Trials@uspto.gov
`571-272-7822
`
`Paper 15
`Date: June 23, 2020
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`LG ELECTRONICS, INC.,
`Petitioner,
`
`v.
`
`BELL NORTHERN RESEARCH, LLC,
`Patent Owner.
`
`IPR2020-00319
`Patent 7,039,435 B2
`
`
`
`
`
`
`
`
`
`Before BRYAN F. MOORE, STACY B. MARGOLIES, and
`SCOTT E. BAIN, Administrative Patent Judges.
`
`MOORE, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314, 37 C.F.R. § 42.4
`
`I.
`
`INTRODUCTION
`
`A. Background and Summary
`
`LG Electronics, Inc. (“Petitioner”) filed a Petition (“Pet.” Paper 2)
`
`pursuant to 35 U.S.C. § 311 to institute an inter partes review of claims 1–3,
`
`6, and 8 of U.S. Patent No. 7,039,435 B2 (“the ’435 patent,” Ex. 1001). The
`
`Petition is supported by the Declaration of Matthew Valenti, Ph.D. (Ex.
`
`
`
`

`

`IPR2020-00319
`Patent 7,039,435 B2
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`1003). Bell Northern Research, LLC (“Patent Owner”) filed a Preliminary
`
`Response (“Prelim. Resp.” Paper 7).1 The Preliminary Response is
`
`supported by the Declaration of Mark Horenstein, Ph.D., (Ex. 2003).
`
`Petitioner filed an authorized reply to the Preliminary Response. (“Prelim.
`
`Reply” Paper 12). Patent Owner filed an authorized sur-reply to the reply.
`
`(“Prelim. Sur-Reply” Paper 13).
`
`For the reasons set forth below, we institute an inter partes review of
`
`claims 1–3, 6, and 8 of the ’435 patent.
`
`B. Real Parties in Interest
`
`Petitioner names LG Electronics, Inc., LG Electronics U.S.A. Inc.,
`
`and LG Mobile Research U.S.A., LLC as the real parties-in-interest. Pet. 2.
`
`Patent Owner names Bell Northern Research, LLC (which is a wholly
`
`owned subsidiary of Hilco Patent Acquisition 56, LLC, which is owned by
`
`both Hilco IP Merchant Capital, LLC, and Hilco, Inc.) as the real party-in-
`
`interest. Paper 4, 1.
`
`C. Related Matters
`
`The parties advise us that the ’435 patent is asserted against Petitioner
`
`in Bell Northern Research, LLC v. LG Elecs., Inc., 3:18-cv-02864 (S.D. Cal.
`
`Dec. 20, 2018). Pet. 2; Paper 4, 1. The parties advise us that the ’435 patent
`
`was asserted against other parties in Bell Northern Research, LLC v. Huawei
`
`Device (Dongguan) Co., Ltd., 3:18-cv-01784 (S.D. Cal. Nov. 13, 2018) and
`
`is currently asserted against other parties in Bell Northern Research, LLC v.
`
`ZTE Corp., 3:18-cv-01786 (S.D. Cal. Oct. 15, 2018). Pet. 2; Paper 4, 1. The
`
`’435 patent was also the subject of IPR2019-01186, which has been
`
`
`1 Patent Owner file a confidential version of its Preliminary Response.
`Paper 8. In this Decision, we cite only to the public version of Patent
`Owner’s Preliminary Response.
`
`2
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`

`

`IPR2020-00319
`Patent 7,039,435 B2
`
`terminated due to settlement prior to institution and IPR2019-01365, which
`
`was instituted and is currently pending.
`
`D. The ’435 Patent
`
`The ’435 patent generally describes techniques for reducing the
`
`transmit power level of a portable cell phone when located near a human
`
`body. Ex. 1001, 1:63–67. For example, the ’435 patent describes a cell
`
`phone device including a “typical power circuit” that provides a transmit
`
`power level. Id. at 3:31–34. A “proximity regulation system” is coupled to
`
`the “power circuit” and determines a “proximity transmit power level” based
`
`on “its location proximate the portable cell phone user.” Id. at 3:43–47. The
`
`’435 patent discloses that a “network adjusted transmit power level may be
`
`reduced to a value determined by the proximity transmit power level when
`
`the location of the portable cell phone 200 is within the vicinity of the user’s
`
`head” or “just within the vicinity of a user’s body.” Id. at 5:29–36.
