`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`APPLE INC.
`Petitioner,
`
`v.
`
`MAXELL, LTD.,
`Patent Owner
`_______________
`
`Case: IPR2020-00408
`
`U.S. Patent No. 6,430,498
`_______________
`
`
`
`
`
`PATENT OWNER PRELIMINARY RESPONSE TO PETITION FOR
`INTER PARTES REVIEW OF U.S. PATENT NO. 6,430,498
`
`
`
`
`
`
`
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`

`

`
`
`PATENT OWNER’S EXHIBIT LIST
`
`Description
`5/31/19 Scheduling Order from District Court Action
`3/10/15 Letter from Apple to Maxell
`5/15/15 Letter from Apple to Maxell
`5/17/18 Letter from Maxell to Apple
`Maxell’s Infringement Contentions from District Court Action
`Apple’s Invalidity Contentions from District Court Action
`Hayashida Chart from Apple’s Invalidity Contentions
`Hayashida Chart from Apple’s Expert Report from District Court
`Action
`Abowd Chart from Apple’s Expert Report from District Court Action
`Apple’s Final Election of Prior Art
`1/8/20 Minute Order
`8/28/19 Minute Order
`9/18/19 Minute Order
`Markman Decision from District Court Action
`4/20/20 Scheduling Order from District Court Action
`Declaration of Tiffany A. Miller
`5/8/20 Notices of Compliance
`Decision denying Apple’s Motion to Stay
`’498 IPR Preliminary Response
`’498 IPR Petition (ASUS)
`Getting Heading and Course Information
`Getting the Heading and Course of a Device
`Wayback Machine excerpts
`
`Exhibit #
`2001
`2002
`2003
`2004
`2005
`2006
`2007
`2008
`
`2009
`2010
`2011
`2012
`2013
`2014
`2015
`2016
`2017
`2018
`2019
`2020
`2021
`2022
`2023
`
`i
`
`

`

`TABLE OF CONTENTS
`
`Page
`
`b.
`
`I.
`II.
`
`INTRODUCTION .......................................................................................... 1
`THE BOARD SHOULD EXERCISE ITS DISCRETION AND
`DENY INSTITUTION FOR ALL GROUNDS PURSUANT TO 35
`U.S.C ............................................................................................................... 2
`A. Application of the General Plastic Factors Weighs in Favor of
`Denying Institution ............................................................................... 5
`1.
`General Plastic Factors 6 and 7 Weigh in Favor of Denial ....... 7
`a.
`The District Court Action Will Resolve the Same
`or Substantially the Same Arguments as Those
`Presented Here ................................................................. 7
`The District Court Action Will Be Complete Well
`Before a Final Written Decision in This
`Proceeding ..................................................................... 11
`Apple’s Inexcusable Delay in Filing the Petition .......... 15
`c.
`General Plastic Factors 4 and 5 Weigh in Favor of Denial ..... 17
`2.
`General Plastic Factor 3 Weighs in Favor of Denial ............... 20
`3.
`General Plastic Factor 2 Weighs in Favor of Denial ............... 20
`4.
`Factor 1 Has Little Probative Value in this Case ..................... 21
`5.
`B. Application of the Fintiv Factors Weighs in Favor of Denying
`Institution ............................................................................................ 21
`III. THE PETITION DOES NOT SHOW A REASONABLE
`LIKELIHOOD OF PREVAILING WITH RESPECT TO ANY
`CHALLENGED CLAIM ............................................................................. 22
`A.
`Background ........................................................................................ 22
`1.
`Background Of The Relevant Technology .............................. 22
`2.
`Level of Skill of a POSITA ..................................................... 23
`Claim Construction............................................................................. 24
`1.
`The Petition Fails To Apply A Proper 35 U.S.C ..................... 24
`2. Maxell Did Not Disavow Claim Scope in Prior IPR
`Proceedings .............................................................................. 26
`
`B.
