UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_______________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`
`TOMTOM, INC.,
`Petitioner,
`
`v.
`
`BLACKBIRD TECH LLC d/b/a BLACKBIRD TECHNOLOGIES,
`Patent Owner.
`
`_______________
`
`Case IPR2017-02023
`Patent 6,434,212
`
`_______________
`
`
`PATENT OWNER BLACKBIRD TECHNOLOGIES’
`RESPONSE
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`IPR2017-02023 – Patent Owner’s Response
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`TABLE OF CONTENTS
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`
`
`I.
`
`Introduction ....................................................................................................... 1
`
`II. Background ........................................................................................................ 4
`
`A. About the ‘212 Patent ..................................................................................... 4
`
`B. Instituted Grounds .......................................................................................... 7
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`C. Claim Construction ......................................................................................... 9
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`1. Claim Construction Should be Governed by the Philips Standard, and
`Terms Construed Consistently with IPR2017-02012. ................................... 9
`
`2. “Calibration” Should be Construed as Specific to a Particular User .......11
`
`III. The Statutes Governing Inter Partes Review Require that this
`Proceeding be Dismissed ....................................................................................... 15
`
`IV. Petitioner cannot salvage its petition’s deficient challenges
`post-institution. ...................................................................................................... 22
`
`V. THE ASSERTED REFERENCES DO NOT RENDER THE
`CHALLENGED CLAIMS OBVIOUS .................................................................. 25
`
`A. Ground 1: Petitioner Fails to Establish that the Combination of
`Jimenez and Levi Disclose a Plurality of Calibrations For a Single User. ..25
`
`1. The Levi Calibration Algorithm...............................................................25
`
`2. Petitioner’s Arguments Mis-read Levi .....................................................29
`
`3. Levi Does Not Teach or Suggest the Plurality of Calibrations
`in the ‘212 Patent ......................................................................................33
`
`4. Dependent Claims 3 and 4: Petitioner has No Support for
`Recalibration ............................................................................................34
`
`B. Ground 2: Petitioner Fails to Establish that the Combination of Jimenez and
`Ebeling Discloses Stride Rate to Stride Length Correspondence. ...............38
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`IPR2017-02023 – Patent Owner’s Response
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`C. All Grounds: Petitioner Fails to Establish that Jimenez Discloses a
`“Transmitter” and a “Receiver” as Required by Claim 6. ...........................42
`
`VI. PETITIONER DOES NOT SHOW A PROPER
`MOTIVATION TO COMBINE ............................................................................ 46
`
`A. The Levi Reference Concerns a Dead Reckoning Navigational
`System, Not a Fitness Monitor .....................................................................46
`
`B. Ground 1: Petitioner’s Motivation to Combine Jimenez and Levi is
`Deficient .......................................................................................................48
`
`C. Ground 2: Petitioner Fails to Explain Why a PHOSITA Would
`Have Been Motivated to Combine Jimenez with Ebeling. ..........................53
`
`VII.RETROACTIVE APPLICATION OF INTER PARTES
`REVIEW ON PRE-AIA PATENTS IS CONSTITUTIONALLY
`IMPERMISSIBLE ................................................................................................. 54
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`VIII.Conclusion ...................................................................................................... 55
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`IPR2017-02023 – Patent Owner’s Response
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`TABLE OF AUTHORITIES
`
`
`Cases
`Berkovitz v. United States,
`486 U.S. 531 (1988).......................................................................................20
`
`Dell Inc. v. Acceleron, LLC,
`818 F.3d 1293 (Fed. Cir. 2016) .............................................................. 22, 37
`
`In re Rambus Inc.,
`694 F.3d 42 (Fed. Cir. 2012) .........................................................................12
`
`Kaneka Corp. v. Xiamen Kingdomway Grp. Co.,
`790 F.3d 1298 (Fed. Cir. 2015) .....................................................................13
`
`MBO Labs., Inc. v. Becton, Dickinson & Co.,
`474 F.3d 1323 (Fed.Cir.2007) .......................................................................13
`
`Oil States Energy Services, LLC v. Greene’s Energy Group, LLC,
`138 S. Ct. 1365 (2018) ...................................................................................53
`
`Phillips v. AWH Corp.,
`415 F.3d 1313 (Fed. Cir. 2005) (en banc) .....................................................11
`
`Reuters Ltd. v. FCC,
`781 F.2d 946 (D.C. Cir. 1986) .......................................................................19
`
`SAS Institute Inc. v. Iancu,
`138 S. Ct. 1348 (2018) ........................................................................... passim
`
`Tec Air, Inc. v. Denso Mfg. Michigan Inc.,
