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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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`SIRIUS XM RADIO INC.,
`Petitioner,
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`v.
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`FRAUNHOFER-GESELLSCHAFT ZUR FÖRDERUNG DER
`ANGEWANDTEN FORSCHUNG E.V.,
`Patent Owner.
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`
`___________________
`
`IPR2018-00689
`Patent 6,993,084 B1
`___________________
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`
`PATENT OWNER’S RESPONSE
`TO PETITIONER’S SUPPLEMENTAL BRIEF
`REGARDING REQUEST FOR REHEARING
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`
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`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`10681403
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`IPR2018-00689 (Patent 6,993,084 B1)
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`TABLE OF CONTENTS
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`Page
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`B.
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`THE BOARD CORRECTLY DENIED PETITIONER’S
`UNTIMELY AND IMPROPER REQUEST TO AMEND ITS RPI
`DISCLOSURES ........................................................................................... 1
`A.
`The Board’s Decision Was Not Based On Jurisdictional
`Grounds .............................................................................................. 1
`This Case Bears No Resemblance To Adello And Proppant,
`Where The Petitioners Diligently Sought To Correct Good-
`Faith Mistakes .................................................................................... 2
`The Proppant Factors Weigh Against Allowing Untimely
`Amendment ........................................................................................ 5
`Petitioner’s Rehearing Request Is Still Procedurally Improper ......... 7
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`C.
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`D.
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`I.
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`IPR2018-00689 (Patent 6,993,084 B1)
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`TABLE OF AUTHORITIES
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` Page(s)
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`Cases
`Adello Biologics LLC v. Amgen Inc.,
`Case PGR2019-00001, Paper 11 (PTAB Feb. 14, 2019) ......................... 1, 2, 3, 5
`Fasteners For Retail, Inc. v. RTC Ind. Inc.,
`Case IPR2018-00741, Paper No. 32 (Nov. 15, 2018) .......................................... 7
`Lumentum Holdings, Inc. v. Capella Photonics, Inc.,
`Case IPR2015-00739, Paper No. 38 (Mar. 4, 2016) ............................................. 2
`Proppant Express Investments, LLC v. Oren Technologies, LLC,
`Case IPR2017-01917, Paper 86 (PTAB Feb. 13, 2019) ..............................passim
`Statutes
`35 U.S.C. § 315(b) ................................................................................................. 5, 6
`35 U.S.C. § 315(e) ................................................................................................. 3, 6
`Other Authorities
`37 C.F.R. § 42.5 ..................................................................................................... 2, 4
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`IPR2018-00689 (Patent 6,993,084 B1)
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`Patent Owner Fraunhofer hereby responds to the supplemental brief filed by
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`Petitioner in support of its request for rehearing of the Board’s decision denying
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`institution in this case. See Paper No. 19 (“Supp. Br.”); Paper No. 12 (“Reh’g Req.”);
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`Paper No. 11 (“Decision”).
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`Petitioner’s supplemental brief fails to present any basis for reversing the
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`Board’s non-institution decision. Although Petitioner asserts that the Board’s recent
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`precedential opinions in Proppant and Adello now require a different result, those
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`cases presented strikingly different facts involving prompt correction of genuine
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`mistakes. Here, by contrast, Petitioner has demonstrated a clear lack of diligence and
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`a protracted refusal to update its disclosures indicative of gamesmanship, bad faith,
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`and attempted circumvention of the rules. And its recent unauthorized amendment
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`is over a year too late. Because Petitioner’s supplemental brief fails to demonstrate
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`any error in the Board’s decision—much less an “abuse of discretion” that could
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`possibly warrant rehearing—Petitioner’s request for rehearing should be denied.
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`I.
