`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`APPLE INC.,
`
`Petitioner
`
`v.
`
`FINTIV, INC.,
`
`Patent Owner
`
`Case No.: IPR2020-00019
`U.S. Patent No. 8,843,125
`
`Title: SYSTEM AND METHOD FOR MANAGING MOBILE
`WALLET AND ITS RELATED CREDENTIALS
`
`PATENT OWNER’S REQUEST FOR REHEARING PURSUANT TO
`37 C.F.R. §§ 42.71(b) and (d)
`
`
`
`TABLE OF CONTENTS
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`Case No. IPR2020-00019
`Patent No.: 8,843,125
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`Page
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`V.
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`B.
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`C.
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`INTRODUCTION .......................................................................................... 1
`I.
`STATEMENT OF RELIEF REQUESTED ................................................... 2
`II.
`FACTUAL BACKGROUND......................................................................... 2
`III.
`IV. APPLICABLE LAW ...................................................................................... 4
`A.
`Standard of Review .............................................................................. 4
`RATIONALE FOR REHEARING ................................................................ 4
`A.
`The Board Abused its Discretion when it Granted Apple’s
`Request for Leave to File the IPR Supplement Without
`Requiring Apple to File a Motion ........................................................ 4
`The Board’s Decision to Hold a Merit Hearing Regarding
`Apple’s Request to Supplement Overlooked and Violated the
`Administrative Procedures Act and Deprived Fintiv of Due
`Process .................................................................................................. 6
`The Board Overlooked Apple’s Failure to Satisfy the
`Requirements that Information Could Not Have Been Obtained
`Earlier or that the Filing is in the Interest of Justice to be
`Permitted to Supplement ...................................................................... 8
`The Board Misapprehended Patent Owner’s Need for the Full
`Three Months Provided by 37 C.F.R. §§ 42.107(b) and
`42.207(b) to Respond to Apple IPR ..................................................... 9
`VI. CONCLUSION ............................................................................................. 11
`
`D.
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`TABLE OF AUTHORITIES
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`Page(s)
`
`Cases
`Abbott Labs. v. Cordis Corp.,
`710 F.3d 1318 (Fed. Cir. 2013) ............................................................................ 6
`Dell Inc. v. Acceleron, LLC,
`818 F.3d 1293 (Fed. Cir. 2016) ............................................................................ 7
`Fintiv, Inc. v. Apple Inc.,
`Case No. 6:18-CV-372-ADA (W.D. Tex.) ........................................................... 2
`Motor Vehicle Mfs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins.
`Co.,
`463 U.S. 29, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) ........................................ 10
`SAS Inst., Inc. v. ComplementSoft, LLC.,
`825 F.3d 1341 (Fed. Cir. 2016), rev’d and remanded sub nom. SAS
`Inst., Inc. v. Iancu, 138 S. Ct. 1348, 200 L. Ed. 2d 695 (2018)............................ 6
`Statutes
`5 U.S.C. § 554(b)(3)............................................................................................... 6, 7
`5 U.S.C. § 554(c) ....................................................................................................... 6
`5 U.S.C. § 556(d) ....................................................................................................... 6
`Administrative Procedures Act .........................................................................passim
`Other Authorities
`37 C.F.R. § 42.71(b) .............................................................................................. 1, 2
`37 C.F.R. § 42.71 (c) .................................................................................................. 4
`37 C.F.R. § 42.71 (d) ......................................................................................... 1, 2, 4
`37 C.F.R. § 42.100(b) ................................................................................................ 8
`37 C.F.R. § 42.107(b) ................................................................................................ 9
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`Case No. IPR2020-00019
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`37 C.F.R. § 42.207(b) ................................................................................................ 9
`37 CPR. § 42.207(b) ................................................................................................ 9
`37 C.F.R. § 42.123 ................................................................................................. 5, 8
`37 CPR. § 42.123 ................................................................................................. 5, 8
`37 C.F.R. § 42.123(c) ......................................................................................... 1, 4, 5
`37 CPR. § 42.123(c) ......................................................................................... 1, 4, 5
`37 C.F.R. § 42.223(c) ............................................................................................. 1, 5
`37 CPR. § 42.223(c) ............................................................................................. 1, 5
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`Case No. IPR2020-00019
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`EXHIBIT LIST
`
`Description
`Declaration of John W. Downing in Support of
`Patent Owner’s Request for Rehearing
`Email dated 11-20-19 from Travis Jensen to counsel
`for Fintiv re seeking leave to file Markman order
`Email dated 11-22-19 from Travis Jensen to the
`Board requesting a conference call
`Email dated 12-3-19 from Travis Jensen to John
`Downing re Apple intending to rely on Section
`II.B.6 of the July 2019 Trial Practice Guide Update
`Email dated 12-3-19 from Travis Jensen to the
`Board confirming parties met and conferred
`July 2019 Trial Practice Guide
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`Patent Owner’s Exhibit No.
