`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.
`____________
`
`IPR2020-00202
`Patent 10,212,586 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, 2, 6, 7, 9, 10, 13, 14, and 16–18
`(“the challenged claims”) of U.S. Patent No. 10,212,586 B2 (Ex. 1001, “the
`’586 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,
`
`
`
`IPR2020-00202
`Patent 10,212,586 B2
`“PO Sur-reply”) 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. 9–21. 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. 21.
`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. 3001. On October 27,
`2020, POP denied Patent Owner’s request for review. Paper 19.
`
`2
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`IPR2020-00202
`Patent 10,212,586 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. 14–18.
`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 15–16. 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 17–18. In weighing all of the Fintiv factors, we
`determined that “the difference in the claims being considered in this
`proceeding and the underlying litigation, the difference in the prior art being
`applied, as well as the strong preliminary showing of unpatentability,”
`outweighed other factors being considered. Id. at 21. 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.
`
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`IPR2020-00202
`Patent 10,212,586 B2
`See Req. Reh’g 3–9, 12–15. In particular, Patent Owner argues that we
`should have 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. at 3–9. 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. 15–16. This is
`consistent with the policy considerations underlying Factor 4 in Fintiv,
`
`4
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`IPR2020-00202
`Patent 10,212,586 B2
`namely, “concerns of inefficiency and the possibility of conflicting
`decisions.” Fintiv at 12.
`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, 2, 6, 7, 9, 10,
`13, 14, and 16–18, Patent Owner was asserting only claims 7, 16, and 17 in
`the underlying litigation. Dec. 16. The Decision also notes that in this
`proceeding, Petitioner is relying on the prior art reference Kirkup alone or
`the combination of Kirkup and Huerga, whereas in the underlying litigation,
`Petitioner is relying on Schiffer alone or the combination of Schiffer and
`Kirkup. Dec. 17. 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, the
`difference in the claims being considered in this proceeding and
`
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`IPR2020-00202
`Patent 10,212,586 B2
`the underlying litigation, the difference in the prior art being
`applied, as well as the strong preliminary showing of
`unpatentability outweigh these other factors.
`Dec. 21. Thus, the Decision considers the factors, as a whole, and does not
`use “an unreasonable judgment in weighing the factors,” 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. 17–18. 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’s arguments in this regard are predicated on the
`notion that we should have weighed Factor 3 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.
`
`6
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`IPR2020-00202
`Patent 10,212,586 B2
`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
`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. 18 (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. 20 (citing
`157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (statement of Senator Kyl)).
`
`7
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`IPR2020-00202
`Patent 10,212,586 B2
`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.
`Id. at 19. 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. at 20. 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 [or]
`around the same time or significantly after the [projected] statutory deadline,
`the decision whether to institute will likely implicate other factors
`discussed herein . . . .” Id. at 15 (emphasis added by Patent Owner) (quoting
`Fintiv at 9). 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. 12–13. Moreover, in our conclusion, we weighed these factors against
`each other. Id. at 21. 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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`IPR2020-00202
`Patent 10,212,586 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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`IPR2020-00202
`Patent 10,212,586 B2
`
`For PETITIONER:
`
`Adam Seitz
`Paul Hart
`Jennifer Bailey
`Robin Snader
`ERISE IP, P.A.
`adam.seitz@eriseip.com
`paul.hart@eriseip.com
`jennifer.bailey@eriseip.com
`robin.snader@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
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`