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`THE BOARD CORRECTLY DENIED PETITIONER’S UNTIMELY
`AND IMPROPER REQUEST TO AMEND ITS RPI DISCLOSURES
`A. The Board’s Decision Was Not Based On Jurisdictional Grounds
`Petitioner begins by pointing to statements in Adello and Proppant to the
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`effect that the Board has discretion to permit correction of RPI defects in appropriate
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`circumstances because such defects are “not jurisdictional.” Supp. Br. at 2-3. But the
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`Board’s decision in this case never said otherwise; indeed, the decision expressly
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`recognized that RPI correction is possible as a discretionary action under 37 C.F.R.
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`IPR2018-00689 (Patent 6,993,084 B1)
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`§ 42.5. See Decision at 7. In exercising its discretion here, the Board simply
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`concluded (correctly) that Petitioner had failed to establish that amendment was
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`warranted on the facts presented. This approach was fully consistent with both new
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`and old precedent. See, e.g., Adello at 5 (amendment of RPI may be proper as
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`“exercise of discretion” under § 42.5); Lumentum Holdings, Inc. v. Capella
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`Photonics, Inc., Case IPR2015-00739, Paper No. 38 at 7 (Mar. 4, 2016) (same).
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`B.
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`This Case Bears No Resemblance To Adello And Proppant, Where
`The Petitioners Diligently Sought To Correct Good-Faith Mistakes
`Petitioner further argues that amendment should be permitted here for the
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`same reasons as in Adello and Proppant. Yet this argument ignores the controlling
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`facts in those decisions that distinguish this case in multiple material respects.
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`For example, in Adello, the petitioners listed several RPIs in the original
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`petition (including “Amneal Pharmaceuticals, Inc.”) but inadvertently failed to
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`disclose another related RPI named “Amneal Pharmaceuticals LLC.” Adello at 2-3.
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`When the patent owner raised this issue, the petitioners “promptly investigated the
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`issue, and agreed that [the missing RPI] should have been listed.” Id. at 2. The
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`petitioners then diligently sought leave to file—and actually filed—a motion to
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`correct their mandatory notices. Id. at 2, 5. In that motion, the petitioners “expressly
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`represent[ed]” that the omission was “accidental.” Id. at 5. The Board found this
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`credible as the petitioners were represented by “different counsel” in the parallel
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`district court action. Id. Moreover, because the petitioners had acted diligently, the
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`IPR2018-00689 (Patent 6,993,084 B1)
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`Board did not need to expend resources analyzing and deciding the RPI status of the
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`missing entity. Id. at 4 (amendment was requested “before an institution decision
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`[was] made”). The petitioners even made a further showing of good faith by
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`voluntarily adding an additional RPI to their disclosures. Id. at 5. On these facts, the
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`Board found that the omission was simply a “human error” that was not motivated
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`by bad faith, gamesmanship, or an attempt to avoid estoppel rules. Id.
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`The petitioner in the Proppant case similarly demonstrated good faith through
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`its diligent actions. The petitioner there omitted the company “Liberty” from its
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`original RPI disclosures and the Board initially confirmed this omission was proper.
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`Proppant at 2. However, after the Federal Circuit issued two further decisions
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`regarding RPI issues, the Board sua sponte raised the question of whether Liberty
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`was in fact an RPI under the standards set forth in those cases. Id. at 4. Within six
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`days, the petitioner sought leave to update its mandatory notices to identify Liberty
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`as an RPI. Id. at 5. The Board granted that request and the petitioner filed updated
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`notices the very same day, including an express representation that Liberty would
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`be “bound by 35 U.S.C. § 315(e)’s estoppel provisions.” Id.
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`None of the operative facts in Adello and Proppant are remotely present here.
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`Petitioner listed only itself as RPI in its Petition, even though it was represented by
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`the same counsel in the parallel district court action where it had disclosed SXM
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`Holdings as a related party. See Ex. 2014. When Patent Owner pointed out this
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`IPR2018-00689 (Patent 6,993,084 B1)
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`obvious omission, Petitioner maintained that its original disclosure was proper and
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`sought to avoid having to correct the error. See Exs. 2034-35 (arguing that “neither
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`Sirius XM Holdings nor Liberty Media is a real party interest [sic]”); Exs. 2036-37
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`(arguing that Board “routinely grants requests to amend RPI disclosures” but without
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`actually seeking leave to amend). Petitioner never filed a motion to amend. Its reply
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`brief focused almost entirely on attempting to prove SXM Holdings was not an RPI.
