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` Hearing
` UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
` --------------------------------------------
` BAYERISCHE MOTOREN WERKE AKTIENGESELLSCHAFT &
` BMW OF NORTH AMERICA, LLC,
` Petitioner
` vs
` PAICE LLC & THE ABELL FOUNDATION, INC.
` Patent Owner.
` --------------------------------------------
` CASE IPR2020-00994
` Patent 7,104,347
` ---------------------------------------------
` TELEPHONIC HEARING
` ** REVISED **
`
`REPORTED BY: Ronda J. Thomas, RPR, CRR
`Job No. 184779
`
`TSG Reporting - Worldwide 877-702-9580
`
`BMW1060
`BMW v. PAICE, IPR2020-00994
`Page 1 of 16
`
`

`

` Hearing
`
`Page 2
`
` Wednesday, September 30, 2020
` 4:00 p.m.
`
` A telephonic hearing was held in the
`above-titled matter before the Patent Trial and
`Appeal Board.
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`BMW1060
`BMW v. PAICE, IPR2020-00994
`Page 2 of 16
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`

`

`Page 3
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` Hearing
`APPEARANCES:
`
`PATENT TRIAL AND APPEAL BOARD:
` The Honorable Arthur Peslak
` The Honorable Kal Deshpande
` The Honorable Sally Medley
`
`ON BEHALF OF PETITIONER:
` VINCENT GALLUZZO, ESQUIRE
` JEFFREY SANOK, ESQUIRE
`
`ON BEHALF OF PATENT OWNER:
` BRIAN LIVENDALEN, ESQUIRE
` GRANT RICE, ESQUIRE
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`BMW1060
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`

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`Page 4
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` Hearing
` P R O C E E D I N G S
` JUDGE PESLAK: This is the Patent
`Trial and Appeal Board. This is
`IPR2020-00914. I'm Judge Peslak. On the
`phone with me are Judge Medley and Judge
`Deshpande.
` Who's on the call for petitioner?
` MR. GALLUZZO: Your Honor, this is
`Vince Galluzzo, backup counsel for
`Petitioners. And also on the line with me is
`lead counsel Jeff Sanok.
` JUDGE PESLAK: Good afternoon,
`counsel.
` Who's on the line for Patent Owner?
` MR. LIVEDALEN: Good afternoon, this
`is Brian Livedalen from Fish & Richardson and
`along with me is Tim Rice also from Fish &
`Richardson.
` JUDGE PESLAK: This was called because
`Petitioner is requesting to file a five-page
`reply to address 314(a) arguments raised by
`the Patent Owner in the preliminary response.
`We understand that at Patent Owner opposes
`the request.
`
`TSG Reporting - Worldwide 877-702-9580
`
`BMW1060
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`Page 4 of 16
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`

`

`Page 5
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` Hearing
` Petitioner, without getting into the
`merits of the 314(a) arguments, can you tell
`us why you need to file a reply?
` MR. GALLUZZO: Yes, Your Honor. Thank
`you for the opportunity for the call today.
` Petitioners do request the Board's
`permission to submit a short reply to the
`preliminary response on the narrow issues of
`discretionary denial under 314(a).
` I think just one correction, Your
`Honor. Our request did not specify a number
`of pages. Petitioner had stated that five
`pages would be appropriate if the Board
`requested. To be clear, we're asking for
`seven pages if the Board would grant it. I
`just wanted to make that clear up front.
` But a reply is appropriate here for
`several reasons, but the first is that the
`preliminary response argues discretionary
`denial because of the complex history of
`eight previous IPR petitions on the '347
`patent. These were all filed sometime
`between 2014 and 2016. Five of them were
`instituted, three of them never reached an
`
`TSG Reporting - Worldwide 877-702-9580
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` Hearing
`institution decision, none of them involved
`the BMW Petitioners here.
` The petition does detail the fact that
`it challenges 6 dependent claims whose
`independent claims were already found
`unpatentable by the Board. And, that most of
`the challenge claims have not been subject of
`IPR and only two of them had reached
`decision.
` But because of the complexity of the
`proceeding, the petition does explain that
`its reliance on the Board's prior decision
`and references is to make the Board's review
`much more streamlined because those decisions
`have preclusive effect. That's the efficient
`way to address these claims and Petitioners
`believe that additional briefing on the
`complexity of the proceeding in relation to
`what Petitioners presented here. In fact,
`that what Petitioners have presented is the
`most efficient way to deal with these claims
`rather than have the parties and the Board
`deal with entirely new art on claims already
`found unpatentable. That this new briefing
`
`TSG Reporting - Worldwide 877-702-9580
`
`BMW1060
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`Page 7
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`would be helpful to the Board in
`understanding the precise issues raised by
`the petition in light of those prior IPRs.
` And some of the arguments that the
`preliminary response had raised turns the
`preclusive effect of those board decisions
`into an immunity from this and future
`challenges. So Petitioner's concern that
`this might raise a broader issue.
` Patent Owners have drafted the '347
`patent and others in the family have
`overlapping features in each of the claims.
`The strategy's been assert different subsets
`of these overlapping claims against various
`defendants over the years.
` Here, Patent Owners waited five years
`since the previous challenges against other
`defendants to assert claims against
`Petitioners that haven't been brought in
`those previous cases against any other
`company. And Petitioners are concerned that
`this could have a wide ranging consequence to
`both patent drafting in litigation strategy
`if the board allows it to happen.
`
`TSG Reporting - Worldwide 877-702-9580
`
`BMW1060
`BMW v. PAICE, IPR2020-00994
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`

