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.: IPR2019-00916
`
`
`______________
`
`
`
`
`
`
`PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY
`PURSUANT TO BOARD’S SEPTEMBER 24, 2019 ORDER
`
`
`
`i
`
`
`
`______________
`
`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.: IPR2019-00916
`
`
`______________
`
`
`
`
`
`
`PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY
`PURSUANT TO BOARD’S SEPTEMBER 24, 2019 ORDER
`
`
`
`i
`
`
`
`Case No.: IPR2019-00916
`Patent No.: 9,651,533
`
`
`
`Atty. Dkt. No.: OMSC0110IPR2
`
`No.
`2101
`
`2102
`
`2103
`2104
`2105
`2106
`2107
`
`2108
`2109
`2110
`
`2111
`
`2112
`2113
`
`2114
`
`2115
`
`2116
`
`2117
`
`Updated List of Exhibits
`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
`Reserved
`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
`Omni MedSci’s Amended Final Election of Asserted Claims,
`served in Omni MedSci, Inc. v. Apple Inc., Case No. 2:18-
`cv-134-RWS (E.D. Tex), May 7, 2019
`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, filed 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
`
`
`
`No.
`2118
`
`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.: IPR2019-00916
`Patent No.: 9,651,533
`
`
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`Atty. Dkt. No.: OMSC0110IPR2
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`Congress designed the IPR as an efficient alternative to challenging patent
`
`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. 2114 at 3; Ex. 2113 at 25.)
`
`2. Parties filed summary judgment motions. (Ex. 2113, 27-28; Ex. 2114, 3.)
`
`3. In August 2019, the Eastern District of Texas transferred the lawsuit to the
`
`N. D. California, which completed transfer on October 2, 2019. (Ex. 2113 at 33.)
`
`4. The lawsuit is no longer stayed—the stay was lifted upon completion of
`
`the transfer. (Ex. 1057 at 1.)
`
`1
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`Case No.: IPR2019-00916
`Patent No.: 9,651,533
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`II. Analysis of the Factors Identified by the Board
`
`Atty. Dkt. No.: OMSC0110IPR2
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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
`
`institution because, as discussed below, the district court will most likely resolve
`
`all 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 most likely will issue several months before an FWD.
`
`The lawsuit is pending before Judge Gonzalez Rogers. The parties have filed
`
`opening summary judgment briefs. Judge Gonzalez Rogers has not yet set a
`
`schedule for the remaining briefs or a trial date, but, on January 28, 2019, in
`
`another patent case pending before Judge Gonzalez Rogers, she scheduled
`
`summary judgment motions and trial deadlines. She set trial 3.5 months after the
`
`2
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`Case No.: IPR2019-00916
`Patent No.: 9,651,533
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`deadline for summary judgment response briefs. (Ex. 2117.) In the present case, it
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`Atty. Dkt. No.: OMSC0110IPR2
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`is likely that trial will be completed in the second quarter of 2020 and certainly no
`
`later than June 2020.
`
`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. 2118.) There, like Judge
`
`Gonzalez Rogers, the court set a trial date approximately three months after the
`
`summary judgment hearing. (Ex. 2118 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 summary judgment motions had not been filed. Id. in contrast, the
`
`litigation in the present case is much more advanced than that in NHK. Even more
`
`so, then, than NHK, “instituting a trial under the facts and circumstances here
`
`would be an inefficient use of 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).
`
`3
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`Case No.: IPR2019-00916
`Patent No.: 9,651,533
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`The circumstances here are not ordinary, and significantly decrease Petitioner’s
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`Atty. Dkt. No.: OMSC0110IPR2
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`chances. As Warriner explains, “early filing of the IPR petition and motion to stay
`
`is especially important.” (Ex. 1059 at 4.) Here, Petitioner waited until the one-year
`
`deadline to file its Petition “Courts frequently deny motions to stay that are
`
`filed . . . close to the one-year 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.
`
`2114 at 3; Ex. 2113 at 25) and the court has issued a Markman order (Ex. 2107).
`
`“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
`
`4
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`
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`Case No.: IPR2019-00916
`Patent No.: 9,651,533
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`with the grounds raised in the Petition. (See Reply at 4.) Petitioner is challenging
`
`Atty. Dkt. No.: OMSC0110IPR2
`
`the validity of the patents with several additional grounds in litigation, including
`
`grounds that cannot be used in IPRs. (Ex. 2101 at 2; Reply at 4.) Granting the
`
`Petitions will create inefficiencies because, even with respect to the alleged “pre-
`
`existing systems and devices” (Reply at 4), the art overlaps significantly—Apple
`
`combines the “pre-existing 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.
`
`2101). 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 all of
`
`the references relied on in the Petition. 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.
`
`5
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`Case No.: IPR2019-00916
`Patent No.: 9,651,533
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`Atty. Dkt. No.: OMSC0110IPR2
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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,
`
`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
`
`6
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`Case No.: IPR2019-00916
`Patent No.: 9,651,533
`
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`institution should be denied for efficiency reasons because the challenged patent is
`
`Atty. Dkt. No.: OMSC0110IPR2
`
`at issue in a parallel investigation before the [ITC].” (Ex. 2116 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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`
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`Case No.: IPR2019-00916
`Patent No.: 9,651,533
`
`
`
`
`
`
`
`Atty. Dkt. No.: OMSC0110IPR2
`
`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
`
`
`
`Case No.: IPR2019-00916
`Patent No.: 9,651,533
`
`
`
`Atty. Dkt. No.: OMSC0110IPR2
`
`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 email 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)
`Sharon Lee (to be admitted pro hac vice)
`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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