`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`APPLE INC.
`Petitioner,
`
`v.
`
`MAXELL, LTD.,
`Patent Owner
`_______________
`
`Case: IPR2020-00409
`
`U.S. Patent No. 6,580,999
`_______________
`
`PATENT OWNER PRELIMINARY RESPONSE TO PETITION FOR
`INTER PARTES REVIEW OF U.S. PATENT NO. 6,580,999
`
`
`
`
`
`
`
`
`
`
`
`
`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
`Decision denying Apple’s Motion to Stay
`4/20/20 Scheduling Order from District Court Action
`5/31/19 Scheduling Order from District Court Action
`Docket from District Court Action
`Markman Decision from District Court Action
`1/8/20 Minute Order
`8/28/19 Minute Order
`9/18/19 Minute Order
`Declaration of Tiffany A. Miller
`5/8/20 Notices of Compliance
`Hayashida Chart from Apple’s Expert Report from District Court
`Action
`Abowd Chart from Apple’s Expert Report from District Court Action
`Maxell’s Infringement Contentions from District Court Action
`Maxell’s Final Election of Claims
`Apple’s Final Election of Prior Art
`Apple’s Invalidity Contentions from District Court Action
`Hayashida Chart from Apple’s Invalidity Contentions
`3/10/15 Letter from Apple to Maxell
`5/15/15 Letter from Apple to Maxell
`’498 IPR Petition (ASUS)
`’498 IPR Preliminary Response
`Wayback Machine excerpts
`Getting Heading and Course Information
`Getting the Heading and Course of a Device
`5/17/18 Letter from Maxell to Apple
`
`Exhibit #
`2001
`2002
`2003
`2004
`2005
`2006
`2007
`2008
`2009
`2010
`2011
`
`2012
`2013
`2014
`2015
`2016
`2017
`2018
`2019
`2020
`2021
`2022
`2023
`2024
`2025
`
`i
`
`

`

`TABLE OF CONTENTS
`
`C.
`
`2.
`
`I.
`II.
`
`Page
`INTRODUCTION .......................................................................................... 1
`THE BOARD SHOULD EXERCISE ITS DISCRETION AND
`DENY INSTITUTION FOR ALL GROUNDS PURSUANT TO 35
`U.S.C ............................................................................................................... 2
`A.
`Factor 1: The District Court Denied Apple’s Motion to Stay .............. 6
`B.
`Factor 2: Trial In The District Court Action Will Occur Ten
`Months Before The Board’s Final Written Decision ........................... 7
`Factor 3: Significant Investment of Time And Resources By
`The Court And the Parties Has Already Occurred ............................... 9
`1.
`The District Court Has Spent Significant Time And
`Resources On The District Court Action ................................. 10
`The Parties Have Spent Significant Time And Resources
`On The District Court Action .................................................. 10
`Factor 4: There Is Significant Overlap Between Issues Raised
`In The Petition And In The District Court Action ............................. 11
`Factor 5: Apple Is Both Petitioner And Defendant ............................ 15
`Factor 6: Other Circumstances, Such As Apple’s Purposeful
`Delay In Filing The Petition, Weigh In Favor of Denial ................... 15
`III. THE PETITION DOES NOT SHOW A REASONABLE
`LIKELIHOOD OF PREVAILING WITH RESPECT TO ANY
`CHALLENGED CLAIM ............................................................................. 19
`A.
`Background ........................................................................................ 19
`1.
`Background Of The Relevant Technology .............................. 19
`2.
`Level of Skill of a POSITA ..................................................... 20
`Claim Construction............................................................................. 20
`1.
`The Petition Fails To Apply A Proper 35 U.S.C ..................... 21
`2. Maxell Did Not Disavow Claim Scope in Prior IPR
`Proceedings .............................................................................. 23
`C. Ground 1: Petitioner Failed To Establish That Claims 1-6 Are
`Obvious Over Hayashida In View Of Abowd ................................... 24
`
`D.
`
`E.
`F.
`
`B.
`
`i
`
`

