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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________
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`RUIZ FOOD PRODUCTS, INC.,
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`Petitioner,
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`v.
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`MACROPOINT LLC,
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`Patent Owner.
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`__________
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`Case IPR2017-02016
`U.S. Patent No. 8,275,358 B1
`__________
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`MOTION TO DISMISS
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`UPDATED LIST OF EXHIBITS
`Description
`Expert Declaration of David Hilliard Williams
`David Hilliard Williams CV
`Ruiz Food Products, Inc.’s Initial Invalidity Contentions,
`Civil Action 6:16-cv-1133
`Expert Report of Dr. Stephen B. Heppe dated January
`25, 2017, Civil Action 6:16-cv-1133
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`Ruiz Food Products, Inc.’s Final Election of Asserted
`Prior Art, Civil Action 6:16-cv-1133
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`Declaration of Kyle B Fleming, Esq.
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`Kyle B. Fleming CV
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`Complaint filed in FourKites, Inc. v MacroPoint,
`LLC, Case No. 1:16-cv-02703-CAB (N.D. Ohio)
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`Exhibit Number
`2001
`2002
`2003
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`2004
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`2005
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`2006
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`2007
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`2008
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`Petitioner lacks standing and is barred from bringing and maintaining this
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`proceeding under 35 U.S.C. § 315(a)(1) because a Real Party In Interest,
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`FourKites, Inc., filed an action challenging the validity of the claims of the ’358
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`Patent prior to the filing of the petition. Board precedent had previously held that a
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`prior action is not a bar under § 315 if it is voluntarily dismissed without prejudice
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`before the Petition is filed. However, a recent Federal Circuit decision en banc
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`reversed this PTAB precedent and held that a prior civil action, even if voluntarily
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`dismissed without prejudice, triggers the standing bars of § 315.
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`Accordingly, Petitioner lacks standing and the Board lacks jurisdiction, and
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`therefore this proceeding must be dismissed.
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`I.
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`BACKGROUND
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`Petitioner Ruiz Food Products, Inc. filed the instant Petition on August 31,
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`2017. Paper 2 (“Petition”). Petitioner identified FourKites, Inc. as an additional
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`Real Party In Interest. Id. at 3.
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`Petitioner further disclosed that the ’358 Patent was the subject of prior,
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`related proceedings, including an action for declaratory judgment of invalidity filed
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`by FourKites on November 4, 2016, FourKites, Inc. v MacroPoint, LLC, Case No.
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`1:16-cv-02703-CAB (N.D. Ohio). Id. A copy of the Complaint from this action is
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`submitted as Ex. 2008. Count IV challenged the validity of all claims of the ’358
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`Patent, and specifically alleged:
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`75. The claims of the ’358 patent are invalid for failure to comply
`with the requirements of patentability specified in Title 35 of the
`United States Code, including but not limited to 35 U.S.C. §§ 101,
`102, 103, 112, 116 and/or 120, and/or based on other judicially
`created bases for invalidation.
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`Ex. 2008 at 18-19.
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`Despite this previously filed declaratory judgment action challenging the
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`validity of the ’358 Patent, Petitioner argued that it was not barred from filing the
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`Petition under Board precedent because the earlier action had been voluntarily
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`dismissed prior to the filing of the Petition:
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`As such, the dismissal without prejudice of the declaratory judgment
`“nullifies the effect of the service of the complaint and, as a
`consequence, does not bar” Petitioner from pursuing this IPR under
`35 U.S.C. § 315(a)(1). Oracle Corp. et al. v Click-to-Call Tech. LP,
`IPR 2013-00312, Paper #26 at 17 (PTAB Oct. 30, 2013)
`(Precedential).
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`Petition at 5-6.
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`On August 16, 2018, the Federal Circuit en banc vacated the Board’s
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`precedent on this issue and remanded IPR2013-00312 for dismissal, holding that
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`the Board “committed legal error” in concluding that the petition was not time-
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`barred by a prior, voluntarily dismissed action. Click-to-Call Tech, LP. v. Ingenio,
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`Inc., —F. 3d—, Case No. 15-1242 (Fed. Cir. August 16, 2018) (en banc). Notably,
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`the order vacated by the Federal Circuit is the same authority upon which
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`Petitioner relied as supporting its claim that it was not barred from pursuing a
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`petition for IPR. The vacatur and reversal of this precedent now requires dismissal
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`of this proceeding.
