UNITED STATES PATENT AND TRADEMARK OFFICE
`______________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________
`MICROSOFT CORPORATION,
`Petitioner,
`v.
`SAINT REGIS MOHAWK TRIBE,
`Patent Owner.
`_______________________
`IPR2018-01607
`Patent 7,620,800
`__________________________
`
`PATENT OWNER SAINT REGIS MOHAWK TRIBE’S SUR-REPLY TO
`PETITIONER MICROSOFT CORPORATION’S REPLY TO PATENT
`OWNER’S PRELIMINARY RESPONSE TO MICROSOFT’S PETITION
`FOR INTER PARTES REVIEW
`
`
`
`
`
`
`
`
`
`______________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________
`MICROSOFT CORPORATION,
`Petitioner,
`v.
`SAINT REGIS MOHAWK TRIBE,
`Patent Owner.
`_______________________
`IPR2018-01607
`Patent 7,620,800
`__________________________
`
`PATENT OWNER SAINT REGIS MOHAWK TRIBE’S SUR-REPLY TO
`PETITIONER MICROSOFT CORPORATION’S REPLY TO PATENT
`OWNER’S PRELIMINARY RESPONSE TO MICROSOFT’S PETITION
`FOR INTER PARTES REVIEW
`
`
`
`
`
`
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`
`
`I. INTRODUCTION
`Microsoft’s legal or factual arguments concerning § 314(a) are incorrect and
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`irrelevant because binding Supreme Court and Federal Circuit precedents have
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`held that the Board may deny an IPR petition for any reason whatsoever.
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`Microsoft’s Reply is legally incorrect when it argues otherwise. There are no
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`constraints on the Board’s discretion to deny an IPR petition.
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`Similarly, Microsoft is factually incorrect when it states that Patent Owner
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`“provides no evidence that the United States, or Lockheed, would be unable to
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`obtain replacement products from another source should SRC stumble in the
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`market.” Patent Owner submitted a Declaration from Mark Wollgast, the
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`Engineering Program Manager at Lockheed Martin in charge of the Tactical
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`Reconnaissance and Counter-Concealment Radar (TRACER) program, that shows
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`that SRC/Directstream’s processor has “leading edge capabilities that Lockheed
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`Martin’s own procurement process showed no other vendor could match.”
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`Finally, denying Microsoft’s Petitions under § 314(a) would affirmatively
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`demonstrate that the Board will not allow large, multi-national corporations to use
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`the IPR process to efficiently infringe patents invented by small, innovative
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`American companies. This would significantly advance Director Iancu’s stated
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`agenda of restoring confidence in the U.S. patent system, helping inventors, and
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`incentivizing innovation.
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`
`
`1
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`
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`II. ARGUMENT
`A. The Board has the discretion to deny Microsoft’s IPR petitions for any
`reason at all.
`Microsoft misstates the law by arguing that it would be inappropriate for the
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`Board to “deny institution of an IPR based on a desire to protect the market
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`position of the Patent Owner’s non-exclusive licensee, or on any similar interest.”
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`Reply at 3.
`
`According to Congress, the Supreme Court, and the Federal Circuit, the Board
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`is never wrong when it denies an IPR petition.
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`In the America Invents Act, Congress granted the Director of the United States
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`Patent and Trademark Office the discretion to deny any IPR petition for any reason
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`by making this decision final and nonappealable. See 35 U.S.C. § 314(d) (“The
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`determination by the Director whether to institute an inter partes review under this
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`section shall be final and nonappealable”).
`
`The Supreme Court has thrice affirmed that the USPTO Director has complete
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`discretion to deny an IPR petition for any reason. Cuozzo Speed Techs., LLC v.
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`Lee, 136 S. Ct. 2131, 2140 (2016) (The “agency's decision to deny a petition is a
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`matter committed to the Patent Office's discretion.”); SAS Inst., Inc. v. Iancu, 138
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`S. Ct. 1348, 1353 (2018) (same); Oil States Energy Servs., LLC v. Greene's Energy
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`Grp., LLC, 138 S. Ct. 1365, 1371 (2018) (same).
`
`The Federal Circuit recently affirmed that the USPTO Director has “complete
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`
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`2
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`
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`discretion to decide not to institute review” because the “Director bears the
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`political responsibility of determining which [IPRs] should proceed.” Saint Regis
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`Mohawk Tribe v. Mylan Pharm. Inc., 896 F.3d 1322, 1327 (Fed. Cir. 2018). Thus,
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`Director Iancu may deny an IPR petition for any reason at all, including
`
`“administrative efficiency or based on a party’s status as a sovereign.” Id.
`
`B. SRC/DirectStream is an irreplaceable, sole-source supplier to Lockheed
`Martin on behalf of the U.S. Southern Command.
`Microsoft’s reply also misstates the facts when it states that Patent Owner
`
`“provides no evidence that the United States, or Lockheed, would be unable to
`
`obtain replacement products from another source should SRC stumble in the
`
`market.” Patent Owner submitted the Declaration of Mark Wollgast,1 which states:
`
`9. SRC/DirectStream is the sole source vendor of
`processors used in both our TRACER program and
`another program that requires extremely high-
`performance signal processing in a very limited SWAP
`(size, weight, and power) environment.
