Trials@uspto.gov
`571-272-7822
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`Paper No. 12
`Date: January 22, 2021
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TIDE INTERNATIONAL (USA), INC.,
`Petitioner,
`v.
`UPL NA INC.,
`Patent Owner.
`
`IPR2020-01113
`Patent 7,473,685 B2
`
`
`Before SUSAN L. C. MITCHELL, ZHENYU YANG, and
`MICHAEL A. VALEK, Administrative Patent Judges.
`
`Opinion of the Board filed by Administrative Patent Judge VALEK.
`
`
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
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`571-272-7822
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`Paper No. 12
`Date: January 22, 2021
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TIDE INTERNATIONAL (USA), INC.,
`Petitioner,
`v.
`UPL NA INC.,
`Patent Owner.
`
`IPR2020-01113
`Patent 7,473,685 B2
`
`
`Before SUSAN L. C. MITCHELL, ZHENYU YANG, and
`MICHAEL A. VALEK, Administrative Patent Judges.
`
`Opinion of the Board filed by Administrative Patent Judge VALEK.
`
`
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
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`IPR2020-01113
`Patent 7,473,685 B2
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`INTRODUCTION
`I.
`Tide International (USA), Inc., (“Petitioner”) filed a Petition (Paper 2,
`“Pet.”), seeking inter partes review of claims 1–4 and 7–12 of U.S. Patent
`No. 7,473,685 B2 (Ex. 1001, “the ’685 patent”). UPL NA, Inc., (“Patent
`Owner”) filed a Preliminary Response. Paper 7 (“Prelim. Resp.”).
`In its Preliminary Response, Patent Owner asked the Board to apply
`its discretion under 35 U.S.C. § 314(a) to deny institution “in view of the
`advanced stage of the related district court proceeding” involving the same
`patent and parties. Prelim. Resp. 2. Although Petitioner addressed the issue
`in the Petition, the district court litigation was apparently stayed at that time.
`Pet. 68. After the Petition was filed, but prior to Patent Owner’s Preliminary
`Response, the district court lifted that stay and set new deadlines, including a
`jury trial to commence on August 3, 2021. Ex. 2001, 1. Given this change,
`we granted Petitioner’s request for leave to file a reply to the Preliminary
`Response to address “the status of the related district court proceeding . . .
`and Patent Owner’s allegations regarding overlapping references” asserted
`therein. Paper 9, 2 (quoting Ex. 3001). Petitioner filed its reply. Paper 10
`(“Reply”). Patent Owner filed an authorized sur-reply. Paper 11 (“Sur-
`Reply”).
`Upon consideration of the parties’ briefing, and for the reasons
`explained below, we decide not to exercise our discretion to deny institution
`under 35 U.S.C. §§ 314(a) or 325(d). We further determine that Petitioner
`has satisfied the threshold requirement to show a reasonable likelihood that
`it would prevail with respect to at least one claim challenged in the Petition.
`Accordingly, we institute an inter partes review of claims 1–4 and 7–12 of
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`Patent 7,473,685 B2
`the ’685 patent on all of the grounds of unpatentability asserted in the
`Petition.
`
`BACKGROUND
`
`II.
`A. Real Parties in Interest
`Petitioner identifies itself, “Tide International (USA), Inc.,” as well as
`
`“Zhejiang Tide Cropscience Co. Ltd., Ningbo Tide Imp. & Exp. Co., Ltd.,
`and Tide International Company Limited” as the real parties-in-interest. Pet.
`73. Petitioner explains that Tide International Company Limited is its parent
`corporation and that “the remaining parties are defendants in co-pending
`litigation.” Id. Patent Owner identifies itself, “UPL NA Inc.,” as the real
`party-in-interest. Paper 3, 1.
`
`B. Related Matter
`Petitioner and Patent Owner identify the following related matter
`involving the ’685 patent: UPL NA Inc. v. Tide International (USA), Inc.,
`No: 8:19-cv-1201-RSWL-KS (C.D. Cal. 2019). Pet. 73; Paper 3, 1. We
`refer to this matter herein as the “related litigation.”
`
`C. The ’685 Patent
`The ’685 patent was issued on January 6, 2009, and claims priority to
`a utility application filed on April 22, 2002, and a provisional application
`filed December 18, 2001. Ex. 1001, 1 (63, 60).
