UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`APPLE INC.
`Petitioner,
`
`v.
`
`MAXELL, LTD.,
`Patent Owner
`_______________
`
`Case: IPR2020-00597
`
`U.S. Patent No. 8,339,493
`_______________
`
`PATENT OWNER’S AUTHORIZED PRELIMINARY SUR-REPLY
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_______________
`
`APPLE INC.
`Petitioner,
`
`v.
`
`MAXELL, LTD.,
`Patent Owner
`_______________
`
`Case: IPR2020-00597
`
`U.S. Patent No. 8,339,493
`_______________
`
`PATENT OWNER’S AUTHORIZED PRELIMINARY SUR-REPLY
`
`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 UPDATED EXHIBIT LIST
`
`Description
`5/31/19 Scheduling Order from District Court Action
`Apple’s Invalidity Contentions from District Court Action
`Apple’s Supplemental Invalidity Contentions from District Court
`Action
`Apple’s Motion for Leave to Supplement
`Maxell’s Opposition to Motion for Leave to Supplement
`Court Order on Motion for Leave to Supplement
`Apple’s Final Election of Prior Art
`Excerpts from Bovik Report
`Sony Chart from Apple’s Invalidity Contentions
`Casio Chart from Apple’s Invalidity Contentions
`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
`Notices of Compliance
`COVID Standing Order
`Docket from District Court Action
`Decision denying Apple’s Motion to Stay
`’236 IPR Preliminary Response
`’236 IPR Institution Decision
`’904 IPR Preliminary Response
`10/9/18 Letter from Maxell to Apple
`U.S. Patent No. 5,828,406 to Parulski
`Mansoorian Declaration from ’236 IPR
`5/17/18 Letter from Maxell to Apple
`Casio Subpoena
`
`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
`2026
`2027
`2028
`
`
`
`Casio Objections and Response to Subpoena
`Casio Fiscal Year Schedule
`Optis v. Apple Order on Motion to Continue Trial
`Docket from District Court Action as of July 30, 2020
`
`2029
`2030
`2031
`2032
`
`ii
`
`
`
`I.
`
`INTRODUCTION
`Every Fintiv factor favors denial of Apple’s Petition. Apple waited 364 days
`
`after being served with the complaint in the District Court Action to file its
`
`petition. Trial is set to begin October 26, 2020. Ex. 2001. A FWD is expected
`
`September 25, 2021—eleven months after trial. These were the facts when Apple
`
`filed its Petition; these are the facts now. Apple’s speculation on whether a trial
`
`date may be continued does not change these facts, nor should it persuade the
`
`Board to ignore sound precedent. See Apple v. Maxell, IPR2020-00203, Paper 12 at
`
`9 (PTAB July 6, 2020) (“the ’203 IPR”).
`
`But Apple’s late filing and the approaching trial date are not the only reasons
`
`Apple’s petition should be denied under Fintiv. There is no material difference
`
`between the facts presented in this case and those presented in the related
`
`IPR2020-00203 matter, where the Board denied institution based on §314. For
`
`example, the facts related to Factors 1-3, 5 and 6 are identical. Regarding Factor 4,
`
`the issues addressed here, like in IPR2020-00203, substantially overlap with those
`
`in the District Court and thus favor denial. The NHK and Fintiv line of cases
`
`recognize discretionary denial is appropriate for precisely the situation present
`
`here, where one of the largest companies in the world uses the IPR process, not as
`
`a less-expensive alternative to litigation, but as an overall gambit to litigate without
`
`1
`
`
`
`end. Apple purposefully chose to delay filing its Petition, and elected to litigate in
`
`the District Court rather than focus on preparation of its Petition. See Paper 6 at 15-
`
`19. These facts remain unrebutted.
`
`II.
`
`THE FINTIV FACTORS OVERWHELMINGLY FAVOR DENIAL
`Here, the Fintiv factors overwhelmingly favor denial of institution. In this
`
`regard, there is no material difference between the facts presented here and those
`
`presented in the ’203 IPR where the Board denied institution.
`
`Factors 1-3 Favor Denial
`A.
`As the Board found in the ’203 IPR, the first three Fintiv factors in this case
`
`are interrelated based on the factual circumstances of the underlying litigation.