`

`TABLE OF CONTENTS
`(continued)
`
`Page
`
`
`
`b.
`
`1.
`
`2.
`
`3.
`
`Petitioner fails to show that Abowd is prior art ....................... 25
`a.
`The University of Pittsburgh Exhibits Are
`Insufficient ..................................................................... 26
`(1) Appendix AB01 Does Not Show Public
`Accessibility ........................................................ 26
`(2) Appendix AB02 Does Not Prove Public
`Accessibility ........................................................ 28
`The Carnegie Mellon University Exhibits Are
`Insufficient ..................................................................... 30
`(1) Appendix AB03 Fails to Prove Public
`Accessibility ........................................................ 30
`(2) Appendix AB04 Fails to Prove Public
`Accessibility ........................................................ 30
`Petitioner fails to show that it would be obvious to
`combine Hayashida and Abowd .............................................. 36
`Petitioner fails to establish that Hayashida in view of
`Abowd Discloses Element 1(b) ............................................... 38
`Petitioner fails to establish that Hayashida in view of
`Abowd Discloses Element 1(d)(ii) .......................................... 44
`Petitioner fails to establish that Hayashida in view of
`Abowd Discloses Claims 2-4 ................................................... 49
`Petitioner fails to establish that Hayashida in view of
`Abowd Discloses Claims 5 and 6 ............................................ 49
`IV. CONCLUSION ............................................................................................. 49
`
`4.
`
`5.
`
`6.
`
`ii
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`

`

`Case IPR2020-00409
`
`Patent No. 6,580,999
`Patent Owner Preliminary Response
`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Acceleration Bay, LLC v. Activision Blizzard Inc.,
`908 F.3d 765 (Fed. Cir. 2018) ............................................................................ 29
`In re Antor Media Corp.,
`689 F.3d 1282 (Fed. Cir. 2012) .......................................................................... 46
`Apple Inc. v. Fintiv,
`IPR2020-00019, Paper 11 ..................................................................................... 5
`Apple Inc., v. Immersion Corporation,
`IPR2016-01372, Paper 7 (January 11, 2017) ..................................................... 21
`Apple v. Maxell,
`IPR2020-00204, Paper 1 ............................................................................... 11, 17
`Beckman Instruments, Inc. v. LKB Produkter AB,
`892 F.2d 1547 (Fed. Cir. 1989) .......................................................................... 46
`Bruckelmyer v. Ground Heaters, Inc.,
`445 F.3d 1374 (Fed. Cir. 2006) .......................................................................... 27
`Cuozzo Speed Techs., LLC v. Lee,
`136 S. Ct. 2131 (2016) .......................................................................................... 4
`E-One, Inc. v. Oshkosh Corp.,
`IPR2019-00161, Paper 16 (PTAB May 16, 2019) ........................................... 8, 9
`Edwards Lifesciences Corp. v. Evalve,
`IPR2019-01546, Paper 7, 12-13 (PTAB Feb. 26, 2020) .................................... 15
`Facebook, Inc. v. Sound View Innovations, LLC,
`IPR2017-01004, Paper No. 13 (Aug. 29, 2017) ................................................. 21
`Facebook, Inc. v. Sound View Innovations, LLC,
`IPR2017-01006, Paper No. 14 (Aug. 29, 2017) ................................................. 21
`
`iii
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`

`

`Case IPR2020-00409
`Patent No. 6,580,999
`Patent Owner Preliminary Response
`
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Gen. Plastic Indus. Co., Ltd. v. Canon Kabushiki Kaisha,
`IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017) ................................. 1, 7, 16, 18
`Harmonic Inc. v. Avid Tech.,
`815 F.3d 1356 (Fed. Cir. 2016) ............................................................................ 4
`Hormel Foods Corp. v. HIP, Inc.,
`IPR2019-00469, Paper 9 ................................................................................... 8, 9
`Hulu, LLC v. Sound View Innovations, LLC,
`Case No. IPR2018-01039, Paper 29 (PTAB Dec. 20, 2019) ................. 25, 31, 32
`IPCom GmbH & Co. v. HTC Corp.,
`861 F.3d 1362 (Fed. Cir. 2017) .......................................................................... 22
`KAIST IP LLC v. Samsung Electronics Co., Ltd.,
`No. 2:16-cv-01314-JRG (E.D. Tex. Feb. 13, 2020) ............................................. 9
`In re Klopfenstein,
`380 F.3d 1345 (Fed. Cir. 2004) .................................................................... 25, 26
`In re Kumar,
`418 F.3d 1361 (Fed. Cir. 2005) .......................................................................... 46
`Maxell, Ltd. v. Apple Inc.,
`No. 5:19-cv-00036-RWS (E.D. Tex.) ................................................................... 1
`NetApp Inc. v. Realtime Data LLC,
`IPR2017-01195, Paper 9 (PTAB Oct. 12, 2017) ................................................ 14
`NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc.,
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) ........................................passim
`Polycom, Inc. v. Directpacket Research, Inc.,
`No. IPR2019-01235, 2020 WL 205974 (P.T.A.B. Jan. 13, 2020) ..................... 25
`Pride Solutions LLC v. Not Dead Yet Manufacturing, Inc.,
`IPR2013-00627, Paper No. 14 (March 17, 2014) ............................................... 21
`iv
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`

