Paper 21
`Trials@uspto.gov
`Date: February 3, 2021
`571-272-7822
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`MAXELL, LTD.,
`Patent Owner.
`____________
`
`IPR2020-00200
`Patent 10,084,991 B2
`____________
`
`
`
`Before MICHAEL R. ZECHER, KEVIN C. TROCK, and
`JOHN A. HUDALLA, Administrative Patent Judges.
`
`TROCK, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 C.F.R. § 42.71(d)
`
`Apple Inc. (“Petitioner”) filed a Petition (Paper 1, “Pet.”) requesting
`an inter partes review (“IPR”) of claims 1–5 and 8–12 (“the challenged
`claims”) of U.S. Patent No. 10,084,991 B2 (Ex. 1001, “the ’991 patent”).
`Patent Owner, Maxell, Ltd. (“Patent Owner”), filed a Preliminary Response
`(Paper 6, “Prelim. Resp.”). Petitioner also filed a Reply (Paper 8, “Pet.
`Reply”) and Patent Owner filed a Sur-Reply (Paper 10, “PO Sur-reply”)
`
`

`

`IPR2020-00200
`Patent 10,084,991 B2
`addressing whether we should exercise our discretion to deny institution
`under 35 U.S.C. § 314(a).
`On July 15, 2020, we entered a Decision on Institution (Paper 11,
`“Decision” or “Dec.”) that instituted inter partes review on all claims and all
`grounds presented in the Petition. As part of the Decision, we considered
`Patent Owner’s arguments that we should exercise our discretion to deny
`institution under 35 U.S.C. § 314(a) based on the duplicative nature and
`advanced stage of the related case styled Maxell, Ltd. v. Apple Inc., No.
`5:19-cv-00036 (E.D. Tex. Mar. 15, 2019) (“the underlying litigation”).
`Dec. 10–25. We based our discretionary denial analysis on the Board’s
`precedential decision in Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11
`(PTAB Mar. 20, 2020) (precedential) (“Fintiv”). After weighing the factors
`identified in Fintiv, we declined to exercise our discretion under 35 U.S.C.
`§ 314(a) to deny inter partes review. Dec. 25.
`Patent Owner filed a Request for Rehearing (Paper 13, “Req. Reh’g”)
`seeking reconsideration of our analysis of the Fintiv factors and our decision
`not to exercise discretion to deny institution.1 For the reasons stated below,
`we deny the Request for Rehearing.
`
`
`I. ANALYSIS
`When reconsidering a decision on institution, we review the decision
`for an abuse of discretion. See 37 C.F.R. § 42.71(c). An abuse of discretion
`
`
`1 Patent Owner also requested rehearing by the Precedential Opinion Panel
`(“POP”) to “clarify the date from which Fintiv Factor 4 should be analyzed,
`namely, the Petition’s filing date.” Req. Reh’g 1; Ex. 3002. On October 27,
`2020, POP denied Patent Owner’s request for review. Paper 19.
`
`2
`
`

`

`IPR2020-00200
`Patent 10,084,991 B2
`may be determined if a decision is based on an erroneous interpretation of
`law, if a factual finding is not supported by substantial evidence, or if the
`decision represents an unreasonable judgment in weighing relevant factors.
`See Star Fruits S.N.C. v. United States, 393 F.3d 1277, 1281 (Fed. Cir.
`2005); Arnold P’ship v. Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004); In re
`Gartside, 203 F.3d 1305, 1315–16 (Fed. Cir. 2000). The party requesting
`rehearing has the burden of showing the decision should be modified, which
`includes specifically identifying all matters the party believes were
`misapprehended or overlooked. See 37 C.F.R. § 42.71(d).
`In our Decision on Institution, we found that Fintiv Factor 4, i.e.,
`overlap between issues raised in the Petition and in the underlying litigation,
`weighed against exercising our discretion to deny institution. Dec. 15–22.
`Specifically, we considered the parties’ efforts to narrow the issues at trial
`and determined that there was a material distinction between the claims
`being asserted at trial and the claims being challenged in this proceeding. Id.
`at 16–17. We also determined that there were significant differences
`between the references being asserted at trial and the references being relied
`on in this proceeding. Id. at 18–22. In weighing all of the Fintiv factors, we
`determined that “the differences in the claims being considered in this
`proceeding and the underlying litigation, as well as the differences in the
`prior art being applied, counsels against exercising discretionary denial.” Id.
`at 25. Thus, we declined to exercise our discretion under 35 U.S.C. § 314(a)
`to deny inter partes review. Id.
`Patent Owner contends our weighing of the Fintiv factors—
`particularly with regard to Factor 4—represents an unreasonable judgment.
`See Req. Reh’g 3–9. In particular, Patent Owner argues that we should have
`
`3
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`IPR2020-00200
`Patent 10,084,991 B2
`considered the overlap only at the time the Petition was filed and that we
`should not have considered any developments affecting the overlap arising
`thereafter. Id. Patent Owner argues that there was complete overlap with
`the underlying litigation at the time the Petition was filed. Id. at 4, 7.
`According to Patent Owner, our consideration of post-filing developments
`“necessarily leads to gamesmanship, allowing petitioners to assert positions
`in the district court and the petition and then switch positions when it suits
`their purpose.” Id. at 1.
`We do not agree with Patent Owner that our analysis of Fintiv
`Factor 4 must be constrained to the facts as they existed when the Petition
`was filed. For example, in the Board’s informative decision in Sand
`Revolution II, LLC v. Continental Intermodal Grp.—Trucking LLC,
`IPR2019-01393, Paper 24 (PTAB June 16, 2020) (informative) (“Sand
`Revolution”), the panel considered and gave weight to Petitioner’s
`stipulation to withdraw certain prior art references from a related litigation if
`inter partes review was instituted. Sand Revolution at 11–12. Importantly,
`the stipulation in Sand Revolution arose long after the Petition was filed.
`Compare IPR2019-01393, Paper 1, 88 (petition with July 25, 2019, filing
`date), with IPR2019-01393, Ex. 1015 (stipulation to withdraw prior art dated
`April 13, 2020). Here, we also considered the parties’ more recent efforts in
`the underlying litigation to narrow the issues at trial, which reduced
`concerns of duplicative efforts between the District Court and the Board and
`minimized the potential for conflicting decisions. See, e.g., Dec. 16. This is
`consistent with the policy considerations underlying Factor 4 in Fintiv,
`namely, “concerns of inefficiency and the possibility of conflicting
`decisions.” Fintiv at 12.
`
`4
`
`