`The ’685 patent relates to “[d]ry flow, low compact, dust free, soluble
`granules” containing the pesticide “acephate” in combination with certain
`other ingredients, and processes for making such. Ex. 1001, Abstr.
`According to the Specification, “[t]he formulation of acephate presently in
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`Patent 7,473,685 B2
`use . . . poses the problems of dust, low pourability, high transportation
`costs, high capital manufacturing investment, measurement difficulties,
`difficulties in packing material disposal, handling problems, high risk of
`caking and others.” Id. at 2:13–20.
`
`The Specification purports to overcome these problems by describing
`a method that constitutes “an improvement over prior manufacturing
`processes” that produces dust free, soluble granules that are “more
`advantageous than prior granular products and exhibit[] certain very
`desirable characteristics.” Ex. 1001, 2:33–43.
` The claims of the ’685 patent recite particular formulations of
`“chemically stable dry flow, low compact, dust free” granule compositions
`“consisting of” acephate and certain recited ingredients in amounts falling
`within specified ranges. Ex. 1001, 7:44–8:65.
`
`D. Challenged Claims
`The Petition challenges claims 1–4 and 7–12. Of these, claims 1 and
`7 are independent. Claim 1 reads as follows:
`1. A chemically stable dry flow, low compact, dust free
`soluble phosphoramidothioate granule consisting of
`(i) 85-98% w/w an insecticidally active compound of the
`following formula:
`
`
`wherein R and R1 individually are alkyl, alkynyl or
`alkenyl group containing up to 6 carbon atoms, R2 is hydrogen,
`an alkyl group containing 1 to 18 carbon atoms, a cycloalkyl
`group containing 3 to 8 carbon atoms, an alkenyl group
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`Patent 7,473,685 B2
`containing 2 to 18 carbon atoms or an alkynyl group containing
`3 to 18 carbon atoms, R3 is hydrogen or an alkyl group
`containing 1 to 6 carbon atoms, and Y is oxygen or sulfur,
`wherein said insecticidal active compound is Acephate:
`(ii) 0.1-5.0% w/w a dispersing agent;
`(iii) 0.1-3% w/w a wetting agent;
`(iv) 0.01-0.08% w/w an antifoaming agent;
`(v) 0.01-1% w/w a stabilizer and
`(vi) fillers to make 100%,
`wherein said granule has a length of 1.5-3.0 mm and a
`diameter of 0.5-1.5 mm.
`Ex. 1001, 7:44–8:4. Claim 7 is directed to a granule consisting of the same
`ingredients as claim 1, but additionally recites the presence of a “binding
`agent” and “disintegrating agent” in the granule. See id. at 8:19–48.
`
`
`
`E. Asserted Grounds of Unpatentability
`Petitioner asserts the following grounds of unpatentability:
`Claims Challenged
`35 U.S.C. §
`References
`Misselbrook,2 CN ’588,3 JP
`1–4, 7–12
`103(a)1
`’902,4
`1–4, 7–12
`103(a)
`Misselbrook, Mayer,5 CN ’588
`
`
`1 The Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
`(2011) (“AIA”), included revisions to 35 U.S.C. §§ 102 and 103 that became
`effective after the filing of the application that led to the ’685 Patent.
`Therefore, we apply the pre-AIA versions of 35 U.S.C. §§ 102 and 103.
`2 U.S. Patent No. 6,387,388 B1, issued May 14, 2002 (Ex. 1005)
`(“Misselbrook”).
`3 CN 1127588A, published July 31, 1996 (Ex. 1006). Petitioner has
`provided a certified translation (Ex. 1007), which we refer to and cite herein
`as “CN ’588.”
`4 JP 9-315902, published Dec. 9, 1997 (Ex. 1008). Petitioner has provided a
`certified translation (Ex. 1009), which we refer to and cite herein as “JP
`’902.”
`5 U.S. Patent No. 6,030,924, issued Feb. 29, 2000 (Ex. 1010) (“Mayer”).
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`References
`35 U.S.C. §
`Claims Challenged
`Misselbrook, JP ’902, Mayer
`103(a)
`1–4, 7–12
`In support of these grounds, Petitioner relies on the declaration of William
`Geigle (Ex. 1003).
`III. DISCRETIONARY DENIAL UNDER 35 U.S.C. § 314(A)
`Patent Owner contends we should exercise our discretion under
`35 U.S.C. § 314(a) to deny institution of inter partes review. Prelim. Resp.
