`
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`GOOGLE LLC, ZTE (USA), INC., SAMSUNG ELECTRONICS CO., LTD.,
`LG ELECTRONICS INC., HUAWEI DEVICE USA, INC.,
`HUAWEI DEVICE CO. LTD., HUAWEI TECHNOLOGIES CO. LTD.,
`HUAWEI DEVICE (DONGGUAN) CO. LTD.,
`HUAWEI INVESTMENT & HOLDING CO. LTD.,
`HUAWEI TECH. INVESTMENT CO. LTD., and
`HUAWEI DEVICE (HONG KONG) CO. LTD.,
`Petitioner
`
`v.
`
`Cywee Group Ltd.
`(record) Patent Owner
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`
`PETITIONER GOOGLE’S OPPOSITION TO PATENT OWNER’S
`OBJECTION AND MOTION TO TERMINATE PROCEEDINGS UNDER
`UNITED STATES CONSTITUTION ARTICLE II, SECTION 2, CLAUSE 2
`
`
`
`
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`I.
`II.
`
`TABLE OF CONTENTS
`INTRODUCTION ........................................................................................... 1
`ARGUMENT ................................................................................................... 1
`A.
`CyWee’s Motion Is Inconsistent with Arthrex...................................... 2
`B.
`CyWee’s Motion Is Inconsistent with the Statute and
`Regulations ............................................................................................ 3
`CyWee’s Motion Is Inconsistent with the Cited Supreme Court
`Cases ..................................................................................................... 6
`III. CONCLUSION ................................................................................................ 9
`
`
`C.
`
`
`
`
`
`
`
`1
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`
`TABLE OF EXHIBITS
`
`Exhibit No.
`1001
`1002
`1003
`1004
`1005
`1006
`1007
`
`1008
`
`1009
`1010
`
`1011
`
`1012
`
`1013
`
`1014
`
`1015
`
`Description
`U.S. Pat. No. 8,552,978 (“the ’978 patent”).
`Declaration of Professor Majid Sarrafzadeh.
`C.V. of Professor Majid Sarrafzadeh.
`U.S. Pat. No. 7,089,148 (“Bachman”).
`U.S. Pat. App. Pub. 2004/0095317 (“Zhang”).
`U.S. Pat. 7,158,118 (“Liberty”).
`Return of Service for Cywee Group Ltd. v. Google, Inc., Case
`No. 1-18-cv-00571, (D. Del.).
`Return of Service for Cywee Group Ltd. v. Huawei Technologies
`Co., Inc. et al., Case No. 2-17-cv-00495, (E.D. Tex.).
`File History of U.S. Pat. App. 13/176,771
`Joint Claim Construction and Prehearing Statement in Cywee
`Group Ltd. v. Samsung Electronics Co. Ltd. et al., Case No. 2-
`17-cv-00140, (E.D. Tex.).
`Ex. D to Complaint of April 16, 2018 in Cywee Group Ltd. v.
`Google, Inc., Case No. 1-18-cv-00571 (D. Del.).
`Email of August 3, 2018 from Michael Shore to Luann
`Simmons.
`CyWee’s First Requests for Production of Documents in Cywee
`Group Ltd. v. Google, Inc., Case No. 1-18-cv-00571, (D. Del.).
`CyWee’s Opposition to Petitioner’s Motion for Joinder to Inter
`Partes Review IPR2018-01258 of February 8, 2019.
`CyWee’s Opp. to Defendants’ Motion to Stay Pending Inter
`Partes Review Proceedings in CyWee Group, Ltd. v. Samsung
`
`2
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`
`1016
`
`1017
`1018
`1019
`
`1020
`1021
`1022
`1023
`
`1024
`1025
`
`1026
`
`1027
`
`1028
`
`1029
`
`1030
`
`Elec. Co., Ltd., Case 2:17-cv-00140-WCB-RSP (E.D. Tex. Jan.
`25, 2019).
`Complaint of April 16, 2018 in Cywee Group Ltd. v. Google,
`Inc., Case No. 1-18-cv-00571 (D. Del.).
