 in CellCast Techs., et
`al. v. United States, et al., C.A. No. 1:15-cv-1307-VJW (C.F.C.)
`(Mar. 22, 2017)
`
`Ex. 2008
`
`Excerpts from Senate Debate on the Leahy-Smith America Invents
`Act, 157 CONG. REC. S5402 (daily ed. Sep. 8, 2011) (statement of
`Sen. Schumer)
`
`Ex. 2009
`
`Excerpts from Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756
`(Aug. 14, 2012).
`
`Ex. 2010
`
`Excerpts from Joint Invalidity Contentions served by U.S. and IBM
`jointly in CellCast Techs., et al. v. United States, et al., C.A. No.
`1:15-cv-1307-VJW (C.F.C.).
`
`
`
`
`
`vi
`
`

`

`
`
`
`
`CLAIM 19:
`
`LISTING OF CLAIMS
`
`19[pre]
`
`A method of public service broadcast messaging to a broadcast target
`area, the method comprising:
`
`receiving over an input interface a broadcast request including a
`broadcast agent identification, a geographically defined broadcast
`target area, and a broadcast message from one of a plurality of
`coupled broadcast agent message origination systems;
`
`storing a geographically defined broadcast message jurisdiction for a
`broadcasting agent;
`
`verifying an authority of the broadcast agent identification including
`an authority of the originating broadcast agent to send the broadcast
`message to the broadcast target area by comparing the stored
`geographically defined broadcast message jurisdiction for the
`originating broadcast agent with the broadcast target area associated
`with the broadcast message in the broadcast request; and
`
`transmitting the broadcast message over an output interface to one or
`more coupled broadcast message networks providing broadcast
`message alerting service to at least a portion of the broadcast target
`area.
`
`19[a]
`
`19[b]
`
`19[c]
`
`19[d]
`
`
`
`
`
`vii
`
`

`

`Pursuant to 37 C.F.R. § 42.107, Patent Owner EnvisionIT, LLC (“Patent
`
`Owner”) submits this Preliminary Response to the above-captioned Petition for
`
`inter partes review of U.S. Patent No. 8,438,221 (“Pet.” or “Petition,” Paper 1).
`
`I.
`
`U.S. Patent No. 8,438,221
`
`U.S. Patent No. 8,438,221 (“the ’221 Patent”) discloses a system and
`
`method of admission control for authorizing transmission of a broadcast message
`
`to a broadcast target area. Ex. 1001 at Abstract. Public service warning systems in
`
`existence at the time of the ’221 Patent application filing were “antiquated and
`
`provide[d] only limited access to the public who may be in need of knowing of
`
`potential emergencies or danger.” Ex. 1001 at 1:29–31. Those systems did not
`
`“provide for location-based notification or broadcasting messages.” Ex. 1001 at
`
`1:31–33. Attempted solutions to those problems, which focused on the use of SMS
`
`technology, suffered from their own technical drawbacks, including delays in
`
`delivery, congestion of networks, and overloading of
`
`telecommunications
`
`infrastructure. Ex. 1001 at 1:36–67.
`
`The ’221 Patent describes a method and system for broadcast messaging to a
`
`broadcast
`
`target area which overcomes
`
`the above-mentioned drawbacks.
`
`According
`
`to
`
`the ’221 Patent, “[l]ocation-based message broadcasting
`
`is
`
`transmitted from [a] predefined cell in a downlink only mode and therefore, unlike
`
`current SMS services, does not require functionality or network resources from the
`
`
`
`1
`
`

`

`
`
`mobile services provider or from any portion of the mobile service provider's
`
`mobility management resources.” Ex. 1001 at 5:50–55. This technique allows for
`
`“the simultaneous sending of public service messages to millions of subscribers
`
`with less impact on the supporting networks than a single SMS-message.” Ex.
`
`1001 at 4:56–59. That characteristic and advantage of the ’221 patent’s invention
`
`is critical and is fundamentally different from systems that identify specific
`
`recipients for messages.
`
`The location-based message broadcasting described in the ’221 Patent relies
`
`on the “broadcast target area” which is received as part of a broadcast message
`
`record. Ex. 1001 at Fig. 5 (element 502), 5:1–3, claim 19. This broadcast target
`
`area is utilized by the public service message location broadcasting system (PLBS)
`
`to provide “a message or alert to a single cell geographic location, a neighborhood,
`
`a city, or an entire nation with minimal impact to the hosting telecommunication
`
`networks.” Ex. 1001 at 6:23–27. The ’221 Patent further explains that “[u]nlike
`
`other emergency messaging services that require the recipient's identity, a
`
`predetermined fixed delivery location, and usually the payment of a service fee, the
`
`[PLBS] uses broadcast messaging technology to reach an unlimited number of
`
`people in real time, with no pre-event recipient action required.” Ex. 1001 at 6:17–
`
`22.
`
`
`
`2
`
`