`2001
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`2002
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`2003
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`2004
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`2005
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`2006
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`-iv-
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`I.
`
`INTRODUCTION
`Fintiv, Inc. (“Fintiv” or “Patent Owner”) respectfully requests, pursuant to 37
`
`CFR §§ 42.71(b) and (d), a panel rehearing of the Board’s decision (Paper 6)
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`(“Order”) to grant Apple’s request to supplement IPR 2020-00019 (Paper 1) (“Apple
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`IPR”) prior to a decision on institution. The Order granted Apple’s request to
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`supplement the Apple IPR and denied Fintiv’s alternative request for additional time
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`to file a preliminary response.
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`The Board, however, abused its discretion in holding a hearing and granting
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`Apple’s request to supplement because Apple did not file a motion pursuant to 37
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`CFR §§ 42.123(c) and 42.223(c), which is required before the Board can grant
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`permission to supplement a pre-institution IPR. The Order additionally violated the
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`Administrative Procedures Act (the “APA”) and Fintiv’s procedural and substantive
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`due process rights. Specifically, because the Board did not require Apple to submit
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`a motion pursuant to 37 CFR §§ 42.123(c) and 42.223(c), Fintiv was forced to
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`respond to Apple’s arguments (many of which Fintiv heard for the first time during
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`the hearing) in real-time thus depriving Fintiv of a meaningful opportunity to be
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`heard and respond to Apple’s request. Finally, the Board abused its discretion when
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`it failed to grant Fintiv’s alternative request for additional time to file its preliminary
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`response. For these reasons, Fintiv respectfully requests that the Board grant Fintiv’s
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`Patent No.: 8,843,125
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`request for a panel rehearing and reverse its decision that permitted Apple to submit
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`a supplemental IPR petition (“IPR Supplement) and strike the same.
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`II.
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`STATEMENT OF RELIEF REQUESTED
`Pursuant to 37 CFR §§ 42.71(b) and (d), a panel rehearing of the Board’s
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`Order granting Apple’s request to supplement the Apple IPR prior to a decision on
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`institution.
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`III. FACTUAL BACKGROUND
`On November 20, 2019 Apple contacted Fintiv to request leave to file the
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`Markman order in the district court action Fintiv, Inc. v. Apple Inc., Case No. 6:18-
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`CV-372-ADA (W.D. Tex.) once it was entered in the related District Court action.
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`(Ex. 2001 (Downing Declaration) at ¶ 3; Ex. 2002 (November 20 email to Fintiv’s
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`counsel.) Apple also requested permission to file a brief paper and accompanying
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`exhibits that addressed how Apple contended the prior art satisfied the district
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`court’s construction of “OTA proxy” because the district court indicated during the
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`claim construction hearing that it was not adopting either party’s construction of
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`OTA proxy. Id. Fintiv opposed Apple’s request.
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`On November 22, 2019 Fintiv emailed the Board requesting a conference call
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`and seeking permission to file the district court Markman Order once it was entered,
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`as well as a “5-page paper (and accompanying exhibits) that address how Apple
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`contends the prior art satisfies one claim construction issued by the district court that
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`was not proposed by either party.” (Ex. 2001 at ¶ 4; Ex. 2003 (November 22 email
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`to Board).) The parties met and conferred on November 25th and December 3rd.
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`(Ex. 2001 at ¶¶ 1-2.) During meet and confer discussions, Apple indicated that it
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`planned to submit an industry standard to support the “OTA proxy” limitation. (Ex.