`
`ii
`
`

`

`TABLE OF CONTENTS
`(continued)
`
`Page
`
`2.
`
`3.
`
`4.
`
`E.
`
`C. Ground 1: Petitioner Failed To Establish That Claims 1, 3, 5,
`and 7-8 Are Obvious Over Hayashida In View Of The
`Knowledge of POSITA ...................................................................... 28
`1.
`Petitioner fails to establish that Hayashida Discloses
`Element 1(b) ............................................................................. 28
`Petitioner fails to establish that Hayashida Discloses
`Element 1(c)(ii) ........................................................................ 34
`Petitioner fails to establish that Hayashida Discloses
`Claim 5 ..................................................................................... 39
`Petitioner fails to establish that Hayashida Discloses
`Claims 3 and 7-8 ...................................................................... 39
`D. Ground 2: Petitioner Failed To Establish That Claims 3 And 7
`Are Obvious Over Hayashida In View Of Ikeda ............................... 39
`Ground 3: Petitioner Failed To Establish That Claims 1, 3-5, 7-
`11, and 13 Are Obvious Over Hayashida In View Of Abowd .......... 39
`1.
`Petitioner fails to show that Abowd is prior art ....................... 40
`a.
`The University of Pittsburgh Exhibits Are
`Insufficient ..................................................................... 41
`(1) Appendix AB01 Does Not Show Public
`Accessibility ........................................................ 41
`(2) Appendix AB02 Does Not Prove Public
`Accessibility ........................................................ 43
`The Carnegie Mellon University Exhibits Are
`Insufficient ..................................................................... 45
`(1) Appendix AB03 Fails to Prove Public
`Accessibility ........................................................ 45
`(2) Appendix AB04 Fails to Prove Public
`Accessibility ........................................................ 45
`Petitioner fails to show that it would be obvious to
`combine Hayashida and Abowd .............................................. 51
`IV. CONCLUSION ............................................................................................. 53
`
`b.
`
`2.
`
`iii
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`

`

`Case IPR2020-00408
`
`Patent No. 6,430,498
`Patent Owner Preliminary Response
`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Apple Inc. v. Maxell Ltd.,
`IPR2020-00204, Paper 1 ............................................................................... 18, 19
`Cuozzo Speed Techs., LLC v. Lee,
`136 S. Ct. 2131 (2016) .......................................................................................... 5
`E-One, Inc. v. Oshkosh Corp.,
`IPR2019-00161, Paper 16 (PTAB May 16, 2019) ....................................... 14, 17
`Gen. Plastic,
`IPR2016-01357, Paper 19 ............................................................................... 5, 21
`Harmonic Inc. v. Avid Tech.,
`815 F.3d 1356 (Fed. Cir. 2016) ............................................................................ 5
`Hormel Foods Corp. v. HIP, Inc.,
`IPR2019-00469, Paper 9 (PTAB July 15, 2019) .......................................... 14, 17
`KAIST IP LLC v. Samsung Electronics Co., Ltd.,
`No. No. 2:16-cv-01314-JRG (E.D. Tex. Feb. 13, 2020) .................................... 17
`Maxell, Ltd. v. Apple Inc.,
`No. 5:19-cv-00036-RWS (E.D. Tex.) ............................................................... 1, 2
`Mylan Pharms., Inc. v. Bayer Intell. Prop. GmbH,
`IPR2018-01143, Paper 13 (PTAB Dec. 3, 2018) ......................................... 14, 17
`NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc.,
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) ........................................passim
`Sand Revolution II, LLC v. Continental Intermodal Group – Trucking
`LLC,
`IPR2019-01393, Paper 12 (PTAB Feb. 5, 2020) ...................................... 6, 14, 17
`
`iv
`
`

`

`Case IPR2020-00408
`Patent No. 6,430,498
`Patent Owner Preliminary Response
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Statutes
`35 U.S.C. § 314 ................................................................................................ 2, 4, 22
`35 U.S.C. § 314(a) ................................................................................... 1, 14, 21, 22
`35 U.S.C § 314(b) ...................................................................................................... 5
`35 U.S.C. §316(a)(11) .............................................................................................. 13
`35 U.S.C. § 316(b) ..................................................................................................... 5
`Other Authorities
`37 C.F.R. § 42.104(b)(4) .......................................................................................... 24
`37 C.F.R. § 42.108(a) ................................................................................................. 5
`83 Fed. Reg. 39,989 (August 2018) ........................................................................... 5
`
`
`
`v
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`

`

`Case IPR2020-00408
`
`Patent No. 6,430,498
`Patent Owner Preliminary Response
`
`I.