`1–9; see also Sur-reply 1–5. Patent Owner contends that a “jury trial in the
`district court is already scheduled to take place nearly six months before a
`final written decision would likely be due in this IPR,” and therefore, Patent
`Owner expects “the parties’ disputes over the validity of the claims of the
`’685 patent to be resolved in the district court long before they could be
`resolved in this IPR.” Prelim. Resp. 1. According to Patent Owner,
`“[p]roceeding in parallel with the district court would result in an inefficient
`and unnecessary duplication of efforts, so discretionary denial of institution
`under § 314(a) is appropriate” in view of the factors enumerated in Fintiv.
`Id. (citing Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar.
`20, 2020) (precedential) (“Fintiv”)).
`Petitioner has offered its own assessment of these factors and urges
`that “the relevant circumstances of this case favor institution under Section
`314(a) despite co-pending litigation.” Pet. 68–72; see also Reply 1–5. For
`instance, Petitioner asserts that the parallel litigation would not resolve
`challenges to non-asserted claims 2, 3 and 7 through 12, which would be
`resolved in an inter partes proceeding if such a review is granted here. Pet.
`68. Petitioner also believes that the district court is likely to grant a stay if
`an inter partes review is instituted here. Id. at 70–71; Reply 1–3. Petitioner
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`also stated that if an inter partes review is instituted, it would not pursue any
`ground in the Petition in the parallel litigation. Reply 3–4; Ex. 1035.
` The Board’s precedential decision in Fintiv provides several factors
`that balance considerations of system efficiency, fairness, and patent quality
`when a patent owner raises an argument for discretionary denial due to the
`advanced state of a parallel proceeding, such as the related litigation here.
`Fintiv, Paper 11 at 5–6. These factors are:
`1. whether the court granted a stay or evidence exists that one
`may be granted if a proceeding is instituted;
`2. proximity of the court’s trial date to the Board’s projected
`statutory deadline for a final written decision;
`3. investment in the parallel proceeding by the court and the
`parties;
`4. overlap between issues raised in the petition and in the
`parallel proceeding;
`5. whether the petitioner and the defendant in the parallel
`proceeding are the same party; and
`6. other circumstances that impact the Board’s exercise of
`discretion, including the merits.
`
`Id.
`
`We now consider these factors to assess whether we should exercise
`discretion to deny institution under 35 U.S.C. § 314(a). “[I]n evaluating the
`factors, the Board takes a holistic view of whether efficiency and integrity of
`the system are best served by denying or instituting review.” Id. at 6.
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`A. Factor 1: whether the court granted a stay or evidence exists that
`one may be granted if a proceeding is instituted
`In the Petition, Petitioner argued that the first Finitv factor favors
`institution because “all activities in the co-pending litigation are indefinitely
`stayed.” Pet. 68 (emphasis in original). Since the filing of the Petition,
`however, the district court has lifted its prior stay, ordered a new set of
`discovery deadlines, and set trial for August 3, 2021. Ex. 2001 (Sept. 1,
`2020 order). Patent Owner asserts that no stay now exists, and “there is no
`indication that the court would grant any request for a stay if this proceeding
`is instituted, and the fast-approaching trial date (about six months after any
`decision on institution) would disfavor any stay of the district court
`proceedings in the event of institution.” Prelim. Resp. 2.
`
`Petitioner responds that the district court’s rejection of Patent Owner’s
`aggressive discovery schedule in favor of setting the close of fact discovery
`(and service of final contentions) until after institution of any inter partes
`review “avoided setting any dates that would result in overlapping efforts by
`the Court and the Board—including implicitly recognizing [Petitioner’s]
`commitment to forego pursuing overlapping IPR grounds if an IPR were
`instituted.” Reply 2–3. In Petitioner’s view, the district court’s actions in
`setting the schedule “signaled its willingness to compromise between Patent
`Owner’s desire to pursue discovery and Petitioner’s desire to seek relief
`from the Board in an IPR proceeding,” and “the Court indicated its
`willingness to stay (and delay) the case as appropriate by carefully setting a
`schedule that avoided overlapping efforts between the Board and district
`court proceedings.” Reply 3.