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`Reply at 1-5. The single paragraph of argument on the amendment issue offered only
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`a conditional request to amend “if the Board considers Holdings” to be an RPI. Id.
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`at 5 (emphasis added). Petitioner’s cursory argument made little or no attempt to
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`satisfy the § 42.5 standard. And it made clear that the omission of SXM Holdings
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`was deliberate and intentional rather than inadvertent human error. Id.
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`Because Petitioner refused to simply add SXM Holdings as an RPI, the Board
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`was forced to fully analyze the RPI issue as part of its decision denying institution.
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`Decision at 3-6. It was only after the Board confirmed that SXM Holdings was
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`indeed an RPI that Petitioner made a belated attempt to show “good cause” to amend
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`under § 42.5. See Reh’g Req. at 7-15. Petitioner also launched a series of emails to
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`the Board seeking yet additional briefing and arguing that Petitioner “should have
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`been afforded the opportunity to amend those disclosures without any effect on the
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`filing date of the petitions.” Ex. 2038; see also Exs. 2039-40. Yet Petitioner still
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`maintained that its original omission of SXM Holdings was correct and sought leave
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`IPR2018-00689 (Patent 6,993,084 B1)
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`to amend only “in the event the Board considers Petitioner’s original identification
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`… inadequate.” Ex. 2039-40. Petitioner also submitted a request for Precedential
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`Opinion Panel review, which was denied. Paper No. 14.
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`Finally, on May 6, 2019—well over a year after it had filed its original
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`defective RPI disclosures—Petitioner finally filed amended disclosures naming
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`SXM Holdings as an RPI. Paper No. 21. The Board never granted Petitioner leave
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`to file these amendments and Petitioner did not file a motion seeking leave to do so.
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`The facts of this case are thus easily distinguished from those in Adello and Proppant
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`where a petitioner immediately amended to add an RPI that was omitted based on
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`human error or a change in law. By contrast, SXM Holdings was a clear RPI from
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`the beginning, and yet Petitioner deliberately resisted correction all along the way.
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`C. The Proppant Factors Weigh Against Allowing Untimely Amendment
`By the same token (and contrary to Petitioner’s arguments, Supp. Br. 3-7), the
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`factors set forth in Proppant do not suggest that the Board’s non-institution decision
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`should be reversed. Rather, the factors weigh against allowing amendment here.
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`First, Petitioner’s intentional omission of SXM Holdings was clearly an
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`“attempt[] to circumvent the § 315(b) bar [and] estoppel rules.” Proppant at 6.
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`Although Petitioner now tries to explain away the key admission in its Reply with a
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`selectively tailored quotation (Supp. Br. at 6-7), the full admission is unmistakable
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`on its face: “Further, Holdings and Liberty are not involved in the related litigation,
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`IPR2018-00689 (Patent 6,993,084 B1)
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`and thus there are no § 315(b) time bar or § 315(e) estoppel concerns.” Reply at 5
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`(emphasis added). In other words, SXM asserted that because SXM Holdings was
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`not named a defendant in the parallel district court action, the one-year § 315(b) time
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`bar had not yet started to run for SXM Holdings, nor would it be bound by any final
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`written decision in these proceedings. This is the exact opposite of what happened
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`in Proppant, where the petitioner promptly amended to disclose the missing RPI and
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`confirmed the RPI would be bound by the IPR outcome. Proppant at 5.
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`Moreover, Petitioner had ample motive to attempt to keep open the possibility
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`of a future IPR petition by SXM Holdings. At least one of the Petitions at issue here
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`was not actually filed with the statutorily required payment until one day after the
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`applicable § 315(b) deadline. See Case IPR2018-00690, Paper No. 12 at 27-33.
