UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`BAYERISCHE MOTOREN WERKE AKTIENGESELLSCHAFT and
`BMW OF NORTH AMERICA, LLC,
`Petitioners,
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`v.
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`PAICE LLC and THE ABELL FOUNDATION, INC.,
`Patent Owners.
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`Case IPR2020-01386
`Patent 7,237,634
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`PATENT OWNERS’
`PRELIMINARY RESPONSE
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`Attorney Docket: 36351-0018IP1
`Case IPR2020-01386
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`TABLE OF CONTENTS
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`I. 
`II. 
`
`Introduction ................................................................................................. iii 
`The Board Should Exercise Its Discretion and Deny Institution under
`§ 314(a) .......................................................................................................... 7 
`A. 
`The General Plastic Factors Favor Denial ....................................... 9 
`1.  Factor 1: whether the same petitioner previously filed a
`petition directed to the same claims of the same patent .......... 10 
`2.  Factor 3: whether at the time of filing of the second petition
`the petitioner already received the patent owner’s preliminary
`response to the first petition or received the Board’s decision
`on whether to institute review in the first petition ................... 13 
`3.  Factor 2: whether at the time of filing of the first petition the
`petitioner knew of the prior art asserted in the second petition
`or should have known of it; and Factor 4: the length of time
`that elapsed between the time the petitioner learned of the
`prior art asserted in the second petition and the filing of the
`second petition ............................................................................. 15 
`4.  Factor 5: whether the petitioner provides adequate
`explanation for the time elapsed between the filings of multiple
`petitions directed to the same claims of the same patent ......... 16 
`5.  Factor 6: the finite resources of the Board; and Factor 7: the
`requirement under 35 U.S.C. § 316(a)(11) to issue a final
`determination not later than 1 year after the date on which the
`Director notices institution of review ........................................ 16 
`Additional Factors Favor Denial .................................................... 17 
`B. 
`III.  The Technology of the ’634 Patent ........................................................... 20 
`IV.  Claim Construction .................................................................................... 27 
`V. 
`BMW’s Proposed Grounds Are Unsustainable ....................................... 27 
`A.  Ground 1 – Severinsky in View of Nii Does Not Render Claim 33
`Obvious ............................................................................................. 28 
`1.  BMW has failed to show a reasonable likelihood of establishing
`obviousness based on the combination of Severinsky and Nii 28 
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`i
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`Case IPR2020-01386
`a)  Severinsky’s parallel hybrid vs. Nii’s series hybrid ................. 28 
`b)  BMW has failed to demonstrate that a POSA would modify
`Severinsky’s parallel hybrid with Nii’s generator output
`controller ...................................................................................... 33 
`2.  The Severinsky/Nii combination does not teach or suggest
`“varying the SP [setpoint] accordingly.” .................................. 36 
`B.  Ground 2 – Severinsky in View of Quigley Does Not Render
`Claim 33 Obvious ............................................................................. 40 
`1.  Severinsky in view of Quigley does not teach or suggest
`“varying the SP [setpoint] accordingly.” .................................. 40 
`C.  Ground 3 – Severinsky in View of Graf Does Not Render Claim
`33 Obvious ........................................................................................ 45 
`1.  Severinsky in view of Graf does not teach or suggest “varying
`the SP [setpoint] accordingly.” .................................................. 45 
`2.  Severinsky in view of Graf does not teach or suggest
`“monitoring patterns of vehicle operation over time” ............. 47 
`D.  Grounds 4-6, 8, and 9 Are Deficient ............................................... 52 
`E.  Ground 7 (Claim 49), Ground 10 (Claim 105), and Ground 11
`(Claims 188-189, 199-203, 205-206, 208, 211 and 213) Are
`Deficient ............................................................................................ 53 
`1.  BMW has failed to show a reasonable likelihood of establishing
`obviousness based on the combination of Severinsky and Ma 53 
`2.  Severinsky in view of Ma fails to teach or suggest “a
`turbocharger controllably coupled to the engine” ................... 59 
`F.  Grounds 12-14 Are Deficient .......................................................... 63 
`VI.  Conclusion ................................................................................................... 64 
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`ii
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`Attorney Docket: 36351-0018IP1
`Case IPR2020-01386
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`
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`Exhibit No.