`192 F.3d 1353 (Fed. Cir. 1999) .....................................................................53
`
`W.L. Gore & Assoc., Inc. v. Garlock, Inc.,
`721 F.2d 1540 (Fed. Cir. 1983) .....................................................................49
`
`Statutes
`
`35 U.S.C. § 282(a) ...................................................................................................54
`
`35 U.S.C. § 314 ....................................................................................................2, 15
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`35 U.S.C. § 314(a) ...................................................................................................20
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`35 U.S.C. § 314(b) ............................................................................................ 16, 21
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`35 U.S.C. § 314(d) ...................................................................................................18
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`35 U.S.C. § 316 ................................................................................................. 20, 22
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`35 U.S.C. § 316(a)(4) ...............................................................................................16
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`35 U.S.C. § 316(b) ...................................................................................................20
`
`35 U.S.C. § 318(a) ...................................................................................................21
`
`35 U.S.C. § 324(e) ...................................................................................................18
`
`Rules
`
`37 C.F.R. § 42 ..........................................................................................................17
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`37 C.F.R. § 42.108(a) ...............................................................................................17
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`37 C.F.R. § 42.108(b) ..............................................................................................17
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`37 C.F.R. § 42.108(c) ........................................................................................ 17, 19
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`37 C.F.R. § 42.120 ..................................................................................................... 1
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`37 C.F.R. § 42.23(b) ......................................................................................... 22, 37
`
`37 C.F.R. § 42.5 .......................................................................................................19
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`37 C.F.R. § 42.71(c) .................................................................................................18
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`Other Authorities
`
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48,612 (Aug. 14, 2012) ...... 17, 18
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`IPR2017-02023 – Patent Owner’s Response
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`LIST OF PATENT OWNER’S EXHIBITS
`
`
`Exhibit Number
`2001
`2002
`
`Exhibit Description
`Declaration of Michael Caloyannides, Ph.D.
`Curriculum Vitae of Michael Caloyannides, Ph.D.
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`IPR2017-02023 – Patent Owner’s Response
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`Pursuant to 37 C.F.R. § 42.120, Blackbird Tech LLC d/b/a Blackbird
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`Technologies (“Blackbird” or “Patent Owner”) files this Response, setting forth
`
`reasons why the Board should determine that claims 1- 8 of U.S. Patent
`
`6,434,212 are not unpatentable, contrary to the Petition for inter partes review
`
`(“IPR”) filed by
`
`the named Petitioner TomTom, Inc. (“TomTom” or
`
`“Petitioner”).
`
`I.
`
`INTRODUCTION
`
`In its March 12, 2018 Institution Decision (Paper 7) the Board found that
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`Petitioner’s Ground 1 challenge failed to “demonstrate a reasonable likelihood of
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`prevailing on [its] challenge to claim 6 and its dependent claims 7 and 8 for
`
`obviousness over” the asserted combination. (Paper 7, 32). The Board also found,
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`with respect to the Ground 2 challenge, that Petitioner “fail[ed] to establish a
`
`reasonable likelihood that [it] would prevail in showing that independent claims 1,
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`2, 5, and 6, and dependent claims 3, 4, 7, and 8, would have been obvious over”
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`the asserted combination. (Id. at 36). Accordingly, the Board instituted IPR on
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`Petitioner’s Ground 1 only with respect to claims 1 – 5.
`
`After the Supreme Court’s decision in SAS Institute Inc. v. Iancu, 138 S. Ct.
`
`1348 (2018), on May 16, 2018, the Board issued an Order to “modify [the]
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`1
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`IPR2017-02023 – Patent Owner’s Response
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`
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`institution decision to institute on all of the challenged claims and all of the
`
`grounds presented in the Petition.” (Paper 10, 2).
