Trials@uspto.gov
`571-272-7822
`
`Paper 24
` Entered: February 6, 2020
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE, INC.,
`Petitioner,
`
`v.
`
`OMNI MEDSCI, INC.,
`Patent Owner.
`
`
`IPR2019-00916
`Patent 9,651,533 B2
`
`
`
`Before GRACE KARAFFA OBERMANN, JOHN F. HORVATH, and
`SHARON FENICK, Administrative Patent Judges.
`
`HORVATH, Administrative Patent Judge.
`
`
`DECISION
`Denying Patent Owner’s
`Request on Rehearing of Institution Decision
`37 C.F.R. § 42.71(d)
`
`
`
`
`
`
`
`
`571-272-7822
`
`Paper 24
` Entered: February 6, 2020
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE, INC.,
`Petitioner,
`
`v.
`
`OMNI MEDSCI, INC.,
`Patent Owner.
`
`
`IPR2019-00916
`Patent 9,651,533 B2
`
`
`
`Before GRACE KARAFFA OBERMANN, JOHN F. HORVATH, and
`SHARON FENICK, Administrative Patent Judges.
`
`HORVATH, Administrative Patent Judge.
`
`
`DECISION
`Denying Patent Owner’s
`Request on Rehearing of Institution Decision
`37 C.F.R. § 42.71(d)
`
`
`
`
`
`
`
`
`
`
`IPR2019-00916
`Patent 9,651,533 B2
`
`
`I. INTRODUCTION
`
`Apple, Inc. (“Petitioner”) filed a Petition challenging claims 5, 7–10,
`13, and 15–17 (“the challenged claims”) of U.S. Patent No. 9,651,533 B2
`(Ex. 1001, “the ’533 patent”) as obvious over the combination of Carlson1
`and Lisogurski2, and claims 8, 9, 16, and 17 as obvious over the combination
`of Carlson, Lisogurski, and Mannheimer.3 Paper 1 (“Pet.”), 3. Omni
`MedSci, Inc. (“Patent Owner”) filed a Preliminary Response (Paper 10,
`“Prelim. Resp.”).
`In its Preliminary Response, Patent Owner argued that we should
`exercise our discretion to deny institution under 35 U.S.C. § 314(a) because
`a related case in the Eastern District of Texas was set to go to trial and
`“Petitioner is challenging the validity of the ‘533 Patent as obvious over . . .
`the same references asserted in this proceeding.” Prelim. Resp. 5 (citing
`Ex. 2101, 2).4 Therefore, Patent Owner argued, we should deny the Petition
`because “the district court will determine the validity of the ‘533 Patent[]
`using the same claim construction standard, and over the same art in
`February 2020,” eight months before any final decision would issue in this
`
`
`1 US 2005/0049468 A1
`2 US 9,241,676 B2
`3 US 5,746,206
`4 We note that Exhibit 2101 is “Apple Inc.’s Final Election of Asserted Prior
`Art.” Ex. 2101, 1. As such, it only identifies the prior art Apple intends to
`assert against the ’533 patent in district court. Id. at 2–3. It does not
`identify Apple’s invalidity contentions, i.e., how Apple contends particular
`claims are invalid over particular combinations of prior art.
`2
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`IPR2019-00916
`Patent 9,651,533 B2
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`proceeding. Id. at 5–6 (citing NHK Spring Co. v. Intri-Plex Tech., Inc.,
`IPR2018-00752, Paper 8 at 20 (PTAB, Sept. 12, 2018) (Precedential).
`Given Patent Owner’s discretionary denial argument, we authorized
`the parties to brief the facts and factors the Board should consider when
`deciding how to exercise discretion under § 314(a). See Paper 12, 3.
`Specifically, we asked the parties to brief
`whether, and to what extent, the Board should consider (a) the
`merits of Petitioner’s challenge; (b) the amount of time between
`the District Court’s expected findings on validity and any
`expected Board findings on patentability; (c) any differences
`between the claims challenged in the District Court and the
`Petition; (d) any differences between the grounds raised in the
`District Court and the Petition, where a ground challenges the
`validity/patentability of an identified claim over identified prior
`art; and (e) any delay between the filing of Petitioner’s invalidity
`contentions in the District Court and the filing of the Petition.