`PAICE 2001
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`PAICE 2002
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`PAICE 2003
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`PAICE 2004
`PAICE 2005
`PAICE 2006
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`PAICE 2007
`PAICE 2008
`PAICE 2009
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`PAICE 2010
`PAICE 2011
`PAICE 2012
`PAICE 2013
`PAICE 2014
`PAICE 2015
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`EXHIBIT LIST
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`Description
`Patent Owners’ Preliminary Response to Petition for IPR in
`IPR2015-0722 Dated August 10, 2015
`Patent Owner’s Preliminary Response to Petition in IPR2015-
`00787 dated August 10, 2015
`Patent Owner’s Preliminary Response to Petition in IPR2015-
`00791 dated August 10, 2015
`Statutory Disclaimer
`Reserved
`Response to Interrogatory 27, BMW Responses to PAICE 1st
`Set of Interrogatories [1-28] dated May 6, 2020
`Paice/Toyota Complaint dated June 8, 2004
`Paice/Toyota Amended Complaint dated July 3, 2007
`Scheduling Order [Docket No. 36] from 1:19-cv-03348-SAG
`(USDC-DMD) dated February 25, 2020
`Docket Navigator Statistics – Top Patents by Number of IPRs
`Ex. J to BMW Invalidity Contentions dated June 8, 2020
`Reserved
`IPR2017-00232 Petition dated November 14, 2016
`UK Patent Application GB 2,318,105 Cover Page
`Printout of http://www.paicehybrid.com/licensing-agreements/
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`iii
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`Case IPR2020-01386
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`I.
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`Introduction
`The Board should deny BMW’s Petition because it is weak on the merits and
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`is an abuse of the IPR process and Patent Owners Paice LLC and the Abell
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`Foundation.
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`U.S. Patent No. 7,237,634 (“’634 patent”) describes and claims novel
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`control strategies and architectures for hybrid electric vehicles. For example,
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`challenged claims 33-44, 46, 49-50, and 52-55 are directed to an innovative control
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`strategy that monitors patterns of vehicle operation in order to refine how the
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`hybrid controller selects operating modes, e.g., choosing whether to operate the
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`electric motor or the gas engine. The Board has already carefully considered the
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`validity of the ’634 patent on multiple occasions and denied institution of three
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`separate IPRs challenging independent claim 33 and its dependent claims.
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`(BMW1060, 6-8, 16-17; BMW1061, 7-9, 14-15; BMW1062, 7-9, 15-16.)
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`Challenged claims 49, 105, and 188 are directed to a novel architecture that
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`combines a gas engine and electric motor with a controllably coupled, “on-
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`demand” turbocharger. Instead of using a turbocharger that operates mechanically
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`as a function of engine output, the ’634 patent provides a control system that
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`controls the turbocharger to work alongside the electric motor. For example, the
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`’634 patent’s control system controls the electric motor and turbocharger to
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`complement one another, by applying the instant torque of the electric motor to
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`1
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`make up for the inherent lag of the turbocharger and using the turbocharger over
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`extended periods of time where use of the electric motor would deplete the battery.
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`Failing to identify any prior art that discloses or teaches these concepts,
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`BMW’s Petition endeavors to piece together the ’634 patent’s claimed inventions
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`using disparate teachings from various unrelated references. While 35 U.S.C. §
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`103 is available to BMW, the Petition fails to present a proper prima facie case of
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`obviousness. BMW’s IPR is fraught with errors, oversights, and a disregard for
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`the proper obviousness framework that the law demands.
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`Ground 1. BMW’s first ground attacking claim 33 (which uses patterns of
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`vehicle operation over time to vary a setpoint used to decide whether to employ the
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`electric motor or gas engine to propel the vehicle) suffers from a host of problems.
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`Most notably, the Petition fails to explain why a POSA would combine
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`Severinsky1 and Nii. In particular, the Petition fails to explain why a POSA would
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`apply Nii’s teaching about setting a constant generator output (for charging the
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`battery) in a “series” hybrid architecture to modify the alleged torque-based
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`setpoint in Severinsky’s “parallel” hybrid architecture. According to BMW,
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`Severinsky uses the torque-based setpoint as a demarcation between electric motor
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`1 Dr. Alex Severinsky, the lead inventor of the ’634 patent, is also the single-named
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`inventor of Severinsky (BMW1013).