`
`However, the Board’s partial institution decision was unlawful under 35
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`U.S.C. § 314, and SAS Institute, 138 S. Ct. 1348, and the Board cannot correct that
`
`unlawful order by issuing an unauthorized and untimely Order attempting to
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`modify the institution decision outside of the statutory period for issuing institution
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`decisions. First, the Board’s institution “modification” order improperly attempts
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`to address, without the statutorily-mandated rulemaking, how to govern a
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`proceeding covering all challenged claims and all asserted grounds, including those
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`for which a petitioner failed to establish a reasonable likelihood of prevailing.
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`Second, the Board lacks authority to modify an unlawful institution decision once
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`the statutory timeframe for issuing an institution decision has expired. Because full
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`institution of this IPR did not occur until after the three-month statutory period for
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`making the requisite determination, the Agency has no authority to carry out this
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`proceeding and the IPR must be terminated.
`
`Petitioners’ challenges are also substantively deficient. Petitioner challenges
`
`the claims of the ‘212 Patent with two obviousness combinations. However, the
`
`prior art fails to disclose all elements of the challenged claims and fails to establish
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`2
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`IPR2017-02023 – Patent Owner’s Response
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`a motivation to combine. Specifically, among other problems, Petitioner’s
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`references do not disclose or suggest the “transmitter” and “receiver” elements of
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`claim 6, fail to teach a “plurality of calibrations,” and do not teach an algorithm
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`that correlates stride rate to stride length as claimed in the ‘212 Patent.
`
`Additionally, Petitioner’s motivation to combine references is based on incorrect
`
`facts and is not legally sound. For example, Petitioner asserts that a PHOSITA
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`would look to the Levi reference (U.S. Pat. No. 5,583,776) to calculate distance
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`walked, but Levi calculates displacement between two map locations, and not
`
`distance walked. (See infra Section VI.B). Therefore, each of Petitioners
`
`obviousness grounds fail because each relies on a combination of reference that
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`cannot legally be combined. (See infra Section VI).
`
`Finally, as explained below in Section IV, the Petitioner failed to establish a
`
`reasonable likelihood of success in its challenge of Ground 2. Because Petitioner is
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`prohibited from introducing new theories of unpatentability post-institution,
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`Petitioner cannot now remedy the Petition’s shortcomings identified by the Board
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`in its Institution Decision. Further, the Board also denied institution with respect
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`to challenge Ground 1 as applied to claims 6, 7, and 8, based on deficiencies that
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`IPR2017-02023 – Patent Owner’s Response
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`Petitioner likewise cannot correct at this time. As a result, the Board must confirm
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`the patentability of at least claims 6 - 8 in its final written decision.
`
`II. BACKGROUND
`A. About the ‘212 Patent
`The ‘212 Patent describes and claims an improved exercise monitoring
`
`device that tracks a user’s activity, and reports key fitness metrics back to the user.
`
`(See generally, ‘212 Patent, “Summary of the Invention”). The device includes a
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`pedometer, which is a portable electromechanical device for determining the
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`distance a person travels on foot. (‘212 Patent, 1:17-18). The inventions claimed
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`in the ‘212 Patent were born out of the inventor’s research into ways of solving
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`problems with prior art pedometers. (Id. at 2:8-11). At the time of invention in
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`1998, prior art pedometers were overly complex devices that produced inaccurate
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`distance determinations. (Id.). Complexity and inaccuracy are serious problems
`
`because they tend to defeat the purpose of the pedometer’s inclusion in an exercise
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`monitoring device, which is to provide a wearable device that informs the user of
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`the distance he or she has walked or run while exercising. (Id. at 1:12-18).
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`To overcome the problems of complexity and inaccuracy, the inventor
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`conceived of a novel pedometer that reduces design complexity, increases distance
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`IPR2017-02023 – Patent Owner’s Response
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`calculation accuracy, and improves calibration efficiency. (Id. at 2:15-26). This
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`invention is reflected, for instance, in claim 6 of the ‘212 Patent:
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`6. A pedometer comprising:
`
`a step counter;
`
`a transmitter in communication with the step counter to generate a step
`count signal corresponding to each step and transmit the step count
`signal;
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`a receiver mountable on a user body portion to receive the step count
`signal transmitted from the transmitter; and
`
`a data processor programmed to calculate a distance traveled by
`multiplying a number of steps counted by a stride length that varies
`according to a rate at which steps are taken, and further
`programmed to derive an actual stride length from a range of stride
`lengths calculated from a range of corresponding stride rates.