`
`INTRODUCTION
`Patent Owner Maxell, Ltd. (“Patent Owner”) respectfully requests that the
`
`Board deny institution because Petitioner Apple Inc. (hereinafter, “Apple” or
`
`“Petitioner”) has failed to demonstrate a reasonable likelihood of success on the
`
`grounds submitted in its Petition for challenging the patentability of claims 1, 3-5,
`
`7-11, and 13 (“challenged claims”) of U.S. Patent No. 6,430,498 (“the ’498
`
`patent”).
`
`First, the Board should exercise its discretion pursuant to 35 U.S.C. § 314(a)
`
`and deny this petition. Application of the General Plastic and Fintiv factors weighs
`
`heavily in favor of denying institution. One of the purposes of IPRs is to be an
`
`“effective and efficient alternative” to litigation. Gen. Plastic Indus. Co., Ltd. v.
`
`Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 at 16-17 (PTAB Sept. 6,
`
`2017) (precedential). Here, instituting an IPR would not be an effective or efficient
`
`alternative to litigation, particularly given the advanced stage of the co-pending
`
`District Court case Maxell, Ltd. v. Apple Inc., No. 5:19-cv-00036-RWS (E.D.
`
`Tex.), the finite resources of the Board, and Apple’s delay in filing its Petition.
`
`Second, it is Petitioner’s burden to propose a construction and then explain
`
`how the construed claim is unpatentable under that proposed construction. See 37
`
`C.F.R. § 42.104(b)(4). The Petition fails, however, to propose a construction and
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`1
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`Patent No. 6,430,498
`Patent Owner Preliminary Response
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`explain how the claims are unpatentable in view of that construction, particularly
`
`with the terms “a device for getting location information denoting a [p]resent place
`
`of said portable terminal;” and “a device for getting direction information denoting
`
`an orientation of said portable terminal.”
`
`Third, Apple fails to show that Abowd is prior art; this is fatal to Ground 2.
`
`Fourth, even if Abowd is prior art, Apple’s obviousness analysis lacks
`
`sufficient articulated reasons with rational underpinnings on why it would be
`
`obvious to combine the systems of Hayashida in view of the knowledge of
`
`POSITA and Hayashida in view of Abowd.
`
`For at least reasons, more fully explained below, Apple has failed to show a
`
`reasonable likelihood of success on any ground presented.
`
`II. THE BOARD SHOULD EXERCISE ITS DISCRETION AND DENY
`INSTITUTION FOR ALL GROUNDS PURSUANT TO 35 U.S.C. § 314
`Apple’s Petition for IPR should be denied because the invalidity arguments
`
`Apple raises here will be resolved in a co-pending District Court action long before
`
`this proceeding will conclude. Specifically, the ’498 Patent is asserted in the co-
`
`pending District Court case, Maxell, Ltd. v. Apple Inc., No. 5:19-cv-00036-RWS
`
`(E.D. Tex.) (“District Court Action”). While Apple acknowledged the District
`
`Court Action in its Petition, it failed to inform the Board that the District Court
`
`Action will be complete long before any final decision would issue in this
`
`2
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`Patent No. 6,430,498
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`proceeding. Nor did Apple inform the Board—when attempting to justify its delay
`
`in filing its Petition—that Maxell identified Apple’s infringement of the claims at
`
`issue in the ’498 Patent long prior to Apple filing its Petition, and that the trial date
`
`of October 2020 for the District Court Action was scheduled back in May 2019.
