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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`________________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`________________________________
`
`RUIZ FOOD PRODUCTS INC.,
`Petitioner,
`
`v.
`
`MACROPOINT LLC,
`Patent Owner.
`
`________________________________
`
`IPR2017-02016
`
`Patent 8,275,358
`
`
`________________________________
`
`PETITIONER’S REQUEST FOR REHEARING
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`I.
`
`INTRODUCTION ........................................................................................ 1
`
`II.
`
`STANDARD OF REVIEW .......................................................................... 2
`
`III. ARGUMENT................................................................................................ 2
`
`A.
`
`The Board Misapprehended the Role of Background Legal
`Principles in the Statutory Construction of § 315(a)(1). ...................... 2
`
`1.
`
`2.
`
`3.
`
`Consideration of Background Legal Principles Is a
`Cardinal Rule of Statutory Construction. ................................. 2
`
`The Board Did Not Apply This Cardinal Rule in This
`Case. ........................................................................................ 4
`
`The Board’s Failure Introduces Ambiguities Where
`There Were None. .................................................................... 6
`
`B.
`
`The Board Overlooked Whether There Was Subject-Matter
`Jurisdiction for the Declaratory Judgment Action ............................... 7
`
`IV. PRECEDENTIAL OPINION PANEL REVIEW IS APPROPRIATE......... 12
`
`V.
`
`CONCLUSION .......................................................................................... 13
`
`
`
`
`
`
`
`
`
`
`ii
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`
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`
`
`I.
`
`INTRODUCTION
`
`Petitioner Ruiz Food Products, Inc. (“Ruiz”) respectfully requests rehearing
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`of the Board’s Decision Granting Patent Owner’s Motion to Dismiss and
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`Terminating the Proceedings. Paper 25. Ruiz requests this rehearing based on the
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`following: (1) the Board misapprehended the role of background legal principles in
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`the statutory construction of § 315(a)(1); and (2) the Board overlooked whether
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`there was, in fact, subject-matter jurisdiction for the declaratory judgment action.
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`First, the Board mistakenly ignored the background legal principle at issue—
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`the effect of a dismissal without prejudice—because it believed that this principle
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`was not applicable if the relevant statutory language was not ambiguous. The
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`statute, here § 315(a)(1), must be read in the context in which Congress enacted it,
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`and this background legal principle provides necessary context.
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`Second, the Board failed to determine whether the district court declaratory
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`judgment action was a “civil action” under the statute. Contradicting another
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`recent institution decision, the Board observed only that the district court did not
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`grant Patent Owner MacroPoint LLC’s (“MacroPoint”) motion to dismiss. The
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`absence of a district court decision is not determinative of whether subject matter
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`jurisdiction existed. Before the Board can invoke § 315(a)(1) to bar inter partes
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`review, the Board must find that there was subject-matter jurisdiction in order for
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`there to have been a “civil action.” It did not.
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`
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`1
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`
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`Finally, this request for rehearing should be heard by the Precedential
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`Opinion Panel (“POP”). By extending Click-to-Call to § 315(a)(1), this Board
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`Panel has adopted a new statutory interpretation that is not only at odds with the
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`settled understanding that had been applied in innumerable prior proceedings, but
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`which also introduces new ambiguities where there had previously been none. The
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`proper and precedential resolution of these issues is a matter of importance that
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`extends beyond the instant current IPR proceedings and is thus appropriate for
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`consideration by the POP. Therefore, the POP should be convened, and the
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`Board’s decision to terminate the proceedings should be reversed.
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`II.
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`STANDARD OF REVIEW
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`A request for rehearing “must specifically identify all matters the party
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`believes the Board misapprehended or overlooked, and the place where each
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`matter was previously addressed in a motion, an opposition, or a reply.” 37 C.F.R.
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`§ 42.71(d).
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`III. ARGUMENT
`
`A. The Board Misapprehended the Role of Background Legal
`Principles in the Statutory Construction of § 315(a)(1).
`
`1.
`
`Consideration of Background Legal Principles Is a Cardinal
`Rule of Statutory Construction.