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`2
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`and engine operation, but Severinsky’s setpoint has nothing to do with Nii’s
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`generator output value. In addition, the Petition fails to explain why a POSA
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`would adjust the claimed setpoint based on patterns of vehicle operation in view of
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`Severinsky and Nii where neither reference discloses such a feature.
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`Ground 2. BMW’s second ground attacking claim 33 is also flawed as
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`neither Severinsky nor Quigley adjusts the claimed setpoint based on patterns of
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`vehicle operation over time. BMW’s obviousness analysis attempting to map
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`Severinsky and Quigley onto claim 33 is at such a high level of abstraction that it
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`omits key claim limitations. For example, BMW never attempts to demonstrate
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`that a POSA would vary the claimed “setpoint”—which the control system uses for
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`turning the engine on—based on “monitoring patterns of vehicle operation over
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`time” as claim 33 requires. And as explained below, Ground 2 also fails because it
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`is premised on the false assertion that Quigley adjusts a setpoint used for
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`employing either the electric motor or engine when in fact Quigley expressly states
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`its “intelligent controller” is not used for that purpose.
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`Ground 3. BMW’s third ground attacking claim 33 based on Severinsky in
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`view of Graf suffers from similar flaws. Like Ground 2, BMW’s obviousness
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`analysis fails because it never attempts to demonstrate that a POSA would vary the
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`claimed “setpoint,” and BMW’s allegations that a POSA would vary “operating
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`points” generally cannot render the detailed requirements of claim 33 obvious.
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`3
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`Moreover, the Petition incredibly asserts that the secondary reference, Graf,
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`discloses “monitoring patterns of vehicle operation over time” because “[a] POSA
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`would have understood” that detecting driver style would somehow include this
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`claimed feature. The Petition, however, falls far short of establishing inherency or
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`obviousness as the law demands, and certainly provides no evidence that a POSA
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`would have had such understanding.
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`Grounds 7, 10, and 11. BMW’s reason to combine Severinsky and Ma
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`does not withstand scrutiny because Severinsky alone already achieves all of the
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`alleged benefits of Ma’s turbocharger and so there is no basis for a POSA to
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`combine these teachings in the first instance. Courts and the PTAB have
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`repeatedly rejected obviousness arguments premised on alleged motivation to
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`provide a feature or benefit already present in the primary reference. Moreover,
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`the Petition presents no evidence that Ma’s generic turbocharger is “controllably
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`coupled to the engine” as claims 49, 105, and 188 require, or that it would have
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`been obvious to include such a feature. In fact, the terse Ma reference is silent as
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`to any control scheme or mechanism.
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`4
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`Grounds 4-6, 8, 9, and 12-14. BMW’s remaining sets of grounds attack
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`claims that depend from claims addressed in Grounds 1-3 and/or Ground 11 and
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`are thus deficient for at least the reasons discussed with respect to those grounds.2
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`***
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`BMW also fails to consider the historical context of its Petition and address
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`why the Board should not exercise its discretion and deny institution under
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`§314(a). The Petition constitutes the 27th attack on the ’634 patent. The Board has
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`already scrutinized the validity of the ’634 patent in 13 separate proceedings. Yet,
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`BMW’s Petition asks the Board to consider, yet again, claims that the Board
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`already found immune to previous challenges.
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`Patent Owners have already expended significant resources defending the
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`’634 patent against numerous IPR petitions from other petitioners such as Ford,
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`VW, and Hyundai. Indeed, prior to BMW’s Petition, Patent Owners, Paice and
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`Abell, were universally recognized as the poster child of patent owners that have
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`2 In an effort to narrow the issues and increase efficiency, without conceding the
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`propriety of BMW’s assertions or admitting unpatentability, Patent Owners hereby
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`disclaim claims 242 and 268. (See PAICE2004.) Patent Owners’ maintain the
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`remaining claims, claims 33-44, 46, 49-50, 52-54, 55, 68, 105, 188-189, 199-206,
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`208, and 211-214 (“the Challenged Claims”) in this proceeding.
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`5
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`suffered harassment and abuse at the hand of larger, well-funded petitioners filing
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`serial patent attacks. (PAICE2010 (showing the ’634 patent ranked the most-
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`IPR’d patent in the history of IPR).) Notwithstanding this barrage of attacks, every
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`one of the prior petitioners ultimately reached agreement with Patent Owners
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`regarding their patent portfolio, along with many of the largest hybrid automobile
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`companies in the world who licensed the patents without litigation or IPR
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`proceedings. (PAICE2015 (http://www.paicehybrid.com/licensing-agreements/).)