`
`E. Illustrative Claims
`
`Challenged claim 1 is an independent claim. Challenged claims 2, 3,
`
`6, and 8 depend directly from claim 1. Claim 1, reproduced below, is
`
`illustrative.
`
`1.
`
`A portable cell phone, comprising:
`a power circuit that provides a network adjusted
`transmit power level as a function of a position to a
`communications tower; and
`a proximity regulation system, including:
`a location sensing subsystem that determines a
`location of said portable cell phone proximate a user; and
`a power governing subsystem that determines a
`proximity transmit power level of said portable cell phone
`based on said location and determines a transmit power
`level for said portable cell phone based on said network
`adjusted transmit power level and said proximity transmit
`power level.
`
`3
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`IPR2020-00319
`Patent 7,039,435 B2
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`Ex. 1001, 8:2–15.
`
`F. Evidence
`
`Petitioner relies on the following references. Pet. 11–56.
`
`Name
`
`Reference
`
`Exhibit
`
`Luxon
`
`Irvin
`
`US 6,095,820, filed Oct. 27, 1995, issued Aug. 1,
`2000
`WO 2002/05443 A2, filed June 20, 2001,
`published Jan. 17, 2002
`Myllymäki US 6,018,646, filed Aug. 22, 1997, issued Jan.
`25, 2000
`US 6,845,246, filed June 15, 2000, issued Jan.
`18, 2005
`
`Steer
`
`1004
`
`1005
`
`1006
`
`1007
`
`
`
`G. Prior Art and Asserted Grounds
`
`Petitioner asserts that claims 1–3, 6, and 8 would have been
`
`unpatentable on the following grounds:
`
`Claim(s) Challenged
`1–3, 8
`6
`1–3, 6, 8
`1–3, 6, 8
`
`35 U.S.C. §
`103
`103
`103
`103
`
`Reference(s)/Basis
`Luxon, Irvin
`Luxon, Irvin, Myllymäki
`Irvin, Myllymäki
`Steer, Irvin
`
`
`
`A. Discretion Under 35 U.S.C. § 314(a)
`
`II. ANALYSIS
`
`We, for the reasons discussed below, do not exercise the discretion
`
`available under § 314(a) to deny institution of a trial in this case.
`
`GENERAL PLASTIC FACTORS
`
`In the context of follow-on petitions, our exercise of discretion under
`
`§ 314(a) is guided by a set of non-exclusive factors:
`
`1. whether the same petitioner previously filed a petition directed
`to the same claims of the same patent;
`
`4
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`IPR2020-00319
`Patent 7,039,435 B2
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`2. whether at the time of filing of the first petition the petitioner
`knew of the prior art asserted in the second petition or should
`have known of it;
`
`3. whether at the time of filing of the second petition the
`petitioner already received the patent owner’s preliminary
`response to the first petition or received the Board’s decision
`on whether to institute review in the first petition;
`
`4. the length of time that elapsed between the time the petitioner
`learned of the prior art asserted in the second petition and the
`filing of the second petition;
`
`5. whether the petitioner provides adequate explanation for the
`time elapsed between the filings of multiple petitions directed
`to the same claims of the same patent;
`
`6. the finite resources of the Board; and
`
`7. the requirement under 35 U.S.C. § 316(a)(11) to issue a final
`determination not later than 1 year after the date on which the
`Director notices institution of review.
`
`General Plastic Indus. Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-
`
`01357, Paper 19 at 16 (PTAB Sept. 6, 2017) (precedential as to § II.B.4.i)
`
`(“the General Plastic factors”). We determine the General Plastic factors
`
`do not weigh in favor of denying institution.
