UNITED STATES PATENT AND TRADEMARK OFFICE
`
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`______________
`
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`OMNI MEDSCI, INC.,
`Patent Owner.
`
`______________
`
`
`U.S. Patent No. 9,651,533
`
`IPR Case No.: IPR2019-00913
`
`
`______________
`
`
`
`
`
`
`PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY
`PURSUANT TO BOARD’S SEPTEMBER 24, 2019 ORDER
`
`
`
`
`
`
`
`______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`______________
`
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`OMNI MEDSCI, INC.,
`Patent Owner.
`
`______________
`
`
`U.S. Patent No. 9,651,533
`
`IPR Case No.: IPR2019-00913
`
`
`______________
`
`
`
`
`
`
`PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY
`PURSUANT TO BOARD’S SEPTEMBER 24, 2019 ORDER
`
`
`
`
`
`
`
`Case No.: IPR2019-00913
`Patent No.: 9,651,533
`
`
`
`
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`Atty. Dkt. No.: OMSC0110IPR1
`
`Updated List of Exhibits
`
`No.
`2001
`
`2002
`
`2003
`2004
`2005
`2006
`2007
`
`2008
`2009
`2010
`
`2011
`2012
`2013
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`2014
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`2015
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`2016
`
`2017
`
`Description
`Apple Inc.’s Final Election of Asserted Prior Art, filed in
`Omni MedSci, Inc. v. Apple Inc., Case No. 2:18-cv-134-
`RWS (E.D. Tex), May 24, 2019
`Scheduling Order, filed in Omni MedSci, Inc. v. Apple Inc.,
`Case No. 2:18-cv-134-RWS (E.D. Tex), June 19, 2018
`Reserved
`Reserved
`Reserved
`US Patent App. Pub. No. 2013/0327966 A1 to Fidler et al.
`Claim Construction Memorandum Opinion and Order, filed
`in Omni MedSci, Inc. v. Apple Inc., Case No. 2:18-cv-134-
`RWS (E.D. Tex), June 24, 2019
`Reserved
`Reserved
`District Court Scheduling Notice, issued in Omni MedSci,
`Inc. v. Apple Inc., Case No. 2:18-cv-134-RWS (E.D. Tex),
`July 12, 2019
`Reserved
`Reserved
`District Court Docket Sheet, Omni MedSci, Inc. v. Apple
`Inc., Case No. 2:18-cv-134-RWS (E.D. Tex), October 3,
`2019
`Amend Docket Control Order, issued in Omni MedSci, Inc.
`v. Apple Inc., Case No. 2:18-cv-134-RWS, Dkt. 142 (E.D.
`Tex), March 29, 2019
`Petition challenging U.S. 8,888,701 to LeBoeuf et al., Apple
`Inc. v. Valencell, Inc., IPR2017-01704, Paper 2 (PTAB) June
`30, 2017
`Order, Apple Inc. and ZTE (USA) Inc., v. INVT SPE LLC,
`IPR2018-01478, Paper 8 (PTAB) January 30, 2019
`Civil Minutes, issued in Windy City Innovations, LLC v.
`Facebook, Inc., Case No. 16-cv-01730-YGR, Dkt. 148 (N.D.
`Cal) January 28, 2019
`
`i
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`
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`Atty. Dkt. No.: OMSC0110IPR1
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`No.
`2018
`
`Description
`Case Management and Pretrial Order, issued in Intri-Plex
`Technologies, Inc., v. NHK Intl. Corp., Case No. 17-cv-
`01097-EMC, Dkt. 114 (N.D. Cal) May 23, 2019
`
`
`
`ii
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`
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`Atty. Dkt. No.: OMSC0110IPR1
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`Congress designed the IPR as an efficient alternative to challenging patent
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`validity. Proceeding with these IPRs would be inefficient due solely to Petitioner’s
`
`delays. Petitioner waited an entire year to file parallel sets IPR petitions against the
`
`patents asserted in the lawsuit. At least eight months earlier, Petitioner knew about and
`
`identified the prior art asserted in the IPRs. The same invalidity issues (and more) raised
`
`in the IPRs will most certainly be tried in the Northern District of California before the
`
`October 2020 deadline for a Final Written Decision (“FWD”) in these IPRs. The
`
`lawsuit is more advanced than in NHK—the parties are in the summary judgment
`
`phase. The Board should deny the Petition under 35 U.S.C. § 314(a).
