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`UNITED STATES PATENT AND TRADEMARK OFFICE
`___________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`
`
`ZTE (USA) INC.
`.
`
`Petitioner,
`
`v.
`
`Fundamental Innovation Systems International LLC,
`Patent Owner.
`___________________
`
`Case IPR2018-00111
`Patent No. 8,624,550
`___________________
`
`
`PATENT OWNER'S OPPOSITION TO PETITIONER'S MOTION TO ADD
`A REAL PARTY IN INTEREST RETROACTIVELY AND IN THE
`ALTERNATIVE TO TERMINATE THE PROCEEDING
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`10620881
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`TABLE OF CONTENTS
`
`Page
`Introduction ............................................................................................ 1
`Argument ................................................................................................ 2
`A.
`The Board Cannot Suspend the 315(b) Deadline ........................ 2
`B.
`Petitioner Has Failed to Demonstrate That Its Requested
`Relief Is For Good Cause or In The Interests Of Justice ............. 3
`1.
`AIT did not change the legal standard on who is a
`real party-in-interest ("RPI") in an IPR proceeding .......... 4
`Petitioner's Misapplication of Law Is Not Good
`Cause For Suspending The Board's Rules On
`Filing Dates ........................................................................ 6
`Back-dating the Petition to Circumvent § 315(b) Is
`Not In the Interests of Justice Because It
`Prejudices Patent Owner and Encourages
`Gamesmanship ................................................................... 9
`Petitioner's Extraordinary Request Finds No
`Support In The Board's Past Decisions ........................... 12
`The Board Should End the Proceeding With A Decision
`Having Estoppel Effect .............................................................. 14
`
`2.
`
`3.
`
`4.
`
`C.
`
`I.
`II.
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`
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`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Application in Internet Time, LLC v. RPX Corp.,
`897 F.3d 1336. (Fed. Cir. 2018) ............................................................passim
`Atlanta Gas Light Co. v. Bennett Regular Guards, Inc.,
`IPR2013-00453, Paper 88 (PTAB, Jan. 6, 2015) ....................................... 5, 6
`
`Corning Optical Communications RF, LLC v. PPC Broadband,
`Inc., IPR2014-00440, Paper 68 (PTAB, Aug. 18, 2015) ................. 4, 7, 8, 13
`Elekta, Inc. v. Varian Med. Sys., Inc.,
`IPR2015-01401, Paper 19 (PTAB, Dec. 31, 2015) ..............................passim
`Fasteners for Retail, Inc. v. RTC Indus., Inc.,
`IPR2018-00741, Paper 32 (PTAB, Nov. 15, 2018) .................................. 4, 14
`Lumentum Holdings, Inc. v. Capella Photonics, Inc.,
`IPR2015-00739, Paper 38 (PTAB, Mar. 4, 2016) ............................ 11, 12, 15
`Mexichem Amanco Holdings S.A. de C.V., v. Honeywell Int’l, Inc.,
`IPR2015-01309, Paper 25 (PTAB Apr. 7, 2016) ................................... 10, 14
`Petroleum Geo-Services Inc., v. WesternGeco LLC,
`IPR2014-00678, Paper 23 (PTAB Aug. 12, 2014) ....................................... 14
`Reflectix, Inc. v. Promethean Insulation Tech. LLC,
`IPR2015-00039, Paper 18 (PTAB, Apr. 24, 2015) .......................... 3, 6, 9, 11
`
`Sirius XM Radio, Inc. v. Fraunhofer-Gesellschaft zur Forderung
`der Angewandten Forschung E.V.,
`IPR2018-00689, Paper 11 (PTAB, Sept. 21, 2018) ................................. 4, 14
`Statutes
`35 U.S.C. § 312(a) ..................................................................................... 1, 2, 12
`35 U.S.C. § 315(b) ......................................................................................passim