`
`1. Whether the same petitioner previously filed a petition
`directed to the same claims of the same patent
`
`Petitioner asserts that “[a]n IPR petition (IPR2019-01186) was
`
`previously filed against the ’435 patent on June 11, 2019 by a different
`
`petitioner, independent of LG, and a second IPR petition (IPR2019-01365),
`
`substantively identical to IPR2019-01186 was filed against the ’435 patent
`
`on July 24, 2019, again by a different petitioner, independent of LG.” Pet.
`
`63.
`
`The precedential Valve decision held that “[w]hen different petitioners
`
`challenge the same claims of the same patent, we also consider the nature of
`
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`IPR2020-00319
`Patent 7,039,435 B2
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`any relationship between those petitioners when weighing the General
`
`Plastic factors.” Valve Corp. v. Elec. Scripting Prods., Inc., IPR2019-00062,
`
`-00063, -00084, Paper 11 at 10 (PTAB Apr. 2, 2019) (precedential). In
`
`Valve, the Board found that the first General Plastic factor favored denying
`
`institution in light of the overlap in the challenged claims and the significant
`
`relationship between the first and second petitioners:
`
`We determine that the first General Plastic factor weighs against
`institution. As discussed above, the petitions in these cases
`challenge the same claims of the ’934 patent as the previous
`petition in the 1031 IPR. As also discussed above, Valve and
`HTC were co-defendants in the District Court litigation and were
`accused of infringing the ’934 patent based on HTC’s VIVE
`devices that incorporate technology licensed from Valve. Thus,
`there is a significant relationship between Valve and HTC with
`respect to Patent Owner’s assertion of the ’934 patent. The
`complete overlap in the challenged claims and the significant
`relationship between Valve and HTC favor denying institution.
`
`Id. at 10 (emphasis added). Thus, Valve instructs us to consider the
`
`relationship between the petitioners and the overlap in the challenged claims,
`
`as between this case and the earlier-filed IPR2019-01186 and IPR2019-
`
`01365. We address each of these points in turn.
`
`a) Relationship between the Petitioner, Huawei, and ZTE
`
`Petitioner argues that “[n]ot only is there no control or cooperation in
`
`the IPRs between LG and distinct petitioners in the previous IPRs, but they
`
`remain distinct parties, with ultimately distinct interests, and distinct
`
`litigation strategies, and are often competitors in the marketplace.” Pet. 64–
`
`65. For example, Petitioner states “unlike its competitor Huawei which is
`
`based in China, LG is a separate and different company based in South
`
`Korea that has its own personnel, that is facing different potential liability
`
`6
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`IPR2020-00319
`Patent 7,039,435 B2
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`based on different accused products, and that has different motivations from
`
`Huawei.” Prelim. Reply 5.
`
`Patent Owner argues the “relationship between the first filer, Huawei,
`
`and the current Petitioner, LG, . . . is relevant to the equities here. Huawei
`
`and LG share the same counsel. Fish and Richardson (“Fish”) represents
`
`both Huawei and LG in the district court litigation.” Prelim. Resp. 33 (citing
`
`Ex. 2012; Ex. 2013, 79).
`
`We compare the circumstances in the present case to those in Valve.
`
`In Valve, the two petitioners were codefendants in a single patent
`
`infringement proceeding and the challenged patent had been asserted against
`
`both because one petitioner had licensed the allegedly infringing technology
`
`from the other petitioner. Valve, Paper 11 at 9–10. The first petitioner,
`
`HTC, made accused devices that incorporated technology licensed from the
`
`second petitioner, Valve, who had also provided HTC with technical
`
`assistance during the development of the accused devices. Id. at 10.
`
`Consequently, the panel in Valve found a “significant relationship” between
`
`the petitioners that favored denying institution. Id. at 11. Huawei and LG
`
`were not and are not currently co-defendants. We do not consider sharing
`
`the same counsel to create a significant relationship under the inquiry set
`
`forth in Valve. Thus, on the record before us, Huawei and LG do not have a
`
`significant relationship, nor are they similarly situated, with respect to Patent
`
`Owner’s assertion of the ’435 patent. Valve Corp., Paper 11.