`
`I.
`
`The Board’s Finding of Facts
`
`In addition to the facts identified by the Board, and the facts identified by
`
`Petitioner in the Reply, the following facts are also relevant.
`
`1. All discovery ended on July 5, 2019. (Ex. 2014 at 3; Ex. 2013 at 25.)
`
`2. The parties filed summary judgment motions. (Ex. 2013, 27-28; Ex. 2014, 3.)
`
`3. In August 2019, the Eastern District of Texas transferred the lawsuit to the
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`Northern District of California, which completed transfer on October 2, 2019. (Ex.
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`2013 at 33.)
`
`4. The lawsuit is no longer stayed—the stay was lifted upon completion of the
`
`transfer. (Ex. 1057 at 1.)
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`1
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`II. Analysis of the Factors Identified by the Board
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`Atty. Dkt. No.: OMSC0110IPR1
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`A. The merits of Petitioner’s challenge
`
`As detailed in the Patent Owner’s Preliminary Response (“POPR”), Petitioner
`
`fails to meet its burden on both procedural and substantive grounds. This factor favors
`
`denying institution.
`
`B. Any differences between the claims challenged in the
`District Court and the Petition
`
`Petitioner admits that “[e]very claim asserted in the litigation has been
`
`challenged in the petition.” (Reply at 3.) This factor weighs in favor of denying
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`institution because, as discussed below, the district court will most likely resolve all
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`invalidity issues for all asserted claims before an FWD in these IPRs.
`
`C. The time between the District Court’s expected findings on
`validity and any expected Board findings on patentability
`
`The lawsuit is in the summary judgment phase and a jury decision on validity
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`most likely will issue several months before an FWD.
`
`The lawsuit is pending before Judge Gonzalez Rogers. The parties have filed
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`opening summary judgment briefs. Judge Gonzalez Rogers has not yet set a schedule
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`for the remaining briefs or a trial date, but, on January 28, 2019, in another patent case
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`pending before Judge Gonzalez Rogers, she scheduled summary judgment motions and
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`trial deadlines. She set trial 3.5 months after the deadline for summary judgment
`
`response briefs. (Ex. 2017.) In the present case, it is likely that trial will be completed in
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`2
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`the second quarter of 2020 and certainly no later than June 2020.
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`Atty. Dkt. No.: OMSC0110IPR1
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`The NHK case (NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752)
`
`supports this view. The underlying lawsuit was Intri-Plex Techs., Inc. v. NHK Intern.
`
`Corp., 3:17-cv-01097-EMC (N.D. Cal.). (Ex. 2018.) There, like Judge Gonzalez
`
`Rogers, the court set a trial date approximately three months after the summary
`
`judgment hearing. (Ex. 2018 at 1.)
`
`In NHK, the PTAB found “that the advanced state of the district court
`
`proceeding is an additional factor that weighs in favor of denying the Petition under §
`
`314(a).” NHK, Paper 8 at 20 (PTAB Sept. 12, 2018) (precedential). At the time the
`
`PTAB issued that decision, expert discovery in the district court case was ongoing and
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`summary judgment motions had not been filed. Id. in contrast, the litigation in the
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`present case is much more advanced than that in NHK. Even more so, then, than NHK,
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`“instituting a trial under the facts and circumstances here would be an inefficient use of
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`Board resources.” Id.
`
`Petitioner asserts it will “move to stay the district court proceedings” if the Board
`
`decides to institute. (Reply at 3.) It claims only a 62% chance of success in ordinary
`
`circumstances, citing a 2017 (pre-SAS) blog post (“Warriner,” Ex. 1059). The
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`circumstances here are not ordinary, and significantly decrease Petitioner’s chances. As
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`Warriner explains, “early filing of the IPR petition and motion to stay is especially
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`important.” (Ex. 1059 at 4.) Here, Petitioner waited until the one-year deadline to file its
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`3
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`Petition “Courts frequently deny motions to stay that are filed . . . close to the one-year
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`Atty. Dkt. No.: OMSC0110IPR1
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`deadline.” (Id.) See Int’l Test Solutions, Inc. v. Mipox Int’l Corp., 2017 U.S. Dist.
`
`LEXIS 54627, * 7, Case No. 16-cv-791 (N.D. Cal. Apr. 10, 2017) (denying motion for
`
`stay where IPR petition was filed “nearly a year after this lawsuit was filed”).