`35 U.S.C. § 315(e) ............................................................................................. 10
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`Page(s)
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`Regulations
`37 C.F.R. § 42.1(b) ............................................................................................ 10
`37 C.F.R. § 42.5(c)(3) ...................................................................................... 3, 6
`37 C.F.R. § 42.8 ......................................................................................... 1, 2, 12
`37 C.F.R. § 42.72 ............................................................................................... 15
`37 C.F.R. § 42.73(a) .......................................................................................... 15
`37 C.F.R. § 42.73(b)(4)...................................................................................... 15
`37 C.F.R. § 42.104 ..................................................................................... 1, 2, 12
`37 C.F.R. § 42.106 ..................................................................................... 1, 2, 12
`77 Fed. Reg. 48,756 ............................................................................................. 5
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`Ex. 2001
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`Ex. 2002
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`Ex. 2003
`Ex. 2004
`Ex. 2005
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`Ex. 2006
`Ex. 2007
`Ex. 2008
`Ex. 2009
`Ex. 2010
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`Ex. 2011
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`Ex. 2012
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`Ex. 2013
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`Ex. 2014
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`Ex. 2015
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`EXHIBIT LIST
`
`
`Declaration of Kenneth Fernald, Ph.D. in Support of
`Fundamental Innovation Systems International LLC's Patent
`Owner Preliminary Response
`Declaration of Mr. Steven Rogers in Support of Fundamental
`Innovation Systems International LLC's Patent Owner
`Preliminary Response
`Jan Axelson, USB Complete (1999), excerpt
`U.S. Patent No. 5,884,086 ("Amoni")
`Deposition Transcript of John Garney (Nov. 20, 2017) in
`Fundamental Innovation Sys. Int'l LLC v. Samsung
`Electronics Co. (E.D. Tex.), excerpt
`Jan Axelson, USB Complete (2d ed. 2001), excerpt
`Sheasby PHV Declaration
`Fundamental-Samsung Settlement Agreement (Confidential)
`2018-07-02 Hearing Transcript
`Deposition Transcript of John Garney (Nov. 20, 2017) in
`Fundamental Innovation Sys. Int'l LLC v. Samsung
`Electronics Co. (E.D. Tex.), full transcript
`Declaration of Kenneth Fernald, Ph.D. in Support of
`Fundamental Innovation Systems International LLC's Patent
`Owner Response
`Declaration of Mr. Steven Rogers in Support of Fundamental
`Innovation Systems International LLC's Patent Owner
`Response
`Deposition Transcript of Mr. James T. Geier in IPR2018-
`00111 (July 30, 2018)
`ZTE (TX) Inc.'s corporate disclosure statement in Fractus,
`S.A. v. ZTE Corp. et al., Civ. No. 2:17-cv-00561-JRG (Sept.
`25, 2017, E.D. Tex.)
`ZTE (USA) and ZTE (TX) Inc.'s corporate disclosure
`statement in Saint Lawrence Communications LLC v. ZTE
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`Corp. et al., Civ. No. 2:15-cv-00349-JRG (May 26, 2015,
`E.D. Tex.)
`Amended complaint in Fundamental Innovation Sys. Int'l
`LLC v. ZTE Corp., 2:17-cv-00124-JRG (E.D. Tex.), now
`transferred to N.D. Tex. as 3:17-cv-01827-N.
`Declaration of Chao Shan in Support of ZTE's Motion to
`Dismiss in Fractus, S.A. v. ZTE Corp. et al., Civ. No. 2:17-
`cv-00561-JRG (Sept. 25, 2017, E.D. Tex.)