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`Against this backdrop, there is no reason for the Board to institute BMW’s
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`redundant Petition. BMW wholeheartedly embraces the prior Ford and VW
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`petitions, Patent Owners’ prior Preliminary Responses, as well as the Board’s prior
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`Institution Decisions as menus from which to pick and choose work product and
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`even hired Ford’s expert that opined on the validity of the ’634 patent in nine
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`separate proceedings. BMW openly recycles prior art already asserted by Ford and
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`VW to challenge the ’634 patent claims, including claims that Patent Owners
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`already successfully defended before the Board. There is no reason to subject
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`Patent Owners to further harassment, especially when considering the derivative
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`and weak grounds that BMW presents in its Petition.
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`For these and other reasons discussed below, BMW has failed to
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`demonstrate that there is a reasonable likelihood that it would prevail with respect
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`to at least one of the claims challenged in the Petition. The Board should deny
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`institution.3
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`II. The Board Should Exercise Its Discretion and Deny Institution under
`§ 314(a)
`The AIA’s 35 U.S.C. 314(a) “invests the Director with discretion on the
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`question [of] whether to institute review.” SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348,
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`1356 (2018) (original emphasis). The Board is thus “permitted, but never
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`compelled, to institute an IPR proceeding.” Harmonic Inc. v. Avid Tech., Inc., 815
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`F.3d 1356, 1367 (Fed. Cir. 2016); see also Cuozzo Speed Techs., LLC v. Lee, 136
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`S. Ct. 2131, 2140 (2016) (“[T]he agency’s decision to deny a petition is a matter
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`committed to the Patent Office’s discretion.”). In exercising its discretion, the
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`Board considers the merits of a petition, not in a vacuum, but in view of
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`surrounding circumstances relevant to “the potential impacts on both the efficiency
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`of the inter partes review process and the fundamental fairness of the process for
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`all parties.” General Plastic Industrial Co., Ltd., v. Canon Kabushiki Kaisha,
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`IPR2016-01357, Paper 19 at 18 (PTAB Sept. 6, 2017) (precedential).
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`3 While the Petition contains additional flaws beyond those discussed in this
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`Preliminary Response, the Board’s resolution of such additional matters is not
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`necessary to find this record undeserving of an instituted inter partes review.
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`BMW’s Petition is not a fair and efficient use of IPR. It is a classic example
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`of a serial IPR challenge designed to harass the Patent Owners and abuse the IPR
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`process. BMW’s Petition is the 27th petition against the ’634 patent—the most
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`IPR’d patent in the history of IPR. (See PAICE2010.) Ford, VW, and Hyundai
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`together already targeted the ’634 patent, collectively filing a total 26 petitions for
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`IPR, 13 of which reached final written decision. Needless to say, the Board has
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`already carefully vetted the ’634 patent and refused to institute IPR on 19 of the
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`challenged claims that BMW now seeks to serially challenge.4 BMW knows its
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`Petition is an abuse of process and willfully ignores 35 U.S.C. 314(a) and the
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`Board’s General Plastic framework.5
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`4 The Board could additionally, or alternatively, deny BMW’s Petition under
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`35 U.S.C. § 325(d).
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`5 BMW was clearly well aware of 35 U.S.C. 314(a) and the Board’s General
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`Plastic framework at the time of filing the Petition, but tellingly chose not to
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`address them. To the extent that BMW seeks a reply, the Board should deny
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`BMW’s request as an improper end-around the 14,000-word limit. See 37 C.F.R. §
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`42.24. BMW chose to use its 13,945 words to assert 16 grounds and should not be
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`rewarded for its deliberate choice to ignore the serial nature of its filing and failure
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`to address the Board’s General Plastic factors.
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`Moreover, BMW unfairly uses this long history to roadmap its attack against
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`the ’634 patent and liberally takes prior art from the Ford and VW petitions to
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`formulate its grounds. In presenting its grounds, BMW cherry-picks art already
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`presented in the Ford and VW petitions and even hired Ford’s expert to support its
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`attack on the ’634 patent. BMW also openly and repeatedly leverages Patent
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`Owners’ prior Preliminary Responses (PAICE2001; PAICE2002; PAICE2003) and
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`the Board’s Institution Decisions (BMW1060, 6-8, 16-17; BMW1061, 7-9, 14-15;
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`BMW1062, 7-9, 15-16) to craft its arguments.