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`II. ARGUMENT
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`Section 315 contains two parallel bars based on prior civil actions, one for
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`actions brought by the petitioner or a real party in interest, and one for actions
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`brought by the patent owner:
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`(a) Infringer’s Civil Action.—
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`(1) Inter partes review barred by civil action.—
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`An inter partes review may not be instituted if, before the date
`on which the petition for such a review is filed, the petitioner or
`real party in interest filed a civil action challenging the validity
`of a claim of the patent.
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` * *
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`(b) Patent Owner’s Action.—
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`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. The time limitation set forth in the preceding
`sentence shall not apply to a request for joinder under
`subsection (c).
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`The major difference between the two provisions is the date on which the
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`bar attaches: under subsection (a)(1) it attaches on the date that the petitioner (or a
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`real party in interest) files the action challenging validity, and under subsection (b)
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`the bar attaches one (1) year after the date on which the infringement action is
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`served on petitioner (or certain others).
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`The Board previously created an exception to these statutory bars, holding
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`that the voluntary dismissal of the triggering civil action rendered it a nullity for
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`purposes of § 315. For example:
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`Accordingly, the dismissal of the infringement suit brought by
`Inforocket against Keen—now Ingenio, LLC—nullifies the effect of
`the service of the complaint and, as a consequence, does not bar
`Ingenio, LLC or any of the other Petitioners from pursuing an inter
`partes review of the ’836 patent.
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`Oracle Corp. et al. v Click-to-Call Tech. LP, IPR 2013-00312, Paper 26 at 17
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`(PTAB Oct. 30, 2013). However, the Federal Circuit has now rejected this
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`“voluntary dismissal” exception as contrary to and unsupported by the plain and
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`unambiguous statutory language of § 315.
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`A. A Chevron Analysis of 35 U.S.C. § 315(a)(1) Precludes The
`Creation Of Any Exception To The Statutory Bar
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`The Federal Circuit in Click-to-Call analyzed the Board’s dismissal
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`exception to § 315 pursuant to Chevron, U.S.A. Inc. v. Natural Resources Defense
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`Counsel, Inc., 467 U.S. 837 (1979):
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`Chevron requires that a court reviewing an agency’s construction of a
`statute it administers first discern “whether Congress has directly
`spoken to the precise question at issue.” 467 U.S. at 842. If the answer
`is yes, the inquiry ends, and the reviewing court must give effect to
`Congress’s unambiguous intent. Id. at 842–43.
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`Click-to-Call, Slip Op. at 10. Click-to-Call concerned the § 315(b) bar based on a
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`prior action served on petitioner, and the Federal Circuit concluded that the plain
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`and unambiguous language of the statute and the legislative history did not permit
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`any exception. Id. at 12-17.
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`Turning first to the statutory language, the Federal Circuit stated that the
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`plain language of the statue does not create any exceptions, and the time-bar was
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`unambiguously triggered by the service of a complaint:
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`The statute does not contain any exceptions or exemptions for
`complaints served in civil actions that are subsequently dismissed,
`with or without prejudice. Nor does it contain any indication that the
`application of § 315(b) is subject to any subsequent act or ruling.
`Instead, the provision unambiguously precludes the Director from
`instituting an IPR if the petition seeking institution is filed more than
`one year after the petitioner, real party in interest, or privy of the
`petitioner “is served with a complaint” alleging patent infringement.
`Simply put, § 315(b)’s time bar is implicated once a party receives
`notice through official delivery of a complaint in a civil action,
`irrespective of subsequent events.
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`Id. at 13 (emphasis added).
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`The statutory of language of § 315(a)(1) is equally plain and unambiguous:
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`An inter partes review may not be instituted if, before the date on
`which the petition for such a review is filed, the petitioner or real
`party in interest filed a civil action challenging the validity of a claim
`of the patent.
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`In this regard § 315(a)(1) is identical to § 315(b). It does not contain any
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`exceptions or exemptions for civil actions that are subsequently dismissed, with or
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`without prejudice. Nor does it contain any indication that the application of §
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`315(a)(1) is subject to any subsequent act or ruling. Instead, the provision
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`unambiguously precludes the Director from instituting an IPR if the petition
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`seeking institution is filed after the petitioner, or real party in interest, files a civil
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`action challenging the validity of a claim of the patent. Simply put, the bar of §
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`315(a), like the time bar of § 315(b), is implicated once the triggering event occurs,
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`irrespective of subsequent events. Under § 315(a) the triggering event is when a
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`party files an action challenging validity.