`LG Electronics Inc. Corporate Structure Tree
`2016-2017 LG Electronics Sustainability Report
`Excerpts from LG Corporation Annual Report (2017)
`(translated from Korean)
`LG Corporation Key Developments Report
`Jan Axelson, USB Complete (2d ed. 2001), additional excerpt
`Deposition Transcript of Daniel Fischer (May 9, 2018) in
`Fundamental Innovation Sys. Int'l LLC v. Samsung
`Electronics Co. et al. (E.D. Tex.), Fundamental Innovation
`Sys. Int'l LLC v. LG Electronics, Inc. et al. (E.D. Tex.),
`Fundamental Innovation Sys. Int'l LLC v. Huawei Device Co.,
`Ltd. et al. (E.D. Tex.), Fundamental Innovation Sys. Int'l LLC
`v. ZTE Corp. et al. (N.D. Tex.), excerpt
`LinkedIn public profile of Dan Radut
`LinkedIn public profile of Jonathan Malton
`LinkedIn public profile of Michael Habicher
`Fundamental-LG Settlement Agreement (Confidential)
`2018-11-28 Hearing Transcript
`ZTE (TX), Inc.'s answer to Fundamental's Amended
`Complaint
`ZTE USA, Inc.'s answer to Fundamental's Amended
`Complaint
`ZTE Corporation's answer to Fundamental's Amended
`Complaint
`Zhong Declaration regarding www.ztetx.com
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`Ex. 2016
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`Ex. 2017
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`Ex. 2018
`Ex. 2019
`Ex. 2020
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`Ex. 2021
`Ex. 2022
`Ex. 2023
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`Ex. 2024
`Ex. 2025
`Ex. 2026
`Ex. 2027
`Ex. 2028
`Ex. 2029
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`Ex. 2030
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`Ex. 2031
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`Ex. 2032
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`I.
`
`Introduction
`The Board should deny Petitioner's request to back-date the petition
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`because doing so would subvert the 315(b) statutory bar. Under the current
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`statutory and regulatory scheme, a petition is not granted a filing date until it is
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`complete, including naming all real parties-in-interest ("RPIs") of the
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`petitioner. 35 U.S.C. § 312(a)(2); 37 C.F.R. §§ 42.106, 42.104, 42.8. In this
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`case, Petitioner did not file a complete petition before the 315(b) bar date.
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`To the extent that the Director has the rule-making authority to allow a
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`petitioner to back-date a petition to overcome the statutory bar under 35 U.S.C.
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`§ 315(b), the Director has not done so following the required APA rule-making
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`procedure. Nor is it likely that such a rule would ever be made because it
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`would encourage gamesmanship by petitioners who deliberately file potentially
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`deficient petitions and then decide on a final course of action after evaluating
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`Patent Owner's arguments. This is what happened here: Petitioner admits that
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`it took a calculated risk of omitting ZTE (TX), Inc. ("ZTX"), even though ZTX
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`has been a co-defendant in the district court action since Day 1, has a real
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`interest in invalidating the patent and has been regularly named as an RPI in
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`similar situations. See § II.B.2. Petitioner omitted ZTX without conceding that
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`ZTX would be bound by the Board's decision. See Mot. 9 (implying ZTX was
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`not subject to any estoppel until named as an RPI). This tactic, if successful,
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`would have allowed ZTX to litigate validity at the district court even after a
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`final written decision in this trial. Petitioner claims that the Federal Circuit's
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`AIT decision changed its assessment of ZTX's RPI status, but it waited nearly
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`five months after AIT before seeking to add ZTX and did so only after it had
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`fully evaluated Patent Owner's responses in the two pending trials.
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`Further, even if the Board has discretion to back-date the petition,
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`Petitioner has not shown that its request is for "good cause" or "in the interests
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`of justice" because mistake in law is not good cause and the interests of justice
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`are not served by allowing Petitioner to circumvent § 315(b).
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`II. Argument
`A. The Board Cannot Suspend the 315(b) Deadline
`35 U.S.C. § 312(a)(2) provides that the Board may consider a petition
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`"only if . . . the petition identifies all real parties in interest." Thus, the AIA
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`statute does not regard a petition as filed and ready for review until it names all
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`RPIs. The regulations reflect this understanding: 37 C.F.R. § 42.106 provides
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`that a filing date will not be accorded until it "[c]omplies with § 42.104."
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`§ 42.104 in turn requires the petition to satisfy "the requirements of" § 42.8;
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`and § 42.8 requires a mandatory notice be filed "[b]y the petitioner, as part of
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`the petition" to "[i]dentify each real party-in-interest for the [petitioner]."
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`Thus, even today, Petitioner is not entitled to a filing date because its
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`latest mandatory notice adds ZTX but omits the Samsung entities involved in
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`preparing the petition. Pet. 1; Ex. 2009, 12:7-15. But even if the latest notice
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`entitled Petitioner to a filing date, that date—December 6, 2018— is long after
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`the February 14, 2018 statutory deadline under 35 U.S.C. § 315(b).