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`Prior IPR proceedings are not supposed to provide a roadmap for future
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`proceedings. This is what the Board meant in General Plastic when it said that
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`“[m]ultiple, staggered petitions challenging the same patent and same claims raise
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`the potential for abuse.” General Plastic at 17. Indeed, there are “undue inequities
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`and prejudices” against the patent owner when a petitioner has “the opportunity to
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`study Patent Owner’s Preliminary Response, as well as [the Board’s] institution
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`decisions on the first-filed petitions, prior to its filing of follow-on petitions.” Id.
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`For this reason alone, the Board should deny BMW’s Petition.
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`A. The General Plastic Factors Favor Denial
`The General Plastic factors were formulated to reveal any “undue inequities
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`and prejudices” of follow-on petitions. General Plastic at 17. As detailed below,
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`each of these factors weighs in favor of denying institution of BMW’s Petition.
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`1.
`Factor 1: whether the same petitioner previously filed a
`petition directed to the same claims of the same patent
`While the first General Plastic factor considers “whether the same petitioner
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`previously filed a petition directed to the same claims of the same patent,” General
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`Plastic at 16, “when different petitioners challenge the same patent, [the Board]
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`consider[s] any relationship between those petitioners while weighing the General
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`Plastic factors.” Valve Corp. v. Electronic Scripting Products, Inc., IPR2019-
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`00062, Paper 11 at 2 (PTAB Apr. 2, 2019) (precedential) (“Valve I”); Valve Corp.
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`v. Electronic Scripting Products, Inc., IPR2019-00064, Paper 10 at 2 (PTAB May
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`1, 2019) (precedential) (“Valve II”).
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`The same-patent, same-claims prong of Factor 1 favors denial. BMW’s
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`petition challenges a patent that has already been the target of 26 petitions, 13 of
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`which instituted and reached final written decision. Moreover, BMW’s petition
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`challenges 19 claims that survived multiple IPR challenges by Ford and VW. For
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`example, the Board denied institution of petitions for IPR challenging claims 33-
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`44, 46, 49-50, and 52-55, including three petitions challenging independent claim
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`33. (BMW1060, 6-8, 16-17; BMW1061, 7-9, 14-15; BMW1062, 7-9, 15-16). In
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`each case, the Board found that Ford had failed to demonstrate a reasonable
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`likelihood that it would prevail. (BMW1060, 16-17; BMW1061, 14-15;
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`BMW1062, 15-16).
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`As to the remaining challenged claims, they largely address the same prior
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`art and similar issues raised in the Ford and VW petitions. According to BMW,
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`“there are very few claims with limitations that the Board needs to consider for the
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`first time.” Petition, 6. And while the Board may be considering certain claims for
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`the “first time,” BMW largely reuses the same prior art that Ford already used to
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`challenge other ’634 patent claims. For example, BMW relies on secondary
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`references like Vittone, Frank, Lateur, and Yamaguchi to challenge claims
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`depending from independent claims 33 and 188. Ford’s petitions, however,
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`applied these same references on multiple occasions against the ’634 patent.
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`(BMW1064, 6; BMW1065, 6; BMW1066, 6.)
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`The same-petitioner prong also supports denial. While BMW is not the
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`same entity as Ford and VW, BMW has tied itself to these previous petitioners by
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`reusing their petitions, prior art, and expert. BMW’s grounds are largely a
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`combination of the prior art presented in the previous Ford and VW petitions.
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`BMW goes so far as to rely on VW’s prior art to fill the holes that the Board
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`identified in Ford’s failed petitions. For example, BMW unreservedly relies on
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`Ford’s prior art (i.e., Severinsky) to challenge independent claim 33 and relies on
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`VW’s art (e.g., Graf6) in an attempt to address the defects in Ford’s original
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`petitions. E.g. compare Petition, 30-32 with BMW1060, 16-17; BMW1061, 14-
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`15; BMW1062, 15-16; and PAICE2013, 15-25.
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`Moreover, BMW hired the same expert, Dr. Gregory Davis, that Ford used
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`to challenge the ’634 patent. Dr. Davis submitted declarations in nine of Ford’s
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`IPR petitions, including the three petitions unsuccessfully challenging claims 33-
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`44, 46, 49-50, and 52-55. (BMW1060; BMW1061; BMW1062.) Moreover, Dr.