`
`Moreover, “[t]he motion to stay . . . should be filed immediately after filing the IPR
`
`petitions.” (Id.) But Petitioner has not sought a stay pending the IPRs in the six months
`
`that have passed since the filing of the Petitions.
`
`Warriner also says that factors such as “whether discovery is complete” and
`
`“whether claim construction briefing is complete and a Markman order has issued”
`
`weigh against granting a stay. (Ex. 1059 at 4.) Here, discovery is complete (Ex. 2014 at
`
`3; Ex. 2013 at 25) and the court has issued a Markman order (Ex. 2007). “Courts
`
`frequently deny motions to stay that are filed in a relatively late stage in the litigation
`
`. . . .” (Ex. 1059 at 4.) This weighs in favor of denying institution.
`
`D. Differences between grounds raised in District Court and
`the Petition
`
`Patent Owner admits that the grounds raised in the District Court overlap with
`
`the grounds raised in the Petition. (See Reply at 4.) Petitioner is challenging the validity
`
`of the patents with several additional grounds in litigation, including grounds that
`
`cannot be used in IPRs. (Ex. 2001 at 2; Reply at 4.) Granting the Petitions will create
`
`inefficiencies because, even with respect to the alleged “pre-existing systems and
`
`4
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`devices” (Reply at 4), the art overlaps significantly—Apple combines the “pre-existing
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`Atty. Dkt. No.: OMSC0110IPR1
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`system” prior art with the same references that it uses in the IPR combinations, as
`
`confirmed by Apple’s Final Election of Prior Art (Ex. 2001). This factor weighs in
`
`favor of denying institution.
`
`E. Any delay between the filing of Petitioner’s invalidity
`contentions in District Court and the filing of the Petition
`
`Petitioner filed its invalidity contentions on August 28, 2018, listing two of the
`
`four references relied on in the Petition. While Petitioner did not list LeBoeuf/Valencel-
`
`093 (Ex. 1005), i.e., its primary reference in this IPR, in its initial invalidity contentions,
`
`Petitioner was fully aware of that reference. LeBoeuf/Valencell-093, issued as U.S.
`
`Patent No. 8,888,701, and Petitioner filed an IPR Petition in 2017 challenging the ‘701
`
`Patent. (Ex. 2015, IPR2017-01704, Paper 1.)
`
`Petitioner argues that its delay was reasonable because Patent Owner added ‘533
`
`patent dependent claim 15 and ‘040 patent dependent claim 3 to its infringement
`
`contentions. (Reply at 5.) But the limitations added in claim 15 are the same as those in
`
`dependent claim 7—Petitioner challenged the two claims together in the ‘533 Petition.
`
`(Petition at 58-60, 69.) Likewise, the limitations added in ‘040 patent claim 3 match
`
`limitations in ‘533 patent claims 5 and 7. Notably, Petitioner cites no unique prior art
`
`against claims 15 and 3—it uses the same references it used for the other claims. Patent
`
`Owner’s addition of claims 15 and 3 did not delay the filing of the Petitions.
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`5
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`Atty. Dkt. No.: OMSC0110IPR1
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`Petitioner also argues it was waiting for the district court to issue its Markman
`
`Order. (Reply at 5-6.) Yet Petitioner admittedly “addressed multiple constructions of
`
`the claims in each petition.” (Reply at 6.) The Markman Order did not delay the filing
`
`of the Petitions. This factor weighs in favor of denying institution.
`
`F. Whether, and to what extent, Petitioner had sufficient
`notice that the Petition could be denied under § 314(a)
`
`Petitioner had sufficient notice that a petition could be denied institution under
`
`35 U.S.C. § 314(a) due to events in related parallel proceedings, and well before NHK
`
`was designated precedential. NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., Case
`
`IPR2018-00752 (PTAB Sept. 12, 2018) (Paper 8) (precedential).