`
`The Board mistakenly understood Click-to-Call as “reject[ing]
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`the
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`application of the purported background legal principle in the absence of ambiguity
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`
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`2
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`
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`
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`in statutory language.” Paper 25 at 9. In other words, the Board held that it did not
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`need to consider the application of the background legal principle—that a dismissal
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`without prejudice nullifies the original filing—because § 315(a)(1) was not
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`ambiguous. That is not the proper analysis.
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`As the Federal Circuit acknowledged in Click-to-Call, the assessment of
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`whether a statute is ambiguous includes the proper application of rules of statutory
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`interpretation. See Click-to-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321, 1330
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`(Fed. Cir. 2018) (“[W]e may not conclude that a statutory provision is ambiguous
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`until we conclude that resort to all standard forms of statutory interpretation
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`are incapable of resolving any apparent ambiguity which might appear on the face
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`of the statute.” (emphasis added)).
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`“[I]t is a ‘cardinal rule of statutory construction’ that where Congress adopts
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`a common-law term without supplying a definition, courts presume that Congress
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`‘knows and adopts the cluster of ideas that were attached’ to the term.”
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`WesternGeco LLC v. ION Geophysical Corp., 889 F.3d 1308, 1317 (Fed. Cir.
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`2018) (quoting FAA v. Cooper, 566 U.S. 284, 291–92 (2012)).
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`Indeed, as Ruiz observed in its opposition papers, the Supreme Court has
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`recognized, “where a common-law principle is well established,” like here, “the
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`courts may take it as given that Congress has legislated with an expectation that
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`the principle will apply.” Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S.
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`
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`3
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`
`
`
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`104, 108 (1991) (emphasis added); see also Raney v. Fed. Bureau of Prisons, 222
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`F.3d 927, 932 (Fed. Cir. 2000) (“Congress is presumed to enact legislation with
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`knowledge of the law and a newly-enacted statute is presumed to be harmonious
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`with existing law and judicial concepts.”).
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`2.
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`The Board Did Not Apply This Cardinal Rule in This Case.
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`It is a well-established, common-law principle that dismissal of a district
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`court case without prejudice renders that action as if it was never “filed” for
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`purposes of preclusive legal effect. Every U.S. Court of Appeals that had
`
`addressed the issue had recognized and adopted this principle. See 9 Wright,
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`Miller, et al., FEDERAL PRAC. AND PROC. CIV. § 2367, 559 (3d ed.); see also
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`Jet, Inc. v. Sewage Aeration Sys., 223 F.3d 1360, 1364 (Fed. Cir. 2000)
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`Therefore, at the outset, the Board was required to interpret § 315(a)(1) in
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`the context of this common-law principle—namely, that a dismissal without
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`prejudice renders a civil action as if it had never been filed. See Clio USA, Inc. v.
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`The Procter and Gamble Co., IPR2013-00438, Paper 9 at 8 (P.T.A.B. Jan, 9, 2014)
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`(“[W]hen a court permits the challenger to dismiss the declaratory judgment action
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`voluntarily and without prejudice . . . the action is considered never to have
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`existed”). This is not an atextual explanation, or the application of an exception to
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`otherwise unambiguous statutory language. Paper 25 at 9–10. Rather, it is part of
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`the “cluster of ideas” that Congress adopted when it chose the language “filed a
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`
`
`4
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`
`
`
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`civil action.” To interpret § 315(a)(1) otherwise would render it not “harmonious
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`with existing law and judicial concepts.” Raney, 222 F.3d at 932.
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`This is why “[t]he normal rule of statutory construction is that if Congress
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`intends for legislation to change the interpretation of a judicially created concept, it
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`makes that intent specific.” Midlantic Nat. Bank v. N.J. Dep’t of Environ. Prot.,
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`474 U.S. 494, 501 (1986) (emphasis added). Therefore, to find that Congress
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`intended “filed a civil action” to have a special meaning, such that dismissal
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`without prejudice did not have a nullifying effect, the Board must find that
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`Congress had a specific intent to do so. The Board did not find such an intent.1
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`The Board misread Click-to-Call as barring the use of this canon of statutory
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`interpretation absent a preliminary determination that the statute was ambiguous.