`U.S. Pat. Pub. No. US 2010/0312468 Al (“Withanawasam”).
`Rebuttal Declaration of Professor Majid Sarrafzadeh
`Deposition Transcript of Dr. Joseph LaViola in IPR2018-01257,
`-01258 (May 22, 2019)(“LaViola Tr.”).
`U.S. Pat. No. 7,356,361 (“Hawkins”).
`U.S. Pat. No. 7,630,741 (“Siddiqui”).
`U.S. Pat. No. 8,738,103 (“Puente Baliarda”)
`USPTO PATFT database search results (search string
`“ref/7089148”).
`U.S. Pat. Pub. 2018/0153587 A1 (“van der Walt”).
`Deposition Transcript of Joseph LaViola in CyWee Group Ltd.,
`v. Huawei Device Co. Ltd., CASE NO. 2017-cv-00495-WCB-
`RSP (E.D. Tex. September 25, 2018).
`Complaint, CyWee Group Ltd., v. Google, Inc. 1:18-cv-00571
`(D. Del. Apr. 16, 2018).
`First Amended Complaint, CyWee Group Ltd. v. LG Electronics,
`Inc., 3:17-cv- 01102 (S.D. Cal. Oct. 6, 2017).
`First Amended Complaint, CyWee Group Ltd. v. Samsung
`Electronics Co., Ltd., 2:17-cv-00140 (E.D. Tex. Mar. 3, 2017).
`Complaint, CyWee Group Ltd. v. ZTE Corp., 3:17-cv-02130
`(S.D. Cal. Oct. 17, 2017)
`About the Android Open Source Project,
`https://source.android.com
`
`3
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`
`1031
`
`1032
`
`1033
`
`1034
`
`1035
`
`1036
`
`1037
`
`1038
`1039
`
`1040
`
`1041
`
`1042
`1043
`
`1044
`
`Android Is For Everyone, Enabling Opportunity, available at
`https://www.android.com/everyone/enabling-opportunity/
`Android Is For Everyone, Facts available at
`https://www.android.com/everyone/facts/
`Official Blog, Hiroshi Lockheimer April 15, 2015, available at
`https://googleblog.blogspot.com/2015/04/android-has-helped-
`create-more-choice.html
`Memorandum Opinion and Order (Dkt. #250), CyWee v.
`Samsung, 2:17-cv-00140 (E.D. Tex. Nov. 7, 2018)
`PAXLICENSE.ORG, available at
`https://paxlicense.org/index.html
`PhoneArena.com, Phone Manufacturers, available at
`www.phonearena.com/phones/manufacturers
`PhoneArena.com, Google Pixel Rivals and Competitors,
`available at https://www.phonearena.com/phones/Google-Pixel-
`2_id10584/rivals
`Declaration of Collin W. Park
`Screenshot of Adobe Acrobat Creation and Modified Date
`Properties for Exhibit 2021.
`Search results from European Patent Office Web site
`(https://worldwide.espacenet.com) for applicant CyWee, in order
`of ascending priority date.
`Search results from U.S.P.T.O. Web site assignee database for
`assignee CyWee.
`U.S. Pat. No. 8,041,860.
`[SEALED] Second Deposition Transcript of Dr. Joseph LaViola
`in IPR2018-01257, -01258 (August 13, 2019)(“2nd LaViola
`Tr.”).
`Third Declaration of Majid Sarrafzadeh
`
`4
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`
`1045
`
`1046
`1047
`1048
`
`1049
`
`1050
`
`1051
`
`1052
`
`1053
`1054
`
`Apple Press Release, Apple Announces the New iPhone 3GS—
`The Fastest, Most Powerful iPhone Yet, June 8, 2009,
`https://www.apple.com/newsroom/2009/06/08Apple-
`Announces-the-New-iPhone-3GS-The-Fastest-Most-Powerful-
`iPhone-Yet/
`U.S. Pat. No. 8,441,438
`Exhibit 1014 from IPR2019-00143.