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`Thus, Petitioner certainly had a strategic reason to fight strenuously to preserve SXM
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`Holdings’ ability to file its own IPR petition, as a backup in case the Board should
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`ultimately reject the -00690 Petition as untimely. However, this is clearly not a valid
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`basis for refusing to timely disclose an otherwise proper RPI.
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`Petitioner’s intentional omission and prolonged refusal to amend also
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`demonstrate the second and third factors of “gamesmanship” and “bad faith,” as
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`explained above. Petitioner’s counsel clearly knew about SXM Holdings. Its status
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`as RPI was not a close call, nor did it turn on unexpected legal developments as in
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`Proppant. Failing to duly disclose an RPI until after “such unnamed RPI is the cause
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`IPR2018-00689 (Patent 6,993,084 B1)
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`for denying institution” is classic “gamesmanship.” See Fasteners For Retail, Inc. v.
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`RTC Ind. Inc., Case IPR2018-00741, Paper No. 32 at 5 (Nov. 15, 2018) (emphasis
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`added). And the fact that Petitioner completely reversed its position about SXM
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`Holdings’ ability to file its own future IPR petition only after the Board’s non-
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`institution decision (Reh’g Req. at 5) strongly reflects bad faith.
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`Petitioner’s protracted delay also satisfies the fourth factor of “prejudice.”
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`Had it not been for Petitioner’s failure to timely disclose SXM Holdings, these
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`proceedings would have been much further advanced by now (or perhaps even
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`completed). Instead, Petitioner has continued to multiply the burden of these
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`proceedings with countless rounds of additional briefing and attempted new issues.
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`D.
`Petitioner’s Rehearing Request Is Still Procedurally Improper
`Finally, the Proppant and Adello cases are procedurally inapposite, as neither
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`was decided under the stringent standard for rehearing requests. As Patent Owner
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`previously noted in its response to the rehearing requests, Petitioner was required to
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`specifically set forth the “matters the party believes the Board misapprehended or
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`overlooked,” as well as “the place where each [such] matter was previously
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`addressed in a motion, an opposition, or a reply.” 37 C.F.R. § 42.71(d). Petitioner
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`simply failed to comply with this rule. Petitioner cannot fairly be allowed a do-over
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`with new RPI arguments after losing on the arguments it originally chose to present.
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`Date: May 16, 2019
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`IPR2018-00689 (Patent 6,993,084 B1)
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`Respectfully submitted,
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`
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`/s/ Ben J. Yorks
`Ben J. Yorks (Reg. No. 33,609)
`Babak Redjaian (Reg. No. 42,096)
`David McPhie (Reg. No. 56,412)
`IRELL & MANELLA LLP
`1800 Avenue of the Stars, Suite 900
`Los Angeles, CA 90067
`Tel: (310) 277-1010
`Fax: (310) 203-7199
`Email: FraunhoferIPRs@irell.com
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`IPR2018-00689 (Patent 6,993,084 B1)
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6, the undersigned certifies that on May 16, 2019,
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`a copy of the foregoing document PATENT OWNER’S RESPONSE TO
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`PETITIONER’S SUPPLEMENTAL BRIEF REGARDING REQUEST FOR
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`REHEARING and EXHIBITS 2034-2040 was served, by electronic mail, as
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`agreed to by the parties, upon the following:
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`KRAMER LEVIN NAFTALIS & FRANKEL LLP
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`Jonathan Caplan (Reg. No. 38,094)
`JCaplan@kramerlevin.com
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`Mark Baghdassarian (pro hac vice)
`mbaghdassarian@kramelevin.com
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`Shannon Hedvat (Reg. No. 68,417)
`shedvat@kramerlevin.com
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`Jeffrey H. Price (Reg. No. 69,141)
`jprice@kramerlevin.com
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`
`
`
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`
` /s/ Susan Langworthy
`By:
` Susan Langworthy
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`10681403
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