`
`Ex. 2001.1 The jury trial is scheduled in the District Court Action only two months
`
`after the Board’s anticipated Institution Decision, and will adjudicate the validity
`
`of the ’498 Patent ten months before any Final Written Decision issues in this
`
`proceeding.
`
`Not only will the District Court Action conclude long before this
`
`proceeding, but it will also resolve the invalidity arguments that Apple raises in the
`
`instant Petition. The prior art references relied on in this proceeding are the same,
`
`or substantially the same, as those at issue in the District Court Action. Apple
`
`made a strategic decision to put forward the same art it is using in the District
`
`Court Action as it presents in this Petition. Additionally, the challenged claims are
`
`substantially the same as those asserted in the District Court Action. The claim
`
`construction disputes between the parties with respect to the ’498 Patent are also
`
`1 See Letter from Maxell to Apple dated May 17, 2018 (Ex. 2004) at 2 (specifically
`identifying claims 1-13 of the ’498 Patent as being infringed by Apple). As
`explained further herein, over the next year Maxell consistently and periodically
`identified asserted claims of the ’498 Patent to Apple. See, e.g., Ex. 1010 at ¶ 78.
`
`3
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`the same across the two proceedings. The claim constructions Apple applies in this
`
`proceeding are identical to those it is putting forward in the District Court Action
`
`and the Court has already issued a Markman Order. Thus, any questions of whether
`
`the grounds of invalidity raised in Apple’s Petition invalidate the asserted claims of
`
`the ’498 Patent will be decided in the District Court action at least ten months prior
`
`to when the Board would issue a Final Written Decision in this proceeding.
`
`Simply put, instituting an IPR in this circumstance would needlessly
`
`duplicate the District Court Action, and unnecessarily waste the Board’s
`
`resources.2 See NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752,
`
`Paper 8 at 20 (PTAB Sept. 12, 2018) (precedential) (denying institution under
`
`similar facts); Apple v. Fintiv, IPR2020-00019, Paper 11 at 5-6 (PTAB March 20,
`
`2020) (precedential). For at least these reasons and those further set forth below,
`
`the Board should exercise its discretion not to institute this proceeding pursuant to
`
`35 U.S.C. § 314.
`
`
`2 Apple has filed nine other Petitions challenging the patentability of the other
`patents-in-suit in the District Court Action. As set forth individually in Maxell’s
`preliminary responses to those Petitions, the Board should exercise its discretion to
`deny institution in those proceedings for similar reasons pursuant to 35 U.S.C. §
`314. See IPR2020-00199, -00200, -00201, -00202, -00203, -00204, -00407, -
`00409, -00597.
`
`4
`
`

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`Patent No. 6,430,498
`Patent Owner Preliminary Response
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`
`A. Application of the General Plastic Factors Weighs in Favor of
`Denying Institution
`There is no requirement that the Board institute IPR. Harmonic Inc. v. Avid
`
`Tech., 815 F.3d 1356, 1367 (Fed. Cir. 2016). Instead, the decision to institute is
`
`delegated to the Board and is purely discretionary. As 35 U.S.C § 314(b) explains,
`
`“[t]he Director shall determine whether to institute an inter partes review.” See also
`
`Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016); 37 C.F.R. §
`
`42.108(a). The Director’s discretion is informed by many things, including the
`
`consideration of “the integrity of the patent system, [and] the efficient
`
`administration of the Office.” 35 U.S.C. § 316(b).
`
`The USPTO recognized that these factors, and the Board’s discretionary
`
`denial, apply where “other proceedings relating to the same patent, either at the
`
`Office, in district courts, or the ITC” are at advanced stages and will resolve the
`
`same or similar issues presented in the Petition before the Board can. See Trial
`
`Practice Update, 83 Fed. Reg. 39,989 at 10 (August 2018). That is because one of
`
`the purposes of IPRs is to be an “effective and efficient alternative” to litigation.