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`Petitioner is thus asking the Board to back-date its petition to overcome
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`the 315(b) statutory bar. To the extent that the Director is authorized to
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`promulgate such a rule, he has not done so following the requisite APA rule-
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`marking procedure with a notice-and-comment period. Hence, a petitioner
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`currently cannot reserve a filing date with a defective petition before the 315(b)
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`deadline and then perfect the filing after the deadline. No amount of argument
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`can overcome this lack of authority and Petitioner's request must be rejected.
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`B.
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`Petitioner Has Failed to Demonstrate That Its Requested
`Relief Is For Good Cause or In The Interests Of Justice
`To the extent that the Board concludes that the current statutory and
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`regulatory scheme nevertheless allows it to exercise discretion under
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`§ 42.5(c)(3) to backdate a petition to cure a statutory bar, it still should not
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`grant the relief here because the request is neither for "good cause" nor
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`otherwise "in the interests of justice." Reflectix, Inc. v. Promethean Insulation
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`Tech. LLC, IPR2015-00039, Paper 18 at 3, 13 (PTAB, Apr. 24, 2015). Indeed,
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`Petitioner's request is unprecedented because, where Petitioner named all RPIs
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`existing at the time of the petition only after the 315(b) statutory deadline, the
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`Board has "consistently found that any Petition corrected to disclose additional
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`RPIs must be given a new filing date." Corning Optical Communications RF,
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`LLC v. PPC Broadband, Inc., IPR2014-00440, Paper 68 at 23-24 (PTAB, Aug.
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`18, 2015) (collecting cases); Sirius XM Radio, Inc. v. Fraunhofer-Gesellschaft
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`Zur Forderung der angewandten Forschung e.V., IPR2018-00689, Paper 11 at
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`6-7 (PTAB, Sept. 21, 2018) (rejecting request to amend RPI disclosures
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`without changing the petition date). The Board should reach the same
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`conclusion here because ruling otherwise "would encourage gamesmanship by
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`allowing petitioners to refrain from naming all RPIs until if and after such
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`unnamed RPI" caused negative consequences. Fasteners for Retail, Inc. v.
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`RTC Indus., Inc., IPR2018-00741, Paper 32 at 5 (PTAB, Nov. 15, 2018); see
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`also Elekta, Inc. v. Varian Med. Sys., Inc., IPR2015-01401, Paper 19 at 23-24
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`(PTAB, Dec. 31, 2015) (Boucher, J., dissent) (criticizing majority's refusal to
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`reset the filing date even where the new filing date would not implicate 315(b)
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`because the decision was unnecessary and could encourage gamesmanship).
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`1.
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`AIT did not change the legal standard on who is a real
`party-in-interest ("RPI") in an IPR proceeding
`Petitioner first argues that its belated request is justified by the alleged
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`"intervening" change in law on the RPI issue. Mot. 3-9. That assertion sounds
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`disingenuous as Petitioner waited almost five months after AIT to bring the
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`motion. Moreover, the AIT panel actually affirmed the basic framework
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`outlined in the Trial Practice Guide that has been in place since August 2012:
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`[M]any of the statements in the Trial Practice Guide concerning
`§315(b) are consistent with the language, structure, and purpose of
`the statutory provision it addresses and with its common-law
`predicates. More particularly, we do not believe that any of the
`general legal principles expressed in the Trial Practice Guide cited
`by the Board here run contrary to the common-law understanding
`of “real party in interest.” Our concern here is . . . with this
`particular panel’s understanding and application of the
`principles articulated therein, and articulated in the common law
`which the Trial Practice Guide considers.
` Application in Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1344 n.2.
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`(Fed. Cir. 2018). The Federal Circuit's criticism is directed to one particular
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`panel's application of the law to the facts, and not with the law in general. For
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`example, the Trial Practice Guide also lists factors such the "Party A's
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`relationship with the petitioner" and "Party A's relationship to the petition
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`itself." 77 Fed. Reg. 48,756 at 48,759–60. These factors encompass scenarios
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`where an RPI is one who would benefit from the petition as a result of its long-
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`standing relationship with the petitioner, as enunciated in AIT.