`

`Case IPR2020-00409
`Patent No. 6,580,999
`Patent Owner Preliminary Response
`
`
`TABLE OF AUTHORITIES
`(continued)
`
`Page(s)
`
`Samsung Elecs. Co. v. Infobridge Pte. Ltd.,
`929 F.3d 1363 (Fed. Cir. 2019) .................................................................... 29, 30
`SRI Int’l, Inc. v. Internet Sec. Sys., Inc.,
`511 F.3d 1186 (Fed. Cir. 2008) .................................................................... 27, 29
`Williamson v. Citrix Online, LLC,
`792 F.3d 1339 (Fed. Cir. 2015) .......................................................................... 23
`ZTE,
`IPR2018-00235, Paper 9 ..................................................................................... 23
`Statutes
`35 U.S.C. § 112, ¶ 6 ........................................................................................... 21, 22
`35 U.S.C. § 314 .................................................................................................passim
`35 U.S.C. § 314(a) ................................................................................................. 1, 8
`35 U.S.C § 314(b) ...................................................................................................... 4
`35 U.S.C. § 316(a)(11) ............................................................................................... 7
`35 U.S.C. § 316(b) ..................................................................................................... 4
`America Invents Act ................................................................................................ 17
`Other Authorities
`37 C.F.R. § 42.104(b) .............................................................................................. 21
`37 C.F.R. § 42.104(b)(3) .................................................................................... 21, 23
`37 C.F.R. § 42.104(b)(4) ...................................................................................... 1, 20
`37 C.F.R. § 42.108(a) ................................................................................................. 4
`37 CFR § 42.104 ...................................................................................................... 24
`v
`
`