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`Paper 25 at 9. But as Supreme Court precedent directs, consideration of
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`background legal principles must be part of the assessment of whether the statutory
`
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`1 Nor should it. When the Board has previously considered the existence of such
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`intent, it has found it absent. See Gordon * Howard Assoc. v. Lunareye, Inc.,
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`IPR2014-01213, Paper 11 at 11 (P.T.A.B. Feb. 3, 2015) (“Nothing in the
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`legislative history . . . indicates any intent on the part of Congress to set aside long-
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`established case law holding that, in most cases, dismissals without prejudice leave
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`the parties as though the action had never been filed.”).
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`
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`5
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`
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`language is ambiguous. That is, whether inter partes review is barred by a “filed
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`civil action” must be evaluated in the context of established legal principles, which
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`includes the unequivocal principle that, for purposes of preclusion, an action
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`dismissed without prejudice is as if it had never been filed. See Click-to-Call, 899
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`F.3d at 1345–46 (Taranto, C.J., concurring). Congress did not intend to overrule
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`that principle. Therefore, dismissal without prejudice of the FourKites declaratory
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`judgment action renders it as if it was never filed, and it is not a bar to institution.
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`The Board’s decision should be reversed.
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`3.
`
`The Board’s Failure Introduces Ambiguities Where There
`Were None.
`
`The Board’s failure to consider the background against which Congress
`
`enacted § 315(a)(1) creates new ambiguities. Where there had been a cohesive
`
`body of precedent, there will now be open questions for the Board to answer with
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`new interpretations.
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`For example, if a would-be patent challenger files a declaratory judgment
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`action against a patent owner over which the district court does not have personal
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`jurisdiction; or if the challenger files the declaratory judgment action against
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`someone other than the patent owner; or if the challenger correctly identifies the
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`patent owner, but misidentifies the patent; or if the declaratory judgment action is
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`dismissed for lack of subject matter jurisdiction. In each instance, once the action
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`is dismissed, whether voluntarily by the petitioner or by an order of the district
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`
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`6
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`
`
`
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`court, would the challenger be barred from ever seeking inter partes review?
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`Under the existing law and judicial concepts, the answer was clear—the
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`challenger would not be barred. By overruling existing law and disregarding the
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`context in which Congress enacted § 315(a)(1), the Board is now interpreting the
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`statute in a way that makes it ambiguous whether these or other scenarios would
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`constitute a “filed civil action.” The Board will need to engage in interpretative
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`rulemaking to address holes in the statutory scheme that did not originally exist.
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`B.
`
`The Board Overlooked Whether There Was Subject-Matter
`Jurisdiction for the Declaratory Judgment Action.
`
`The Board dismissed Ruiz’s petitions under § 315(a)(1) without determining
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`whether the FourKites declaratory judgment action constituted a “civil action”
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`under the statute. Before moving to dismiss these proceedings, MacroPoint
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`previously argued that FourKites lacked Article III standing to bring declaratory
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`judgment claims and that it failed to plead a real, justiciable case or controversy in
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`the declaratory judgment action.
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`Thus, these proceedings fall within the ambiguous scenarios created by the
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`Board’s new interpretation of § 315(a)(1). While the burden may lie with Ruiz to
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`establish that its petitions are not barred, its certification that the declaratory
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`judgment action was not a bar was entitled to a presumption of being correct. See
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`Worlds Inc. v. Bungie, Inc., 903 F.3d 1237, 1241–1244 (Fed. Cir. 2018)
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`(“[P]etitioner bears the ultimate burden of persuasion to show that its petitions are
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`
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`7
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`
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`
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`not time-barred under § 315(b)”). To dispute it, MacroPoint “must produce some
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`evidence that tends to show that” facts supporting application of the bar exist. Id.
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`at 1244. The mere assertion that a previously-filed declaratory judgment action
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`had the requisite subject-matter jurisdiction to constitute a “filed civil action” is
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`insufficient to put the issue into dispute. Cf. id (“A mere assertion that a third
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`party is an unnamed real party in interest, without any support for that assertion, is
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`insufficient to put the issue into dispute.”)
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`Nor could MacroPoint have made the case for application of the bar. In the
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`district court litigation, MacroPoint adamantly denied the existence of subject-
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`matter jurisdiction and the propriety of the FourKites declaratory judgment action.