`
`’203 IPR, Paper 12 at 9. With respect to Factor 1, the Court denied Apple’s motion
`
`to stay. Id. at 10-11. Though the Court denied the motion without prejudice, it
`
`presaged that “[t]he late stage of the proceedings will certainly weigh against
`
`granting a stay.” Ex. 2020 at 6. Apple has not renewed its motion to stay even in
`
`light of institution of certain IPR proceedings between the parties. This Fintiv
`
`factor favors denial or at least is neutral.
`
`With respect to Factor 2, the Board found this factor favored denial where
`
`trial would be completed eight months before a FWD. ’203 IPR, Paper 12 at 10. In
`
`this proceeding, trial will be completed eleven months before a FWD. Apple does
`
`2
`
`
`
`not even address this factor in its Reply because it so clearly favors denial here.
`
`Though Apple speculates (Reply at 6-7) that the current trial date may be
`
`continued, this type of speculation was already rejected by the Board in the ’203
`
`IPR. See ’203 IPR, Paper 12 at 10. A continuance is not likely in the underlying
`
`litigation. See Ex. 2018; Ex. 2019; see also Fintiv, IPR 2020-00019, Paper 15 at 13
`
`(“We generally take courts’ trial schedules at face value absent some strong
`
`evidence to the contrary.”). Here, there is no evidence to the contrary. In fact, the
`
`Eastern District of Texas recently denied Apple’s request to continue a patent trial
`
`scheduled for August 2020. See Ex. 2031. Similar to the facts in the ’203 IPR, even
`
`were the trial date continued by three to five months, which is unlikely, the trial
`
`would still precede the FWD by six to eight months.
`
`With respect to Factor 3, the Board has found that “much of the court’s and
`
`the parties’ work related to invalidity has been completed in preparation for trial in
`
`October 2020.” ’203 IPR, Paper 12 at 12. Since that ruling, the parties and the
`
`court have only increased their respective investment of time in the underlying
`
`litigation. See Ex. 2032. Apple does not deny this. Instead, Apple spends its reply
`
`regarding Factor 3 arguing it was diligent in filing its petition at the eleventh hour.
`
`Reply at 2-3. For reasons explained in Maxell’s Preliminary Response, Apple was
`
`far from diligent. See Paper 6 at 18-20.
`
`3
`
`
`
`Apple argues that Maxell gained a tactical advantage by asserting 90 claims
`
`for 10 patents early in the litigation “and only narrowing them after the bar date.”
`
`Apple is wrong, and its complaints about undue burden unfounded. Maxell accused
`
`Apple of infringing Claims 1, 3-6, 10, and 11 of the ’493 Patent early in the
`
`litigation and on August 14, 2019, Apple provided hundreds of pages of invalidity
`
`charts analyzing all of those claims. See, e.g., Exs. 2002-03; 2009-10. These are
`
`the same claims challenged in Apple’s petition. As of August 14 (seven months
`
`prior to filing its Petition) Apple had already extensively analyzed Juen, Anderson,
`
`Takase, and the Sony Cameras. Ex. 2002 at 38-48; Ex. 2009. The supposed
`
`“narrow limitation” in Claim 1 that Apple complains took it so long to find prior
`
`art for was also extensively analyzed by Apple many months prior to filing its
`
`Petition. See, e.g., Ex. 2009 at 16-28 (Sony Camera and manual chart); Ex. 2010 at
`
`14-21 (Casio Camera and manual chart). In fact, as set forth further below for
`
`Factor 4, the overlap between Sony and Casio and the references upon which
`
`Apple bases its Petition is extensive, making Apple’s claim that Maxell gained a
`
`tactical advantage by being required to drop certain claims in the District Court
`
`Action incredulous.
`
`B.
`
`Factor 4: There Is Significant Overlap Between Issues Raised In
`The Petition And In The District Court Action
`The issues in this proceeding are substantially the same as in the District
`
`4
`
`
`
`Court Action. Here, Apple asserts that Claims 1, 3-6, 10, and 11 of the ’493 Patent
`
`are unpatentable. Petition at 1. These claims cover the asserted claims against
`
`Apple at the time Apple filed its Petition. The proper time at which to evaluate
`
`facts with respect to Fintiv Factor 4 is the time the Petition is filed. Such a fixed
`
`timeframe—the filing of the Petition—for the Board’s Factor 4 analysis prevents
`
`situations where, like here, Apple manufactures a favorable situation by dropping
`
`some overlapping prior art in the District Court. Such tactics do not promote NHK
`
`and Fintiv’s goal of efficiency and fairness.