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`Patent Owner replies that the district court has not signaled any
`amenability to a stay because Petitioner asked for a five-month continuation
`of the stay, but the district court issued the revised schedule instead. Sur-
`reply 1. Patent Owner contends that the district court could have signaled an
`amenability to stay the litigation if an inter partes review were instituted by
`incorporating a gap in the schedule after the expected date of our institution
`decision to entertain a motion for a stay. Id. at 2. This, Patent Owner
`asserts, the district court did not do. Patent Owner concludes that “[i]f
`anything, the court’s revised schedule seems to indicate that the district court
`expects the parties to continue litigating the case, regardless of the Board’s
`decision on institution.” Id. at 2–3.
`
`A review of the history of the district court litigation and its current
`posture informs our decision on this factor. The parties originally jointly
`requested the stay of the district court litigation because of the difficulties in
`getting materials and testimony from witnesses outside of the United States
`during the COVID-19 pandemic. See Ex. 1036, 2; Reply 1. The district
`court granted the stay except for the Markman hearing, and ordered the
`parties to file a joint status report no later than April 20, 2020. See Ex. 1036,
`2. In that joint status report, Patent Owner asked for a continuation of the
`stay to allow the parties to submit a proposal for appropriate case deadlines,
`while Petitioner sought a lift of the stay at the end of sixty days. Id. On
`June 19, 2020, Petitioner informed the Court of its request for inter partes
`review of the ’685 patent here and stipulated that it would not challenge the
`validity of the patent in the district court litigation based on the grounds
`presented here if we instituted review. Id.
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`On August 25, 2020, the parties filed another joint status report in
`which Patent Owner stated that “continuing to wait out the pandemic would
`impose an undue delay in the relief it is seeking,” noting that all parties had
`agreed that the case should proceed in the previous status report. Id. at 3.
`Patent Owner proposed a schedule culminating in a trial scheduled for April
`27, 2021. Id. at 4. Petitioner asked for a continuation of the stay for five
`months until after our decision on institution, arguing that the parties had not
`expended significant resources on the case as no deposition of any party
`witness had been taken and the parties had only produced documents and
`responded to interrogatories. Id. at 4–6. Both parties accused the other of
`gamesmanship. See generally id.
`
`After considering this joint status report, the district court lifted the
`stay, set a discovery schedule, and scheduled a trial date of August 3, 2021,
`three months later than requested by Patent Owner. Ex. 2001. The district
`court also stated that “[g]iven the uncertainty surrounding the COVID-19
`pandemic, the parties may file a joint request or individual motions to alter
`these dates if so required.” Id.
`
`On January 19, 2021, the parties filed a joint stipulation seeking to
`“modestly extend” the deadlines for fact and expert discovery by about a
`month without impacting the previously set dates for the dispositive motion
`cut-off, pre-trial conference, and trial. Ex. 3002, 2–3. The stipulation also
`notes Petitioner’s intent to file a motion to stay the related litigation “if an
`IPR is instituted,” Patent Owner’s intent to oppose that motion, and proposes
`an expedited briefing schedule “to minimize the amount of work the parties
`would have to do in the expert phase of this litigation if the Court were to
`grant the motion.” Id. at 2.
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`It is difficult to glean any definitive conclusion from the history of the
`district court litigation to conclude whether the district court would be
`amenable to a stay should we institute an inter partes review here. The
`history of the case could support either view that the district court would be
`so amenable or not. For instance, both parties originally agreed to the stay,
`then both parties wanted the stay lifted, then the parties’ viewpoints diverged
`when Petitioner filed this request for inter partes review. In light of this
`history, the district court did not continue the stay as Petitioner requested,
`but issued a scheduling order that did not adopt Patent Owner’s earlier
`schedule, while expressly indicating a willingness to move dates upon a joint
`request or individual motion (and presumably a willingness to entertain a
`motion for another stay), albeit for reasons related to the COVID-19
`pandemic. From this history, one could certainly support the view that the
`district court sought to keep the litigation moving while navigating the
`difficulties of the pandemic, but set a schedule that permitted consideration
`of our decision on institution and a possible motion for a stay. Moreover,
`the parties’ recently-filed joint stipulation seeking to extend the discovery
`deadlines and agreeing to expedite briefing on a motion to stay should, if
`granted, provide additional time for the court to consider a possible stay.
`See Ex. 3002. From this history, however, one could also support the view
`that the district court indicated, by setting the discovery schedule and trial
`date over Petitioner’s request for a continuance of the stay, an unwillingness
`to further stay the litigation pending resolution of an inter partes review. As
`such, we find that this factor is neutral.