`

`IPR2020-00200
`Patent 10,084,991 B2
`Patent Owner also contends that “the Board failed to weigh Factor 4
`properly,” and that “far too much emphasis was placed on Factor 4.” Req.
`Reh’g 4–5. Patent Owner argues that “[t]he Board required complete
`overlap in claims and prior art in its analysis of Factor 4, leading to an
`unreasonable balancing of the Fintiv factors.” Id. at 5, see also id. at 12
`(arguing the same). The Decision, however, does not state, imply, or use a
`“complete overlap” standard in its analysis of Factor 4 as Patent Owner
`argues. Rather, the Decision’s analysis considers the claims and prior art
`that would overlap, as well as the claims and prior art that would not, in
`determining what weight to give Factor 4. For example, the Decision notes
`that, while the Petition challenges the patentability of claims 1–5 and 8–12,
`Patent Owner was only asserting claim 4 in the underlying litigation. Dec.
`17. The Decision also notes that “[i]n this proceeding, Petitioner is relying
`on Asmussen, Bear, Marley, DeFazio, and Lindstrom, whereas in the
`[underlying litigation], Petitioner is relying on Asmussen and Allen only.”
`Dec. 18. Thus, the Decision considers and weighs the similarities, as well as
`the differences, in the claims and the prior art between the two proceedings,
`and does not require “complete overlap” as Patent Owner contends.
`As to the weight afforded Factor 4, the Decision makes clear that:
`A few of the Fintiv factors weigh in favor of exercising
`our discretion to deny institution, including the court’s current
`trial date, and the investment in the underlying litigation,
`including the court’s completion of claim construction. Against
`this, however, the differences in the claims being considered in
`this proceeding and the underlying litigation, as well as the
`differences in the prior art being applied, counsels against
`exercising discretionary denial. Considered as a whole, the
`differences between the two proceedings and Petitioner’s
`relatively strong preliminary showing of unpatentability
`outweigh these other factors.
`
`5
`
`

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`IPR2020-00200
`Patent 10,084,991 B2
`Dec. 25. Thus, the Decision considers the factors, as a whole, and does not
`“place[] undue emphasis on Factor 4,” as Patent Owner contends. Req.
`Reh’g 9.
`With respect to Factor 4, Patent Owner also contends that we
`“overlooked Apple’s reservation of rights in the [underlying litigation] in its
`final election of prior art.” Id. at 14. The Decision’s analysis of Factor 4,
`however, thoroughly considered Patent Owner’s assertion that the prior art
`relied upon in the Petition is the same, or substantially the same, as the prior
`art at issue in the underlying litigation. See Dec. 15–22. Petitioner’s
`boilerplate “reservation of rights” regarding asserted prior art in the
`underlying litigation (see Ex. 1047, 2) has no impact on our analysis.
`Patent Owner also contends that we erred in our analysis of other
`Fintiv factors. With respect to Factor 3, Patent Owner argues that “even
`though the Board found Factor 3 ‘slightly’ favored denial, [the Board]
`significantly discounted the time and effort the Court and the Parties have
`invested in the underlying litigation and clearly did not weigh the factor
`properly.” Req. Reh’g 10. Patent Owner argues that the Board “should
`have weighed Factor 3 to favor denial, not merely ‘slightly’ favor denial.”
`Id. at 10–11. Patent Owner is arguing that we should have weighed this
`factor differently; however, mere disagreement with how we weighed this
`factor is not a proper basis for rehearing. Nor does Patent Owner present
`any persuasive evidence that we exercised unreasonable judgment in
`weighing this factor.
`Regarding Factor 5, Patent Owner contends that we “improperly
`weighed Factor 5 in light of other factors by holding that it ‘does not weigh
`against’ exercising discretion. Id. at 12. We disagree. We quoted language
`
`6
`
`