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`(Id., claim 6). The step counter is configured to count the number of steps the user
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`takes. (Id. at 3:7-8). A transmitter, in communication with the step counter, is
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`configured to generate a step count signal corresponding to each step. The
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`transmitter is also configured to transmit the step count signal to a receiver, which
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`in turn is mountable on a user body portion. The pedometer also includes a data
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`processor that is programmed to determine the distance travelled by multiplying
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`5
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`IPR2017-02023 – Patent Owner’s Response
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`the step count by a stride length (as opposed to, for example, directly measuring
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`stride length).
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`Claim 6 of the ‘212 Patent recites a programmatic mechanism that allows a
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`pedometer to leverage the fact that stride length varies according to stride rate.
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`Specifically, the data processor must derive the stride length used to make the
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`distance determination from a range of stride lengths. These stride lengths are, in
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`turn, calculated from a range of stride rates (i.e., number of strides over some
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`period of time).
`
`Remaining independent claims 1, 2, and 5 of the ‘212 Patent expand on
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`claim 6 in several ways. They each claim a strap-mounted device “for releasably
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`securing the exercise monitoring device to a user[.]” Claims 1, 2, and 5 also recite
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`a heart rate monitor joined to the same strap as the step counter. Claims 2 and 5
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`specifically recite a calibratable pedometer in which the data processor is
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`programmed to select a stride length “with reference to a plurality of calibrations
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`that each calculate a stride length as a function of a known stride rate,” as in claim
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`2, or “from a range of stride lengths calculated from a range of corresponding
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`stride rates calculated from a plurality of calibration samples,” as in claim 5. These
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`calibration features allow for the selection of a stride length to be used in the
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`IPR2017-02023 – Patent Owner’s Response
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`distance calculation that more closely matches the user’s actual stride length,
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`which as a result makes the distance calculation more accurate.
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`The ‘212 Patent describes significant advantages of the claimed inventions
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`over prior art pedometers. It explains that, with the claimed pedometers, unlike
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`prior art pedometers, repeated calibrations are not required (absent significant
`
`fitness improvements):
`
`This third option for calculating stride length, and subsequently
`distance, speed, and pace, is a far more accurate method than a fixed
`stride length pedometer. This device and method are also practical,
`convenient, and has a relatively low manufacturing cost…. If there
`are no significant improvements in time, then recalibration is not
`necessary.
`
`(‘212 Patent, 6:10-19 (emphasis added)). In short, the claimed exercise monitoring
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`devices provided significant advantages for both manufacturers and users.
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`Instituted Grounds
`
`B.
`Petitioner proposed two grounds of challenge for all eight of the claims in
`
`the ‘212 Patent in this petition (See, e.g., Pet. at 4-5). All grounds of challenge are
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`obviousness grounds. (Id.). The proposed grounds of challenge were:
`
`No. Ground
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`Claims
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`7
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`IPR2017-02023 – Patent Owner’s Response
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`No. Ground
`1
`Section 103:
`U.S. Pat. No. 4,367,752 to Jimenez et al. (“Jimenez”) +
`US Pat. No. 5,583,776 to Levi et al. (“Levi”)
`Section 103:
`U.S. Pat. No. 4,367,752 to Jimenez et al. (“Jimenez”) +
`US Pat. No. 6,145,389 to Ebeling et al. (“Ebeling”)
`
`2
`
`Claims
`All
`
`All
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`
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`Throughout this Response, for ease of understanding, the Patent Owner will refer
`
`to these prior art references by the inventor names indicated above.
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`
`
`In its March 12, 2018 Institution Decision (Paper 7) the Board found that
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`Petitioner’s Ground 1 challenge failed to “demonstrate a reasonable likelihood of
`
`prevailing on [its] challenge to claim 6 and its dependent claims 7 and 8 for
`
`obviousness over” the asserted combination. (Paper 7, 32). The Board also found,
`
`with respect to the Ground 2 challenge, that Petitioner “fail[ed] to establish a
`
`reasonable likelihood that [it] would prevail in showing that independent claims 1,
`
`2, 5, and 6, and dependent claims 3, 4, 7, and 8, would have been obvious over”
`
`the asserted combination. (Id. at 36). Accordingly, the Board instituted IPR on
`
`Petitioner’s Ground 1 only with respect to claims 1 – 5.