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`Davis testified for Ford on validity issues at trial before the International Trade
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`Commission. BMW undoubtedly relied on Dr. Davis’s inside knowledge of Ford’s
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`IPR strategy to craft its petition. By relying on the same prior art, the same expert
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`(Dr. Davis), and largely the same analysis as the Ford and VW petitions, BMW has
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`created and leveraged its relationship with these previous petitioners. As the Panel
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`in Ericsson Inc. v. Uniloc 2017, LLC explained:
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`Petitioner implicitly created such a relationship by using the prior
`petitioners’ work as a menu and picking and choosing from their work
`product. The instant Petitioner’s decision to use the prior petition as a
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`6 Graf is the U.S. counterpart to UK Patent Application GB 2,318,105 (“Probst”)
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`on which VW relied to challenge claim 33 of the ’634 patent. (PAICE2013, 7.)
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`Both Graf and Probst have the same named inventors, same title, and both claim priority to
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`German Patent Application DE 196 37 210. (PAICE2014.)
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`roadmap for its own petition ties the interests of all of the petitioners
`together.
`IPR2019-01550, Paper 8 at 12 (PTAB Mar. 17, 2020). The Ericsson Panel’s
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`reasoning is consistent with the Valve I & II precedent that “any relationship”
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`between petitioners lodging serial challenges against the same patent must be
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`considered. See also Fresenius Kabi USA, LLC, et al. v. Amgen Inc., et al.,
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`IPR2019-00971, Paper 13 at 7 (PTAB Oct. 16, 2019) (finding Factor 1 favors
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`denial where “[Petitioner 2] clearly is seeking to coordinate its challenges in the
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`present case with [Petitioner 1’s] challenges”). Like the petitioner in Ericsson,
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`BMW “implicitly created” a relationship with Ford and VW by recycling their
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`contentions against the same claims of the same patent. Factor 1 favors denial.
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`2.
`Factor 3: whether at the time of filing of the second petition
`the petitioner already received the patent owner’s preliminary
`response to the first petition or received the Board’s decision on
`whether to institute review in the first petition
`The third General Plastic factor concerns whether, at the time of filing the
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`second petition, the petitioner already received the patent owner’s preliminary
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`response to the first petition or received the Board’s decision on whether to
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`institute review in the first petition. General Plastic at 16. Both are true here.
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`BMW does not even attempt to put forward an independent analysis. BMW’s
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`Petition is replete with citations to the Board’s prior Institution and Final Written
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`Decisions, which in turn rely on Patent Owners’ Preliminary Response and Patent
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`Owner’s Response from the Ford IPRs. See, e.g., Petition, 10 (citing BMW1060).
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`As just one example, BMW applies Patent Owner’s claim construction of
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`“monitoring patterns of operation” which the Board adopted in rejecting Ford’s
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`invalidity grounds challenging independent claim 33 of the ’634 patent. Petition,
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`10 (citing BMW1060); see also BMW1060, 6-8, 16-17; BMW1061, 7-9, 14-15;
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`BMW1062, 7-9, 15-16. BMW’s petition asserts that Graf (art derived from VW’s
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`petition) succeeds in satisfying this claim construction where Ford’s prior art did
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`not. Petition, 29-33. This is just one example of BMW using the long IPR history
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`of the ’634 patent to retool its arguments to address Patent Owners’ successful
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`Preliminary Responses that preceded BMW’s petition. This is the very unfairness
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`the General Plastic factors were formulated to prevent. Google LLC v. Uniloc
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`Lexembourg S.A., 2018 WL 389194 (Patent Tr. & App. Bd.), 8 (“Petitioner waited
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`until after Patent Owner filed its Preliminary Response … to file its Petition …. In
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`the process, Petitioner took the opportunity to attempt to correct deficiencies
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`alleged by Patent Owner in [a different petitioner’s] petition. This is precisely the
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`type of road mapping General Plastic counsels against.”); General Plastic at 17
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`(“The absence of any restrictions on follow-on petitions would allow petitioners
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`the opportunity to . . . us[e] our decisions as a roadmap . . . All other factors aside,
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`this is unfair to patent owners[.]”). Factor 3 favors denial.
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`Attorney Docket: 36351-0018IP1
`Case IPR2020-01386
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`3.