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`The Board's past decisions confirm that actual control-fund-direction has
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`not been the determinative factor in determining RPI. Atlanta Gas Light Co. v.
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`Bennett Regular Guards, Inc., IPR2013-00453, Paper 88 (PTAB, Jan. 6, 2015),
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`for example, cited the Trial Practice Guide and the Supreme Court's Taylor
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`factors to assess whether petitioner should have named its parent holding
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`company as an RPI. Atlanta, Paper 88 at 8-13. The panel determined that
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`AGLR was an omitted RPI based not only on the control factor, but also "in
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`combination with application of other [applicable] Taylor factors." Id. at 12.
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`AIT thus expounds on existing legal standards rather than establishes new law.
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`Petitioner argues that Judge Reyna opined that AIT changed the standard
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`regarding RPI. Mot. 6. Not so. First, Judge Reyna's concurrence is directed to
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`privity, not RPI. AIT, 897 F.3d 1358-59. Second, the context makes clear that
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`"the standard employed by the PTO in its real party in interest inquiry"
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`mentioned by Judge Reyna refers to the particular panel's overly narrow
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`application of the standard that focused solely on actual control. Id., 1361-62,
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`1344 n.2. Judge Reyna did not criticize the framework as articulated in the
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`Trial Practice Guide with which the Federal Circuit generally agreed. Id.
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`Third, Judge Reyna did not suggest that a petitioner is ever permitted to
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`backdate a petition to overcome § 315(b), especially when the delay resulted
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`from a conscious calculation to omit an affiliated co-defendant as an RPI.
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`2.
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`Petitioner's Misapplication of Law Is Not Good Cause
`For Suspending The Board's Rules On Filing Dates
`To the extent that the Board can back-date a petition to overcome the
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`statutory bar under § 315(b), it still can only grant the relief for "good cause" or
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`"in the interests of justice." 37 C.F.R. § 42.5(c)(3); Reflectix, Paper 18 at 13.
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`Petitioner never addressed either prong, instead simply arguing that under the
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`fund-control-direction test, ZTX was not an RPI because ZTX did not fund or
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`control the petition, ignoring the Trial Practice Guide and case law that makes
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`clear this is not the limits of RPI. Mot. 3, 6. Petitioner alleges that Patent
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`Owner agreed that ZTX was not an RPI before AIT because it did not raise the
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`RPI issues in the POPRs. Mot. 7-8. POPRs are optional, and Patent Owner
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`decided to focus on the technical merits in the limited spaces against the ZTE-
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`Samsung petitions. It addressed the RPI issue in the PORs because of the
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`evidence it later discovered, including that ZTX was regularly named as an RPI
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`in similar cases. Paper 33 at 17-19. Even under Petitioner's narrow direction-
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`fund-control test, evidence shows that ZTX should have been named as an RPI.
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`First, actual control is not required. Rather, the test simply requires an
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`ability or opportunity to control. See Corning Optical, IPR2014-00440, Paper
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`68 at 14 (“[a] common consideration [for the RPI issue] is whether the non-
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`party exercised or could have exercised control over a party’s participation in
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`a proceeding"). Thus, in Corning Optical, the Board ruled that given the
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`overlapping officers and the blurred corporate boundaries, an omitted sister
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`corporation should have been a named RPI because it could have controlled the
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`filing and participation of the IPRs. Id. at 17-19. Petitioner has never
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`presented evidence that ZTX could not have exercised control. That ZTX was
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`repeatedly named RPIs in IPRs that, like this one, concern handset technology
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`strongly indicate that such opportunity to control existed, such as through the
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`common board members and officers that ZTX shares with ZTE Corporation
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`or Petitioner. See IPR2016-00704, -00705, -00664, -00665, -00666, -00667, -
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`00670; IPR2018-01451, -01455, -01456, -01457, -01461, -01462, -01463.