`Paper 12, 5. Petitioner filed a Reply (Paper 13, “Pet. Reply”) and Patent
`Owner filed a Sur-Reply (Paper 15, “PO Sur-Reply”).
`In its Reply, Petitioner alleged that “[e]very claim being asserted in
`the litigation has been challenged in the petition,” and that “Petitioner’s
`challenges in the district court action include, but are not limited to, the prior
`art used in the grounds of the Petition.” Pet. Reply 3–4.5 Therefore,
`Petitioner argued that “address[ing] the prior art in the grounds of the
`
`
`5 Notably, Petitioner’s Reply does not identify Petitioner’s district court
`invalidity contentions, i.e., how particular claims are alleged to be invalid
`over particular combinations of prior art. Nor does Petitioner’s Reply aver
`that Petitioner’s district court invalidity contentions are the same as or
`substantially similar to the Petition’s unpatentability contentions.
`3
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`IPR2019-00916
`Patent 9,651,533 B2
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`Petition . . . would simplify and narrow the dispute in district court.” Id. at
`4. Moreover, Petitioner argued that Patent Owner’s reason for requesting
`discretionary denial was moot because “the Eastern District of Texas granted
`[Petitioner’s] motion to transfer the district court case to the Northern
`District of California” and “all pending deadlines in the Texas action were
`suspended and the February 2020 trial date was vacated.” Id. at 1.
` In its Sur-Reply, Patent Owner argued that, although the district
`court case had been transferred to the Northern District of California and no
`trial date had been set there, the Petition should nonetheless be denied on
`discretionary grounds because the district court case was likely to go to trial
`“in the second quarter of 2020 and certainly no later than June 2020.” PO
`Sur-Reply 2–3. Patent Owner further argued that the Petition should be
`denied because the prior art identified in the Petition and district court case
`“overlaps significantly—[Petitioner] combines the ‘pre-existing system’
`prior art [identified in district court] with the same references that it uses in
`the IPR combinations, as confirmed by [Petitioner’s] Final Election of Prior
`Art (Ex. 2101).” Id. at 5.6
`We instituted review of the ’533 patent based on the papers filed by
`the parties. See Paper 16 (“Dec. Inst.”), 58–59. In doing so, we declined to
`
`
`6 Notably, like Petitioner’s Reply, Patent Owner’s Sur-Reply does not
`identify Petitioner’s district court invalidity contentions, i.e., how particular
`claims are alleged to be invalid over particular combinations of prior art.
`Nor does Patent Owner’s Sur-Reply allege that Petitioner’s district court
`invalidity contentions are the same as or substantially similar to the
`Petition’s unpatentability contentions.
`4
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`IPR2019-00916
`Patent 9,651,533 B2
`
`exercise our discretion to deny the Petition because “the validity of the
`claims challenged in the Petition over the art raised in the Petition will not
`be determined in the related district court proceeding until a jury makes that
`determination after a trial on the merits” for which no date had been set, and
`because we were not inclined to deny the Petition based on Patent Owner’s
`speculation that the district court case was likely to go to trial by June 2020.
`Id. at 55.
`Patent Owner subsequently filed a Request for Rehearing of our
`Institution Decision and further requested its consideration by the
`Precedential Opinion Panel. Paper 18 (“Reh’g Req.”), 10–11. The
`Precedential Opinion Panel declined to consider the rehearing request.
`Paper 22, 2. For the reasons discussed below, Patent Owner’s Request for
`Rehearing is denied.
`
`
`II. ANALYSIS
`
`Under 37 C.F.R. § 42.71(c), a panel “rehearing a decision on
`petition . . . will review the decision for an abuse of discretion.” An abuse of
`discretion occurs when a “decision was based on an erroneous conclusion of
`law or clearly erroneous factual findings, or . . . a clear error of judgment.”
`PPG Indus., Inc. v. Celanese Polymer Specialties Co., 840 F.2d 1565, 1567
`(Fed. Cir. 1988). A request for rehearing “must specifically identify all
`matters the party believes the Board misapprehended or overlooked, and the
`place where each matter was previously addressed in a motion, an
`opposition, or a reply.” 37 C.F.R. § 42.71(d). The burden of showing a
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`IPR2019-00916
`Patent 9,651,533 B2
`
`decision should be modified on a request for rehearing lies with the party
`challenging the decision. Id.