`[PUBLIC-REDACTED] Second Deposition Transcript of Dr.
`Joseph LaViola in IPR2018-01257, -01258 (August 13,
`2019)(“2nd LaViola Tr.”).
`Transcript of Deposition of Collin W. Park (August 21, 2019)
`(Redacted version of Ex. 2045)
`Plaintiff’s Motion for Leave to Supplement Infringement
`Contentions and Expert Reports (Dkt. #326), CyWee v.
`Samsung, No. 2:17-cv-00140 (E.D. Tex. Feb. 11, 2019)
`Hearing Transcript, CyWee Group Ltd. Rule 202 Motion, C-1-
`cv-19-009205, County Court, Travis County, Texas (Dec. 5,
`2019)
`Michael Shore, A Motion Every Patent Owner Should File in
`Pending IPRs (Nov. 9, 2019)
`Redline Comparing Ex. 1052 to CyWee Motion
`Michael Shore, How Big Tech Killed the US Patent System
`(Sept. 6, 2019)
`
`
`
`
`
`
`
`
`
`5
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`INTRODUCTION
`I.
`Petitioner Google LLC (“Google”) submits this opposition to Patent Owner
`
`CyWee’s Motion to Terminate Proceedings Under U.S. Constitution, Art. II, Sec. 2,
`
`Cl. 2 (Paper 83, “Mot.”). CyWee’s motion appears to be an attempt to extend the
`
`Federal Circuit’s Arthrex decision beyond the limited category of IPRs “where final
`
`written decisions were issued and where litigants present an Appointments Clause
`
`challenge on appeal”—the limited class of proceedings to which Arthrex expressly
`
`cabined its holding. Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320, 1340
`
`(Fed. Cir. 2019). In so arguing, CyWee apparently seeks to extend the holding in
`
`Arthrex against all pending IPRs, based solely on the agency’s act of rendering an
`
`institution decision. CyWee’s argument is doubly wrong. First, the instant
`
`proceeding is not one in which a “final written decision[] w[as] issued” before
`
`Arthrex was decided. Id. Second, even if it were, the Federal Circuit in Arthrex
`
`expressly considered the constitutionality of the institution decision and expressly
`
`held that “on remand the decision to institute is not suspect; we see no constitutional
`
`infirmity in the institution decision as the statute clearly bestows such authority on
`
`the Director pursuant to 35 U.S.C. § 314.” Id. (emphases added). CyWee’s motion
`
`should be denied.
`
`II. ARGUMENT
`CyWee’s motion is littered with assertions that are inconsistent with Arthrex
`
`
`
`1
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`(§ A, infra), inconsistent with the statute and regulations (§ B, infra), and
`
`inconsistent with the very Supreme Court decisions it cites (§ C, infra).
`
`A. CyWee’s Motion Is Inconsistent with Arthrex
`
`The Board can simply deny CyWee’s motion based on Arthrex alone. In
`
`Arthrex, the Federal Circuit held that Administrative Patent Judges (“APJs”) were
`
`principal officers who were not properly appointed under the Appointments Clause
`
`of the Constitution, and remedied the problem by severing the portion of the Patent
`
`Act restricting removal of APJs. 941 F.3d at 1325. Having thus remedied the
`
`constitutional problem for IPRs that were still pending before the Board, the Federal
`
`Circuit in Arthrex expressly held that “the impact of this case” was “limited” to the
`
`subset of IPRs “where final written decisions were issued [before Arthrex issued]
`
`and where litigants present an Appointments Clause challenge on appeal.” Id. at
`
`1340 (emphasis added). Regarding the institution decision itself, Arthrex explained
`
`that “the decision to institute is not suspect; we see no constitutional infirmity in the
`
`institution decision as the statute clearly bestows such authority on the Director
`
`pursuant to 35 U.S.C. § 314.” Id. (emphases added).