`
`
`
`b) Overlapping Claims
`
`Next we consider the overlap between the claims challenged in this
`
`proceeding and the challenged claims in IPR2019-01186, 1365. The
`
`Petition seeks inter partes review of claims 1–3, 6, and 8. See Pet. 1. The
`
`7
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`IPR2020-00319
`Patent 7,039,435 B2
`
`Petition in IPR2019-01186 sought inter partes review of claims 1–3, and 6,
`
`but terminated due to settlement prior to institution. IPR2019-01186, Paper
`
`2, 5; Paper 15. In IPR2019-01365, we instituted trial on claims 1–3, and 6.
`
`IPR2019-01365, Paper 13, 4, 39 (Institution Decision). Thus, there is one
`
`claim at issue in this proceeding that is not at issue in IPR2019-01365.
`
`Patent Owner asserts “if [the Board] institute[s] the instant Petition,
`
`[the Board] would have to consider the same arguments across two different
`
`proceedings, resulting in a substantial loss of efficiency and the risk of
`
`inconsistencies.” Prelim. Sur-Reply 4.
`
`Petitioner asserts that because it asserts the additional claim 8,
`
`discretionary denial would prejudice LG. Prelim. Reply 4–5. Patent Owner
`
`responds “Petitioner fails to tell the Board that claim 8 was dropped from the
`
`district court litigation months ago. (See Ex. 2020.).” Prelim. Sur-Reply 6.
`
`Thus, according to Patent Owner, “there is complete overlap between the
`
`claims at issue in the two district court cases. Petitioner’s claims of potential
`
`‘unfair prejudice’ are baseless and rest upon its attempt to mislead the Board
`
`on this issue.” Id.
`
`Nevertheless, there is not complete overlap of asserted claims which
`
`weighs against exercising our discretion to deny institution.
`
`c) “Factor One Conclusion
`
`Accordingly, in light of the lack of a significant relationship between
`
`Petitioner and Huawei, and the incomplete overlap between the challenged
`
`claims in the Petition and IPR2019-01365, the first General Plastic factor
`
`weighs against exercising our discretion to deny institution.
`
`8
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`IPR2020-00319
`Patent 7,039,435 B2
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`2. Whether at the time of filing of the first petition the
`petitioner knew of the prior art asserted in the second
`petition or should have known of it
`
`IPR2019-01186 and IPR2019-01365 included anticipation grounds by
`
`two references Baiker and Irvin and obviousness grounds over: Baiker and
`
`Irvin; Irvin and Myllamäki; Bodin and Irvin; and Bodin, Irvin and
`
`Myllamäki. The current Petition removes Bodin, Baiker and Werling, and
`
`the anticipation by Irvin and adds two references, Luxon and Steer, that were
`
`not cited in the previous petitions, i.e. obviousness grounds over Luxon and
`
`Irvin; Luxon, Irvin, and Myllamäki; Irvin, and Myllamäki; and Steer and
`
`Irvin.
`
`Other than Irvin, and Myllamäki, there is no evidence in the record
`
`indicating whether Petitioner should have been able to find the references
`
`relied on in the Petition at the time of the filing of the prior petitions by
`
`exercising reasonable diligence. Petitioner asserts it “was not aware of” the
`
`Luxon and Steer references at the time of the filing of the first Petition, but
`
`do not address whether they “should have known” of the references. Pet. 65.
`
`Patent Owner asserts this factor does not weigh for or against institution.
`
`Prelim. Resp. 34. Accordingly, given there is not sufficient evidence
`
`whether or not Petitioner should have known about Luxon and Steer, this
`
`factor is neutral.
`
`3. Whether at the time of filing of the second petition the
`petitioner already received the patent owner’s preliminary
`response to the first petition or received the Board’s
`decision on whether to institute review in the first petition
`
`Petitioner filed the present Petition on December 19, 2019, before the
`
`Board issued its decision on institution in IPR2019-01365 on February 11,
`
`2020. Pet. 31; IPR2019-01365, Paper 13. On the other hand, Petitioner’s
`
`9
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`

`

`IPR2020-00319
`Patent 7,039,435 B2
`
`filing occurred after Patent Owner filed its Preliminary Response in
`
`IPR2019-01365 on November 12, 2019 and in IPR2019-01186 on October
`
`11, 2019. IPR2019-01365, Paper 8; IPR2018-01186, Paper 8.