`
`Gen. Plastic, IPR2016-01357, Paper 19 at 16-17. Here, instituting an IPR would
`
`not be an effective or efficient alternative to litigation because the co-pending
`
`District Court Action (1) involves the same, or substantially the same prior art that
`
`5
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`Apple relies on here, and (2) will be complete well before a final decision in this
`
`proceeding.
`
`The majority of the General Plastic factors weigh heavily in favor of the
`
`Board using its discretion to deny institution. Indeed, even if other factors weighed
`
`in favor of institution, Board precedent demands denial of institution due to
`
`Apple’s delay in filing its Petition and the advanced stage of the District Court
`
`Action. NHK Spring, IPR2018-00752, Paper 8 at 20 (“Institution of an inter partes
`
`review under these circumstances would not be consistent with an objective of the
`
`AIA . . . to provide an effective and efficient alternative to district court litigation. .
`
`. . Accordingly, we find that the advanced state of the district court proceeding is
`
`an additional factor that weighs in favor of denying the Petition under § 314(a).”)
`
`(internal quotes omitted); see also Sand Revolution II, LLC v. Continental
`
`Intermodal Group – Trucking LLC, IPR2019-01393, Paper 12 at 15-18 (PTAB
`
`Feb. 5, 2020) (noting the advanced stages of the related district court litigation, the
`
`substantial similarity of the issues, and the precedential effect of the NHK decision
`
`as reasons for denying institution); see also id., Paper 18 (PTAB April 6, 2020)
`
`(denying request for Precedential Opinion Panel review).
`
`6
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`Patent No. 6,430,498
`Patent Owner Preliminary Response
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`
`1.
`General Plastic Factors 6 and 7 Weigh in Favor of Denial
`Apple boldly claims that the “Board’s finite resources will not be adversely
`
`affected by this IPR.” Petition at 8. But Apple only considers the Board’s resources
`
`in relation to the prior denial of institution of a petition filed by ASUSTeK against
`
`the ’498 Patent and ignores the duplicative efforts the Board would engage in as a
`
`result of the co-pending District Court Action. Considering the status of the
`
`District Court Action, and Apple’s delay in filing this Petition, granting institution
`
`here would work against the purposes of IPRs to be an “effective and efficient
`
`alternative” to litigation, and would needlessly consume the finite resources of the
`
`Board. Gen. Plastic, IPR2016-01357, Paper 19 at 16-17.
`
`a.
`
`The District Court Action Will Resolve the Same or
`Substantially
`the Same Arguments as Those
`Presented Here
`
`The scope of Apple’s challenge to the ’498 Patent’s validity in this
`
`proceeding is substantially the same as Apple’s challenge in the District Court
`
`Action. For example, there is overlap in the claims challenged in both proceedings.
`
`Here, Apple asserts that Claims 1, 3-5, 7-11, and 13 of the ’498 Patent are
`
`unpatentable. Petition at 1. These claims cover all the asserted claims against
`
`Apple in the District Court Action at the time Apple filed its Petition, including the
`
`independent claims and the same or similar dependent claims. See Ex. 2005 at 2.
`
`7
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`Patent No. 6,430,498
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`
`The prior art that Apple relies on in its Petition is the same, or substantially
`
`the same, as the prior art at issue in the District Court Action. For example, in the
`
`Petition Apple proposes four grounds, utilizing Hayashida, Abowd, and Ikeda.
`
`Petition at 6. In the District Court Action, Apple also relies on Hayashida and
`
`Abowd as primary grounds of invalidity in its invalidity contentions and in its
`
`Expert Invalidity Report served on May 7, 2020. Ex. 2006 at 6, 12-19; Ex. 2007
`
`(Expert Report Hayashida Chart); Ex. 2008 (Expert Report Abowd Chart); Ex.