`

`Page 8
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` Hearing
` As between Petitioners and Patent
`Owners, I believe this issue is gonna come up
`at least two more times.
` Patent Owner has asserted and
`Petitioner has challenged three patents with
`interrelated limitations here. Here in Case
`Number 994 we have the '347 patent, but in
`Case Number IPR2020-0136, that relates to the
`'634 patent. That patent has over 306
`claims, more than half of which the Board has
`already found unpatentable.
` But the new claims that have not been
`challenged before are being challenged by
`Petitioners here. And so we're -- we believe
`that this same issue will come up again at
`least in relation to that case if not in the
`third as well relates to the '761 patent
`which is Case Number IPR2020-01299.
` Petitioners would like to detail how
`this venue can relate to -- of issue
`preclusion and familiarity with at least two
`of the members of the panel with the patents
`in art is -- makes this venue the more
`efficient way and the most efficient venue to
`
`TSG Reporting - Worldwide 877-702-9580
`
`BMW1060
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`Page 8 of 16
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`

`

`Page 9
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` Hearing
`determine patentability, not in the district
`court, especially in light of the lack of a
`trial date and other factors. And that BMW
`filed the petitions quickly, approximately
`two months after Patent Owners identified
`their asserted claims and still six months
`before the 12-month bar.
` But perhaps, most importantly, Your
`Honor, the Board's decision on discretionary
`denial is one that is not reviewable on
`appeal and this Board has previously found in
`cases like IPR2019-00571 that is RTI v.
`LifeNet and in Paper 14 that the fact of a
`non-reviewable denial on discretionary
`reasons is a good reason to give Petitioners
`an opportunity to respond to such
`discretionary denial issues.
` Additionally, the Board's
`discretionary denial has recently been
`challenged and come under fire for not being
`part of formal rulemaking. It's currently
`being reviewed by the Federal Circuit in at
`least two cases.
` So Petitioners would request a few
`
`TSG Reporting - Worldwide 877-702-9580
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`

`Page 10
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`pages. Again, we're not asking for 10. We
`think that seven is appropriate to address
`the lengthy arguments the Patent Owners have
`made in their preliminary response and that's
`what Petitioners are asking the Board's
`permission for today.
` Happy to answer any other questions
`that, Your Honors, may have.
` JUDGE PESLAK: If we decide to grant
`this, how long do you need to get your briefs
`together?
` MR. GALLUZZO: Your Honor, we can
`commit to two weeks. I think that would be a
`reasonable amount of time. If Your Honors
`would like it quicker than that, we can of
`course commit to that as well.
` JUDGE PESLAK: Okay. And the patents
`in the other two IPRs are also at issue in
`the same litigation that this patent is at
`issue in?
` MR. GALLUZZO: Yes, Your Honor. There
`is a Federal District Court litigation in
`Maryland on the same three patents as are at
`issue in this case 994 on the '347 patent;
`
`TSG Reporting - Worldwide 877-702-9580
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`BMW1060
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`Page 10 of 16
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`