`
`Petitioner argues that it did not have access to the Board’s decision on
`
`institution (Prelim. Reply 6) but this factor relies on either the preliminary
`
`response or the institution decision. See Prelim. Sur-Reply 6. Petitioner
`
`also argues that it did not delay as a litigation tactic:
`
`Patent Owner first asserted the ’435 patent against LG more than
`three months after it asserted it against petitioners in the earlier
`IPR proceedings. Critically, as noted above, Patent Owner
`provided its final election of asserted claims against LG only
`days before patent owner filed its [Patent Owner Preliminary
`Response (POPR)] in IPR2019-01186 (and the POPR in
`IPR2019-01365 is substantively identical).
`
`
`
`Pet. 66.
`
`Patent Owner argues that Petitioner uses most of the same references
`
`and arguments as the earlier cases. Prelim. Resp. 34–35. Specifically,
`
`Patent Owner argues “[w]hile the grounds asserted in the earlier petitions
`
`and the current one are not identical, LG uses Irvin for almost all claim
`
`limitations in all three grounds, and Irvin was also the primary reference in
`
`the earlier-filed petitions.” Id.
`
`Patent Owner also asserts Petitioner used knowledge gained from the
`
`earlier Patent Owner preliminary responses to improve this Petition. For
`
`example, according to Patent Owner, the preliminary response in IPR2019-
`
`01186 argued that that petitioner had not cited to the Irvin provisional in its
`
`mappings for anticipation and obviousness. Id. at 35. Patent Owner argues
`
`Petitioner added those citations to this Petition. Id.
`
`Patent Owner also argues that the preliminary response in IPR2019-
`
`01186 made arguments against Baiker, Bodin, and Irvin. Id. Specifically,
`
`10
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`IPR2020-00319
`Patent 7,039,435 B2
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`Patent Owner argues the prior preliminary response argued that Baiker was
`
`antedated, that Bodin was missing the limitation of “position to a
`
`communications tower,” and that Irvin (as an anticipating reference) was
`
`also missing limitations. Id. at 35–36. We are unable to determine if the
`
`changes between the two petitions was an attempt to address arguments
`
`made in the preliminary response from IPR2019-01186. For example,
`
`arguments were made against Irvin and Myllamäki in IPR2019-01186, yet
`
`Petitioner still asserts a ground based on Irvin and Myllamäki.
`
`Patent Owner points out that in the current Petition, Petitioner
`
`“literally copied Huawei’s entire argument with respect to Irvin’s disclosure
`
`of claim limitations, but then added a couple of paragraphs regarding
`
`Myllymäki in order to cure the deficiency in Irvin that Patent Owner
`
`identified in its Preliminary Response to the first Petition.” Id. at 36.
`
`Patent Owner provides Exhibit 2015, which provides a line by line
`
`comparison of the Irvin section of the IPR2019-01186 petition and the
`
`current Petition to support its assertion. Id. (citing Ex. 2015). Although
`
`Petitioner did apparently copy some portion of the prior Petition and add
`
`some citations, we do not discern specific arguments in the current Petition
`
`that are in response to arguments made in a prior preliminary response.
`
`Accordingly, this factor weighs only slightly in favor of denying
`
`institution under § 314(a).
`
`4. The length of time that elapsed between the time the
`petitioner learned of the prior art asserted in the second
`petition and the filing of the second petition
`
`Petitioner argues it worked diligently to identify prior art and file the
`
`present petition since being served with the Petition in the district court.
`
`Pet. 67. Patent Owner asserts “LG cannot deny that it had knowledge of
`
`11
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`

`IPR2020-00319
`Patent 7,039,435 B2
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`Irvin, Myllamäki, and Luxon at least as of August 9, 2019, when it served its
`
`. . . invalidity contentions in the district court litigation. Prelim. Resp. 37–38
`
`(citing Ex. 2014, 28–29.)
`
`Petitioner asserts the ’435 patent was “one of eight patents asserted
`
`against LG, each citing volumes of prior art, that occupied significant time
`
`to review and consider.” Id. Petitioner also argues the delay between
`
`learning of the prior art and filing the Petition is reasonable because Patent
`
`Owner finally elected asserted claims against LG on October 4, 2019. Id.