`
`2009 (Paradiso Abowd Chart). Indeed, a sample comparison of the evidence cited
`
`in the Petition allegedly supporting unpatentability of Claim 1 illustrates that the
`
`very same issues will be decided by a jury at the trial in the District Court Action a
`
`mere two months after the Board’s Institution Decision:
`
`Element
`
`1[pre]
`
`1[a]
`
`1[b]
`
`1[c][i]
`
`Alleged Support from
`Hayashida Relied on in
`Petition
`Hayashida, 76:13-20
`
`Alleged Support from Hayashida
`Relied on in District Court Action
`Expert Reports
`Hayashida, 1:5-8; 76:5-20
`
`Hayashida, 6:47-49; 6:65-
`67; 7:50-54; 7:60-61; 7:66-
`8:8
`Hayashida, 6:47-49; 6:65-
`67; 7:60-61; 7:28-42;
`10:58-64; 13:35-41; Figs.
`10, 14, 16
`Hayashida, Abstract; 2:10-
`12; 11:9-14; 12:6-58;
`15:64-16:4; 17:58-59;
`23:39-42; 25:67-26:1;
`
`8
`
`Hayashida, 2:46-55; 7:24-30; 7:50-
`8:21; 10:55-11:8; 13:16-33; Fig. 1, 5
`
`Hayashida, 2:46-55; 7:24-42; 7:60-
`8:3; 10:55-64; 13:34-47; Fig. 1, 5
`
`Hayashida, 3:9-16; 5:66-6:16; 21:7-
`63; 21:64-22:44; 34:49-35:8; 49:3-
`11; 49:44-60; 54:4-12; 58:27-43;
`Figs. 16-17, 46, 73
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`
`43:31-40; 37:12-13; 64:38-
`42; Fig. 10, 16, 20, 26, 46
`Hayashida, 7:14-16; 10:6-
`14; 11:25-33; 12:21-25;
`50:10-14; 76:13-20
`
`1[c][ii]
`
`Hayashida, 76:5-20
`
`Compare Petition at 17-32 with Ex. 2008 at 1-17. Other claims show similar
`
`substantial overlap. Compare Petition at 33-38 with Ex. 2008 at 17-28.
`
`Apple’s Final Election of Prior Art served on April 7, 2020 also shows that
`
`Apple continues to rely on Hayashida and Abowd to set forth its invalidity case at
`
`trial in the District Court litigation in October 2020—ten months before a final
`
`written decision is expected in this IPR. See Apple’s Final Election of Prior Art
`
`(Ex. 2010) at 3.3 In fact, there are four remaining invalidity grounds for the ’498
`
`Patent in the District Court Action, and three rely on Hayashida. Thus,
`
`substantially the same issues will be decided by a jury, using the same prior art,
`
`same invalidity theories, and the same citations of the prior art (shown in the above
`
`table), all ten months prior to the issuance of a Final Written Decision.
`
`Here, no meaningful distinction exists between Apple’s references and
`
`grounds used in the Petition versus those in the District Court Action. In the
`
`District Court Action, Apple relied upon the same prior art as this Petition until at
`
`3 Apple presents the “system” version of Abowd in the District Court Action, but
`clearly relies also on the literature that it contends supports that system, See, e.g.,
`Ex. 2010; Ex. 2009.
`
`9
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`Patent No. 6,430,498
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`least April 7, 2020 at which point it selectively dropped certain prior art references
`
`in an attempt to compensate for its delay in filing its Petition and avoid
`
`discretionary denial. But from August 15, 2019 through April 7, 2020, Apple relied
`
`on identical prior art.
`
`Nor can Apple avoid denial simply by challenging extraneous unasserted
`
`claims that raise the same invalidity issues as the asserted ones. First, the Court
`
`ordered Maxell to elect a narrower set of claims. This narrowing should not have
`
`an impact on the Board’s decision. See NetApp Inc. v. Realtime Data LLC,
`
`IPR2017-01195, Paper 9 at 7-8 (PTAB Oct. 12, 2017). Second, even though
`
`independent Claims 5 and 10 are no longer asserted in the District Court Action,
`
`Apple itself acknowledges the substantial overlap at least between Claims 1, 5, and
`
`10; it substantially relies on its Claim 1 analysis for Claims 5 and 10. Petition at
`
`58-61.