`
`However, even after the dropping of certain prior art and claims in the
`
`District Court, Apple’s argument that Claim 1 has a “materially different scope
`
`from the other claims” is disingenuous. In its invalidity contentions for the Sony
`
`camera and manual and Casio camera and manual, for example, Apple’s Claim 5
`
`analysis points back to its Claim 1 analysis for every limitation of Claim 5. See Ex.
`
`2009 at 153-154; Ex. 2010 at 116-119. Even Apple’s analysis in the Petition
`
`undermines its claim that this “material difference” will not be addressed in the
`
`District Court Action. See Petition at 57-59.
`
`The references that Apple relies on in supporting its Petition also are the
`
`same, or substantially the same, as the prior art in the District Court Action. For
`
`example, in its Reply, Apple claims that a unique issue in this proceeding versus
`
`5
`
`
`
`the District Court Action is: “Does Juen disclose mixing and culling?” Reply at 3.
`
`But this is an identical issue that will be decided in the District Court Action when
`
`Apple presents the Juen/Anderson combination. In the District Court, Apple’s
`
`expert is using Juen in his attempt to show the mixing and culling limitation for
`
`video recording and monitoring. Ex. 1058 at 104-105, 107. Apple uses Juen the
`
`same way in the Petition to teach mixing and culling. See Petition at 58. Apple
`
`also attempts to mislead the Board by claiming that “In the litigation, only the
`
`Sony system is used for teaching this [mixing and culling] limitation.” Reply at 4.
`
`This clearly is not true in light of Apple’s use of Juen to purportedly teach this
`
`limitation in the litigation. Ex. 1058 at 104-105, 107.
`
`Apple also ignores that it uses Misawa both in the Petition and the litigation
`
`for the image-instability correction features of Claim 6. Compare Petition at 74-78
`
`with Ex. 1058 at 82-88.
`
`Apple’s effort to distinguish the Casio and Sony references fares no better.
`
`First, while Apple uses the Casio manual in this proceeding (rather than the
`
`camera), it admits that it also uses the Sony manual as evidence in the District
`
`Court Action. See Reply at 4. Indeed, Apple’s District Court expert references the
`
`Sony manual many times throughout his expert report. See generally Ex. 1058.
`
`Additionally, Apple’s expert also includes evidence related to the Casio system in
`
`6
`
`
`
`his expert report, indicating he intends to testify about Casio in the District Court
`
`Action. Ex. 1058, ¶¶99-100.
`
`Second, Apple tries to distinguish Casio and Sony by setting forth additional
`
`evidence that it is relying on, e.g., “a service manual, advertisements, microscopic
`
`images of the sensors, tear down testing, Sony’s employees….” Id. But this litany
`
`of supposed distinguishing evidence is another effort at misdirection. For example,
`
`“Sony’s employees” consists of a single paralegal who authenticated documents
`
`produced in response to Apple’s subpoena to Sony. See Ex. 1060 at 9
`
`(summarizing the declaration). In that regard, it is substantially similar to the
`
`declarations submitted by Casio personnel in this proceeding. See, e.g., Exs. 1026-
`
`1028. Likewise, “advertisements” allegedly supporting the Sony evidence in the
`
`District Court Action is substantially similar to the evidence submitted to support
`
`the use of Casio here. See, e.g., Ex. 1028. Additionally, Apple’s contention it
`
`performed “tear down testing” of the Sony camera as a point of distinction is also
`
`misleading. This “tear down” simply consisted of photos of the image sensor and
`
`other components on the device, which Apple used only to confirm the information
`
`in the Sony user manual about the pixel count of the display screen and the image
`
`sensor. See, e.g., Ex. 1058, ¶¶ 115-116. In any event, Maxell is not contesting the
`
`pixel counts of either the Sony or Casio devices in either venue, so Apple’s attempt
`
`7
`
`
`
`to manufacture a “difference” between its Sony and Casio evidence is irrelevant.
`
`Even Apple itself represented in the District Court Action that its “mapping
`
`of the Casio Camera to the asserted claims of the ’493 patent [is] consistent with
`
`the mapping of other prior art cameras disclosed in Apple’s invalidity
`
`contentions.” Ex. 2004 at 5. Apple’s expert in the District Court Action also points
`
`to the similarities between all of the cameras he tested. Ex. 1058, ¶99.