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`8
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`IPR2017-02023 – Patent Owner’s Response
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`
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`After the Supreme Court’s decision in SAS Institute Inc. v. Iancu, 138 S. Ct.
`
`1348 (2018), on May 16, 2018, the Board issued an Order to “modify [the]
`
`institution decision to institute on all of the challenged claims and all of the
`
`grounds presented in the Petition.” (Paper 10, 2).
`
`C. Claim Construction
`In its Institution Decision, the Board determined that none of the claims
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`terms in the ‘212 Patent proposed by Petitioner require express construction for
`
`consideration of this Petition. Blackbird agrees that express construction of the
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`terms “step counter,” “stride rate,” and “from a range of stride lengths calculated
`
`from a range of corresponding stride rates” is not required for the Board to
`
`consider the merits of the Petition. Nevertheless, several other claim construction
`
`issues are relevant to this matter.
`
`Claim Construction Should be Governed by the Philips
`1.
`Standard, and Terms Construed Consistently with IPR2017-
`02012.
`The Board should apply Philips-standard constructions to the disputed terms
`
`of the ‘212 Patent for purposes of this petition. Because the ‘212 Patent is set to
`
`expire before the conclusion of this IPR, Blackbird will not have any opportunity
`
`to amend claims, and therefore the prosecution-focused “broadest reasonable
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`IPR2017-02023 – Patent Owner’s Response
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`construction” standard is inappropriate. Furthermore, IPR2017-2012, filed by
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`Fitbit. Inc. against the same ‘212 Patent, is proceeding on a parallel track to this
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`IPR proceeding. The two IPRs were instituted on the same day, and the trials for
`
`these two IPRs are scheduled on back-to-back days, December 11 and 12, 2018.
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`Accordingly, the claim terms of the ‘212 Patent should be construed using the
`
`same claim construction standard and should be given consistent constructions, in
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`both this matter and IPR2017-2012.
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`In its Institution Decision in IPR2017-2012, the Board granted Petitioner
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`Fitbit, Inc.’s Motion to Apply Philips-style claim construction to the terms of the
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`‘212 Patent. (IPR2017-2012, Paper 8 at 7). The Board went on to construe the term
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`“step counter” as “a device that collects data to generate a step count.” (Id. at 8).
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`Therefore, to the extent the Board finds that construction of any terms of the ‘212
`
`Patent is ultimately necessary for resolution of this matter, it should likewise
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`construe the claim terms using a Philips-style claim construction analysis. And, if
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`the Board ultimately decides that it is necessary to construe the term “step counter”
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`at any point in these proceedings, it should give the term the same meaning applied
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`in IPR2017-2012: “a device that collects data to generate a step count.”
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`“Calibration” Should be Construed as Specific to a
`2.
`Particular User
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`In the Institution Decision, the Board recognized that construction of a term
`
`not proposed by Petitioner, “calibration,” is relevant to the merits of TomTom’s
`
`Petition. In particular, because no party had proposed to construe “calibration”
`
`prior to the Institution Decision, the Board could not reach a definitive conclusion
`
`whether “calibration,” in the claims of the ‘212 Patent, required that the correlation
`
`between stride length and stride rate be determined for a particular user, or whether
`
`generic testing data satisfied the limitation. (See Paper 7 at 17, 21-22).
`
`Accordingly, the Board encouraged the parties to “develop the record regarding
`
`what a ‘calibration’ is and if the correlation of a known step size with steps per
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`second constitutes a calibration.” (Id. at 22). For the reasons set forth below,
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`“calibration” should be construed as a “process which correlates a particular user’s
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`stride rate and stride length.” (See Ex. 2001 at ¶¶27-29).
`
`Under district court-type claim construction, claim terms are given their
`
`ordinary and customary meaning, as would be understood by a person of ordinary
`
`skill in the art, at the time of the invention, in light of the language of the claims,
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`the specification, and the prosecution history of record (Phillips v. AWH Corp.,
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`415 F.3d 1313 (Fed. Cir. 2005) (en banc); see also In re Rambus Inc., 694 F.3d 42,
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`11
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`46 (Fed. Cir. 2012) (“While claims are generally given their broadest possible
`
`scope during prosecution, the Board’s review of the claims of an expired patent is
`
`similar to that of a district court’s review.”) (internal citation omitted)). Here, all
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`intrinsic evidence shows that “calibration” must be specific to a particular user.