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`Second, control may be inferred from indirect and circumstantial
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`evidence, including blurred lines between corporate entities. Corning Optical,
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`IPR2014-00440, Paper 68 at 15. In public, ZTX has no separate corporate
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`existence but is instead presented as the same as Petitioner (ZTE USA) and the
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`listed RPI (ZTE Corporation). For example, ZTX, Petitioner and ZTE
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`Corporation all admit that each "identifies with the trade name 'ZTE'." Ex.
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`2029, ¶6; Ex. 2030, ¶6; Ex. 2031, ¶6. As another example, ZTX's web site
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`(www.ztetx.com) redirects a visitor to Petitioner's site (www.zteusa.com) if the
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`visitor chooses the US as the home country. Ex. 2032, ¶¶ 3-5. Similarly,
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`clicking the "About Us" tab on ZTX's web page redirects a visitor to a page
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`describing ZTE Corporation. Id., ¶ 6. And ZTX's news page reports events
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`about ZTE group in general. Id., ¶ 7. Hence, there is no real separation among
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`ZTX, Petitioner and ZTE Corporation.
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`Petitioner and its counsel were also aware that ZTX had a real interest in
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`invalidating the '550 patent at issue in this proceeding. Petitioner admits that at
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`least some of ZTX's regular business activities are accused of infringement
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`(Ex. 2028, 8:4-12); and no motions were ever filed or granted to dismiss ZTX
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`from the infringement suit. ZTX, like Petitioner and ZTE Corp., also asserted
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`invalidity as a defense to infringement. Ex. 2029-9; Ex. 2030-9; Ex. 2031-9.
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`Hence, given (1) blurred corporate identities that allow ZTX to assert
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`influence over the IPR, (2) the indisputable fact that ZTX, being a co-defendant
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`with infringement exposure, had a real interest in invalidating the patent, and
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`(3) the Board's past decisions, Petitioner should have named ZTX as an RPI
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`even before AIT, as it did in numerous similar circumstances.
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`The mistaken application of the law to facts at the time of filing does not
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`demonstrate good cause for late correction of the petition. Reflectix, Paper 18
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`at 14-15. Moreover, in this case, good cause also does not exist because of
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`Petitioner's dilatory conduct: It waited almost five months after the AIT
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`decision and nearly four months after receiving the POR before bringing the
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`issue to the Board's attention, with no explanation for the delay. That back-
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`dating will allow Petitioner to circumvent 315(b) further detracts from the
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`requisite showing of good cause.
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`3.
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`Back-dating the Petition to Circumvent § 315(b) Is Not
`In the Interests of Justice Because It Prejudices Patent
`Owner and Encourages Gamesmanship
`Petitioner implies that its request is justified because Patent Owner
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`allegedly would suffer no harm. Mot. 9-10. That is incorrect. First, allowing
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`Petitioner to circumvent the 315(b) statutory deadline would encourage the
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`very "gamesmanship related to the timing of disclosing real parties-in-interest"
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`with which Judge Boucher was concerned, demolish the AIA procedural
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`safeguard, and undermine the AIA's goal for "just" resolution of every
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`proceeding. Elekta, Paper 19 at 26-27; 37 C.F.R. § 42.1(b). This is because
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`under the AIA, Petitioner is not entitled to a filing date until it correctly names
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`all RPIs. By back-dating the petition to antedate the 315(b) bar date and being
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`able to preview Patent Owner's patentability arguments to which it is not
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`entitled, Petitioner gains a material advantage and Patent Owner suffers a
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`corresponding material harm. Cf. Mexichem Amanco Holdings S.A. de C.V., v.
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`Honeywell Int'l, Inc., IPR2015-01309, Paper 25 at 4-5 (PTAB Apr. 7, 2016)
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`(allowing resetting filing date instead of termination because no 315(b)
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`deadline is implicated, Petitioner thus gained no material advantage and Patent
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`Owner suffered no material disadvantage). .
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`Second, Petitioner fails to account for the prejudice that Patent Owner
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`already suffered. Patent Owner had to spend resources investigating the RPI
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`issue and diverting space in the POR to discuss the RPI issue that could have
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`been used on technical matters. By completely omitting ZTX, "[t]here is . . .