`
`At bottom, Apple has not pointed out a single difference between the Sony
`
`and Casio devices (or the manuals) related to purported application to the
`
`challenged claims. Both cameras allegedly have a built-in display screen, image
`
`sensor, and signal processing unit. Compare Ex. 2009 at 9, 16, 28 with Ex. 2010 at
`
`9, 14, 21 and Petition at 22, 27-28, 32. Both purportedly downscale image signals
`
`and monitor recording of image. Compare Ex. 2009 at 153-154 with Ex. 2010 at
`
`116-119 and Petition at 34-35, 37. Both purportedly capture stills and videos.
`
`Compare Ex. 2009 at 64-67 with Ex. 2010 at 49-53 and Petition at 18. Apple’s
`
`argument that “they disclose similar technology because they both show that the
`
`claim limitations are unpatentable[]” (Reply at 4) is conclusory, lacks substance,
`
`and could be said of any art that supposedly teaches the limitations of the ’493
`
`Patent’s claims. Sony and Casio do not just purportedly teach the claim elements
`
`separately, they are both fundamentally the same reference for purposes of Factor 4
`
`8
`
`
`
`analysis, and Apple has not pointed to any practical difference between these
`
`cameras/manuals. As Maxell further set forth in its Preliminary Response, the
`
`references are substantially the same. See Paper 6 at 10-12; compare Ex. 2009 with
`
`Ex. 2010.
`
`Apple’s argument (Reply at 5) regarding Maxell’s summary judgment
`
`motion relating to the Sony camera also misses the mark. In fact, in addition to the
`
`other overlapping references (such as Juen and Misawa) the motion further
`
`highlights that the issues in both proceedings overlap. The District Court (or a jury)
`
`will be addressing these issues long before the Board will in a FWD. Both here (for
`
`Casio) and in the District Court (for Sony), Maxell argues that Apple has failed to
`
`prove the references are actually prior art. See Ex. 1060 and Paper 6 at 38-49.
`
`Maxell’s summary judgment motion does not change the underlying issue that
`
`would be considered by both tribunals if the Board institutes IPR, namely, the
`
`public availability of certain prior art and the substantive overlap of the references
`
`and claimed subject matter. Further, Apple’s argument about the different
`
`standards of review also is not a reason for the Board to look past the similarities in
`
`the issues between the District Court Action and this proceeding. It cites no
`
`authority from the Board or otherwise holding that the filing of a summary
`
`judgment motion—which has not been ruled on—is a basis for weighing any
`
`9
`
`
`
`Fintiv factor in favor of institution.
`
`Additionally, Apple relied upon the same prior art and grounds in the
`
`litigation as this Petition until at 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 in an effort to manipulate the Fintiv factors to avoid
`
`discretionary denial. But from August 15, 2019, through April 7, 2020, Apple
`
`relied on identical prior art.
`
`Apple’s final argument, that it has “eliminated the chance of inconsistent
`
`findings,” (Reply at 5) is wrong. First, Apple’s argument is wholly conclusory.
`
`Second, as set forth above, Juen is used in both proceedings to purportedly disclose
`
`the same claim limitations. Both proceedings also heavily rely on Anderson—as a
`
`secondary reference in the District Court Action, and as a purported evidence of
`
`obviousness here. Further, as set forth above, the differences between Sony and
`
`Casio are insubstantial and for purposes of the Fintiv analysis the two references
`
`are identical. Moreover, as set forth in the Preliminary Response, Apple’s position
`
`in the District Court Action is that there is complete overlap of issues. Paper 6 at
`
`12-13. Thus, substantially the same issues will be decided by a court or jury, using
`
`substantially the same prior art, eleven months prior to the issuance of a FWD.
`
`10
`
`
`
`Factor 5: Apple is Both Petitioner And Defendant
`C.
`This factor favors denial. Apple v. Maxell, IPR2020-00203, Paper 12 at 16.
`
`Factor 6: Other Circumstances
`D.
`Apple’s delay in filing the Petition, an application of the General Plastic
`
`factors in addition to the Fintiv factors, and the Petition’s lack of merit, weigh
`
`heavily in favor of denial. Paper 6 at 2-27, 38-64. This factor favors denial.