`

`Case IPR2020-00409
`
`Patent No. 6,580,999
`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 1-6
`
`(“challenged claims”) of U.S. Patent No. 6,580,999 (“the ’999 patent”).
`
`First, the Board should exercise its discretion pursuant to 35 U.S.C. § 314(a)
`
`and deny this petition. Application of the Board’s recent precedential decision in
`
`Apple v. Fintiv to the facts of this proceeding 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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`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;” “a device for getting direction information denoting an
`
`orientation of said portable terminal;” and “a device for getting the location
`
`information of another portable terminal [from said another terminal via connected
`
`network].”
`
`Third, Apple fails to show that Abowd is prior art; this is fatal to the
`
`Petition.
`
`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 the co-pending District Court Action long
`
`before this proceeding will conclude. While Apple acknowledged the District
`
`2
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`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
`
`proceeding. Apple failed to inform the Board that Maxell identified many of the
`
`claims at issue in the ’999 Patent ten months 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. See Patent Trial and Appeal Board Consolidated Trial Practice Guide
`
`(Nov. 2019) at 58 (noting that proceedings related to the same patent at a district
`
`court may favor denial of a petition and inviting parties to “address in their
`
`submissions whether any other such reasons exist in their case . . . and whether and
`
`how such factors should be considered”). Not only is a jury trial scheduled in the
`
`District Court Action a mere two months after the Board’s anticipated Institution
`
`Decision, the jury trial adjudicating the validity of the ’999 Patent will conclude
`
`ten months before any Final Written Decision issues in this proceeding.
`
`The District Court Action will also resolve the same, or substantially the
`
`same, invalidity arguments that Apple raises in the instant Petition. The prior art
`
`references relied on in this proceeding are also at issue in the District Court Action.
`
`Additionally, the challenged claims are substantially the same in substance and
`
`scope as those asserted in the District Court Action. The claim construction
`
`disputes between the parties with respect to the ’999 Patent are also the same
`
`3
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`across the two proceedings. The claim constructions Apple applies in this Petition
`
`are the same as those 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 ’999 Patent will be decided
`
`in the District Court Action at least nine months prior to when the Board would
`
`render a final decision in this proceeding.
`
`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.” 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).
`
`Simply put, instituting an IPR in this circumstance would needlessly
`
`duplicate the District Court Action, and unnecessarily waste the Board’s
`
`4
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`resources.1 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).
`
`“[T]he Board’s cases addressing earlier trial dates as a basis for denial under
`
`NHK have sought to balance considerations such as system efficiency, fairness,
`
`and patent quality.” Apple Inc. v. Fintiv, IPR2020-00019, Paper 11, at 5. When
`
`applying NHK, the Board has balanced the following factors:
`
`(2)
`
`(1) whether the court granted a stay or evidence exists that one may
`be granted if a proceeding is instituted;
`proximity of the court’s trial date to the Board’s projected
`statutory deadline for the final written decision;
`investment in the parallel proceeding by the court and the
`parties;
`overlap between issues raised in the petition and in the parallel
`proceeding;
`
`(3)
`
`(4)
`
`
`1 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, -00203, -00204, -00407, -00408, -
`00597.
`
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`
`(5) whether the petitioner and the defendant in the parallel
`proceeding are the same party; and
`other circumstances that impact the Board’s exercise of
`discretion, including the merits.
`
`(6)
`
`Id. at 5-6. After applying these factors to the current petition and circumstances, as
`
`further detailed below, all strongly weigh in favor of denying institution of this
`
`Petition pursuant to 35 U.S.C. § 314.
`
`A.
`Factor 1: The District Court Denied Apple’s Motion to Stay
`On April 27, 2020, the Court denied Apple’s motion to stay, noting:
`
`Apple has not sufficiently explained its delay in filing the [IPR]
`petitions. Apple filed its first wave of petitions nine months after
`Maxell filed suit and six months after Maxell served its initial
`infringement contentions.
`
`Ex. 2001 at 4-5 (emphasis added). The Court concluded that “The case is not in its
`
`infancy and is far enough along that a stay would interfere with ongoing
`
`proceedings.” Id. at 4. Though the Court denied the motion without prejudice, it
`
`found that because the last of the institution decisions will not be complete until
`
`September 25, 2020, “[t]he late stage of the proceedings will certainly weigh
`
`against granting a stay.” Id. at 6.
`
`This Fintiv factor weighs in favor of denial.
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`6
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`Patent No. 6,580,999
`Patent Owner Preliminary Response
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`
`B.
`
`Factor 2: Trial In The District Court Action Will Occur Ten
`Months Before The Board’s Final Written Decision
`The District Court Action will be complete ten months before a Final
`
`Written Decision is issued in this proceeding. Fact discovery closed in the District
`
`Court Action on March 31, 2020, and expert discovery closes June 25, 2020, all
`
`well before an institution decision is expected on Apple’s petition. Ex. 2002. The
`
`District Court Action is set for trial beginning October 26, 2020. Id. Apple has
`
`known about the trial date in the District Court Action since May 31, 2019, over
`
`six months prior to filing the instant petition. Ex. 2003. In contrast, if this
`
`proceeding is instituted, an oral hearing would not be expected until about
`
`May 2021, and a Final Written Decision would not be expected until August 12,
`
`2021, a full ten months after the trial in the District Court Action. See 35 U.S.C.
`