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`B. Factor 2: proximity of the court’s trial date to the Board’s projected
`statutory deadline for a final written decision
`In view of the evidence and arguments presented by the parties, we
`understand that discovery in the related litigation is currently progressing
`with final invalidity contentions due January 26, 2021, followed by the
`fact discovery cut-off, deadlines for expert reports, the close of expert
`discovery, and dispositive motion practice. Ex. 2001, 1. The district court
`has scheduled a 5–7 day jury trial beginning on August 3, 2021, but added
`the qualifier that “[g]iven the uncertainty surrounding the COVID-19
`pandemic, the parties may file a joint request or individual motions to alter
`these dates if so required.” Id. If we assume that these dates hold, discovery
`will be completed, a trial held, and presumably a verdict will be rendered in
`the related district court litigation roughly five months before the projected
`statutory deadline for the final written decision in this inter partes review
`(IPR).6
`It is not clear, however, from the history of the district court litigation
`and the continued difficulty of travel during the COVID-19 pandemic that
`this schedule will remain in place. For instance, the parties originally jointly
`asked for the stay that the district court put in place; jointly wished the stay
`to be lifted, albeit at different times; and finally split on whether the stay
`should be lifted (with the expectation that the parties work together to reach
`compromises on discovery issues as they arise) or remain in place at least
`until we rendered our decision. In granting the original stay and
`subsequently setting the case schedule, the district court indicated a
`
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`6 Assuming institution on January 25, 2021, the statutory deadline for the
`final written decision would be January 25, 2022.
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`willingness to entertain a slippage of the schedule dates at least in light of
`the “uncertainty surrounding the COVID-19 pandemic.” Ex. 2001, 1. The
`district court also did not adopt Patent Owner’s schedule, but set the filing of
`final infringement/invalidity contentions, the close of fact discovery, the
`entirety of expert discovery, and dispositive motion practice for after we
`render our decision on institution.
`A current discovery dispute regarding the deposition of an inventor
`named on the ’685 patent who resides in India also remains unresolved. See
`Ex. 1036, Ex. 2001; Ex. 3002. As of January 21, 2021 the magistrate judge
`has not ruled on the issue. Moreover, the parties recently-filed joint
`stipulation seeks to extend the current fact discovery cut-off deadline to,
`inter alia, allow additional time for the court to rule on the parties’ dispute
`and for the parties to be able to take this deposition. Ex. 3002, 2–3. Thus, it
`seems likely that the current discovery deadlines will not hold.
`In addition, the parties’ joint stipulation notes that one of Petitioner’s
`expert witnesses in the related litigation “was recently diagnosed with
`Covid-19 and admitted to the hospital, and has been unable to work.” Ex.
`3002, 2. Since the district court has already expressly indicated a
`willingness to move dates for reasons relating to the pandemic (see Ex.
`2001, 1), it seems likely that the district court will grant the parties’ joint
`request to extend the discovery deadlines, which in turn may ultimately lead
`to a change in the trial date. In other words, there are discovery issues
`currently hindering the related litigation that do not appear to affect this
`proceeding. Sand Revolution II, LLC v. Continental Intermodal Group—
`Trucking LLC, IPR2019-01393, Paper 24 at 8–10 (PTAB June 16, 2020)
`(informative) (“Sand Revolution”) (comparing some uncertainty in the trial
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`date set approximately four months before the projected final written
`decision date with the Board’s adherence to the one-year statutory deadline).
`With the circumstances surrounding the progression of the district
`court litigation and the setting of the trial schedule in mind, we find this
`factor weighs marginally in favor of not exercising discretion to deny
`institution under 35 U.S.C. § 314(a).
`
`C. Factor 3: investment in the parallel proceeding by the court and the
`parties
`Petitioner states, “[t]he work completed by the parties and court [in
`the related litigation] . . . was in its early stages, and does not signal
`‘duplicative costs.’” Pet. 69 (quotations omitted). Patent Owner disagrees,
`noting that “the district court invested significant resources preparing for and
`conducting a Markman hearing and issuing an opinion addressing four
`disputed claim terms.” Prelim. Resp. 4. In addition, Patent Owner argues
`that “[t]he parties have invested substantial resources in discovery,” serving
`various discovery requests, obtaining discovery from multiple non-parties,
`and exchanging preliminary infringement and invalidity contentions. Id. at
`4–5. Patent Owner further contends that “the dates set in the court’s revised
`case schedule show that the parties’ investments in discovery will be
`complete shortly after any decision on institution.” Id. at 5 (noting that final
`infringement and invalidity contentions must be exchanged the day after the
`institution deadline with fact discovery closing a week later).