`

`
`
`The ’221 Patent also describes the verification of Broadcast Agents to
`
`transmit messages to a particular target area. Ex. 1001 at 4:37–40. “[T]he [PLBS]
`
`and methods described herein provide the functions and steps necessary to ensure
`
`that the Broadcast Agents are authorized to send the requested broadcast messages
`
`to the defined broadcast target area.” Ex. 1001 at 6:36–40. The PLBS “provides
`
`internal controls for insuring that the network and components are secure and that
`
`messages are authorized prior to transmittal” to the target area. Ex. 1001 at 6:39–
`
`44, claim 19. A geographically defined broadcast message jurisdiction is stored
`
`for a broadcast agent and is used to verify an authority of an originating broadcast
`
`agent to send a broadcast message to a broadcast target area. Ex. 1001 at claim 19.
`
`After validation is complete, the broadcast message record is transmitted to
`
`an output interface for ultimate broadcast to at least a portion of the broadcast
`
`target area. Ex. 1001 at claim 19.
`
`II. Claim Construction
`
`Petitioner proposes to accept the claim construction proposed by Patent
`
`Owner in IPR2017-00160. Pet. at 38. However, Petitioner misstates the claim
`
`construction proposed by the Patent Owner in that IPR. Specifically, the Petitioner
`
`states that, according to Patent Owner’s proposed claim construction, “‘broadcast”
`
`means “pertaining to transmission to all recipients in a target area and not to an
`
`identified recipient” and “broadcast network” means “a message that is intended
`
`
`
`3
`
`

`

`
`
`for transmission to all recipients in a target area and not an identified recipient.”
`
`Pet. at 39 (emphasis added). This is incorrect. In IPR2017-00160, Patent Owner
`
`proposed a claim construction of “broadcast message” as “a message that is
`
`intended for transmission to all recipients in a target area and not an identified
`
`recipient.” Exhibit 2001 (Patent Owner’s Preliminary Response in IPR2017-
`
`00160) at 15-16. Patent Owner did not, and does not, propose a claim construction
`
`for the term “broadcast network.” Assuming from context that Petitioner intended
`
`to propose this construction for the term “broadcast message,” Patent Owner
`
`concurs.
`
`III. The Petition is time barred under 35 U.S.C. § 315(b)
`
`35 U.S.C. § 315(b) provides:
`
`An inter partes review may not be instituted if the petition requesting
`the proceeding is filed more than 1 year after the date on which the
`petitioner, real party in interest, or privy of the petitioner is served
`with a complaint alleging infringement of the patent.
`
`35 U.S.C. § 315 (2015) (emphasis added). The Board should deny the present
`
`Petition, because both: 1) the United States government (“the United States” or
`
`“the government”) was served with a complaint more than one year before
`
`Petitioner filed the present Petition; and 2) the government is a privy of Petitioner
`
`with regard to the allegations in the lawsuit.
`
`
`
`4
`
`

`

`
`
`A. Background
`
`On November 2, 2015, Patent Owner, along with its exclusive licensee, filed
`
`a Complaint against the United States in the United States Court of Federal Claims
`
`(“C.F.C.”) in CellCast Technologies, LLC, et al. v. United States, Civil Action No.
`
`1:15-cv-1307-VJW (the “Litigation”), alleging that United States’ Integrated
`
`Public Alert Warning System (IPAWS) infringes certain claims of the ’221 Patent
`
`(and other patents). Ex. 2002 (“the Complaint”). The Complaint was served on
`
`the government on November 2, 2015.1
`
`In the Litigation, the United States filed a motion to notice Petitioner IBM
`
`on March 4, 2016. Ex. 2003 (Motion to Notice Third Party (“Motion”).) In the
`
`Motion, the United States stated that “aspects of [IPAWS] were developed in work
`
`performed by IBM under a multi-part contracting vehicle” and that “upon
`
`information and belief, the Department of Homeland Security (DHS) awarded an
`
`umbrella contract referred to as the EAGLE contract for Information Technology
`
`Support Services.” Ex. 2003 at 2. According to the Motion, this contract was
`
`assigned EAGLE Contract No. HSHQDC-06-D-00019. Id.
`
`The Motion explained that EAGLE Contract No. HSHQDC-06-D-00019
`
`“incorporated by reference, among others, Federal Acquisition Regulation (FAR)
`
`1 Court of Federal Claims Rule 4(c) states: “Date of Service. The date of
`service made is the date of filing with the clerk.”
`
`
`
`5
`
`