`Patent Owner first argues that our Institution Decision “represents an
`unreasonable judgement in weighing the relevant factors with regard to the
`Board’s discretion to deny institution under 35 U.S.C. § 314(a).” Reh’g
`Req. 1. Specifically, Patent Owner argues that we erred in our Institution
`Decision because we
`did not address . . . a critical factor relevant to [the Board’s]
`discretion, namely whether, and to what extent, Petitioner’s
`district court invalidity contentions are the same as or
`substantially similar to the unpatentability grounds raised in the
`Petition. (Paper 12, 5–6.) Properly weighed, this factor would
`militate against the Board granting institution of the Petition.
`
`Id.
`
`We are not persuaded by this argument. We could not have addressed
`whether Petitioner’s district court invalidity contentions are the same as or
`substantially similar to the Petition’s unpatentability grounds in our
`Institution Decision because neither party has identified Petitioner’s district
`court invalidity contentions. Although Petitioner avers that it is challenging
`the same claims in district court and the Petition, and that its district court
`challenges include the same prior art used in the Petition, Petitioner never
`identifies any of its district court invalidity contentions, i.e., which claims
`are invalid over which combinations of prior art, and why. See Pet. Reply
`3–4. Likewise, Patent Owner also fails to identify any of Petitioner’s district
`court invalidity contentions. See Prelim. Resp. 5 (identifying prior art relied
`on in the Petition that Petitioner intends to rely on in district court, but
`
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`IPR2019-00916
`Patent 9,651,533 B2
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`failing to identify Petitioner’s district court contentions regarding which
`claims are invalid over which combinations of prior art, and why); see also
`PO Sur-Reply 4–5 (alleging the grounds raised in district court and the
`Petition “overlap significantly,” but citing as evidence Petitioner’s Reply
`and Petitioner’s Final Election of Asserted Prior Art in district court
`(Ex. 2101), neither of which contain Petitioner’s district court invalidity
`contentions).
`Moreover, Patent Owner cites no authority to support its contention
`that the similarity between Petitioner’s district court invalidity contentions
`and the Petition’s unpatentability grounds is a “critical factor” that warrants
`denying institution. Id. Although Patent Owner cites to Paper 12 of this
`proceeding for such authority, Paper 12 does not set forth the factors the
`Board will consider when deciding whether to deny institution under
`§ 314(a), let alone the “critical factors” the Board will consider. Rather,
`Paper 12 invites the parties to provide “input . . . on the facts and factors the
`Board should consider when deciding whether to exercise its discretion to
`deny institution under 35 U.S.C. § 314(a).” Paper 12, 3 (emphasis added).
`We could not have erred in our Institution Decision by failing to consider as
`a “critical factor” a factor that was not in evidence (as explained above), and
`that Patent Owner has not shown to be a “critical factor.”
`The only authority Patent Owner does cite to support its argument that
`we should deny institution under § 314(a) is NHK Spring. See Prelim. Resp.
`4; PO Sur-Reply 3. In NHK Spring, a patent owner argued that because a
`petitioner “relie[d] on the same prior art . . . and arguments in its district
`
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`7
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`IPR2019-00916
`Patent 9,651,533 B2
`
`court invalidity contentions as asserted in the [p]etition,” it would be an
`inefficient use of Board resources to grant the petition because “the district
`court proceeding will [1] analyze the same issues and [2] be resolved before
`any trial on the [p]etition concludes.” NHK Spring, Paper 8 at 19–20
`(emphases added). Agreeing with that argument, the Board denied the
`petition because granting it “under these circumstances would not . . .
`provide an effective and efficient alternative to district court litigation.” Id.
`at 20 (emphasis added). Thus, the critical factor in NHK Spring was not
`simply the similarity between the prior art raised in the petition and district
`court proceeding, but the similarity of the prior art and arguments (i.e., the
`unpatentability/invalidity contentions) raised in the petition and district court
`proceeding combined with evidence that the district court was scheduled to
`decide invalidity before the Board would decide unpatentability over similar
`prior art and arguments.
`In our Institution Decision, we declined to deny the Petition because
`the evidence, including Patent Owner’s admissions, did not show that the
`Northern District of California was scheduled to decide any invalidity
`contentions raised in the Petition before we could decide them. See Dec.