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`2001 at ¶ 2.) Apple did not provide specifics on what exactly would be submitted,
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`would not rule out submitting an expert declaration, and would not provide Fintiv
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`with the proposed IPR supplement prior to filing. (Ex. 2001 at ¶ 2.) After the meet
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`and confer, Apple advised that the IPR Supplement request was based on the July
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`2019 Practice Guide, which states that “as soon as that determination becomes
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`available … [p]referably, the prior claim construction determination should be
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`submitted with the petition, preliminary response, or response, along with
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`explanations.” (Ex. 2001 at ¶ 5; Ex. 2004 (December 3 email regarding Apple’s
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`grounds for seeking supplement).)
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`The Board held a teleconference on December 5, 2019 and issued an Order
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`on December 6, 2019 (Paper 6). Over Fintiv’s objection, the Order granted Apple
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`permission to submit 1000 additional words to address the district court’s claim
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`construction. The Board held that timing warrants submission of the Markman order
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`along with a supplemental brief “so that the district court’s claim construction and
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`Petitioner’s arguments are on record as soon as possible in this proceeding.” (Order
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`at 3.) The Board denied Fintiv’s alternate request for additional time to respond to
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`the IPR Supplement finding that “more than ten weeks” was “ample time for Patent
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`Owner to incorporate into that paper any response to arguments in Petitioner’s
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`supplemental brief.” (Order at 4.)
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`IV. APPLICABLE LAW
`A.
`Standard of Review
`The party challenging a decision in a request for rehearing bears the burden
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`of showing the decision should be modified. (37 C.F.R. § 42.71(d).) A request for
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`rehearing “must specifically identify all matters the party believes the Board
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`misapprehended or overlooked, and the place where each matter was previously
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`addressed.” Id. Upon a request for rehearing, the decision on a petition will be
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`reviewed for an abuse of discretion. Id. at § 42.71(c).
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`V.
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`RATIONALE FOR REHEARING
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`Patent Owner specifically identifies all matters that it believes the Board
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`overlooked in rendering its Decision.
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`A.
`
`The Board Abused its Discretion when it Granted Apple’s
`Request for Leave to File the IPR Supplement Without
`Requiring Apple to File a Motion
`The Board abused its discretion and overlooked Section 42.123(c) when it
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`held a hearing on Apple’s request to supplement without requiring Apple to file a
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`motion. Section 42.123(c) is clear that a party seeking to submit supplemental
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`information must request authorization to file a motion to submit the information:
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`(c) Other supplemental information. A party seeking to submit
`supplemental information not relevant to a claim for which the trial has
`been instituted must request authorization to file a motion to submit
`the information. The motion must show why the supplemental
`information reasonably could not have been obtained earlier, and that
`consideration of the supplemental information would be in the
`interests-of-justice.
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`(37 C.F.R. §42.123(c) (emphasis added).) Apple did not submit a motion that
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`explained why the information reasonably could not have been obtained earlier and
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`that explained why the filing was in the interests-of-justice.1 Although the Order
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`cites to the PTAB’s Consolidated Trial Practice Guide in rationalizing its decision,
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`the Board overlooked the guide’s unequivocal statement that “a motion to submit
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`supplemental information must meet the requirements of 37 C.F.R. §§ 42.123 or
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`42.223.” (Ex. 2001 at ¶ 7; Ex. 2006 (Trial Practice Guide 2019 Update) at 41.)
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`Absent a motion, notice, and opportunity for Fintiv to meaningfully respond to
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`Apple’s request to supplement, the Board had no grounds to grant Apple’s request.
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`Because the Board overlooked 37 C.F.R. §42.123(c), largely because Apple did not
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`identify the applicable standard in its correspondence to the Board, the Board abused
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`its discretion in granting Apple’s motion. Accordingly, Fintiv requests that the
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`Board grant Fintiv’s motion for a rehearing and strike Apple’s IPR Supplement
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`1 Apple sought to supplement its IPR petition based on the July 2019 Trial Practice
`Guide Update. (Ex. 2001 at ¶ 5; Ex. 2004.)
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`which does not comply with the rules to supplement an IPR petition before
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`institution.
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`B.
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`The Board’s Decision to Hold a Merit Hearing Regarding
`Apple’s Request to Supplement Overlooked and Violated the
`Administrative Procedures Act and Deprived Fintiv of Due
`Process
`The Board’s decision to hold a hearing on Apple’s request to supplement its
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`IPR petition without providing Fintiv with the opportunity to know and respond to
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`Apple’s request violated the APA and deprived Fintiv of procedural and substantive
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`due process. Due process requires notice and an opportunity to be heard by an
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`impartial decision-maker. Abbott Labs. v. Cordis Corp., 710 F.3d 1318, 1328 (Fed.