`Petitioner responds that
`the Court rejected Patent Owner’s schedule and, instead, added
`several months to the fact discovery period so that final
`contentions would not be served, and fact discovery would not
`close, until after the Board’s January 25, 2021 institution
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`decision due date. In doing so, the Court avoided setting any
`dates that would result in overlapping efforts by the Court and
`the Board—including implicitly recognizing [Petitioner’s]
`commitment to forego pursuing overlapping IPR grounds if an
`IPR were instituted. The Court’s actions also signaled its
`willingness to compromise between Patent Owner’s desire to
`pursue discovery and Petitioner’s desire to seek relief from the
`Board in an IPR proceeding.
`Reply 2–3.
`
`The facts involved here are somewhat similar to those involved in
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 (PTAB May 13, 2020),
`except here final infringement and invalidity contentions have not yet been
`served. See id. at 13–14. As in Fintiv, discovery is ongoing, expert
`discovery has yet to occur, and dispositive motion practice is yet to come.
`Id. at 14. As we concluded in Fintiv, “although the parties and the Court
`have invested effort in the District Court case to date, further effort remains
`to be expended in this case before trial.” Id. We find that based on the
`district court’s completion of claim construction, this factor weighs only
`marginally in favor of exercising discretion to deny institution of inter partes
`review in this case.
`
`D. Factor 4: overlap between issues raised in the petition and in the
`parallel proceeding
`Petitioner contends this factor weighs against the exercise of
`
`discretionary denial because “the district court proceedings would not
`resolve challenges to non-asserted claims 2-3 and 7-12,” which are
`challenged in the Petition, but which Petitioner is apparently not accused of
`infringing in the related litigation. Pet. 68. Petitioner additionally offers a
`“stipulation (Ex. 1035) to not assert the Grounds [in the Petition], or either
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`of Misselbrook or Lescota7 as primary references in district court” if an inter
`partes review is instituted. Id. at 71. According to Petitioner, this
`stipulation “avoid[s] duplicative efforts” in the related litigation if the IPR is
`instituted in this proceeding. Id.; Ex. 1035, 2. In response to Patent
`Owner’s assertion that the stipulation did not go far enough, Petitioner
`responded: “To be clear, if an IPR is instituted, [Petitioner] will not pursue
`the combinations set forth in its petition—including the iterations identified
`by Patent Owner that treat CN ’588 and JP ’902 as primary references.”
`Reply 4.
`
`Patent Owner cites Petitioner’s preliminary invalidity contentions
`(Ex. 2002) to show that the Petition raises the same art and arguments
`presented in the related litigation. Prelim. Resp. 6–7. According to Patent
`Owner, “[t]he district court’s decision on the validity of claim 1 of the ’685
`patent will resolve all key issues presented in the petition” because the
`Petition “presents essentially the same arguments against independent claim
`1 . . . and narrower claims 2–4 and 7–12.” Id. at 7. Thus, in Patent Owner’s
`view, Petitioner “has not provided any argument as to why the additional
`challenges to the narrower claims in the Petition provide a meaningful
`distinction between the two proceedings.” Id. at 8 (quotations omitted).
`Patent Owner also states that the Petitioner’s stipulation still does not go far
`enough because “it fails to include grounds that [Petitioner] ‘reasonably
`
`
`7 Lescota is a divisional application in the same patent family as
`Misselbrook. The Examiner asserted Lescota in prior art rejections made
`during prosecution of the ’685 patent. See, e.g., Ex. 1020, 137–39. The
`parties agree that Misselbrook “shares the same specification” and is
`“substantially the same as Lescota.” Pet. 7, 64; Prelim. Resp. 11.
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`IPR2020-01113
`Patent 7,473,685 B2
`could have raised’ in its petition, including combinations based on Mayer as
`a primary reference.” Sur-reply 4.