`
`In August 2018, the PTAB released an update to the Trial Practice Guide, that
`
`listed “events in other proceedings related to the same patent, either at the Office, in
`
`district courts, or the ITC” as one of many “Considerations in Instituting a Review”
`
`under 35 U.S.C. § 314(a). PTAB Trial Practice Guide 2018 Update at 10. Additionally,
`
`in a separate matter between Petitioner and INVT SPE LLC, Petitioner filed an IPR
`
`petition in IPR2018-01478 challenging a patent that was involved in a parallel ITC
`
`investigation. INVT filed a POPR on November 29, 2018, and cited NHK to support its
`
`argument that the petition should be denied institution under § 314(a) due to events in
`
`the parallel ITC investigation. (IPR2018-01478, Paper 7 at 52-54.) Petitioner contacted
`
`the Board “to request authorization to file a reply to [INVT’s] argument that institution
`
`6
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`should be denied for efficiency reasons because the challenged patent is at issue in a
`
`Atty. Dkt. No.: OMSC0110IPR1
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`parallel investigation before the [ITC].” (Ex. 2016 at 2.) Thus, Petitioner had sufficient
`
`notice that the Petition could be denied under 35 U.S.C. § 314(a) at least by November
`
`29, 2018 when it received INVT’s POPR.
`
`G. Whether Petitioner’s District Court invalidity contentions
`are the same as or substantially similar to the
`unpatentability grounds raised in the Petition
`
`Petitioner admits that the invalidity contentions it raised in the district court
`
`overlap with the grounds raised in the Petition. (Reply at 4.)
`
`H. Whether Petitioner has filed any dispositive invalidity
`motions in the District Court
`
`Petitioner’s statement in Section H is correct, but the stay ended when the
`
`California court docketed the case, completing the transfer. (Ex. 1057 at 1.)
`
`I.
`
`Any issue preclusive effect of the claims challenged in the
`cases before the Board
`
`Petitioner does not disguise its efforts to use the IPRs as a second (and third) bite
`
`at the patents if the district court does not rule in its favor, i.e., “[i]f the District Court
`
`makes a finding [that the patents are valid], that decision is not binding on the Board.”
`
`(Reply at 7.)
`
`
`
`
`
`
`Dated: October 4, 2019
`
`
`
`Respectfully submitted,
`
`
`
` /Thomas A. Lewry/
`Thomas A. Lewry (Reg. No. 30,770)
`
`
`
`
`
`
`7
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`
`
`
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`
`
`Atty. Dkt. No.: OMSC0110IPR1
`
`John S. LeRoy (Reg. No. 48,158)
`Robert C. J. Tuttle (Reg. No. 27,962)
`John M. Halan (Reg. No. 35,534)
`Christopher C. Smith (Reg. No. 59,669)
`Andrew B. Turner (Reg. No. 63,121)
`BROOKS KUSHMAN P.C.
`1000 Town Center, Twenty-Second Floor
`Southfield, Michigan 48075
`Telephone: (248) 358-4400
`
`Attorneys for Omni MedSci, Inc.
`
`
`8
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`
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`Case No.: IPR2019-00913
`Patent No.: 9,651,533
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`
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`Atty. Dkt. No.: OMSC0110IPR1
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`Certificate of Service
`
`The undersigned hereby certifies that on October 4, 2019, a complete and entire
`copy of PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY
`PURSUANT TO BOARD’S SEPTEMBER 24, 2019 ORDER, was served via
`electronic mail
`by
`serving
`the
`correspondence
`address
`of
`IPRnotices@sidley.com, which delivers to the following lead and back-up counsel:
`
`
`LEAD COUNSEL
`Jeffrey P. Kushan (Reg. No. 43,401)
`SIDLEY AUSTIN LLP
`1501 K Street NW
`Washington, DC 20005
`(202) 736-8914
`
`
`
`BACK-UP COUNSEL
`Ching-Lee Fukuda (Reg. No. 44,334)
`Sidley Austin LLP
`787 Seventh Avenue
`New York, NY 10019
`(212) 839-7364
`
`Thomas A. Broughan III (Reg. No. 66,001)
`Sidley Austin LLP
`1501 K Street NW
`Washington, DC 20005
`(202) 736-8314
`
`Respectfully submitted,
`
`
`
`
`
`
`
` /Thomas A. Lewry/
`Thomas A. Lewry (Reg. No. 30,770)
`John S. LeRoy (Reg. No. 48,158)
`Robert C. J. Tuttle (Reg. No. 27,962)
`John M. Halan (Reg. No. 35,534)
`Christopher C. Smith (Reg. No. 59,669)
`Andrew B. Turner (Reg. No. 63,121)
`BROOKS KUSHMAN P.C.
`1000 Town Center, Twenty-Second Floor
`Southfield, Michigan 48075
`Telephone: (248) 358-4400
`
`Attorneys for Omni MedSci, Inc.
`
`9
`
`
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