From:
`Sent:
`To:
`Cc:
`
`Subject:
`Attachments:
`
`Dear Honorable Board,
`
`Strang, Jonathan (DC)
`Thursday, February 18, 2021 10:02 AM
`Precedential_Opinion_Panel_Request@uspto.gov
`Rosen, Lauren (LA); dmaiorana@jonesday.com; aminsogna@jonesday.com;
`kluchesi@jonesday.com; ggavin@jonesday.com; jrnightingale@jonesday.com;
`gphillips@jonesday.com; gjlarosa@jonesday.com; Moore, Matthew (DC); Chang, Dale
`(CH); Hamming, Lesley (CH); Ghrist, Diane (DC)
`Precedential Opinion Panel Request: IPR2020-01097 (USP 9,839,238)
`2021.02.18 [010] 238 Petitioner's Request for Rehearing (-01097).pdf
`
`I write on behalf of Petitioner Philip Morris Products, S.A., to request Precedential Opinion Panel (“POP”)
`Review of the Board’s decision in Philip Morris Products v. RAI Strategic Holdings, IPR2020-01097, Paper 9
`(January 19, 2020) (“Panel Decision”). Petitioner’s Request for Rehearing (“RFR”) is attached.
`
`Pursuant to PTAB Standard Operating Procedure 2 (Rev. 10), lead counsel for Petitioner provides the following
`certifications:
`• Based on my professional judgment, I believe the Board panel decision is contrary to the
`following constitutional provision, statute, or regulation: Administrative Procedure Act, 5 U.S.C.
`§ 706.
`• Based on my professional judgment, I believe the Board panel decision is contrary to the
`following decision(s) of the Supreme Court of the United States, the United States Court of
`Appeals for the Federal Circuit, or the precedent(s) of the Board: Apple Inc. v. Fintiv, Inc.,
`IPR2020-00019, Paper 11 at 5 (Mar. 20, 2020) (precedential).
`• Based on my professional judgment, I believe this case requires an answer to one or more
`precedent-setting questions of exceptional importance:
`o Whether Apple v. Fintiv, IPR2020-00019, Paper 11 (March 20, 2020) (precedential)
`should apply to IPR proceedings involving parallel ITC investigations.
`o Whether a parallel ITC case precludes institution of an IPR.
`o If a parallel ITC does not rule out institution, whether ITC respondents in the typical
`circumstances are required to drop all grounds that were raised, or reasonably could have
`been raised, in the IPR (“IPR-eligible defenses”) from the ITC proceeding as a necessary,
`but not sufficient, condition to obtain institution, and whether they are required to do so
`unconditionally or if a Sotera-style stipulation will suffice.
`
`POP review is warranted in view of the Board’s record of 21 straight denials of institution under Fintiv. ITC
`respondents need to know exactly what is required beyond diligently filing a meritorious petition, as Petitioner
`did here. The Panel Decision impermissibly denied institution based solely on a pending ITC case, apparently
`applying a de facto rule that IPR is unavailable to ITC respondents absent drastic action to remove any possible
`overlap, such as a Sotera-style stipulation or unconditionally dropping all IPR-eligible defenses from the ITC
`case. RFR at 1-5. It is unclear, however, whether any future panel will apply the same de facto rule, as the Panel
`Decision here (and two others involving the same parties, namely IPR2020-00919 and -01094) are not
`Philip Morris Products, S.A.
`Exhibit 1055
`PMP v. RAI
`IPR2020-00919
`
`1
`
`Ex. 1055-001
`
`