`Petitioner’s strongest argument for this factor is that its stipulation
`mitigates the risk that efforts will be duplicated and the possibility of
`conflicting decisions because “if an IPR is instituted, [Petitioner] will not
`pursue the combinations set forth in its petition––including the iterations
`identified by Patent Owner that treat CN ’588 and JP ’902 as primary
`references.” Reply 4. According to Petitioner, this stipulation goes “above
`and beyond the statutorily prescribed estoppel” because it “has agreed not to
`pursue IPR grounds before the district court irrespective of the results of a
`Final Written Decision.” Id. In response, Patent Owner contends the
`“stipulation is not commensurate with the scope of estoppel under 35 U.S.C.
`§ 325(e),8 as it fails to include grounds that [Petitioner] ‘reasonably could
`have raised’ in its petition, including combinations based on Mayer as a
`primary reference.” Sur-reply 4.
`We agree with Petitioner that its stipulation (Ex. 1035), and
`subsequent clarification that it will also not pursue “iterations . . . that treat
`CN ’588 and JP ’902 as primary references” (Reply 4), reduces the risk of
`duplicative efforts and potentially conflicting decisions to a degree. Indeed,
`the stipulation here appears to be at least as broad as the one in Sand
`Revolution, which when viewed in context of the facts there, shifted this
`factor in the petitioner’s favor. See Sand Revolution, Paper 24, 12
`(informative) (determining that a stipulation to “not pursue the same grounds
`in the district court litigation” if IPR is instituted to “mitigates to some
`
`
`8 Because this is a request for inter partes review, we assume Patent Owner
`is referring to the estoppel provisions of 35 U.S.C. § 315(e) here.
`
`17
`
`
`
`IPR2020-01113
`Patent 7,473,685 B2
`degree the concerns of duplicative efforts” and “potentially conflicting
`decisions”).
`At the same time, we are mindful of Patent Owner’s argument that
`Petitioner’s stipulation could have gone further by prohibiting reliance on
`other grounds that reasonably could have been raised in the event IPR was
`instituted. “A broader stipulation of that nature . . . might better address
`concerns regarding duplicative efforts and potentially conflicting decisions”
`and thereby “tipped this factor more conclusively in [Petitioner’s] favor.”
`Sand Revolution, Paper 24 at 12 n. 5. In particular, a stipulation that
`Petitioner would not pursue any ground that was “or could have been
`reasonably raised” in the Petition would “ensure[] that an inter partes review
`is a ‘true alternative’ to the district court proceeding.” Sotera Wireless, Inc.
`v. Masimo Corp., IPR2020-01019 Paper 12 at 19 (PTAB Dec. 1, 2020)
`(precedential).
`
`Here, it is notable that the stipulation Petitioner provides does not
`encompass certain of the grounds in its preliminary invalidity contentions
`even though they rely upon the same references asserted in the Petition. In
`its contentions, Petitioner asserts that claims 1 and 4 are anticipated by and
`obvious over Mayer, “alone or in combination with other prior art.” See
`Ex. 2002, 10–11, 21, 41–52. While Petitioner has stipulated that it will not
`assert the grounds in the Petition in the district court proceeding, that
`stipulation does not encompass the grounds in Petitioner’s invalidity
`contentions that present Mayer as an anticipatory reference or as the primary
`reference in an obviousness combination. See Ex. 1035, 1–2 (stipulating
`only that, if IPR is instituted, Petitioner will not challenge validity before the
`district court on “grounds being advanced in the IPR Petition,” nor “any
`
`18
`
`
`
`IPR2020-01113
`Patent 7,473,685 B2
`ground that utilizes, as a primary reference Misselbrook . . . or Lescota”).
`Moreover, Petitioner omitted Mayer from the clarification it offered in its
`Reply, stating that if IPR is instituted it would not pursue “iterations . . . that
`treat CN ’588 and JP ’902 as primary references” (but not Mayer) in the
`related litigation. See Reply 4. Thus, it appears that Petitioner has sought to
`carve out from its stipulation the arguments in its contentions that treat
`Mayer as an anticipatory reference or as the primary reference in an
`obviousness combination so that, in the event inter partes review is
`instituted, it can assert the same reference in both proceedings. Doing so
`poses a risk of duplicated efforts and potentially conflicting decisions.
`
`In sum, Petitioner’s stipulation reduces the risks posed by the overlap
`between the proceedings, but not as effectively as including all permutations
`of the asserted prior art that is at issue here. On balance, we determine that
`this factor weighs against the exercise of discretion to deny review, but not
`as strongly
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