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`The Federal Circuit further noted that Congress elsewhere included, for
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`example in § 315(a)(2), a clause directed to the effect of dismissals on an action
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`filed after the petition, and that Congress could have easily included a similar
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`exemption or exception in other subsections had it so chosen. The fact that
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`Congress could have, but did not, include such an exception is further evidence
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`that such an exception does not and was never intended to exist:
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`Similarly, Congress could have chosen to include a variation of the
`phrase “unless the action in which the complaint was served was later
`dismissed without prejudice,” but it did not do so. We reject the
`Board’s effort to graft this additional language into § 315(b).
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`Id. at 15. Congress did not add any exception to § 315(a)(1) either, and Chevron
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`prohibits grafting on one now.
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`The Federal Circuit also cited the legislative history of § 315, and
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`particularly the statements of Sen. Kyl, to confirm that Congress did not
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`contemplate an exception to the plain language of the statute. Id. at 16 (citing 157
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`Cong. Rec. S1375 (daily ed. Mar. 8, 2011) (Statement of Sen Kyl)). In the same
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`remarks cited by the Federal Circuit, Senator Kyl also referenced the then pending
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`version of § 315(a):
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`Subsections (a) and (b) of sections 315 and 325 impose time limits
`and other restrictions when inter partes and post-grant review are
`sought in relation to litigation. Sections 315(a) and 325(a) bar a party
`from seeking or maintaining such a review if he has sought a
`declaratory judgment that the patent is invalid.
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`Similar to his comments regarding § 315(b) that the Federal Circuit cited,
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`Sen. Kyl’s statement on § 315(a)(1) is clear that a party is barred from seeking
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`review “if he has sought a declaratory judgment that the patent is invalid.” See also
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`157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (Statement of Sen Kyl) (“The final
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`bill will still bar seeking IPR or PGR after a declaratory-judgment action has been
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`filed, but [§ 315(a)(2)] will allow a declaratory-judgment action to be filed on the
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`same day or after the petition for IPR or PGR was filed.”). No exception is
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`mentioned and, as noted by the Federal Circuit in Click-to-Call, this is further
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`evidence that Congress did not contemplate any subsequent events somehow
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`“nullifying” § 315(a)(1)’s bar.
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`The Federal Circuit concluded that the language of § 315 clearly and
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`unambiguously expresses Congressional intent that there is no “dismissal”
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`exception to the time bar, and it is not within the agency’s power to add one:
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`Because a statute’s text is Congress’s final expression of its intent, if
`the text answers the question, that is the end of the matter.” Here, the
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`text of § 315(b) clearly and unmistakably considers only the date on
`which the petitioner, its privy, or a real party in interest was properly
`served with a complaint. Because “the statutory language is
`unambiguous and ‘the statutory scheme is coherent and consistent,’ ”
`our inquiry ceases and we need not proceed to Chevron’s second step.
`Simply put, there is no gap to fill or ambiguity to resolve: “[w]here a
`statute’s language carries a plain meaning, the duty of an
`administrative agency is to follow its commands as written, not to
`supplant those commands with others it may prefer.”
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`Click-to-Call, Slip Op. at 17 (citations omitted). The Federal Circuit’s foregoing
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`conclusion applies equally, and for the same reasons, to §315(a)(1).
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`B. Graves and Bonneville Do Not Support a Dismissal Exception to
`the Bar of § 315(a)
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`Although Chevron step one conclusively answered—and rejected—whether
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`any exception to the § 315 bars existed, the Federal Circuit nevertheless continued
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`to step two and rejected the Board’s argument that the exception was proper and
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`judicially created by the Federal Circuit in Graves v. Principi, 294 F.3d 1350 (Fed.
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`Cir. 2002) and Bonneville Associates, Ltd. Partnership v. Barram, 165 F.3d 1360
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`(Fed. Cir. 1999). The Board argued that those cases support the exception and
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`showed that “[t]he Federal Circuit consistently has interpreted the effect of such
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`dismissals as leaving the parties as though the action had never been brought.”
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`Click-to-Call, Slip Op. at 6.