`
`The Board should not countenance Apple’s delayed filing of its IPRs, and its
`
`attempt to then take advantage of the Court’s narrowing order months after filing
`
`its petition in an attempt to avoid discretionary denial. This “gotcha” tactic further
`
`exposes Apple’s insincere claim that it seeks efficiency, and runs contrary to why
`
`the Board found NHK and Fintiv important to declare precedential.
`
`Moreover, Apple’s position in the District Court Action is that there is
`
`10
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`Patent No. 6,430,498
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`complete overlap of issues. “Apple reserves the right to amend its election of prior
`
`art as appropriate. . . .” Ex. 2010 at 1. Apple’s invalidity contentions in the District
`
`Court Action also purport to “incorporate[] by reference all prior art cited during
`
`prosecution of the Asserted Patents, and all inter partes review (IPR) petitions
`filed against the Asserted Patents and the prior art cited in these IPR petitions” Ex.
`
`2006 at 2. In other words, Apple has expressly and specifically sought to
`
`incorporate all of the Petition’s contentions into the District Court Action.
`
`Thus, substantially the same issues will be decided by a jury, using the same
`
`prior art, ten months prior to the issuance of a Final Written Decision. At bottom,
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`the issues presented in the Petition that differ from what will be argued in the
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`District Court Action do not meaningfully distinguish the arguments in this
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`proceeding from those in the District Court Action. Edwards Lifesciences Corp. v.
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`Evalve, IPR2019-01546, Paper 7, 12-13 (PTAB Feb. 26, 2020) (denying institution
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`despite lack of a 1:1 overlap of claims and prior art, finding such distinction not
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`meaningful).
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`b.
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`The District Court Action Will Be Complete Well
`Before a Final Written Decision in This Proceeding
`Not only are the substantive arguments overlapping, but the District Court
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`Action will be complete well before a Final Written Decision is issued in this
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`proceeding. The Court has invested significant time and resources into the District
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`Court Action. For example, the Court conducted a four-hour Markman hearing and
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`issued a 57-page Markman order with a detailed discussion of a number of
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`disputed claim terms and phrases for the ten patents at issue in the District Court
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`Action. Ex. 2011; Ex. 2014. The Court also has invested many hours in holding
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`arguments and issuing numerous rulings on various motions, including Apple’s
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`motion to dismiss, motion to transfer, and motion to stay along with several
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`discovery related motions and the parties’ other various motions. See Exs. 2011-
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`2013.
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`The parties have also invested significant time and resources into the District
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`Court Action. For example, fact discovery closed on March 31, 2020, except for
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`remaining depositions postponed due to COVID-19 that are now complete. Ex.
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`2015. During fact discovery, the parties collectively produced nearly 2 million
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`pages of documents, conducted 35 depositions, filed 20 motions, and served 50
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`interrogatories and 120 requests for admission. Ex. 2016, ¶¶3-4. The parties also
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`served over 30 third-party subpoenas. Id. ¶5. Expert discovery is underway and
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`closes June 25, 2020. For example, Maxell’s experts have already spent nearly 600
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`hours reviewing source code produced by Apple. Id. ¶6. Maxell’s expert report
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`regarding infringement and Apple’s expert reports regarding invalidity of the ’498
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`Patent were served on May 7, 2020 after substantial expense and effort by counsel
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`and experts on both sides. Ex. 2017. Indeed, Apple’s expert for the ’498 Patent
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`addresses the invalidity of the challenged claims based on prior art relied upon by
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`Apple in this petition. Exs. 2008-2009.
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`The District Court Action is set for trial beginning October 26, 2020. Ex.