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`Cir. 2013). As formal administrative adjudications, IPRs are subject to the
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`Administrative Procedures Act (“the APA”). SAS Inst., Inc. v. ComplementSoft,
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`LLC., 825 F.3d 1341, 1351 (Fed. Cir. 2016), rev'd and remanded sub nom. SAS Inst.,
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`Inc. v. Iancu, 138 S. Ct. 1348, 200 L. Ed. 2d 695 (2018). Under the APA, the Board
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`must inform the parties of “the matters of fact and law asserted.” (5 U.S.C. §
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`554(b)(3).) It also must give the parties an opportunity to submit facts and arguments
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`for consideration. Id. § 554(c). Each party is entitled to present oral and
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`documentary evidence in support of its case, as well as rebuttal evidence. Id. §
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`556(d).
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`Here, the Board abused its discretion and overlooked the APA requirements
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`by holding a hearing that was not authorized under the rules. Although Fintiv
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`learned general details in the meet-and-confer regarding Apple’s basis for
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`supplementing
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`its petition, Apple revealed
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`little about what
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`the actual
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`supplementation would include. (Ex. 2001 at ¶ 1-3.) Apple disclosed only that the
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`supplement would include five additional pages, a few exhibits regarding the skill
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`of one in the art, an industry standard, and possibly an expert declaration. Id. Apple
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`did not provide relevant details regarding what specifically it was submitting or the
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`amount of material in the proposed supplement. Apple also refused to share the
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`proposed filing and exhibits with Fintiv in advance of the hearing. Id. Thus, Fintiv
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`was deprived of a meaningful opportunity to be heard as required by the APA and
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`due process because Apple was able to hide details regarding the proposed
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`supplement until the hearing. Dell Inc. v. Acceleron, LLC, 818 F.3d 1293, 1300-01
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`(Fed. Cir. 2016) (holding that the Board, in relying on factual assertions the
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`petitioner introduced for the first time at the oral hearing, violated § 554(b)(3)
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`because the patent owner did not have a meaningful opportunity to respond).
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`Therefore, the Board should grant rehearing and strike Apple’s IPR Supplement.
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`C.
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`Case No. IPR2020-00019
`Patent No.: 8,843,125
`The Board Overlooked Apple’s Failure to Satisfy the
`Requirements that Information Could Not Have Been
`Obtained Earlier or that the Filing is in the Interest of Justice
`to be Permitted to Supplement
`The Board further committed an abuse of discretion by authorizing
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`supplementation of the Apple IPR petition because the district court’s claim
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`construction order could have been obtained earlier and the filing of the
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`supplemental petition was not in the interests of justice. See 37 C.F.R. §§ 42.123 or
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`42.223. As an initial matter, Patent Owner will submit the district court’s claim
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`construction order with Patent Owner’s Preliminary Response (Ex. 2001 at ¶ 7; Ex.
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`2006 at 47; Order at 3) and the Board will consider a timely submitted claim
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`construction order from the district court. See 37 C.F.R. 42.100(b). Thus, the
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`interest of justice does not require Apple’s IPR supplement because there is no
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`circumstance under which the Board would not have been timely made aware of the
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`district court’s claim construction order.
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`Setting this aside, the Board has less prejudicial ways of receiving the district
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`court’s claim construction. Specifically, Apple’s deadline to file an IPR petition has
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`not lapsed. Apple could easily dismiss its current petition and refile one that includes
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`arguments related to the district court’s construction. This is less prejudicial because
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`it allows Apple to submit a petition within the IPR word limit and provides Fintiv
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`with the full statutory time to respond. But instead, Apple wants to keep the current
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`schedule, submit a petition over the word limit, introduce multiple new prior art
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`references without submitting the supplement to Fintiv and the Board to review prior
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`to a decision on leave to supplement, and reduce Fintiv’s time to respond to the
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`petition. This result is not in the interest of justice, it instead places the parties on
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`uneven ground for no reason, except for Apple’s desire to keep the current schedule.
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`This is simply not an “unanticipated event” that can serve as a basis to add new
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`material into a petition that has not been instituted.
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`D.
