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`Filed: April 29, 2020
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`___________________
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`LG ELECTRONICS INC.,
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`PETITIONER,
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`V.
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`BELL NORTHERN RESEARCH, LLC,
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`PATENT OWNER.
`___________________
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`Case No. IPR2020-00319
`U.S. Patent No. 7,039,435
`___________________
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`PATENT OWNER’S PRELIMINARY SUR-REPLY TO
`PETITIONERS’ PRELIMINARY REPLY
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`I.
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`The Case Schedule Strongly Supports Non-Institution
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`Petitioner’s Reply draws a deeply flawed comparison between this Petition
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`and other IPR proceedings where BNR urged discretionary denial under § 314(a)
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`and the Board instituted review. In those other proceedings, because there was no
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`trial date and the district court said it might consider a stay, the Board held “it is
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`not clear that the district court litigation will have concluded by the time our final
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`decision is due.” (Ex. 1027, 8; Ex. 1028, 8, Ex. 1029, 10.) The clarity the Board
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`sought in those prior proceedings exists here, and discretionary denial under §
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`314(a) is warranted for every reason such discretion exists.
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`The Board’s precedential § 314(a) opinions repeatedly emphasize the
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`importance of a date certain for trial. In NHK Spring Co., Ltd. v. Intri-Plex
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`Technologies, Inc., the Board denied institution under § 314(a), citing the
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`duplicative art and arguments and a fixed trial date that would be complete before
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`any final written decision. IPR2018-00752, Paper 8 at 19-20 (PTAB Sept. 12,
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`2018). Recently, in Oticon Medical AB v. Cochlear Ltd., the Board instituted over
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`a § 314(a) challenge, distinguishing it from NHK because “a trial in [Oticon]
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`would not be directly duplicative of the District Court action. Nor is there a trial
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`date set at the District Court.” IPR2019-00975, Paper 15, 23-24 (PTAB Oct. 16,
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`2019). As shown in NHK and Oticon, a fixed trial date that would be complete
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`before any final written decision strongly favors denying institution.
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`1
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`
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`Petitioner suggests the ongoing COVID-19 pandemic renders the trial date
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`uncertain and cites a joint motion the parties filed to extend certain deadlines due
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`to COVID-19. There, Petitioner alone sought an extension of the trial date. (Ex.,
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`2009, 5.) After Petitioner filed its Reply, the district court rejected Petitioner’s
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`request to delay the trial and confirmed the existing December 14, 2020 trial date.
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`(Ex. 2017, 2.) Petitioner speculates about whether and under what conditions the
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`district court might vacate the scheduled trial date it recently confirmed and
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`institute a stay, and proceeds under the assumption that a stay is a foregone
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`conclusion – it is not. Crucially, the Board does not make decisions under § 314(a)
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`based on speculation or what Petitioner hopes will happen. IPR proceedings are
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`intended to be a cost-effective alternative to litigation. When they will not be, and
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`institution proceeds, it undermines the AIA’s purpose and intent—and when forced
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`into parallel duplicative proceedings, it inflicts a significant cost on the parties, the
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`courts, and the Board. Musing about what might happen is contrary to NHK and
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`Oticon, which require a tight focus on known, objective facts. See NHK, IPR2018-
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`00752, Paper 8, 19-20; Oticon, IPR2019-00975, Paper 15, 23-24.
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`Petitioner also fails to acknowledge or disclose that in the prior litigation, the
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`district court did not consider a stay until each asserted patent in litigation was
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`instituted. That will not happen here. Petitioner challenged four asserted litigation
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`patents but declined to challenge a fifth litigation patent (now time-barred). See
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`2
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`
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`IPR2020-00318 (Patent No. 7,957,450), IPR2020-00330 (Patent No. 6,549,792).
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`Petitioner cannot argue to the district court that a stay of the litigation is warranted
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`based on all asserted patents instituted, which makes a stay less likely.
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`Petitioner’s relies on Abbott Vascula, Inc. v. Flexstent LLC, IPR2019-00882,
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`Paper 11, 29-30 (PTAB Oct. 7, 2019), which is distinguishable because there the
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`Board noted that petitioner filed its IPR “before it filed an answer in the district
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`court proceeding.” Here the Petitioner filed at the one-year deadline. Further, in
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`Abbott “fact discovery will not close, and expert discovery will not begin, until
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`after issuance of this decision.” Here, fact discovery will be complete before the
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`expected issuance of an institution decision and expert discovery well underway.
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`In Illumina, the Board noted that the petition challenged all claims of the patent,
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`whereas only a subset of claims was at issue in the co-pending district court
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`proceeding leaving the open the possibility that the patent owner might later assert
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`some of the non-litigation claims against the petitioner were challenged in the IPR.
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`Illumina, Inc. v. Natera, Inc., IPR2019-0101, Paper 19 at 6 (PTAB Dec. 18, 2019).
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`Here the challenged claims coincide with the claims in litigation.
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`Finally, there is a fundamental unfairness to patent owners generally if the
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`precedential decisions such as NHK can be ignored based on hypothetical scenarios
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`conjured up by a petitioner. Adopting such a standard leads to unpredictability and
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`renders precedential decisions, such as NHK, a nullity.
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`3
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`
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`II.
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`Petitioner Fails to Refute Patent Owner’s General Plastic Arguments
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`Petitioner’s Reply is remarkable only for the arguments it fails to address.