`§ 316(a)(11).
`
`As the Board has recognized, this fact pattern weighs in favor of denying the
`
`Petition. For example, in NHK the Board denied institution when the Petitioner had
`
`asserted the same prior art and arguments in a co-pending district court proceeding
`
`set to go to trial six months before the IPR hearing. See NHK Spring Co., IPR2018-
`
`00752, Paper 8 at 20. Specifically, the Board found that institution in that situation
`
`“would not be consistent with ‘an objective of the AIA . . . to provide an effective
`
`and efficient alternative to district court litigation.’” Id. (quoting Gen. Plastic,
`
`7
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`IPR2016-01357, Paper 19 at 16-17.).
`
`Similarly, the Board in Mylan Pharms., Inc. v. Bayer Intell. Prop. GmbH,
`
`denied institution based on the advanced stage of the co-pending district court
`
`proceeding and the extensive overlap of the asserted prior art, expert testimony and
`
`claim construction. IPR2018-01143, Paper 13 at 13 (PTAB Dec. 3, 2018). The
`
`Board further held that the “inefficiency is amplified when the district court trial is
`
`set to occur . . . more than eight months before [the Board’s] Final Written
`
`Decision,” if the Board had instituted trial. Id. at 14; see also Hormel Foods Corp.
`
`v. HIP, Inc., IPR2019-00469, Paper 9 at 50 (PTAB July 15, 2019) (recognizing “in
`
`cases such as NHK Spring that the fact that [a] court will resolve the same issues
`
`raised by [a] Petition, at an earlier date than the Board, gives rise to inefficiencies
`
`and duplication of effort between the tribunals.”); E-One, Inc. v. Oshkosh Corp.,
`
`IPR2019-00161, Paper 16 at 9 (PTAB May 16, 2019) (denying institution pursuant
`
`to § 314(a) due to parallel district court trial scheduled eleven months away).
`
`In Sand Revolution II, LLC v. Continental Intermodal Group – Trucking
`
`LLC, the Board relied on NHK to deny institution of a petition in view of the
`
`advanced stage of related District Court proceedings where the invalidity
`
`arguments were “very similar to, but perhaps not exactly the same” as those
`
`presented in the District Court. IPR2019-01393, Paper 12 at 17 (PTAB Feb. 5,
`
`8
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`2020).
`
`Most recently, in Google LLC v. Uniloc 2017 LLC, the Board denied
`
`institution where the underlying trial would begin less than five months from the
`
`Institution decision. IPR2020-00115, Paper 8, at 3, 10 (PTAB March 27, 2020).
`
`Here, the advanced stage of the District Court Action relative to a hearing or
`
`Final Written Decision in this matter is the same as in NHK, Mylan, Hormel Foods,
`
`E-One, Sand Revolution, and Google. Quite simply, the arguments at issue in this
`
`proceeding will be resolved in the District Court Action well before the Board
`
`would reach a Final Written Decision on the same issues. Accordingly, it would be
`
`inefficient and contrary to the Board’s express goals and finite resources to
`
`institute IPR here due to the advanced stage of the District Court Action.2 NHK
`
`Spring Co., IPR2018-00752, Paper 8 at 20-21.
`
`This Fintiv factor weighs in favor of denial.
`
`C.
`
`Factor 3: Significant Investment of Time And Resources By The
`Court And the Parties Has Already Occurred
`There has been significant time and resources invested by both the Court and
`
`
`2 Apple’s delay in filing this Petition should not allow it to “effect a collateral
`attack on the verdict of a jury empaneled pursuant to the Seventh Amendment or
`the judgments of an Article III court.” KAIST IP LLC v. Samsung Electronics Co.,
`Ltd., No. 2:16-cv-01314-JRG (E.D. Tex. Feb. 13, 2020).
`
`9
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`Patent No. 6,580,999
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`the parties in the District Court Action, pending now for over one year. See
`
`generally Ex. 2004.
`
`1.
`
`The District Court Has Spent Significant Time And
`Resources On The District Court Action
`The Court has invested significant time and resources into the District Court
`
`Action. For example, the Court conducted a four-hour Markman hearing and
`
`issued a 57-page Markman order with a detailed discussion of a number of
`
`disputed claim terms and phrases for the ten patents at issue in the District Court
`
`Action. Ex. 2005; Ex. 2006. The Court also has invested many hours in holding
`
`arguments and issuing numerous rulings on various motions, including Apple’s
`
`motion to dismiss, motion to transfer, and motion to stay along with several
`
`discovery related motions and the parties’ other various motions. See Exs. 2006-
`
`2008. As the Court understatedly noted in denying Apple’s motion to stay, “The
`
`case is not in its infancy. Ex. 2001 at 4.
`
`2.
`
`The Parties Have Spent Significant Time And Resources On
`The District Court Action
`The parties have also invested significant time and resources into the District
`
`Court Action. For example, fact discovery closed on March 31, 2020, except for
`
`remaining depositions postponed due to COVID-19 that are now complete. Ex.
`
`2002. During fact discovery, the parties collectively produced nearly 2 million
`
`10
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`Case IPR2020-00409
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`Patent No. 6,580,999
`Patent Owner Preliminary Response
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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. 2009, ¶¶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 ’991
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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. 2010. Indeed, Apple’s expert for the ’999 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. 2011-2012.
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`As Apple admits, “Apple prepared and served invalidity contentions . . . on
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`August 14, 2019, which involved a significant time investment beyond the prior
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`art searching already undertaken . . . .” Apple v. Maxell, IPR2020-00204, Paper 1 at
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`46 (emphasis added). This Fintiv factor weighs in favor of denial.
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`This Fintiv factor weighs in favor of denial.
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`D.
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`Factor 4: There Is Significant Overlap Between Issues Raised In
`The Petition And In The District Court Action