`
`III. APPLE FAILS TO SHOW CASIO WAS PUBLICLY AVAILABLE
`Apple sets up a red herring by casting the pertinent issue regarding the
`
`public availability of Casio as whether “Apple must establish communications
`
`between Casio and Mr. Etchells” at Institution (Apple Reply at 12). In so doing,
`
`Apple misinterprets the law, ignores all but one of Maxell’s arguments, and fails to
`
`satisfy its evidentiary burden. The relevant question is whether Apple has
`
`“identif[ied], with particularity, evidence sufficient to establish a reasonable
`
`likelihood that the reference was publicly accessible before the critical date” of the
`
`’493 patent. Hulu, IPR2018-01039, Paper 29 at 13. It has not. The “reasonable
`
`likelihood” standard requires “sufficient” evidence:
`
`Additionally, the statute requires that the petition identify with
`particularity the grounds for institution and evidence supporting such
`grounds. . . . This includes the prior art relied upon and evidence that
`it qualifies as such. This standard is far more than is required in
`typical notice pleading . . . .
`
`11
`
`
`
`Hulu, at 13 (emphasis added and in original). Apple fails to identify with
`
`particularity evidence supporting that Casio was available prior to the critical date.
`
`First, Apple relies on an alleged encounter between Etchells and Casio, but
`
`provides no evidence showing that this occurred. Rather, Apple’s evidence shows
`
`that Etchells bought a camera after the critical date. Second, the camera,
`
`packaging, and user guide Etchells allegedly received from Casio lack date stamps,
`
`receipts, or any way to verify receipt prior to the critical date. Anonymous,
`
`unidentifiable exhibits are not particular or sufficient. See, e.g., Intervet Inc. v.
`
`Boehringer Ingelheim Vetmedica, Inc., No. IPR2019-00374, Paper 10 at 18-20
`
`(PTAB July 10, 2019). Third, Apple’s press release evidence is irrelevant—it did
`
`not mention or include the Casio User Guide. Indeed, there is no evidence that the
`
`individual making the declaration even attended the show. Finally, Apple hinges its
`
`claim that sales occurred prior to the critical date on a contradicted declaration.
`
`Apple fails to provide any additional support such as the actual sales records.
`
`Apple’s claim that Maxell’s argument is “simply one of disagreement with
`
`[Etchells’] ‘factual’ statements” (Reply at 12) is an attempt to cloud the issues. See
`
`Paper 6 at 38-49. It is Apple’s burden to prove with particular and identifiable
`
`evidence that Casio was publicly available prior to the critical date. It has not
`
`satisfied its burden.
`
`12
`
`
`
`Dated: July 31, 2020
`
`Respectfully submitted,
`
`/Robert G Pluta Reg No 50970 /
`Robert G. Pluta (Reg. No. 50,970)
`Amanda S. Bonner
`Registration No. 65,224
`MAYER BROWN LLP
`71 S. Wacker Drive
`Chicago, IL 60606
`
`Jamie B. Beaber
`(Pro Hac Admission to be Sought)
`James A. Fussell
`Registration No. 54,885
`Bryan C. Nese
`Registration No. 66,023
`Saqib J. Siddiqui
`Registration No. 68,626
`MAYER BROWN LLP
`1999 K Street, NW
`Washington, D.C. 20006
`
`13
`
`
`
` CERTIFICATE OF SERVICE
`
`I hereby certify that on this 31st day of July, 2020, a copy of the
`
`attached PATENT OWNER’S AUTHORIZED PRELIMINARY SUR-REPLY
`
`was served by electronic mail to the attorneys of record, at the following addresses:
`
`Jennifer C. Bailey
`Jennifer.Bailey@eriseip.com
`PTAB@eriseip.com
`Adam P. Seitz
`Adam.Seitz@eriseip.com
`ERISE IP, P.A.
`7015 College Blvd., Suite 700
`Overland Park, Kansas 66211
`Telephone: (913) 777-5600
`Fax: (913) 777-5601
`
`Paul R. Hart
`Paul.Hart@eriseip.com
`ERISE IP, P.A.
`5600 Greenwood Plaza Blvd., Ste. 200
`Greenwood Village, Colorado 80111
`Telephone: (913) 777-5600
`Fax: (913) 777-5601
`
` Respectfully submitted,
`
`Date: July 31, 2020 By:
`
`/Robert G Pluta Reg No 50970/
`Robert G. Pluta
`MAYER BROWN LLP
`
`14
`
`
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