`
`Before that time, according to Petitioner, it had “little certainty as to which
`
`claims were at issue and could be included in the petition without
`
`introducing unnecessary inefficiencies for the Board and patent owner.” Id.
`
`Specifically, claim 8 was cited against Petitioner but asserted against other
`
`parties. Finally, Petitioner asserts it identified Steer in late October and it
`
`diligently filed the Petition after discovering Steer. Id.
`
`Additionally, according to Patent Owner, given that this petition was
`
`filed six months after Huawei’s petition, the delay is significant considering
`
`the substantial overlap of between the two petitions. Prelim. Resp. 38; see
`
`Valve, IPR2019-00062, Paper 11 at 14 (holding that a delay of five months
`
`after the filing of a prior petition weighed in favor of a discretionary denial
`
`of the later petition).
`
`Because there is a significant length of time between the first filed
`
`petition asserting the Irvin and Myllamäki references, among others, and the
`
`current Petition asserting the Irvin and Myllamäki references, among others,
`
`this factor weighs slightly in favor of invoking our discretion to deny
`
`institution.
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`12
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`IPR2020-00319
`Patent 7,039,435 B2
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`5. Whether the petitioner provides adequate explanation for
`the time elapsed between the filings of multiple petitions
`directed to the same claims of the same patent
`
`Petitioner argues that this factor weighs against denying institution
`
`because this is the first petition filed by LG, it worked diligently to file after
`
`Patent Owner elected claims in district court, and this inter partes review
`
`advances different “primary” references and an additional claim as
`
`compared to the prior inter partes review petition. Pet. 67–68.
`
`Patent Owner argues that Petitioner shares the same counsel with a
`
`party that was aware Irvin and Myllamäki months prior to the filing of this
`
`Petition. Prelim. Resp. 38. Specifically, Patent Owner asserts “on February
`
`25, 2019, [Counsel for Petitioner in its district court litigation] had signed
`
`invalidity contentions against the ’435 Patent on behalf of another client
`
`asserting Irvin and Myllamaki as prior art against the ’435 Patent,” eight
`
`months before it filed the current Petition. Id. Patent Owner also argues
`
`there are only nine claims--only one of which is independent--in the
`
`challenged patent, so waiting for Patent Owner’s election of claims would
`
`not result in a significant reduction in the complexity of the Petition versus
`
`addressing all nine claims. Prelim. Sur-Reply 6.
`
`Nevertheless, Petitioner asserts adequately that it waited until after
`
`Patent Owner’s election of claims to file the current petition and that it found
`
`the asserted reference Steer in October. Accordingly, this factor weighs
`
`against denying institution under § 314(a).
`
`6. The finite resources of the Board
`
`“The sixth and seventh factors are efficiency considerations.” Valve,
`
`IPR2019-00062, Paper 11 at 15. “In general, having multiple petitions
`
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`IPR2020-00319
`Patent 7,039,435 B2
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`challenging the same patent, especially when not filed at or around the same
`
`time as in this case, is inefficient and tends to waste resources.” Id.
`
`This proceeding presents the same arguments as to the Irvin and
`
`Myllamäki references asserted in IPR2019-01365 so resolving the present
`
`petition on its merits would result in some duplication of the work already
`
`undertaken on the earlier proceeding. Petitioner argues that, because there is
`
`allegedly no evidence of road-mapping or gamesmanship, instituting this
`
`proceeding would promote efficiency in the event IPR2019-01365 was
`
`terminated. Pet. 68. Petitioner also argues that “[t]here is no prejudice to
`
`the [Patent Owner] here, because the multiple earlier petitions filed against
`
`the ’435 patent are ‘a directed result of its own litigation activity.’” Id. at
`
`68–69 (citing Samsung Electronics America, Inc. et al v. Uniloc 2017 LLC,
`
`IPR2017-01797, Paper 8 at 33 (PTAB Feb. 6, 2018) (Institution Decision).