`

`designated Precedential. Such uncertainty is intolerable, especially in the early stages of an ITC proceeding
`while facing the concomitant risk of an exclusion order.
`
`To be clear, drastic action to eliminate any possible overlap is a de facto requirement under the Panel Decision
`for practically all ITC respondents because ITC cases are typically similar in the relevant respects. As the Board
`is well aware, the Fintiv factors under the Panel Decision’s analysis will almost always be the same, or worse,
`for other ITC respondent/petitioners:
`• Factor 1, stay: There will not be a stay of a parallel ITC proceeding because the ITC does not stay
`pending IPR. That was true in this case, and will be true in all foreseeable ITC cases.
`• Factor 2, proximity to trial: Per the ITC’s usual 16-month schedule, the evidentiary hearing is usually
`9-10 months after the complaint is filed. Despite Petitioner’s exceptional diligence in this case (filing
`multiple IPRs within two months after the complaint was filed), the ITC’s hearing was about the same
`date as the institution decision. The Board cannot reasonably expect more from other petitioners.
`• Factor 3, investment at institution: The investment here was “moderate” only because of Petitioner’s
`exceptional diligence. The investment will be higher for petitioners that file in more reasonable time
`frames due to the ITC’s fast-paced schedule.
`• Factor 5, same parties: The parties are always the same when an ITC respondent is the petitioner.
`• Factor 6, other: Here, the merits were strong, but that combined with Petitioner’s diligence did not
`outweigh the other factors.
`
`The only remaining factor is Factor 4, overlap, and the Board now apparently requires a Sotera-style stipulation
`or more, even if the petition is strong on the merits and filed with exceptional diligence. RFR at 2-5 (also noting
`that unconditionally dropping over two-thirds of the IPR grounds was not enough in the ’919 Decision). This
`was not true before mid-October 2020, when the Board uniformly granted institution despite a co-pending ITC
`case. RFR at 10-12 (noting the Board granted institution over NHK/Fintiv despite a parallel ITC case in 35 of 36
`cases before mid-October, and only once in 22 cases after then).
`
`Prospective petitioners, as well as prospective plaintiff patent owners, are entitled to fair notice of how the
`Board will treat parallel ITC cases. If a Sotera-style stipulation (or more) is not truly a de facto requirement in
`the typical situation involving a parallel ITC case, the POP should state or re-iterate exactly how panels should
`treat parallel ITC cases. For example, if Fintiv correctly set forth the proper analysis, the POP should vacate the
`Panel Decision and re-iterate that Fintiv meant what it said: where Fintiv said “district court,” it meant “district
`court,” and where it said “ITC,” it meant “ITC.” And under a proper Fintiv analysis on these facts, the Board
`should have instituted review. RFR at 12-15.
`
`But if it is indeed the Board’s new de facto rule that ITC respondents that diligently file a meritorious IPR
`petition must give up all IPR-eligible grounds, the POP should say so in a Precedential decision and provide the
`reason(s) for its departure from the PTAB’s well-established past practice.
`
`Further, the POP should vacate the Panel Decision because it is contrary to law. As explained at length in the
`RFR, Congress did not grant the Director the authority to deny institution based solely on a parallel ITC
`proceeding, and certainly did not authorize the Director to treat the courts (which can invalidate claims) and the
`ITC (which cannot invalidate claims) in the same manner. RFR 5-10. Congress instead carefully balanced
`competing interests, requiring petitioners to file their IPRs within one year of being served with a district court
`complaint for infringement. 35 U.S.C. § 315(b). In contrast, Congress placed no limit on institution in view of
`concurrent ITC proceedings RFR 6-9; see also Robert Bosch Tool Corp. v SD3, LLC, IPR2016-01751, Paper 15
`at 11-14 (March 22, 2017) (explaining that § 315(b) does not apply to ITC complaints).
`
`2
`
`Ex. 1055-002
`
`