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`To advocate for the application of the § 315(a)(1) bar to these proceedings,
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`MacroPoint would need to take the opposite position and argue for the existence of
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`subject-matter jurisdiction. See New Hampshire v. Maine, 532 U.S. 742, 749–750
`
`(2001) (recognizing the doctrine of judicial estoppel “protect[s] the integrity of the
`
`judicial process” and “prevent[s] improper use of judicial machinery” (internal
`
`quotations omitted)); see also Wright, A. Miller, & E. Cooper, Federal Practice and
`
`Procedure § 4477 (“[A]bsent any good explanation, a party should not be allowed
`
`to gain an advantage by litigation on one theory, and then seek an inconsistent
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`advantage by pursuing an incompatible theory”).
`
`
`
`
`
`8
`
`
`
`
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`Under these circumstances, the Board must determine whether, in fact, there
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`was subject-matter jurisdiction for the “civil action” on which a § 315(a)(1) bar
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`would rest. Instead, the Board simply held that “it suffices to say that the
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`particular circumstances of a complaint dismissed for lack of subject matter
`
`jurisdiction are not before us here—the district court did not dismiss FourKites’s
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`declaratory-judgment complaint for lack of subject matter jurisdiction.” Paper 25
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`at 15.
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`The Board’s decision, however, overlooked that “[i]t is well settled that no
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`action of the parties can confer subject-matter jurisdiction on a tribunal and that the
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`principles of estoppel do not apply to vest subject-matter jurisdiction where
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`Congress has not done so.” Dunklebarger v. Merit Sys. Prot. Bd., 130 F.3d 1476,
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`1480 (Fed. Cir. 1997); Insurance Corp. of Ireland v. Compagnie des Bauxites de
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`Guinee, 456 U.S. 694, 702, 102 S. Ct. 2099, 72 L.Ed.2d 492 (1982). Thus, if
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`subject matter jurisdiction for the declaratory judgment action did not exist, as
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`MacroPoint argued, then nothing that FourKites did—including the filing of the
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`case or the voluntary dismissal of it before the district court entered a decision on
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`MacroPoint’s motion—could or did confer subject-matter jurisdiction on the
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`district court.
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`While a district court decision on the motion to dismiss would undoubtedly
`
`have been helpful to the Board in resolving this issue, the lack of such a decision
`
`
`
`9
`
`
`
`
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`cannot be determinative. The Board must still determine that subject matter
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`jurisdiction existed in order to find a “civil action” was filed in accordance with
`
`315§(a)(1).
`
`In an analogous example involving § 315(b), the Board recently considered
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`the effect of a complaint served and then voluntarily dismissed prior to a district
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`court order to dismiss for lack of standing. See Sling TV, LLC v. Realtime
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`Adaptive Streaming, LLC, IPR2018-01331, slip op. (PTAB January 31, 2019)
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`(Paper 9). There, a plaintiff filed and served a district court complaint against the
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`petitioner alleging infringement of the challenged patent. Id. at 5. The plaintiff
`
`“thus voluntarily dismissed the complaint without prejudice,” and the patent owner
`
`filed a new complaint for infringement. Id. at 5–6. Without the benefit of a district
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`court decision, the Board panel determined the original plaintiff was not the patent
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`owner in order to find the petition timely under § 315(b). Id. at 6–7.
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`The Federal Circuit also calls for the determination of subject matter
`
`jurisdiction in an analogous statute. That statute requires a contractor to file a
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`dispute with either an agency board or the US Court of Federal Claims, but once
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`the choice is made it becomes a binding election “and the contractor can no longer
`
`pursue its claim in the alternate forum.” See 41 U.S.C. § 609(a)(1); Nat’l
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`Neighbors v. United States, 839 F.2d 1539, 1541-1542 (Fed. Cir. 1988) (“This
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`choice [under 41 U.S.C. § 609(a)(1)] has given rise to a body of jurisprudence
`
`
`
`10
`
`
`
`
`
`known as the ‘Election Doctrine.’”). However, “only if the chosen forum has
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`jurisdiction over the proceeding can a contractor’s choice to pursue its claim in
`
`that forum be a binding election.” Id. at 1543 (emphasis added); see also
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`Bonneville Assocs. v. United States, 43 F.3d 649, 653 (Fed.Cir.1994) (“if the forum
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`originally selected lacked subject matter jurisdiction over the appeal[,] ... no true
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`choice of forum is available to the contractor and the Election Doctrine does not
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`apply”) (internal citation omitted).