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`2001 at 1. Apple has known about the trial date in the District Court Action since
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`May 31, 2019, over seven months prior to filing the instant petition. Id. In contrast,
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`if this proceeding is instituted, an oral hearing would not be expected until May
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`2021, and a Final Written Decision would not be expected until August 12, 2021,
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`ten months after the trial in the District Court Action. See 35 U.S.C. §316(a)(11).
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`As the Board has recognized, this fact pattern weighs in favor of denying the
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`Petition. For example, in a precedential decision, the Board denied institution when
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`the Petitioner had asserted the same prior art and arguments in a co-pending district
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`court proceeding set to go to trial six months before the IPR hearing. See NHK
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`Spring, IPR2018-00752, Paper 8 at 20. Specifically, the Board found that
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`institution in that situation “would not be consistent with ‘an objective of the
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`AIA…to provide an effective and efficient alternative to district court litigation.’”
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`Id. (quoting Gen. Plastic, IPR2016-01357, Paper 19 at 16-17).
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`Similarly, the Board in Mylan Pharms., Inc. v. Bayer Intell. Prop. GmbH,
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`denied institution based on the advanced stage of the co-pending district court
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`proceeding and the extensive overlap of the asserted prior art, expert testimony and
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`claim construction. IPR2018-01143, Paper 13 at 13 (PTAB Dec. 3, 2018). The
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`Board further held that the “inefficiency is amplified when the district court trial is
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`set to occur . . . more than eight months before [the Board’s] Final Written
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`Decision,” if the Board had instituted trial. Id. at 14. See also Google LLC v.
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`Uniloc 2017 LLC, IPR2020-00115, Paper 8, at 3 (PTAB March 27, 2020) (denying
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`institution where the underlying trial would begin less than five months from the
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`Institution decision); Hormel Foods Corp. v. HIP, Inc., IPR2019-00469, Paper 9 at
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`50 (PTAB July 15, 2019) (recognizing “in cases such as NHK Spring that the fact
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`that [a] court will resolve the same issues raised by [a] Petition, at an earlier date
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`than the Board, gives rise to inefficiencies and duplication of effort between the
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`tribunals.”); E-One, Inc. v. Oshkosh Corp., IPR2019-00161, Paper 16 at 9 (PTAB
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`May 16, 2019) (denying institution pursuant to §314(a) due to parallel district court
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`trial scheduled eleven months away).
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`In Sand Revolution II, the Board relied on NHK to deny institution of a
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`petition in view of the advanced stage of District Court proceedings where the
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`invalidity arguments were “very similar to, but perhaps not exactly the same” as
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`those presented in the District Court. IPR2019-01393, Paper 12 at 17. The Board
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`recently denied Petitioner’s request Precedential Opinion Panel review. Id., Paper
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`18 (PTAB April 6, 2020).
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`c.
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`Apple’s Inexcusable Delay in Filing the Petition
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`Apple argues that it has not delayed in filing this Petition (Petition at 9), but
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`the facts are otherwise. Although Apple filed its Petition within the statutory
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`deadline, it has known about the District Court Action trial date for nearly a year
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`and waited nearly a year after being sued by Maxell to file its Petition. Ex. 2001.4
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`Apple argues that § 315(b) “originally contained only a 6-month filing
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`window, which was amended to 1-year prior to passage of the America Invents Act
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`to ‘afford defendants a reasonable opportunity to identify and understand the patent
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`claims that are relevant to the litigation’ before having to file an IPR petition.”
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`Petition at 9. Having analyzed and charted all of the references that support the
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`grounds asserted in its Petition by at least August 2019, Apple could have been
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`ready to file an IPR at that time, but it chose to delay filing until five months later.
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`This delay undermines any argument that Apple was not afforded “a reasonable
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`opportunity to identify and understand the patent claims that are relevant to the
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`4 Further exhibiting Apple’s delay in filing the instant Petition, Apple’s
`representative signed the Power of Attorney asso