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`The Federal Circuit rejected the Board’s interpretation and reading of those
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`cases, finding the Board’s reliance on these cases to be “erroneous.” Id. at 18. Both
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`Bonneville and Graves addressed whether the jurisdictional deadline in which to
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`file an appeal is tolled by the filing and dismissal of a first appeal when the later
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`appeal is otherwise after the deadline. These cases answered in the negative:
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`[T]he background legal principle in these cases [Bonneville and
`Graves] is that a party’s voluntary dismissal of its action or appeal
`will not toll a statute of limitations, and, as a result, a subsequently
`filed action or appeal must still be brought within the original
`limitations period.
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`The Federal Circuit further explained that these cases not only fail to support
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`the Board’s arguments, but are actually antithetical to the Board’s position:
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`Here, by contrast, the appropriate question is whether the voluntary,
`without prejudice dismissal of a civil action in which a complaint had
`been served nullifies an administrative time bar that is triggered by
`service of that complaint. It does not. Yet the Board, without
`explanation, extended the background principle of Graves and
`Bonneville to conclude that such a dismissal “nullifies the effect of the
`service of the complaint.” It then relied on this erroneous conclusion
`to “un-ring” § 315(b)’s time bar. In effect, the Board relied on cases
`holding that the voluntary dismissal of an action or appeal does not
`toll a statute of limitations to conclude that the voluntary dismissal
`without prejudice of a civil action does indefinitely toll § 315(b) and
`permitted an otherwise untimely IPR to proceed, turning Bonneville
`and Graves on their head.
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`Id. at 22. Thus, instead of supporting an exception to the time bars, Bonneville and
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`Graves instead stand for the proposition that a voluntary dismissal does not “un-
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`ring” the bell and does not toll the running of a time bar. The Federal Circuit’s
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`decision was clear: the bars of § 315, once started, cannot not be tolled or negated
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`by subsequent events or dismissals.
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`III. CONCLUSION
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`Sections 315(a)(1) and 315(b) are substantively identical for purposes of the
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`Chevron analysis in Click-to-Call. Both provisions contain plain, clear, and
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`unambiguous statements that the bar is triggered when certain events occur (the
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`filing of an action or the service of a complaint), and neither provision contains any
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`exception to “un-ring” the bar.
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`It is further undisputed that Petitioner filed the Petition on August 31, 2017,
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`nearly 10 months after FourKites, a designated Real Party In Interest, filed a
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`declaratory judgment seeking invalidity of the ’358 Patent. Petitioner is therefore
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`time-barred under § 315(a)(1) and the Board lacks jurisdiction to review the claims
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`of the ’358 Patent.1 Accordingly, the IPR must be dismissed.
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`1 The Click-to-Call IPR had already proceeded to a Final Written Decision.
`Nevertheless, the Federal Circuit concluded that, because the time bar, “the Board
`lacked jurisdiction to institute the IPR,” vacating the Decision and remanding with
`instructions to dismiss. Slip Op. at 3.
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`Date: September 28, 2018
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`Respectfully submitted,
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` /Mark C. Johnson/
`Mark C. Johnson, Reg. No. 51,854
`Kyle B. Fleming (admitted pro hac vice)
`Luis A. Carrion, Reg. No. 61,255
`Renner Otto
`1621 Euclid Avenue, Floor 19
`Cleveland, Ohio 44115
`t: +1.216.621.1113
`f: +1.216.621.6165
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`Attorneys for Patent Owner
`MacroPoint, LLC
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`CERTIFICATE OF SERVICE UNDER 37 C.F.R. § 42.6 (e)(4)
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`The undersigned hereby certifies that the above-captioned MOTION TO DISMISS
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`is being served in its entirety on this date by filing this document through the
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`Patent Review Processing System as well as delivering a copy via electronic mail
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`upon the following at:
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`James P. Murphy jpmurphy@polsinelli.com
`Matt Frontz mfrontz@polsinelli.com
`Ryan Murphy rmurphy@polsinelli.com
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`Date: September 28, 2018
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`Respectfully submitted,
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` /Mark C. Johnson/
`Mark C. Johnson, Reg. No. 51,854
`Renner Otto
`1621 Euclid Avenue, Floor 19
`Cleveland, Ohio 44115
`t: +1.216.621.1113
`f: +1.216.621.6165
`
`Attorney for Patent Owner
`MacroPoint, LLC
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