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`no way to know whether a 35 U.S.C. § 315(e) bar on subsequent petitions
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`would have been conceded if [Patent Owner] had never raised the issue."
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`Reflectix, Paper 18 at 16. Had Petitioner succeeded in its tactic, Patent Owner
`
`would have to litigate in the district court the estoppel issue, if not again the
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`validity issue itself, even if it prevails in this proceeding. Petitioner stood to
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`gain a significant strategic benefit from its tactic and it must now accept the
`
`consequence.
`
`Petitioner's unreasonable delay in bringing this motion caused further
`
`harm and exemplifies the timing gamesmanship that Judge Boucher criticized.
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`AIT was available in July 2018, which, if as Petitioner asserts triggered the re-
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`evaluation, should have alerted it that its petition was deficient then. Mot. 8.
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`But Petitioner did not discuss the current motion with Patent Owner until Nov.
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`20, 2018, by which time Patent Owner had already incurred costs to take and
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`defend deposition(s) and prepare for POR in IPR2018-00111, to take
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`deposition and prepare POR in IPR2018-00425 and to prepare POPR in
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`IPR2018-01076. Petitioner never addressed these avoidable harm or explained
`
`the long delay between the alleged triggering event (the AIT ruling) and its
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`request for relief. The timing of the events suggests that despite knowledge of
`
`a deficient petition, Petitioner waited until it fully evaluated the Patent Owner's
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`responses and concluded that it might not prevail before seeking relief that it
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`knew no other panel has ever granted (Ex. 2028, 9:17-24).
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`4.
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`Petitioner's Extraordinary Request Finds No Support In
`The Board's Past Decisions
`Petitioner argues that the Board's decisions in Elekta and Lumentum
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`support its request. Neither is on point. In Lumentum, Petitioner correctly
`
`identified all the real parties-in-interest at the time of the filing. Lumentum
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`Holdings, Inc. v. Capella Photonics, Inc., IPR2015-00739, Paper 38 at 2-3
`
`(PTAB, Mar. 4, 2016). Later, due to reorganization, new real parties-in-
`
`interest emerged but Petitioner failed to name the new RPIs within the requisite
`
`21 days. Id. The Board thus had to decide whether Petitioner may belatedly
`
`add RPIs that did not exist at the time of the petition without losing the
`
`original filing date. Given these facts, unsurprisingly, the Lumentum panel
`
`allowed Petitioner to retain the original filing date because the petition met all
`
`the requirements for a filing date at the time of the filing. In contrast, here, the
`
`petition, as filed, was deficient and no filing date should have been accorded;
`
`no events have changed ZTX's corporate status. 35 U.S.C. § 312(a); 37 C.F.R.
`
`§§ 42.106, 42.104, 42.8.
`
`Elekta, a split decision, likewise involved a different fact pattern. Unlike
`
`here, in Elekta, "there [was] no evidence that conforming the Petition’s filing
`
`date to when Petitioner satisfied the specified requirements would have any
`
`meaningful impact because no time bar under 35 U.S.C. § 315(b) would be
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`implicated by such a change." IPR2015-01401, Paper 19 at 26 (Boucher, J.,
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`dissent). Moreover, Judge Boucher criticized the majority's decision and
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`reasoning as "unwarranted and unnecessarily subvert[ing] the Board's rule,"
`
`and was troubled by the "wide ramifications" that may result from the decision:
`
`Various strategic considerations may encourage concealment by
`petitioners, or other forms of gamesmanship related to the timing
`of disclosing real parties-in-interest, that otherwise are
`discouraged by our current rules. The majority’s deviation from
`the Board’s rules is unneeded in this case, and the Board has other
`mechanisms available to it to revisit the overall framework of
`those rules. Id. at 26-27.
`Judge Boucher's concern is prescient as this is what Petitioner is doing: It
`
`deliberately omitted ZTX as the RPI without conceding that ZTX would be
`
`later estopped from re-litigating the issue, and brought this motion only after it
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`had an opportunity to fully evaluate Patent Owner's responses in pending trials.