`

`
`
`Clause 52.227-3 (APR 1984).” Id. at 3. Clause 52.227-3 provides that a
`
`“Contractor shall indemnify the Government and its officers, agents, and
`
`employees against liability, including costs, for infringement of any United States
`
`patent…” See 48 C.F.R. § 52.227-3(a). The government stated that, “pursuant to
`
`the patent indemnity clause in Contract No. HSHQDC-06-D-00019, IBM may
`
`have an interest in the subject matter of this suit within the meaning of [the Rules
`
`of the United States Court of Federal Claims] 14(b).” Ex. 2003 at 3. Petitioner
`
`then voluntarily intervened in the Litigation. See Ex. 2004 (Answer of
`
`International Business Machines Corp.).2
`
`On November 1, 2016, the second-to-last permissible day in its own one-
`
`year period, the government filed a petition seeking inter partes review of the ’221
`
`Patent. Ex. 2005 (Petition for Review in IPR2017-00160). Petitioner and the
`
`government then filed a joint motion to stay the Litigation in light of the
`
`government’s petition for inter partes review. See Ex. 2006 (Motion to Stay
`
`Proceedings). However, the Court denied the Motion to Stay, Ex. 2007 (Order
`
`denying Motion to Stay), and on May 2, 2017, the Board denied institution of the
`
`
`2 Although Petitioner is involved in the supply of the accused system, Patent
`Owner’s sole remedy for the government system is against the government (and
`not Petitioner) in the Court of Federal Claims. See 28 U.S.C. §1498(a) (2015).
`
`
`
`6
`
`

`

`
`
`government’s petition. United States v. EnvisionIT, LLC, Case No. IPR2017-
`
`00160, slip op. at 2 (PTAB May 2, 2017) (Paper 8).
`
`On April 6, 2017, after Patent Owner filed its Preliminary Response to the
`
`government’s petition, and over 17 months after the government was served with
`
`the complaint in the Litigation, Petitioner filed the present Petition.
`
`B.
`
`The Complaint in the Litigation Qualifies under Section 315(b)
`
`The Complaint alleges infringement of the ’221 Patent. Ex. 2002 at ¶¶ 11,
`
`58–62. The Complaint, therefore, qualifies as a “complaint” within the meaning of
`
`§ 315(b), which applies to “civil actions for patent infringement” brought in the
`
`first instance by the patent owner. See Alcon Research, Ltd. v. Neev, Case No.
`
`IPR2014-00217, slip op. at 8 (PTAB May 9, 2014) (Paper 21). Actions at the
`
`C.F.C. under 28 U.S.C. § 1498 are “civil actions” that can trigger the § 315(b)
`
`statutory bar, because a “court” is defined as including “the United States Court of
`
`Federal Claims.” 28 U.S.C. § 610 (2015). The Board has recognized that § 315(b)
`
`applies to an IPR petition with a co-pending C.F.C. action. See, e.g., United States
`
`v. Iris Corp. Berhad, Case No. IPR2016-00497, slip op. at 8–9 (PTAB July 25,
`
`2016) (Paper 7) (noting that the government “fil[ed] a petition for inter partes
`
`review within the one-year window provided by § 315(b).”).
`
`
`
`7
`
`

`

`
`
`C. The Government is a “Privy” of Petitioner
`
`Under a proper interpretation of the America Invents Act (“AIA”), the
`
`government is a privy of its supplier with regard to the products/services at issue in
`
`the Litigation before the Court of Federal Claims. Again, 35 U.S.C. § 315(b),
`
`states that “[a]n inter partes review may not be instituted if the petition requesting
`
`the proceeding is filed more than 1 year after the date on which … [a] privy of the
`
`petitioner is served with a complaint alleging infringement of the patent.”
`
`(emphasis added).
`
`The legislative history of the AIA explains the meaning of “privy.” Section
`
`18 of the AIA, addressing the transitional program for covered business method
`
`patents, also uses the term “privy” in a similar context:
`
`A person may not file a petition for a transitional proceeding with
`respect to a covered business method patent unless the person or the
`person’s real party in interest or privy has been sued for infringement
`of the patent or has been charged with infringement under that patent.
`
`AIA § 18(a)(1)(B) (emphasis added). The legislative history makes clear that an
`
`accused customer whose use of products or services of a supplier is accused in
`
`litigation is a privy of the supplier in this context, even if not a real party in
`
`interest. Senator Schumer, one of the primary authors of Section 18, explained:
`
`Madam President, I would like to clarify the record on a few points
`related to section 18 of the America Invents Act. Section 18, of which
`
`
`
`8
`
`