`Page 11
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` Hearing
`case 1386 on the '634 patent; and case 1299
`on the '761 patent.
` JUDGE PESLAK: Okay. Patent Owner,
`what do you have to say about all this?
` MR. LIVEDALEN: Thank you. I'll try
`to keep my response short. The fundamental
`reason why we oppose the request is that the
`standard governing whether or not a reply
`should be granted is in 37 C.F.R. 108(c) and
`that standard requires good cause and we
`believe, based on the facts as they're just
`laid out, that BMW can't show good cause.
` The two primary reasons for that is
`that the facts and the law have remained the
`same both before and after the petition was
`filed.
` After the facts, the petition does
`address the long history of various IPRs
`against the '347 patent but never puts that
`in the context of 314(a). And as to the law,
`the concept that 314(a) should consider
`things like serial petitions and the later
`precedent both in the valid 1, valid 2 cases
`which extend the general classic factors
`
`TSG Reporting - Worldwide 877-702-9580
`
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`

`Page 12
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` Hearing
`framework of 314(a), the situations where
`there are different Petitioners, all that law
`was out in 2019 and established as
`precedential well before BMW filed its
`petition. So we believe that really there's
`nothing new here whether it's in the facts or
`the law.
` And what we see from the petition is
`that the BMW well understood that there was a
`long history and should have known that
`314(a) would have been an issue but chose not
`to address it in its petition.
` The second reason and really related
`to that is because BMW does not address
`314(a) in its petition, it spent nearly all
`of its 14,000-word count on the merits, and
`in doing so it has asserted 11 grounds
`against six claims, and so the notion that
`you can avoid important things like 314(a) in
`your petition and then get more briefing in a
`reply seems to essentially negate the idea
`that the petition should be limited to a
`specified length and allowing the reply would
`basically -- would be an end around that
`
`TSG Reporting - Worldwide 877-702-9580
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`

`

`Page 13
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`requirement.
` We agree with Petitioner obviously
`that discretionary denial is important so to
`the extent that the Board requires additional
`briefing as we suggested in the email we can
`be limited to five pages both in reply and
`sur-reply and also as to the timing we
`suggest five business days for both.
` And one thing I will mention is this
`issue does come up in one of the other IPRs
`that is forthcoming.
` Again, we seen this as something BMW
`should have foreseen. I think this '347
`patent has been subject to eight IPRs, five
`of which instituted in brief final written
`decision, and the '634 patent I think that's
`the subject of 25 IPRs, if I have that
`correct. Again we think because of that long
`history, 314(a) is a glaring issue that
`should have been addressed in the first
`instance.
` Just one point of correction is the
`claims in the '347 patent and in the '634
`patent that are challenged here are not new
`
`TSG Reporting - Worldwide 877-702-9580
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`

`Page 14
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`claims. These are -- at least one-third of
`the claims have, in this particular IPR, have
`been found by either patentable or denied
`institution for similar reasons.
` So like I said because of the
`foreseeability of this issue, we oppose the
`request but would alternatively agree to the
`reply and sur-reply if the Board feels
`necessary.
` JUDGE PESLAK: Okay. Why don't you
`give us a minute here, hold on.
` (Pause.)
` JUDGE PESLAK: Okay, counsel. We're
`going to grant Petitioner's request.
` Petitioner, you can submit a
`seven-page reply brief due in seven days from
`today that, that would be October 7th. And,
`Patent Owner, you can submit a seven-page
`sur-reply that will be due seven days later
`on October 14th.
` Does anybody have any questions?
` MR. GALLUZZO: None from Petitioner,
`Your Honor.
` MR. RICE: This is Tim Rice, Your
`
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`
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`

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` Hearing
`Honor. If I could ask for a point of
`clarification. I presume there will be no
`additional testimony submitted with these
`briefs; is that correct?
` JUDGE PESLAK: That's correct. It
`will just be briefing with no evidence in it.
` MR. RICE: Thank you, Your Honor.
` JUDGE PESLAK: That's it. Good
`afternoon. Have a good day, counsel.
` (All Counsel - "Thank you, Your
`Honor.")
` (Hearing adjourned at 4:15 p.m.)
`
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`

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`Hearing
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`Page 16
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`State of Maryland
`County of Baltimore, to wit:
` I, RONDA J. THOMAS, a Notary Public of the
`State of Maryland, Baltimore County, do hereby
`certify that the above-captioned matter came on for
`telephonic hearing before the Patent Trial and
`Appeal Board.
` I further certify that the telephonic hearing
`was recorded stenographically by me and this
`transcript is a true record of the proceedings.
` I further certify that I am not related to any
`of the parties, nor in any way interested in the
`outcome of this action.
` As witness my hand this 12th day of
`October, 2020.
`
`_____________________
`RONDA J. THOMAS
`Notary Public
`
`My Commission Expires:
`October 15, 2021
`
`TSG Reporting - Worldwide 877-702-9580
`
`BMW1060
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`Page 16 of 16
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`

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