`

`The Board’s unannounced and unexplained departure from its well-established practice could not have been any
`more abrupt and absolute. Up until mid-October of 2020, the Board granted institution despite NHK/Fintiv
`arguments in 35 of 36 cases involving a parallel ITC case. Since that time, the Board has granted institution
`only once in 21 such cases. RFR 1, 10-12. Even if the Director’s “discretion [was] unfettered at the outset,” the
`Board violated the Administrative Procedure Act by irrationally and without notice departing from its past
`practice. McCarthy v. MSPB, 809 F.3d 1365, 1372 (Fed. Cir. 2016); Id.
`
`Fintiv does not justify this drastic change in the Board’s record—from 35-1 to 1-21—in institution decisions
`applying NHK/Fintiv to parallel ITC cases. First, Fintiv did not purport to change the Board’s practice, and
`certainly does not require petitioners to take such drastic action as unconditionally dropping all IPR-eligible
`defenses from the ITC case. Rather, Fintiv purports to catalog the Board’s current practices, and carefully
`circumscribes the Board’s treatment of co-pending ITC cases. RFR 12-15. Yet the Board required such drastic
`action in its sole decision instituting review since October 2020. See IPR2020-01094, Paper 9 at 22 (Jan. 25,
`2021) (“’1094 Decision”).
`
`Second, Fintiv was decided in March and made precedential on May 5, 2020, well before the Board’s October
`2020 departure from its well-established practice. Indeed, the first half-dozen institution decisions applying
`Fintiv to ITC proceedings granted institution without a Sotera-style stipulation. See Samsung Elecs. Co. v.
`Dynamics, IPR2020-00499, Paper 41 at 11-16 (Aug. 12, 2020) reh’g denied Paper 46 (October 5, 2020)
`(“Samsung”); see also IPR2020-00223, -00502, -00504, -00505.
`
`In any event, the Panel Decision did not follow Fintiv, which as a precedential decision, should have bound the
`panel. Where Fintiv directs the Board to consider district court facts, such as “whether there is a parallel district
`court case that is ongoing or stayed” in Factor 1 (Fintiv 8-9), the Panel Decision instead considered ITC facts,
`such as whether the ITC proceeding is stayed. RFR 12-15. The Panel Decision did not recognize, much less
`justify, its departure from Fintiv. Id.
`
`In addition to being contrary to Fintiv’s express guidance, the Panel Decision’s methodology makes no sense.
`Continuing the Factor 1 analysis, for example, Fintiv does not direct the Board to evaluate whether the ITC has
`or is likely to stay the case because the ITC has not and will not stay pending IPR. RFR 13; Reply 2; Certain
`Laser-driven Light Sources, Subsystems Containing Laser-driven Light Sources, and Products Containing
`Same, Inv. No. 337-TA-983, Order No. 8 at 4, 8 (Mar. 3, 2016) (“The Commission has reversed a stay granted
`by an [ALJ] when there was no final judgment in the parallel proceeding.”) (Ex. 1033). Rather, Fintiv directs
`the Board to analyze whether the district court has issued a stay. RFR 13; Reply 2.
`
`Further, the Board now seems to require petitioners sued in the ITC to submit a Sotera-style stipulation to
`achieve institution. RFR 2-5 (discussing the ’1094 Decision, the sole exception to the Board’s new practice of
`denying institution of all IPRs with a co-pending ITC cases). Such a rule, however, would increase inefficiency
`and duplication of effort. Even if a petition is filed just two or three months after the ITC complaint, the Board’s
`institution decision will almost always fall about the time of the hearing and while post-trial briefing is on-going
`or complete. Id. Despite the stipulation, whether the IPR is instituted or not, the parties would therefore fully
`brief and argue at the ITC the IPR grounds in addition to backup grounds. Id.
`
`Taking such drastic action as dropping IPR-eligible art from the ITC action (via stipulation or unconditionally
`as in the ’1094 Decision) is too much to ask ITC respondents in typical cases. RFR at 2-5. And without
`certainty as to whether even that is sufficient, many if not all ITC respondents will simply forgo IPR rather than
`drop their best art from the ITC case on the chance they will draw a sympathetic panel.
`
`For all of the above reasons, the POP should address exactly how concurrent ITC proceedings are to be treated
`going forward. It is unfair to subject the public to such wide swings in Board policy and rules without warning
`
`3
`
`Ex. 1055-003
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`

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`or justification. It is doubly unfair to impose unwritten de facto rules that require parties to guess what is
`required to obtain institution beyond diligently filing a meritorious petition.
`
`
`
`* * *
`
`
`For the above reasons and in the RFR, Petitioner seeks POP review and requests the Board reconsider the Panel
`Decision and institute this IPR.
`
`Respectfully submitted,
`
`Jonathan Strang
`Lead Counsel for Petitioner Philip Morris Products, S.A.
`
`
`Jonathan M. Strang
`
`
`LATHAM & WATKINS LLP
`555 Eleventh Street, NW
`Suite 1000
`Washington, D.C. 20004-1304
`Direct Dial: +1.202.637.2362
`Fax: +1.202.637.2201
`Email: jonathan.strang@lw.com
`https://www.lw.com
`
`
`4
`
`Ex. 1055-004
`
`