`
`CyWee’s motion is directly contrary to Arthrex’s holdings. First, the instant
`
`proceeding is not one in which a “final written decision[] w[as] issued” prior to
`
`Arthrex being decided; rather, the instant proceeding was pending at the Board at the
`
`time Arthrex remedied the statute and the proceeding still remains pending prior to
`
`2
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`any final written decision. Second, CyWee’s argument (Mot. 4) that the “institution
`
`decision is . . . void from its inception” and “[t]he only option . . . is a remand to
`
`have the matter reheard in its entirety”, is flatly inconsistent with Arthrex’s express
`
`holding that “on remand the decision to institute is not suspect; we see no
`
`constitutional infirmity in the institution decision as the statute clearly bestows such
`
`authority on the Director pursuant to 35 U.S.C. § 314.” Arthrex, 941 F.3d at 1340.
`
`CyWee’s motion misleadingly fails to even acknowledge that Arthrex considered
`
`and confirmed the ongoing validity of institution decisions on the basis of the
`
`Director’s independent authority under § 314.1
`
`Because Arthrex expressly refutes CyWee’s arguments, CyWee’s motion should
`
`be denied.
`
`B. CyWee’s Motion Is Inconsistent with the Statute and Regulations
`
`The statute and regulations shed further light on why the Federal Circuit in
`
`Arthrex found “no constitutional infirmity in the institution decision.” 941 F.3d at
`
`
`1 CyWee’s motion, including its key assertion at page 4, is a substantial
`
`reproduction of pro hac counsel Michael Shore’s publication, dated November 9,
`
`2019, A Motion Every Patent Owner Should File in Pending IPRs (Ex. 1052). See
`
`Ex. 1053 (redline comparing the texts of CyWee’s motion and Shore’s
`
`publication).
`
`3
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`1340. As Arthrex explained, “the statute clearly bestows such authority on the
`
`Director pursuant to 35 U.S.C. § 314.” Id.; see id. at 1331 (“the Director has the
`
`independent authority to decide whether to institute an inter partes review”) (citing
`
`35 U.S.C. § 314(a)).
`
`Under § 314(a), the Director can singlehandedly institute an inter partes review.
`
`See 35 U.S.C. § 314(a) (“The Director may not authorize an inter partes review to
`
`be instituted unless the Director determines . . . .”) (emphases added). In contrast to
`
`the institution decision, the inter partes review itself must “be heard by at least 3
`
`members of the Patent Trial and Appeal Board.” 35 U.S.C. § 6(c).
`
`CyWee asserts that “[t]he Director of the USPTO has unconditionally delegated
`
`the authority to make institution decisions to APJs.” Mot. 1 (citing 37 C.F.R. § 42.4,
`
`§ 42.108). This assertion is wrong. First, the delegation is not unconditional because
`
`the cited regulations can be “waive[d] or suspend[ed]” by the Director or the agency.
`
`37 C.F.R. § 42.5(b). Second, the delegation is not limited “to APJs” as CyWee
`
`contends, but extends to the “Board” as a whole, which “institutes the trial on behalf
`
`of the Director.” Id. at § 42.4(a). The “Board,” of course, includes the “Director”
`
`himself. 35 U.S.C. § 6(a). “For petition decisions” (including institution decisions),
`
`the regulations define the “Board” to include even a single “Board member”
`
`(including the Director himself) “or employee acting with the authority of the
`
`Board.” 37 C.F.R. § 42.2. Thus, the Director retains authority to render institution
`
`4
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`decisions personally if he chooses. And, if the Director does not do so personally,
`
`each institution is still made “on behalf of the Director” under § 42.4(a).
`
`It is impossible to square CyWee’s assertion (Mot. 2) that “the Director has
`
`unconstitutionally abrogated any responsibility for institution determinations and
`
`delegated the Board’s APJs complete and unchecked power to make institution
`
`determinations”,2 with Arthrex’s statement that “the Director has the independent
`
`authority to decide whether to institute an inter partes review.” 941 F.3d at 1331.