`Factor 2: whether at the time of filing of the first petition
`the petitioner knew of the prior art asserted in the second petition
`or should have known of it; and Factor 4: the length of time that
`elapsed between the time the petitioner learned of the prior art
`asserted in the second petition and the filing of the second petition
`The second and fourth General Plastic factors relate to when the prior art
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`was discovered—i.e., whether at the time of filing of the first petition the petitioner
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`knew, or should have known, of the prior art asserted in the second petition (Factor
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`2); and the length of time that elapsed between the time the petitioner learned of
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`the prior art asserted in the second petition and the filing of the second petition
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`(Factor 4). General Plastic at 16.
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`The Petition fails to address both factors, which is unsurprising because
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`BMW acknowledged in the co-pending district court litigation that it has been
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`tracking Paice’s licensing and litigation efforts, including Paice’s litigation against
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`Toyota in which Paice asserted both the ’634 patent and Severinsky (which BMW
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`asserts here as prior art). (PAICE2006, 2-3; PAICE2007; PAICE2008.) Because
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`BMW was aware of this dispute, BMW at the very least should have known about
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`the ’634 patent, Severinsky, and the subsequent petitions for IPR. Moreover,
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`BMW certainly could have found the prior art “with reasonable diligence.” Valve I
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`at 10. Indeed, Severinsky and Nii are all listed on the face of the ’634 patent and
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`considered during prosecution. (BMW1001, 2.) Additionally, the five-year time
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`gap between Ford’s last Petition and BMW’s Petition in this case is significantly
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`15
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`Case IPR2020-01386
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`longer than the inexcusable five-month delay in Valve I & II. See Valve I at 14;
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`Valve II at 14-15. Factors 2 and 4, therefore, weigh in favor of denial.
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`4.
`Factor 5: whether the petitioner provides adequate
`explanation for the time elapsed between the filings of multiple
`petitions directed to the same claims of the same patent
`The fifth General Plastic factor asks whether the petitioner provides
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`adequate explanation for the time elapsed between the filings of multiple petitions
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`directed to the same claims of the same patent. General Plastic at 16. BMW does
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`not provide an explanation at all, much less any explanation for its delay in filing a
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`derivative petition of the Ford and VW petitions filed years earlier. Factor 5 favors
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`denial. Valve II at 1 (explaining that “Valve is not the first party to request inter
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`partes review of the ’935 patent,” because the Board previously instituted review
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`of HTC’s petition).
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`5.
`Factor 6: the finite resources of the Board; and Factor 7:
`the requirement under 35 U.S.C. § 316(a)(11) to issue a final
`determination not later than 1 year after the date on which the
`Director notices institution of review
` “The sixth and seventh factors are efficiency considerations.” Valve I at 15;
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`Valve II at 15-16. “In general, having multiple petitions challenging the same
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`patent, especially when not filed at or around the same time as in this case, is
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`inefficient and tends to waste resources.” Id. Here, there is a several-year gap
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`between petitions applying the same prior art, to the same claims, based on the
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`same expert testimony. Moreover, the Board already spent significant resources
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`Attorney Docket: 36351-0018IP1
`Case IPR2020-01386
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`presiding over 13 instituted petitions against the ’634 patent all the way through
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`final written decision. The Board’s resources are better spent elsewhere than on
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`unfair derivative, follow-on petitions. Factors 6 and 7 weigh in favor of denial.
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`B. Additional Factors Favor Denial
`Fundamental fairness of the process for all parties and consideration of
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`BMW’s flawed IPR grounds further counsels against institution. As noted above,
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`the instant Petition is the 27th time that Patent Owners must defend the
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`patentability of the ’634 patent. When Congress created inter partes review
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`proceedings, it recognized that patent owners should be able to enjoy quiet title to
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`their property and cautioned against using the IPR process as a tool to harass patent
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`owners as BMW is doing here:
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`The Committee recognizes the importance of quiet title to patent
`to ensure continued
`investment resources. While
`this
`owners
`amendment is intended to remove current disincentives to current
`administrative processes, the changes made by it are not to be used as
`tools for harassment or a means to prevent market entry through
`repeated litigation and administrative attacks on the validity of a patent.
`Doing so would frustrate the purpose of the section as providing quick
`and cost effective alternatives to litigation.
`H.R. Rep. No. 112-98, pt.