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`The Board Misapprehended Patent Owner’s Need for the
`Full Three Months Provided by 37 C.F.R. §§ 42.107(b) and
`42.207(b) to Respond to Apple IPR
`The Board additionally abused its discretion by denying Fintiv’s request for
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`additional time if Apple was allowed to supplement its petition. The Board’s
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`decision to deny Fintiv an extension to its deadline to file a preliminary response
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`also overlooked and 37 C.F.R. §§ 42.107(b) and 42.207(b) which provides the Patent
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`Owner three months, from the notice of the IPR filing date, to submit a preliminary
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`response. The Order is particularly prejudicial in this case because the volume of
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`material in Apple’s IPR supplement exceeded 500 pages of prior art. The
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`voluminous nature of Apple’s IPR supplement was not known to the Board when
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`the Order was issued. Given the amount of new material to be reviewed, Fintiv is
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`severely prejudiced by having less than the full time period provided in 37 C.F.R.
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`§§ 42.107(b) and 42.207(b).
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`However, the prejudice to Fintiv can be mitigated. The 2019 Practice Guide
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`that the Board relied on to grant Apple’s request to supplement (Order at 3) states
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`that a final written decision will be entered not more than one year, but “time may
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`be extended up to six months for good cause.” (Practice Guide at 44.) To the extent
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`that the Board believed that allowing Apple to supplement its petition on the stated
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`grounds “was in the interests of justice,” the Board should have also concluded that
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`good cause exists to extend the schedule in this case to prevent prejudice to the patent
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`owner. (Emphasis added.) The Board’s determination that two months was “ample”
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`is conclusory and contrary to the APA; indeed, the Court had no basis to determine
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`that 10 weeks was sufficient since Apple did not file a motion attaching its proposed
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`supplement prior to the Order and the precise size and scope of Apple’s IPR
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`supplement was not known to the Board, and thus could not have been examined
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`before the Order was issued. See Motor Vehicle Mfs. Ass’n of U.S., Inc. v. State
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`Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)
`
`(“[T]he agency must examine the relevant data and articulate a satisfactory
`
`explanation for its action including a rational connection between the facts found
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`and the choice made.” (internal quotation marks omitted)).
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`VI. CONCLUSION
`For the reasons above, Fintiv respectfully requests that a panel rehear and
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`reverse the Order allowing Apple to supplement its IPR petition because Apple did
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`not comply with the statutory grounds for requesting supplementation of its IPR.
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`Date: December 20, 2019
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`Respectfully Submitted,
`
`
`
`By: /s/ Jonathan K. Waldrop
`Name: Jonathan K. Waldrop
`Registration No.: 50,334
`Kasowitz Benson Torres LLP
`333 Twin Dolphin Drive, Suite 200
`Redwood Shores, CA 94065
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`CERTIFICATE OF PAGE LIMIT
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`Pursuant to 37 C.F.R. § 42.24, the undersigned certifies that the foregoing
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`Patent Owner’s Request For Rehearing Pursuant To 37 C.F.R. §§ 42.71(b) and (d)
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`is below 15 pages excluding a table of contents, a table of authorities, mandatory
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`notices under § 42.8, a certificate of service or word count, or appendix of exhibits
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`or claim listing.
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`Dated: December 20, 2019
`
`/s/ Jonathan K. Waldrop
`Jonathan K. Waldrop, Reg. No. 50,334
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`-12-
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`CERTIFICATE OF SERVICE
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`I hereby certify that on December 20, 2019, I caused a true and correct copy
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`of the foregoing Patent Owner’s Request For Rehearing Pursuant To 37 C.F.R. §§
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`42.71(b) and (d) to be served via electronic mail upon the following counsel of
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`record for Petitioner:
`
`Travis Jensen
`Orrick, Herrington & Sutcliffe LLP
`1000 Marsh Road
`Menlo Park, CA 94025-1015
`tjensen@orrick.com
`
`K. Patrick Herman
`Tyler Miller
`Orrick, Herrington & Sutcliffe LLP
`51 West 52nd Street
`New York, NY 10019
`t61ptabdocket@orrick.com
`p52ptabdocket@orrick.com
`tmiller@orrick.com
`pherman@orrick.com
`AppleFintiv_OHS@orrick.com
`
`Dated: December 20, 2019
`
`/s/ Jonathan K. Waldrop
`Jonathan K. Waldrop, Reg. No. 50,334
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`-13-
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