`
`Even if a change in law (there isn't one) justified accommodating timely
`
`reconsideration, this request is not timely: Petitioner waited almost five months
`
`after AIT and nearly 4 months after Patent Owner formally raised the issue to
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`seek the "reconsideration" (if its request can even be regarded as one). Further,
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`Petitioner's attempt to evade estoppel and the prejudice it caused Patent Owner
`
`(see § II.B.3) also does not satisfy the Elekta conditions that purportedly
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`justified back-dating (see Mot. 11).
`
`In situations similar to this trial, the Board has "consistently found that
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`any Petition corrected to disclose additional RPIs must be given a new filing
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`date." Corning Optical, IPR2014-00440, Paper 68 at 23-24 (collection of
`
`cases); Petroleum Geo-Services Inc., v. WesternGeco LLC, IPR2014-00678,
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`Paper 23 at 6 (PTAB Aug. 12, 2014); see also Mexichem, IPR2015-01309,
`
`Paper 25 (resetting petition date after naming additional RPIs even when
`
`315(b) deadline had not passed).
`
`This tradition continued even after AIT. Sirius, IPR2018-00689, Paper
`
`11 at 6-7 (rejecting Petitioner's request to amend RPI disclosures without
`
`changing the petition date); Fasteners, IPR2018-00741, Paper 32 at 5 (rejecting
`
`Petitioner's request to amend RPI disclosures because ruling otherwise "would
`
`be unfair to Patent Owner and would encourage gamesmanship by allowing
`
`petitioners to refrain from naming all RPIs until if and after such unnamed
`
`RPI" caused negative consequences). That is, AIT is not and should not be a
`
`get-out-of-jail-free card for petitioner to correct a calculated omission. Ruling
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`otherwise would afford Petitioner a material advantage and do Patent Owner a
`
`material harm because it sanctions a practice by which Petitioner reserves a
`
`filing date before the 315(b) bar date with a deficient petition and then finds an
`
`excuse to fix the petition later.
`
`C. The Board Should End the Proceeding With A Decision
`Having Estoppel Effect
`In its POR, Patent Owner requested that the Board terminate the trial
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`because the petition omitted ZTX as an RPI and back-dating the petition is not
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`allowed. By termination, Patent Owner means that the Board should end the
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`proceeding without reaching the technical merits of the petition. The question
`
`is whether the decision should have an estoppel effect, whether issued under 37
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`C.F.R. § 42.73(a) or § 42.72 (which does not appear applicable).
`
`For fairness, at this stage of the trial and given Petitioner's concession
`
`that the Petition intentionally omitted ZTX as an RPI, the proper remedy is a
`
`judgment with an estoppel effect on Petitioner. Specifically, by arguing for
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`termination, Petitioner is effectively abandoning its unpatentability contest,
`
`which should be construed as a request for adverse judgment. 37 C.F.R.
`
`§ 42.73(b)(4). If the requirements under 312(a) is not jurisdictional (see
`
`Lumentum), the Board has the authority to issue a judgment against Petitioner,
`
`ruling that it cannot prevail in its patentability challenge due to the defective
`
`filing before the 315(b) deadline. Simply dismissing the Petition would
`
`encourage gamesmanship by accused infringers who can intentionally file a
`
`deficient petition, force Patent Owner to spend considerable resources to
`
`defend the patent, and then withdraw the petition when it appears that its
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`challenge may not prevail.
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`Dated: December 13, 2018
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`Respectfully submitted,
`
`
`/Hong Zhong/
`
`H. Annita Zhong (Reg. No. 66,530)
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`CERTIFICATE OF SERVICE
`
`I hereby certify, pursuant to 37 C.F.R. section 42.6, that on December
`
`13, 2018, a complete copy of the foregoing document and Exhibits 2029-2032
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`were served upon the following, by ELECTRONIC MAIL:
`
`
`Charles M. McMahon (Reg. 44,926)
`cmcmahon@mwe.com
`Brian A. Jones (Reg. No. 68,770)
`bajones@mwe.com
`Thomas DaMario (Reg. No. 77,142)
`tdamario@mwe.com
`MCDERMOTT WILL & EMERY
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