`
`
`
`a)
`
`Claim language
`
`The term “calibration” appears in independent claims 2 and 5, and the
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`related term “recalibrate” appears in dependent claims 3 and 4 of the ‘212 Patent.
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`The use of “recalibrate” in claims 3 and 4 is instructive. Claim 3 adds the
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`limitation that the data processor is “further programmed to recalibrate the stride
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`lengths as a function of a subsequently calculated and known stride rate.” Claim 4
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`further requires that a new stride length is determined by “calculating an average
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`stride length from the calibration stride length and the recalibration stride length.”
`
`“Recalibration” in claims 3 and 4 only makes sense if the original “calibration” is
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`specific to a user. As the ‘212 specification explains, such “recalibration” would be
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`beneficial when “an individual’s running or walking style is progressing with
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`training and practice.” (‘212 6:14-15). If “calibration” is generic across all users –
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`i.e. if a set of stride lengths corresponded to a set of stride rates, and any user of the
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`device fell somewhere in that calibration table – there would be no need to
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`IPR2017-02023 – Patent Owner’s Response
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`recalibrate if a user improves. A user would merely look up a new stride length
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`that corresponded to their new stride rate. (Ex. 2001 at ¶ 29).
`
`
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`b)
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`Specification
`
`The ‘212 specification confirms that “calibration” is a “process which
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`correlates a particular user’s stride rate and stride length.” For example, the ‘212
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`Patent states that “[a] preferred embodiment uses a plurality of sample runs over
`
`known distances [i.e. calibration] to derive an accurate N value [the correlation
`
`coefficient relating stride length to stride rate] for each individual.” (‘212 Patent
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`2:56-59) (emphasis added). Indeed, every embodiment of “calibration” described
`
`in the ‘212 specification discusses a process by which “the user” calibrates the
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`device for his or her own stride rate/stride length correlation. It is black letter claim
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`construction law that a “claim construction that reads out a preferred embodiment
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`is ‘rarely, if ever, correct.’ A construction that excludes all embodiments . . . is
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`especially disfavored.” Kaneka Corp. v. Xiamen Kingdomway Grp. Co., 790 F.3d
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`1298, 1304 (Fed. Cir. 2015) (citing MBO Labs., Inc. v. Becton, Dickinson & Co.,
`
`474 F.3d 1323, 1333 (Fed.Cir.2007). Blackbird’s proposed construction for
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`“calibration” comports with the meaning of that term in the specification. (Ex.
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`2001 at ¶ 29).
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`IPR2017-02023 – Patent Owner’s Response
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`c)
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`File History
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`
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`During prosecution of U.S. Patent 6,175,608, which is the parent to the ‘212
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`Patent and shares a specification, the Applicant noted that the patent examiner
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`indicated (in an interview) that “[a] distinctive part of invention is the “use of data
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`input from runs or walks over known distances to establish a range of stride rate
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`versus stride length data that can be used in subsequent runs or walks to derive
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`actual stride lengths from actual stride rates.” (Ex. 1010, ‘608 Prosecution History,
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`June 19, 2000 Amendment at 4). This distinguished the pending claims from prior
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`art that disclosed the generic “correspondence between stride rate and stride
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`length.” (Id. at 3). Although the passage does not specifically discuss calibration,
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`the “subsequent runs or walks” suggests that the data gathered is specific to a user.
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`Here again, the intrinsic record supports a construction for “calibration” that is
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`specific to a particular user, not generic across users. (Ex. 2001 at ¶ 29).
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`d)
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`Experts agree
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`Although it is sufficient that the intrinsic record of the ‘212 Patent
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`overwhelmingly supports Blackbird’s construction for “calibration,” it is also
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`significant that both parties’ technical experts agree that “calibration” in the
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`context of the ‘212 Patent must be specific to a particular user. Mr. Blackadar,
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`IPR2017-02023 – Patent Owner’s Response
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`Petitioner’s expert, confirmed in his deposition, that his understanding of
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`“calibration” in the ‘212 Patent is specific to a user:
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`Q: Okay. So one more time. What would your construction for
`calibration be?