`

`IPR2020-00200
`Patent 10,084,991 B2
`from Fintiv: “If a petitioner is unrelated to a defendant in an earlier court
`proceeding, the Board has weighed this fact against exercising discretion.”
`Dec. 22 (quoting Fintiv at 13–14). We noted that the parties are the same in
`this proceeding as in the underlying litigation, so we found that Factor 5
`does not weigh against exercising discretionary denial. Id. This is not
`inconsistent with other Board decisions viewing Factor 5 as favoring denial
`when issues overlap with the related district court litigation. See, e.g., Apple
`Inc. v. Maxell, Ltd., IPR2020-00203, Paper 12 at 16 (PTAB July 6, 2020)
`(determining that Factor 5 favors the exercise of discretionary denial when
`“the trial court may reach the overlapping issues before the Board would in a
`final written decision”).
`Patent Owner also argues that we “improperly discounted
`[Petitioner’s] extreme delay in filing its Petition.” Req. Reh’g 15.
`According to Patent Owner, Petitioner had already drafted invalidity
`contentions for all the claims asserted here four months before the filing date
`of the Petition. Id. (citing Ex. 2003).
`Fintiv, however, recognizes “that it is often reasonable for a petitioner
`to wait to file its petition until it learns which claims are being asserted
`against it in the parallel proceeding.” Fintiv at 11. As stated in our
`Decision, this is consistent with the Leahy-Smith America Invent Act’s
`legislative history as to the one-year statutory bar under § 315(b),
`particularly with respect to a complex underlying litigation. Dec. 24 (citing
`157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (statement of Senator Kyl)).
`Our Decision credited Petitioner’s arguments about Patent Owner’s initial
`assertion of 10 different patents and 132 claims in the underlying litigation
`as a reason why it took nine months for Petitioner to file its Petition here.
`
`7
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`

`

`IPR2020-00200
`Patent 10,084,991 B2
`Id. We also noted that Petitioner filed its Petition only one month after
`Patent Owner made a preliminary election of asserted claims in the
`underlying litigation. Id. In light of this, and considering the multiple
`patents and numerous claims in the underlying litigation, we did not find
`Petitioner’s filing to be untimely. Id. Thus, we did not render an
`unreasonable judgment regarding the timing of Petitioner’s filing.
`Patent Owner also disputes the manner in which we collectively
`weighed the Fintiv factors. See Req. Reh’g 4 (“the Board should reweigh
`the Fintiv factors because far too much emphasis was placed on Factor 4”).
`Patent Owner contends we should have weighed Factor 2 more than others
`based on the following statement from Fintiv: “[I]f the court date is at
`around the same time or significantly after the statutory deadline, the
`decision whether to institute will likely implicate other factors discussed
`herein . . . .” Id. at 15 (emphasis added by Patent Owner). However, we do
`not interpret the quote from Fintiv as suggesting that Factor 2 should be
`given more weight. Rather, it recognizes how other Fintiv factors likely
`come into play when a trial in related litigation is on a similar or faster
`timeline. And we credited the trial date in the underlying litigation as
`supporting the exercise of discretionary denial. Dec. 13–14. Moreover, in
`our conclusion, we weighed these factors against each other. Id. at 25.
`Given that we reasonably accounted for the various factors, we do not agree
`with Patent Owner that we failed to conduct a balanced assessment of all
`relevant circumstances.
`
`
`
`
`
`8
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`

`

`IPR2020-00200
`Patent 10,084,991 B2
`
`
`II. CONCLUSION
`For the reasons stated above, we conclude that Patent Owner has not
`met its burden of showing that we abused our discretion in evaluating and
`weighing the Fintiv factors as part of our decision not to exercise discretion
`under 35 U.S.C. § 314(a) to deny inter partes review. Therefore, we deny
`Patent Owner’s requests to reweigh the Fintiv factors and to use our
`discretion to deny institution in this proceeding.
`
`
`III. ORDER
`
`Accordingly, it is
`ORDERED that Patent Owner’s Request for Rehearing is denied.
`
`9
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`

`

`IPR2020-00200
`Patent 10,084,991 B2
`For PETITIONER:
`
`Jennifer Bailey
`Adam Seitz
`Paul Hart
`ERISE IP, P.A.
`jennifer.bailey@eriseip.com
`adam.seitz@eriseip.com
`paul.hart@eriseip.com
`
`
`For PATENT OWNER:
`
`Robert Pluta
`Amanda Bonner
`Luiz Miranda
`James Fussell
`William Barrow
`Saqib Siddiqui
`MAYER BROWN LLP
`rpluta@mayerbrown.com
`asbonner@mayerbrown.com
`lmiranda@mayerbrown.com
`wbarrow@mayerbrown.com
`jfussell@mayerbrown.com
`ssiddiqui@mayerbrown.com
`
`
`10
`
`