`
`Having two petitions challenging the ’435 patent, not filed at the same
`
`time, is indeed inefficient from the perspective of the Board, and given that
`
`the IPR2019-01365 was instituted a few months ago, coordination of the two
`
`cases would be difficult. The two petitions challenge substantially similar
`
`sets of claims based on overlapping prior art, with the instant Petition
`
`challenging one additional claim that is not challenged in IPR2019-01365.
`
`Additionally, although this is the third Petition filed against the ’435 patent,
`
`it is one of only two that will be pending against the ’435 patent. There is a
`
`risk that IPR2019-01365 will terminate due to settlement, as did IPR2019-
`
`01186, and leave Petitioner without the ability to timely file a petition. We
`
`therefore determine that the sixth General Plastic factor weighs slightly for
`
`denying the Petition.
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`Patent 7,039,435 B2
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`7. The requirement under 35 U.S.C. § 316(a)(11) to issue a
`final determination not later than 1 year after the date on
`which the Director notices institution of review
`
`Any trial in the present proceeding could be resolved within the one-
`
`year statutory timeframe. Accordingly, this factor weighs against denying
`
`institution under § 314(a).
`
`8. Conclusion
`
`The seven General Plastic factors weigh in both directions; however,
`
`the fact that this is an unrelated Petitioner presenting some new references
`
`and non-overlapping claims weighs against denying institution under
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`§ 314(a) quite heavily. Upon consideration of all the factors, we conclude
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`that we should not exercise discretion under § 314(a) and deny institution of
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`trial.
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`ADVANCED STAGE OF DISTRICT COURT LITIGATION
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`Patent Owner argues that we also should exercise our discretion under
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`35 U.S.C. § 314(a) to deny institution because the related district court
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`litigation is in advanced stages. Prelim. Resp. 23–29; Prelim. Sur-Reply 1–
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`3. Patent Owner asserts that the district court has issued its Claim
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`Construction order, fact discovery will be completed before our institution
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`deadline, the final pretrial conference is scheduled for November 30, 2020,
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`and trial is scheduled to commence December 14, 2020. Prelim. Resp. 24.
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`Thus, Patent Owner asserts that the district court trial will have concluded
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`several months before we issue our final written decision. Id. at 25. Patent
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`Owner also asserts that Petitioner relies on nearly the same prior art and
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`arguments in the district court action. Id. at 28.
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`As explained above, the Director has discretion to institute an inter
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`partes review under 35 U.S.C. § 314(a). Gen. Plastic Indus. Co., Paper 19 at
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`15
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`IPR2020-00319
`Patent 7,039,435 B2
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`15 (precedential). We consider the advanced state of a district court
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`proceeding as a “factor that weighs in favor of denying the Petition under §
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`314(a).” NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8
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`(PTAB Sept. 12, 2018) (precedential). Specifically, we consider an early
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`trial date as part of a “balanced assessment of all relevant circumstances of
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`the case, including the merits.” Consolidated Trial Practice Guide
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`November 2019, available at
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`https://www.uspto.gov/TrialPracticeGuideConsolidated. As part of this
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`balanced assessment, we consider the following: (1) whether the district
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`court granted a stay or evidence exists that one may be granted if this
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`proceeding is instituted; (2) proximity of the district court’s trial date to the
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`Board’s projected statutory deadline for a final written decision; (3)
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`investment in the parallel proceeding by the court and the parties; (4)
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`overlap between issues raised in the petition and in the parallel proceeding;
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`(5) whether the petitioner and the defendant in the parallel proceeding are
`
`the same party; and (6) other circumstances that impact the Board’s exercise
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`of discretion, including the merits. Apple Inc. v. Fintiv, Inc., IPR2020-
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`00019, Paper 11, 5–6 (Mar. 20, 2020) (precedential).
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`We agree with Petitioner that our exercise of discretion to deny
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`institution under Section 314(a) is not warranted here. Prelim. Reply 1–3.
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`Factor (5) weighs in favor of denying the Petition under § 314(a) because the
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`parallel proceeding—the LG district court litigation—involves the same
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`parties and factor (4) weighs slightly in favor of denying because the parallel
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`proceeding involves the same patent and potentially some of the same prior
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`art. See Ex. 2010, 13–18 (listing Luxon, Irvin, Myllymäki, and Steer among
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`many references). However, we determine the remaining factors weigh
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`against exercising our discretion to deny institution.