`

`
`
`Senator Kyl and I were the authors, relates to business method
`patents. As the architect of this provision, I would like to make
`crystal clear the intent of its language.
`* * *
`As originally adopted in the Senate, subsection (a)(1)(B) only allowed
`a party to file a section 18 petition if either that party or its real parties
`in interest had been sued or accused of infringement. In the House,
`this was expanded to also cover cases where a ‘‘privy’’ of the
`petitioner had been sued or accused of infringement. A ‘‘privy’’
`is a party that has a direct relationship to the petitioner with
`respect to the allegedly infringing product or service. In this case,
`it effectively means customers of the petitioner. With the addition
`of the word ‘‘privy,’’ a company could seek a section 18
`proceeding on the basis that customers of the petitioner had been
`sued for infringement.
`
`157 CONG. REC. S5402 at S5432 (daily ed. Sep. 8, 2011) (statement of Sen.
`
`Schumer) (highlighted excerpts attached as Ex. 2008).
`
`Senator Schumer made Congress’s intent clear that “privy” and “real party
`
`in interest” are different requirements, and a company whose customer had been
`
`sued for patent infringement was a privy of that company for the purposes of the
`
`AIA. Accordingly, had the ’221 patent qualified as a covered business method
`
`patent (which Patent Owner does not contend or admit) and had other prerequisites
`
`been met, because of Patent Owner’s lawsuit against the government alleging
`
`infringement of the ’221 patent based upon products or services supplied by
`
`
`
`9
`
`