`The scope of Apple’s challenge to the ’999 Patent’s validity in this
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`proceeding is substantially the same as in the District Court Action. For example,
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`there is overlap in the claims challenged in both proceedings. Here, Apple asserts
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`that Claims 1-6 of the ’999 Patent are unpatentable. Petition at 1. These claims
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`cover all the asserted claims against Apple in the District Court Action at the time
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`Apple filed its Petition. See Ex. 2013 at 2. Pursuant to the District Court Action
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`scheduling order, months after the filing of the Petition, on March 17, 2020,
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`Maxell made a Final Election of Asserted Claims; and, on April 7, 2020, Apple
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`made a Final Election of Prior Art. Ex. 2014; Ex. 2015.
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`The prior art that Apple relies on in its Petition is the same, or substantially
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`the same, as the prior art at issue in the District Court Action. For example, in the
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`Petition, Apple proposes one ground, utilizing Hayashida and Abowd as
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`references. Petition at 14. In the District Court Action, Apple prominently uses
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`Hayashida and Abowd as references both in its Invalidity Contentions and its
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`Expert Report. Ex. 2016 at 6; Ex. 2017; Exs. 2011-2012. Apple’s expert in the
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`District Court Action relies heavily on Hayashida and Abowd to set forth Apple’s
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`invalidity case for the trial in the District Court litigation See Ex. 2011-2012.
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`Indeed, a sample comparison of the evidence cited in the Petition allegedly
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`supporting unpatentability of Claim 1 illustrates that the very same issues will be
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`decided by a jury at the trial in the District Court Action a mere two months after
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`the Board’s Institution Decision. Compare Petition at 19-40 with Ex. 2011 at 1-19
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`and Ex. 2012 at 1-20. Other claims show similar substantial overlap. Compare
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`Petition at 48-67 with Ex. 2011 at 19-25 and Ex. 2012 at 20-27.
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`Here, no meaningful distinction exists between Apple’s references and
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`grounds used in the Petition versus those in the District Court Action. In the
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`District Court Action, Apple relied upon the same prior art as this Petition until at
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`least April 7, 2020 at which point it selectively dropped certain prior art references
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`in an attempt to compensate for its delay in filing its Petition and avoid
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`discretionary denial. But from August 15, 2019 through April 7, 2020, Apple relied
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`on identical prior art.
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`Nor can Apple avoid denial simply by challenging extraneous unasserted
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`claims that raise the same invalidity issues as the asserted ones. First, the Court
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`ordered Maxell to elect a narrower set of claims. This narrowing should not have
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`an impact on the Board’s decision. See NetApp Inc. v. Realtime Data LLC,
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`IPR2017-01195, Paper 9 at 7-8 (PTAB Oct. 12, 2017). Second, Apple itself
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`acknowledges the substantial overlap at least between Claims 1, 5, and 6; it
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`substantially relies on its Claim 1 analysis for Claims 5 and 6. Petition at 50-57.
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`Moreover, Apple’s position in the District Court Action is that there is
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`complete overlap of issues. In Apple’s Final Election, Apple states that “Apple
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`reserves the right to amend its election of prior art as appropriate, including in
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`response to any further amendments and/or supplement to Maxell’s Infringement
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`Contentions (if any is permitted by the Court) or to any disclosure of infringement
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`theories in Maxell’s expert reports for which Apple has not received fair notice.”
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`Ex. 2015 at 1. Apple’s invalidity contentions in the District Court Action purport to
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`“incorporate[] by reference all prior art cited during prosecution of the Asserted
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`Patents, and all inter partes review (IPR) petitions filed against the Asserted
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`Patents and the prior art cited in these IPR petitions” Ex. 2016 at 2. In other words,
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`Apple has expressly and specifically sought to incorporate all of the Petition’s
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`contentions into the District Court Action.
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`Thus, substantially the same issues will be decided by a jury, using the same
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`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 o