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`16
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`IPR2020-00319
`Patent 7,039,435 B2
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`We determine that factors (1) and (2) weigh in favor of institution
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`because we find it likely that that district court will stay the litigation, which
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`will affect the trial date. Although the trial is currently scheduled for
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`December 14, 2020, it is not clear that trial will proceed as scheduled. For
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`example, other deadlines, including the close of fact and expert discovery,
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`were recently continued to later dates. See Order Granting in Part Joint
`
`Motion to Continue Discovery Dates and Mandatory Settlement Conference,
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`Bell Northern Research, LLC v. LG Elecs. Co., Case No. 3:18-cv-02864
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`(S.D. Cal. Mar. 24, 2020), ECF No. 117. And, significantly, shortly after
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`the Board instituted IPRs in other proceedings involving challenged patents
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`of Patent Owner (IPR2019-01319, -01320, and -01365), the same district
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`court judge presiding over the LG district court litigation related to this case
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`stayed the actions involving the patents challenged in those proceedings.
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`See Ex. 1033; Ex. 1034. The district court reasoned that “[t]he PTAB’s
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`decision to institute on the two remaining patents will substantially impact
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`the scope of this case and streamline this litigation” and that “[d]espite the
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`advanced nature of this case, this step [to stay] will resolve an important
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`aspect of the case and narrow the issues for a jury trial, and may avoid
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`disparate invalidity findings in the co-pending cases.” Ex. 1033, 2–3. In
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`those proceedings, the district court previously requested the parties to keep
`
`it informed if any IPRs were instituted because it is “rather loathe to go on
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`parallel tracks with the Patent Office.” Ex. 1032, 120:20–121:12.
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`Therefore, under factor (1), we determine there is strong evidence that
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`indicates a stay may be granted if this proceeding is instituted.
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`Patent Owner argues that the circumstances are different here because
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`the LG district court litigation also involves a patent that is not the subject of
`
`a pending IPR petition. See Prelim. Sur-Reply, 2–3. However, it is not clear
`
`17
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`IPR2020-00319
`Patent 7,039,435 B2
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`that trial will proceed as scheduled on issues relating to patents that are the
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`subject of an instituted IPR. See Ex. 1035, 77:6–22 (district court requesting
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`to be made “aware of what’s going on in the Patent Office”). Thus, under
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`factor (2), it is not clear that the district court litigation will have concluded
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`as to the patent challenged here by the time our final decision is due. Rather,
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`our decision here has the potential to impact the efficiencies of the district
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`court litigation. Because there is a strong likelihood that a stay may be
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`granted, we accord less weight to the fact that the current trial date is
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`scheduled to occur prior to the deadline for a final decision this proceeding.
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`Further, under factor (3), we note that significant investment and
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`effort is still required in the district court proceeding because expert
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`discovery has not started and Petitioner’s litigation invalidity grounds are
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`not finalized. See Prelim. Reply 3; Ex. 2017, 3–5; Order Granting in Part
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`Joint Motion to Continue Discovery Dates and Mandatory Settlement
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`Conference, Bell Northern Research, LLC v. LG Elecs. Co., Case No. 3:18-
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`cv-02864 (S.D. Cal. Mar. 24, 2020), ECF No. 117, 2. Finally, under factor
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`(6), for the reasons discussed below, we determine there are strong merits to
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`Petitioner’s challenges, which weighs against exercising discretion to deny
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`institution.
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`In view of the foregoing, we decline to exercise our discretion to deny
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`under 35 U.S.C. § 314(a).
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`B. Level of Ordinary Skill in the Art
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`In an obviousness analysis, prior art references must be “considered
`
`together with the knowledge of one of ordinary skill in the pertinent art.” In
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`re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994) (quoting In re Samour, 571
`
`F.2d 559, 562 (CCPA 1978)). Moreover, “it is proper to take into account
`
`not only specific teachings of the reference but also the inferences w