`

`
`
`Petitioner, Petitioner could have filed a petition for a transitional proceeding with
`
`respect to the patent, because Petitioner would have been a privy of the
`
`government.
`
`A consistent construction of “privy” across different sections of the AIA
`
`requires that, with respect to inter partes review practice, likewise, the
`
`government, as a customer whose use of IBM-supplied products or services is
`
`accused in the Litigation is a privy of Petitioner IBM for purposes of the timing
`
`requirement of Section 315(b)3, and, for that reason, Petitioner’s present Petition
`
`became time barred one year after the government was served with the Complaint.
`
`Petitioner cites to AM General LLC v. UUSI, LLC, Case No. IPR2016-
`
`01049, slip op. at 5–6 (PTAB Nov. 7, 2016) (Paper 14) (“AM General”), which
`
`addressed the issue of whether service on the government in a C.F.C. case
`
`constitutes service on a privy. Pet. at 4. Patent Owner respectfully disagrees with
`
`the legal analysis in that specific and non-precedential decision in several regards
`
`and respectfully asks the Board to consider the following.
`
`In AM General, the Board cites to aspects of the Patent Trial Practice Guide
`
`(“TPG”), 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) (excerpts attached as Ex.
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`2009). That passage of the TPG, in turn, cites to the Congressional Record but
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`3 Both Section 18 of the AIA and 35 U.S.C. § 315(b) are contingent upon a
`patent infringement lawsuit.
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`does not consider the statement of Senator Schumer, even though Senator Schumer
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`spoke directly to the meaning of “privy” in analogous post-grant practice. The AM
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`General analysis conflates the concept of “real party in interest” with that of
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`“privy,” by overemphasizing the concepts of exercise of control and estoppel,
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`when the TPG makes clear that “[t]he notion of ‘privity’ is more expansive,
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`encompassing parties that do not necessarily need to be identified in the petition as
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`‘a real party in interest.’” Id at 48,759. Consistent with Senator Schumer’s
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`statement, the TPG cites Senator Kyl’s statement that “’privity is an equitable rule
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`that takes into account the “practical situation,” and should extend to parties to
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`transactions and other activities relating to the property in question.’” Id.
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`(emphasis added). AM General does not fully consider that statement.
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`Respectfully, and more generally, the AM General analysis does not take
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`into account the unique circumstances of a C.F.C. case. Specifically, a supplier of
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`accused products to the government, such as Petitioner here, cannot be sued in the
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`C.F.C. or elsewhere for infringement by products supplied to the government and
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`at issue in the C.F.C. litigation. While AM General gives passing recognition to
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`the fact that a patent owner’s sole remedy is against the government in the C.F.C.,
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`AM General’s analysis does not take that fact into account when it performed its
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`privity analysis. Instead, AM General’s analysis centers on the issues of whether
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`the supplier had a full opportunity to litigate and whether it controlled the
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`proceeding. Id. at 4–5. Petitioner respectfully submits that those concepts are a
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`square peg and irrelevant in this instance – because, as a matter of law, a
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`government supplier such as IBM could not face separate liability for products
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`supplied to the government, an estoppel analysis simply does not fit.
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`To the contrary, Senator Schumer’s explanation -- that a customer is a privy
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`of its supplier in the context of post-grant practice in relation to patent
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`infringement litigation -- should particularly apply when the underlying litigation
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`is before the C.F.C. and no independent liability of the supplier exists as a matter
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`of law. Accordingly, the government is a privy of Petitioner IBM with respect to
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`the infringement allegations in the Litigation, and this Petition is time barred.
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`IV. The Board should exercise its authority to deny institution under 35
`U.S.C. § 325(d)
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`35 U.S.C. § 325(d) provides, in part:
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`In determining whether to institute or order a proceeding under this
`chapter, chapter 30, or chapter 31, the Director may take into account
`whether, and reject the petition or request because, the same or
`substantially the same prior art or arguments previously were
`presented to the Office.
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`35 U.S.C. § 235 (2015). “The statute expressly establishes [the Board’s] discretion
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`to consider whether the prior art and arguments are ‘substantially the same’ in a
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`first and second petition, and confers authority to reject a second petition on that
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`basis.” Conopco Inc. v. Proctor & Gamble Co., Case No. IPR2014-00628, slip op.
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`at 6 (PTAB Mar. 20, 2015) (Paper 23). “[Allowing] petitioners to file ‘follow-on’
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`second petitions in order to ‘correct deficiencies’… would allow petitioners to
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`unveil strategically their best prior art and arguments in serial petitions, using our
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`decisions on institution as a roadmap, until a ground is advanced that results in
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`review—a practice that would tax Board resources, and force patent owners to
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`defend multiple attacks.” Id. at 5. “While petitioners may have sound reasons for
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`raising art or arguments similar to those previously considered by the Office, the
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`Board weighs petitioners’ desires to be heard against the interests of patent owners,
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`who seek to avoid harassment and enjoy quiet title to their rights.” Neil Ziegman,
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`N.P.Z., Inc. v. Stephens, Case No. IPR2015-01860, slip op. at 11–12 (PTAB Feb.
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`24, 2016) (Paper 11). The Board has exercised its authority to deny institution
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`under 35 U.S.C. § 325(d) when IPR Petitions filed by different petitioners have
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`presented the “same or substantially the same prior art and arguments.” Unified
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`Patents v. PersonalWeb Technologies, Case No. IPR2014-00702, slip op. at 8–9
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`(PTAB July 24, 2014) (Paper 13).
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`Here, IBM has petitioned on three grounds: 1) an obviousness combination
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`of the FCC 1994, NSTC, and CAP 0.5 references, 2) anticipation by the Rieger
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`reference, and 3) an obviousness combination of the Rieger and NSTC references.
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`Pet. at 30, 36. For Grounds II and III, Petitioner’s primary reference for all
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`challenged claims is Rieger, which the government relied upon to challenge claim
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`19 in both Grounds I and II of its petition. Ex. 2005 at 9. While the decision
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`denying institution of the government’s petition had not yet issued at the time IBM
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`filed the instant petition, IBM specifically referenced Patent Owner’s Preliminary
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`Response, e.g. Pet. at 38, and appears to have used the Petition and Patent Owner’s
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`Preliminary Response in IPR2017-00160 as a roadmap for filing its petition. This
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`is classic “follow on” filing.
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`Other evidence confirms that the use of this same art in a follow on petition
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`was not a coincidence or otherwise disconnected from the government’s use of this
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`art. The government’s November 1, 2016, petition, which relied on Rieger,
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`admitted that the government and IBM had engaged in “an arm’s length exchange
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`of prior art.” Ex. 2005 at 3. On December 16, 2016, the government and IBM
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`served joint invalidity contentions in the Court of Claims Litigation, in which they
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`relied upon Rieger, as well as CAP version 1. Ex. 2010 at 23. In those joint
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`invalidity contentions, IBM specifically incorporated the government’s Petition in
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`IPR2017-00160 by reference. Id. at 34 (“Defendants incorporate by reference the
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`grounds for unpatentability and associated rationales identified [in] the United
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`States’ Petitions.”). On April 6, 2017, IBM filed the present petition. In addition,
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`while IBM and the government purported to rely upon 75 patents or printed
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`publications in their joint invalidity contentions in the Litigation, IBM chose to
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`anchor two of the three grounds in its follow-on IPR petition around Rieger –a
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`central reference from the government’s earlier petition. This is just another
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`variety of sequential filings based upon the same art, disallo