`
`The institution decision in Arthrex was issued by APJs “on behalf of the Director”
`
`under 37 C.F.R. § 42.4(a) rather than by the Director himself,3 and yet the Federal
`
`Circuit in Arthrex saw “no constitutional infirmity in the institution decision as the
`
`statute clearly bestows such authority on the Director.” 941 F.3d at 1340. Thus,
`
`
`2 While CyWee argues here that APJs have “unchecked power” and lack any
`
`“oversight” by the Director (Mot. 2), CyWee has taken the opposite position in
`
`Texas state court (Ex. 1051 at 18). See also Ex. 1054 (pro hac counsel Michael
`
`Shore arguing that APJs “are not independent”).
`
`3 The institution decision Arthrex’s inter partes review IPR2017-00275 (Paper 7)
`
`was issued by a panel of APJs consisting of Judges Saindon, Grossman, and
`
`Goodson.
`
`5
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`what matters is that the Director retains the independent authority to render
`
`institution decisions if he chooses, not that he actually do so in a given case.
`
`C. CyWee’s Motion Is Inconsistent with the Cited Supreme Court
`Cases
`
`CyWee is wrong that “Nguyen, Ryder, and Lucia,” either individually or
`
`collectively, “require[]” the Board “to start this [IPR] process over from scratch,”
`
`including vacating the institution decision and issuing a new institution decision.
`
`Mot. 6. See Mot. 4 (arguing the “institution decision is . . . void from its inception”).
`
`Of the three Supreme Court decisions on which CyWee relies, the most recent
`
`and directly applicable is Lucia v. SEC, 138 S. Ct. 2044 (2018). In Lucia, the “case
`
`began when the SEC instituted an administrative proceeding against petitioner
`
`Raymond Lucia and his investment company.” Id. at 2049 (emphasis added); see
`
`17 C.F.R. § 201.200(a) (“Order instituting proceedings: notice and opportunity for
`
`hearing”). After institution, the task of conducting the “hearing” was delegated to
`
`an ALJ. Lucia, 138 S. Ct. at 2049-50. “After a hearing ends, the ALJ issues an
`
`‘initial decision.’” Id. at 2049 (citing 17 C.F.R. § 201.360(a)(1)). “The Commission
`
`can then review the ALJ’s decision,” and if the Commission opts against review,
`
`initial decision is “deemed the action of the Commission.” Id. In Lucia, the Court
`
`held that the particular APJ who “heard and decided Lucia’s case” was appointed
`
`“without the kind of appointment the [Appointments] Clause requires.” Id. at 2055.
`
`6
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`The “appropriate” remedy under Ryder (a case also cited by CyWee) was “a new
`
`‘hearing before a properly appointed’ official”—not a wholly new institution
`
`decision under § 201.200(a). Lucia, 138 S. Ct. at 2055 (quoting Ryder v. United
`
`States, 515 U. S. 177, 183, 185 (1995)) (emphasis added); see id. (“To cure the
`
`constitutional error, another ALJ (or the Commission itself) must hold the new
`
`hearing to which Lucia is entitled.”) (emphasis added). Notably, the Court ordered
`
`only a “new hearing,” and did not vacate and order a new institution decision.4
`
`The Supreme Court’s focus on the “hearing,” as opposed to preliminary matters
`
`like institution, is also apparent in the very quotation of Nguyen reproduced in
`
`CyWee’s motion. Mot. 4 (“This Court succinctly observed: ‘If the statute made him
`
`
`4 Quoting this part of Lucia, the Federal Circuit in Arthrex explained that “when a
`
`judge has heard the case and issued a decision on the merits, ‘[h]e cannot be
`
`expected to consider the matter as though he had not adjudicated it before. To cure
`
`the constitutional error, another ALJ . . . must hold the new hearing.’” Arthrex, 941
`
`F.3d at 1340 (quoting Lucia, 138 S. Ct. at 2055) (emphasis added). Thus, to trigger
`
`any possible need for a remedy in the first place, the improperly appointed judge
`
`must have “issued a decision on the merits,” not simply to have “heard the case.”