`Inst. 54–55 (citing Ex. 1057, 1–3; PO Sur–Reply 2) (finding (1) the related
`district court case had been transferred from the Eastern District of Texas to
`the Northern District of California, (2) the February 2020 Eastern District of
`Texas trial date had been vacated, and (3) the Northern District of California
`had yet to schedule a new trial date). Patent Owner has not shown that the
`reasoning in our Institution Decision is either (a) inconsistent with the
`
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`IPR2019-00916
`Patent 9,651,533 B2
`
`Board’s decision in NHK Spring, (b) an improper weighting of the relevant
`NHK Spring factors, or (c) otherwise erroneous.
`Patent Owner next argues that we erred in our Institution Decision by
`failing to address Patent Owner’s one-paragraph argument that we should
`deny the Petition because “Petitioner is challenging the validity of the
`patents with several additional grounds in litigation, including grounds that
`cannot be used in IPRs” and this “will create inefficiencies because . . . the
`art overlaps significantly—[Petitioner] combines the ‘pre-existing system’
`prior art with the same references that [Petitioner] uses in the IPR
`combinations.” Reh’g Req. 5–6 (citing PO Sur-Reply 4–5) (emphasis
`omitted). Adding eight paragraphs to this argument in its Request for
`Rehearing, Patent Owner further argues that our Institution Decision was
`erroneous because “estoppel will not apply to seven of the eight [prior art]
`combinations asserted in the [district court].” Id. at 7.
`We are not persuaded by these arguments. Patent Owner cites no
`authority for its contention that the nature of Petitioner’s district court
`invalidity contentions—i.e., that they are based on combinations of public
`uses with prior art relied on in the Petition—weighs in favor of denying
`institution. See PO Sur-Reply 4–5. Thus, we could not have erred in our
`Institution Decision by failing to consider a factor that Patent Owner has not
`shown to be a relevant factor in a § 314(a) analysis. Moreover, Patent
`Owner had not previously argued that we should deny institution because
`estoppel will not apply to seven of Petitioner’s eight district court invalidity
`contentions. See Prelim. Resp. 4–6; PO Sur-Reply 1–7. We could not have
`
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`IPR2019-00916
`Patent 9,651,533 B2
`
`erred in our Institution Decision by failing to consider an argument Patent
`Owner raised for the first time in its Request for Rehearing.
`Lastly, Patent Owner complains that Petitioner, despite stating in its
`Reply that it would move to stay the district court case if inter partes review
`was granted, has not only failed to move to stay the district court case but
`has moved to dismiss it. See Reh’g Req. 9–10 (citing Pet. Reply 3;
`Ex. 2119). To the extent Patent Owner provides this information in its
`Request for Rehearing as evidence that we erred in granting inter partes
`review, we are not persuaded of such error. We could not have erred in our
`Institution Decision by failing to consider evidence that was not available to
`us and could not have been made available to us until after we issued our
`Institution Decision.
`
`
`III. CONCLUSION
`
`We have considered Patent Owner’s arguments that we abused our
`discretion by granting the Petition and instituting inter partes review of
`the ’533 patent. For the reasons discussed above, Patent Owner has failed to
`show that our Institution Decision resulted from an abuse of our discretion.
`Accordingly, Patent Owner’s Request for Rehearing is denied.
`
`
`IV. ORDER
`
`It is ORDERED that Patent Owner’s Request for Rehearing is denied.
`
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`IPR2019-00916
`Patent 9,651,533 B2
`
`For PETITIONER:
`
`Jeffrey P. Kushan
`Ching-Lee Fukuda
`Kathi Cover
`Thomas A. Broughan III
`SIDLEY AUSTIN LLP
`jkushan@sidley.com
`clfukuda@sidley.com
`kcover@sidley.com
`tbroughan@sidley.com
`
`
`For PATENT OWNER:
`
`Thomas A. Lewry
`John S. LeRoy
`Robert C.J. Tuttle
`John M. Halan
`Christopher C. Smith
`BROOKS, KUSHMAN P.C.
`OMSC0110IPR1@brookskushman.com
`tlewry@brookskushman.com
`rtuttle@brookskushman.com
`jhalan@brookskushman.com
`csmith@brookskushman.com
`
`
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`
`11
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