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`In addition, like in the present case, the second tribunal (Court of Federal
`
`Claims) was required to determine if the first tribunal (General Service
`
`Administration Board of Contract Appeals) had subject matter jurisdiction because
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`the first proceeding was voluntarily dismissed prior to any decision by the first
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`tribunal. Bonneville Assocs., 43 F.3d at 651-52 (“The court [of Federal Claims]
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`therefore concluded that, because the board had jurisdiction over Bonneville’s
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`appeal, the Election Doctrine required dismissal” of the Court of Federal Claims
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`action).
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`Like the statute as issue in the Election Doctrine, § 315(a)(1) provides a
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`petitioner with a choice of forums: the PTAB or a district court. Similarly, if the
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`first forum chosen by the petitioner to file in lacks jurisdiction, that filing is “a
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`nullity and not a binding election.” Nat’l Neighbors, 839 F.2d at 1543. In order to
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`dismiss a proceeding under § 315(a)(1), like a dismissal under the Election
`
`
`
`11
`
`
`
`
`
`Doctrine, the Board must first find that the district court had subject matter
`
`jurisdiction.
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`Therefore, if there was not subject-matter jurisdiction for the FourKites
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`declaratory judgment action—as MacroPoint argued in moving to dismiss it—then
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`it was a nullity and cannot be the basis for barring inter partes review. Notably,
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`MacroPoint made no effort in its reply to argue that there was, in fact, subject-
`
`matter jurisdiction. It, like the Board, rested its analysis on nothing more than the
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`fact that the case was not dismissed by order of the district court. That is not
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`enough. Before the Board can hold that inter partes review is barred by a “filed
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`civil action,” it must find that there was subject-matter jurisdiction for the civil
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`action.
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`IV. PRECEDENTIAL OPINION PANEL REVIEW IS APPROPRIATE
`
`The POP may be convened to address issues of exceptional importance
`
`regarding statutes or issues of broad applicability to the Board. PTAB Standard
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`Operating Procedure 2, Rev. 10 as Section II(A). The resolution of the issues in
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`this case raises both of these concerns. In particular, this case raises issues of first
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`impression in the statutory interpretation of § 315(a) including whether the Federal
`
`Circuit’s holding in Click-to-Call, which is about “served with a complaint” under
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`§ 315(b), should be expanded to cover “filed a civil action” under § 315(a).
`
`Petitioner is aware of other pending PTAB cases examining this issue and there are
`
`
`
`12
`
`
`
`
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`likely to be many others in the future given the widespread use of dismissals
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`without prejudice in district court litigation. See e.g., Avigilon Corporation et al v.
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`Canon Inc., IPR2018-01626, -01627, PTAB Order issued Jan. 9, 2019 (authorizing
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`additional briefing to address the impact of Click-to-Call on §315(a)).
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`V. CONCLUSION
`
`Ruiz respectfully requests the Board reverses its decision terminating these
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`
`
`Respectfully submitted,
`
`/James P. Murphy/
`POLSINELLI PC
`James P. Murphy
`Reg. No. 55,474
`Matthew Frontz
`Reg. No. 65,198
`Ryan Murphy
`Reg. No. 66,285
`
`
`proceedings.
`
`
`
`Date: February 28, 2019
`
`
`
`
`
`
`
`
`
`POLSINELLI PC
`1000 Louisiana Street,
`Suite 6400
`Houston, Texas 77002
`P: 713-374-1600
`F: 713-374-1601
`
`
`
`
`
`
`13
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies
`
`that a copy of
`
`the
`
`foregoing
`
`PETITIONER’S REQUEST FOR REHEARING was served on February 28, 2019,
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`via email directed to the following email addresses of record:
`
`Mark Johnson
`mjohnson@rennerotto.com
`
`Luis Carrion
`lcarrion@rennerotto.com
`
`Kyle Fleming
`kfleming@rennerotto.com
`
`
`
`
`
`
`
`/Sabrina Alaniz/
`Sabrina Alaniz
`POLSINELLI PC
`1000 Louisiana,
`Sixty-Fourth Floor
`Houston, Texas 77002
`Tele: (713) 374-1600
`Fax: (713) 374-1601
`
`
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