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`A: To have an individual perform a series of known walk/run events
`to capture their physiological profile.
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`
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`(Ex. 1022 at 52:25-53:4). Blackbird’s technical expert, Dr. Caloyannides, concurs
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`in this construction. (See Ex. 2001 at ¶¶27-29).
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`That all the evidence supports a conclusion that calibration must be specific
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`to a particular user is not surprising. One of the objectives of the ‘212 Patent is to
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`disclose a “highly accurate” pedometer. That accuracy is achieved by recognizing
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`that the stride rate/stride length correlation will vary from user to user based on
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`gender, height, weight, gait, and other factors. Thus, individual calibration is
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`necessarily to determine the correct stride rate/stride length correlation for the
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`particular user wearing the device claims in the ‘212 Patent.
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`INTER PARTES REVIEW
`III. THE STATUTES GOVERNING
`REQUIRE THAT THIS PROCEEDING BE DISMISSED
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`The Board’s partial institution decision (Paper 7) was unlawful under 35
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`U.S.C. § 314, and the Board cannot correct that unlawful order by issuing an
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`IPR2017-02023 – Patent Owner’s Response
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`unauthorized Order (Paper 10) attempting to modify the institution decision
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`outside of the statutory period for issuing institution decisions. First, the Board’s
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`institution “modification” order violates existing regulations governing inter partes
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`review. With those regulations thrown into disarray by the Supreme Court, the
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`modification order improperly attempts to create new rules, without the statutorily-
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`mandated rulemaking, regarding how to govern a proceeding covering all
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`challenged claims and grounds, including those for which a petitioner failed to
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`establish a reasonable likelihood of prevailing. Second, the Board lacks authority
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`to modify an unlawful institution decision once the statutory timeframe for issuing
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`an institution decision has expired. This period expired three months after Patent
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`Owner filed its Preliminary Response, or March 13, 2018 in this case. Because the
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`Board’s attempt to correct the unlawful institution decision did not occur until May
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`16, 2018, over two months after this critical date, the Agency has no authority to
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`carry out this proceeding and this IPR must be terminated.
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`The statute authorizing inter partes review requires the Director to (a) issue
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`regulations “establishing and governing inter partes review under this chapter” (35
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`U.S.C. § 316(a)(4)) and (b) to “determine whether to institute an inter partes
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`review … within 3 months after” a preliminary response (35 U.S.C. § 314(b)(1)).
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`IPR2017-02023 – Patent Owner’s Response
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`In 2012, prior to SAS Institute Inc. v. Iancu, the Director implemented the
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`regulations required by statute in a manner that permitted claim-by-claim and
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`ground-by-ground institution. See 37 C.F.R. § 42. In particular, 37 C.F.R. §
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`42.108(a) allowed the Board to “authorize the review to proceed on all or some of
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`the challenged claims and on all or some of the grounds of unpatentability asserted
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`for each claim.” Additionally, 37 C.F.R. § 42.108(b) allowed the Board to “deny
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`some or all grounds for unpatentability for some or all of the challenged claims”
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`prior to institution of inter partes review.” When denying a ground, 37 C.F.R. §
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`42.108(b) held that such a “[d]enial of a ground is a Board decision not to institute
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`inter partes review on that ground.” Moreover, under the heading “Sufficient
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`grounds,” 37 C.F.R. § 42.108(c) provided that “Inter partes review shall not be
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`instituted for a ground of unpatentability unless the Board decides that the
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`petition supporting the ground would demonstrate that there is a reasonable
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`likelihood that at least one of the claims challenged in the petition is unpatentable.”
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`(emphasis added). In implementing these final rules, the Agency stated, “The
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`Board will identify the grounds upon which the review will proceed on a claim-by-
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`claim basis. Any claim or issue not included in the authorization for review is not
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`part of the review.” 77 Fed. Reg. 48,689. Indeed, the Agency specifically stated
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`IPR2017-02023 – Patent Owner’s Response
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`that the regulations did not adopt comments requesting that “all challenged claims
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`to be included in the inter partes review when there is a reasonable likelihood of
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`prevailing with respect to one challenged claim.” 77 Fed. Reg. 48,702-03. Under
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`the pre-SAS regulati