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`Petitioner (1) concedes, through its silence, that there are significant General
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`Plastics factors that weigh strongly in favor of denial of institution, (2) sets forth a
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`collection of half-truths to mislead the Board into believing that there are
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`differences between the scope of the instant Petition and IPR2019-01365, and (3)
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`misconstrues the relevant inquiry under General Plastic.
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`Petitioner never denies the significantly overlapping scope of the two IPRs,
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`or that the Board, if it instituted the instant Petition, would have to consider the
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`same arguments across two different proceedings, resulting in a substantial loss of
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`efficiency and the risk of inconsistencies. The factor concerning the finite
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`resources of the Board (Factor 6) is important, as it has resulted in denial of
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`institution even where other factors are neutral or do not favor Patent Owner. See
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`Juniper Networks, Inc. v. Finjan, Inc., IPR2019-00060, Paper 7 at 15-17 (PTAB
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`April 29, 2019). Nor does Petitioner deny that it knew of the prior art references at
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`least eight months before it filed its Petition (Factor 4). Petitioner further concedes
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`that, at the time it filed its Petition, it had already received Patent Owner’s
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`preliminary response to the earlier filed petitions two months before (Factor 3).
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` Petitioner instead argues that the POPR did not “identify any deficiencies in
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`the Huawei petition that LG remedied.” But that is demonstrably false. Patent
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`4
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`
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`Owner devoted more than three full pages of its POPR to specifically identifying
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`several areas where LG attempted to fix the earlier-filed Petition’s mistakes. (See
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`POPR, 34-37; see also Ex. 2015 (showing one example of how Petitioner copied
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`the earlier filed Petition and then added arguments to address the issues raised in
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`the earlier-filed POPR).) Petitioner never addresses these identifications in its
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`Reply. Petitioner’s Reply also contends that LG is a different company from
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`Huawei—a fact that no party has ever disputed—and for that reason the Board
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`should completely disregard the fact that the two companies share the exact same
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`counsel. But Petitioner’s argument asks the Board to look the other way when
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`Petitioner clearly derived a tactical benefit from keeping apprised of the earlier-
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`filed case and then essentially sought a “do-over” through a follow-on petition.
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`That is precisely the type of imbalanced equities that General Plastic addressed.
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`Petitioner attempts to cast aspersions on BNR for an alleged “delay” in
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`asserting claims in the district court action. (Rep., 4.) But this argument is a red
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`herring for at least two reasons. First, Petitioner failed to tell the Board that,
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`between Patent Owner’s first round of contentions and the second round (both
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`rounds served as of right under the district court’s local patent rules), there was no
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`change in the asserted claims. (Compare Ex. 2018 with Ex. 2019.) Second, the
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`district court has permitted BNR to amend its contentions as recently as one month
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`ago, well after LG’s statutory deadline to file an IPR. Changes in district court
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`5
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`
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`litigation scope simply do not excuse Petitioner’s unreasonable delay. This is
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`especially true here, where the ’435 patent only has nine claims, and only one
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`independent claim. The four dependent claims that LG decided not to challenge are
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`no justification for Petitioner’s lie-in-wait approach, and its argument is pretextual.
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`Moreover, Petitioner makes much of the fact that there was one additional
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`dependent claim, claim 8, asserted against LG in the district court case as
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`compared with the ZTE case. But here, too, Petitioner fails to tell the Board that
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`claim 8 was dropped from the district court litigation months ago. (See Ex. 2020.)
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`Thus, there is complete overlap between the claims at issue in the two district
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`court cases. Petitioner’s claims of potential “unfair prejudice” are baseless and rest
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`upon its attempt to mislead the Board on this issue.
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`Finally, Petitioner sets up a straw man argument when it argues that it could
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`not have used the Board’s institution decision in the earlier filed IPR as a roadmap
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`because it issued after the Petition was filed. But the inquiry under General Plastic
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`is very clearly “whether…the petitioner already received the patent owner’s
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`preliminary response to the first petition or received the Board’s decision on
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`whether to institute review in the first petition.” General Plastic at 15-16.
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`Petitioner never states that it did not use or rely upon BNR’s POPR in response to
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`the earlier petitions to craft its arguments against BNR in the instant Petition. Nor
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`can it, since the Petition makes it clear that is precisely what Petitioner did.
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`6
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`
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`Dated: April 29, 2020
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`
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`
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`Respectfully Submitted,
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`/Steven W. Hartsell/
`Steven W. Hartsell (Reg. No. 58,788)
`SKIERMONT DERBY LLP
`1601 Elm St., Ste. 4400
`Dallas, Texas 75201
`P: 214-978-6600/F: 214-978-6601
`Lead Counsel for Patent Owner
`
`Alexander E. Gasser (Reg. No. 48,760)
`SKIERMONT DERBY LLP
`1601 Elm St., Ste. 4400
`Dallas, Texas 75201
`P: 214-978-6600/F: 214-978-6621
`Back-Up Counsel for Patent Owner
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`
`
`
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6(e), I certify that I caused to be served on the
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`counsel for Petitioner a true and correct copy of the foregoing Patent Owner’s
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`Preliminary Sur-Reply to Petitioner’s Reply, by electronic means on April 29,
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`2020 at the following addresses of record:
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`Timothy W. Riffe
`riffe@fr.com
`Christopher C. Hoff
`hoff@fr.com
`R. Andrew Schwentker
`schwentker@fr.com
`PTABInbound@fr.com
`IPR18768-0183IP1@fr.com
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`Dated: April 29, 2020
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`
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`Respectfully Submitted,
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`/Steven W. Hartsell/
`Steven W. Hartsell (Reg. No. 58,788)
`Counsel for Patent Owner
`
`
`
`
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