`…
`19. Currently SRC/DirecStream is under a sole source
`contract by Lockheed on behalf of the U.S. Southern
`Command to produce an even more advanced version of
`
`
`1 Mr. Wollgast’s declaration was submitted as EX 2032 in IPR2018-01594 and EX.
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`2033 in IPR2018-01599, -01600, -01601, -01602, -01603, -01604, -01605, -01606,
`
`-01607.
`
`
`
`3
`
`
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`the current TRACER processor expected to be delivered
`in 2019.
`20. This system will have five times the current
`processing capability while being just 1/3 the physical
`size and consuming half the power.
`21. These performance, size and power consumption
`improvements continue to demonstrate
`SRC/DirectStream’s leading edge capabilities that
`Lockheed Martin’s own procurement process has showed
`no other vendor could match.
`This evidence affirmatively shows that the United States and Lockheed would be
`
`unable to obtain a replacement processor from another source that matches the
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`capabilities of the SRC/DirectStream processor.
`
`C. Denying Microsoft’s Petitions under § 314 will advance Director Iancu’s
`agenda of restoring confidence in the U.S. Patent System.
`Abraham Lincoln firmly believed that the U.S. Patent System “added the fuel of
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`interest to the fire of genius, in the discovery and production of new and useful
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`things.” Director Iancu has said: “For our IP system to function as intended, patent
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`owners and the public must have confidence in the patent grant. And when patent
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`owners and the public have confidence in the patent grant, inventors are
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`encouraged to invent, investments are made, companies grow, jobs are created,
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`and science and technology advance.” https://www.uspto.gov/about-us/news-
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`updates/remarks-director-andrei-iancu-us-institute-peace.
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`To further these goals, Director Iancu has made it very clear that the USPTO
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`must “write, interpret, and administer patent laws” to help inventors and innovative
`4
`
`
`
`
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`companies by incentivizing innovation:
`
`Here’s a start: when we write, interpret, and administer
`patent laws, we must consistently ask ourselves "Are we
`helping these inventors?" Whether it’s an individual
`tinkering in her garage, or a team at a large corporation,
`or a laboratory on a university campus, we must ask
`ourselves "Are we helping them? Are we incentivizing
`innovation?
`https://www.uspto.gov/about-us/news-updates/remarks-director-andrei-iancu-us-
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`chamber-commerce-patent-policy-conference.
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`But, as it currently stands, Microsoft and other large companies refuse to
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`license any patents, even when they know they infringe, because they believe the
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`IPR process provides them a get-out-of-jail-free card. Whether true or not, this
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`perception must be changed so that innovators can license their patents for fair
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`value without having to spending years and tens of millions of dollars on litigation.
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`Denying Microsoft’s Petitions under § 314(a) would affirmatively demonstrate
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`to the market that the Board will no longer allow corporations to abuse the IPR
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`process in order to efficiently infringe the patents of small, innovative companies.
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`This would go a long way to restoring the public’s confidence in U.S. patent grants
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`in furtherance of Director Iancu’s stated agenda.
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`
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`5
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`
`
`/Alfonso Chan /
`Alfonso Chan
`Reg. No. 45,964
`achan@shorechan.com
`Michael Shore*
`mshore@shorechan.com
`Christopher Evans*
`cevans@shorechan.com
`SHORE CHAN DEPUMPO LLP
`901 Main Street, Suite 3300
`Dallas, TX 75202
`Tel: (214) 593-9110
`Fax: (214) 593-9111
`
`Attorneys for Patent Owner
`Saint Regis Mohawk Tribe
`
`
`
`
`
`Date: March 6, 2019
`
`
`
`
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` Respectfully submitted,
`
`
`
`
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`
`6
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`
`
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. §§ 42.6(e)(4) and 42.25(b), the undersigned certifies that
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`on March 6, 2019, a complete copy of Patent Owner Saint Regis Mohawk Tribe’s
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`Sur-Reply To Petitioner Microsoft Corporation’s Reply To Patent Owner’s
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`Preliminary Response To Microsoft’s Petition For Inter Partes Review was filed
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`electronically through the Patent Trial and Appeal Board’s PTABE2E System and
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`provided, via electronic service, to the Petitioner by serving the correspondence
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`address of record as follows:
`
`
`Joseph A. Micallef
`jmicallef@sidley.com
`Scott M. Border
`sborder@sidley.com
`SIDLEY AUSTIN LLP
`1501 K Street N.W.
`Washington, DC 20005
`
`Jason P. Greenhut
`jgreenhut@sidley.com
`SIDLEY AUSTIN LLP
`1 South Dearborn
`Chicago, IL 60603
`
`
`/Alfonso Chan/
`Alfonso Chan
`Reg. No. 45,964
`Phone: 214-593-9118
`
`
`
`
`
`
`
`
`
`Dated: March 6, 2019
`
`
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`
`
`7
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`
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