`
`The decision on the merits, for purposes of an IPR, is the “final written decision[]”
`
`as Arthrex expressly held, not simply the institution decision. Id. at 1340.
`
`7
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`incompetent to sit at the hearing, the decree in which he took part was unlawful,
`
`and perhaps absolutely void, and should certainly be set aside or quashed by any
`
`court having authority to review it by appeal, error or certiorari.’” (quoting Nguyen
`
`v. United States, 539 U.S. 69, 78 (2003), citing American Constr. Co. v. Jacksonville,
`
`T. & K.W.R. Co., 148 U.S. 372, 387 (1893)) (emphasis added).
`
`As applied to IPRs, a “hearing” only exists after an IPR has been instituted. The
`
`statute refers to an “inter partes review” being “heard by at least 3 members of the
`
`Patent Trial and Appeal Board.” 35 U.S.C. § 6(c) (emphasis added). As discussed
`
`above, this 3-person requirement exists only for instituted reviews, not institution
`
`decisions under § 314(a). Moreover, the statute authorizes an “oral hearing” under
`
`regulations prescribed by the Director, id. at § 316(a)(10) (emphasis added), which
`
`again takes place only in instituted reviews as provided in the Board’s scheduling
`
`order upon institution, see 37 C.F.R. § 42.70.
`
`Consistent with the foregoing, the Federal Circuit in Arthrex instructed only that
`
`“a new panel of APJs must be designated to hear the inter partes review anew on
`
`remand.” Arthrex, 941 F.3d at 1340. The court did not disturb the institution
`
`decision and saw “no error in the new panel proceeding on the existing written
`
`record.” Id. Thus, given that Arthrex did not disturb the institution decision and did
`
`not require reopening of discovery and briefing, see id., CyWee is wrong to assert
`
`that the Board must “start this [IPR] process over from scratch.” Mot. 6.
`
`8
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`
`Because Nguyen, Ryder, and Lucia each focused their remedies only on a new
`
`“hearing,” and because Lucia itself did not vacate the SEC’s institution decision,
`
`CyWee is wrong that a successful Appointments Clause challenge (which CyWee
`
`has not shown) would require vacating this Board panel’s institution decision.
`
`III. CONCLUSION
`For the foregoing reasons, CyWee’s motion to terminate should be denied.
`
`
`
`Dated: January 3, 2020
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`/Andrew S. Baluch/
`Andrew S. Baluch (Reg. No. 57,503)
`
`
`
`
`9
`
`
`
`IPR2018-01257
`Patent No. 8,552,978
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that the foregoing Reply on Motion to Seal was
`
`served by electronic mail on Tuesday, December 31, 2019, on the following counsel:
`
`Counsel for CyWee:
`Jay Kesan
`
`jay@jaykesan.com;
`Cecil Key
`
`cecil@keyiplaw.com
`Ari Rafilson
`arafilson@shorechan.com;
`Michael Shore
`mshore@ShoreChan.com
`
`Counsel for ZTE:
`James R. Sobieraj jsobierah@brinksgilson.com
`Yeuzhong Feng
`yfeng@brinksgilson.com
`Andrea Shoffstall ashoffstall@brinksgilson.com
`ZTE_CyweeIPRs@brinksgilson.com
`
`
`Counsel for Samsung:
`Naveen Modi
`Chetan Bansal
`
`PH-Samsung-Cywee-IPR@paulhastings.com
`
`
`Counsel for LG:
`Collin Park
`Andrew Devkar
`Jeremy Peterson
`Adam Brooke
`
`collin.park@morganlewis.com
`andrew.devkar@morganlewis.com
`jeremy.peterson@morganlewis.com
`adam.brooke@morganlewis.com
`MLB_CyweevsLGE@morganlewis.com
`
`Counsel for Huawei:
`Kristopher L. Reed HuaweiCywee@kilpatricktownsend.com
`Benjamin M. Kleinman
`Norris P. Boothe
`
`Dated: January 3, 2020
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`/Andrew S. Baluch/
`Andrew S. Baluch (Reg. No. 57,503)
`
`10
`
`