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 &
`BMW OF NORTH AMERICA, LLC,
`Petitioners
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`v.
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`PAICE LLC & THE ABELL FOUNDATION, INC.
`Patent Owners
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`IPR2020-01386
`Patent 7,237,634 B2
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`PETITIONERS’ REPLY TO
`PATENT OWNERS’ PRELIMINARY RESPONSE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`BAYERISCHE MOTOREN WERKE AKTIENGESELLSCHAFT &
`BMW OF NORTH AMERICA, LLC,
`Petitioners
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`v.
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`PAICE LLC & THE ABELL FOUNDATION, INC.
`Patent Owners
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`IPR2020-01386
`Patent 7,237,634 B2
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`___________________
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`PETITIONERS’ REPLY TO
`PATENT OWNERS’ PRELIMINARY RESPONSE
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`Petitioners’ Reply to Preliminary Response
`U.S. Patent No. 7,237,634
`Petitioners (“BMW”) submit their Reply to Patent Owners’ Preliminary
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`Response (Paper 8) as requested by the Board (Paper 9). The discretionary denial
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`issue presented here is the same as that presented in related IPR2020-00994, where
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`the Board rejected the majority of Patent Owners’ arguments and instituted
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`proceedings. IPR2020-00994, Paper 19, at 10-22.1 The main difference here is
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`that the ’634 Patent has nearly eight times as many claims—306 in all—which, in
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`conjunction with Patent Owners’ litigation strategy, is the sole reason for the high
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`number of IPR challenges. None of that changes the discretionary denial analysis;
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`indeed, that there should be no denial is buttressed by the District Court’s Order
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`granting a stay. BMW1086.
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`A.
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`The ’634 Patent and Patent Owners’ Litigation Strategy
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`This is BMW’s first, and only, Petition against the ’634 Patent. While
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`different unrelated parties filed prior petitions against various subsets of the ’634
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`Patent’s 306 claims, those challenges were a direct result of Patent Owners’
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`strategy of filing serial patent infringement complaints against different parties,
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`asserting different claims against each such party. See Samsung Elecs. Am., Inc. v.
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`Uniloc Luxembourg S.A., IPR2017-01797, Paper 8, 33-34 (PTAB Feb. 6, 2018)
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`1 Patent Owners also sued BMW on the related ’761 Patent, which BMW is
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`challenging in IPR2020-01299 (the first IPR challenge of the ’761 Patent).
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`1
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`Petitioners’ Reply to Preliminary Response
`U.S. Patent No. 7,237,634
`(recognizing the purpose of the availability of inter partes review to parties
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`accused of infringement, and finding Patent Owner’s complaint about multiple
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`petitions filed against the same patent unpersuasive “when the volume [of
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`petitions] appears to be a direct result of its own litigation activity”). Patent
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`Owners sued BMW in November 2019, some five years after separately suing its
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`competitors Ford and VW. BMW quickly filed this petition once Patent Owners
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`identified the allegedly infringed claims (on March 25, 2020), which are a different
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`set of claims than Patent Owners asserted against Ford or VW.
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`Like in IPR2020-00994, BMW is challenging many claims never before
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`challenged and, as to all of the challenged claims, most of the claim limitations are
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`identical to limitations in claims previously cancelled by the Board (almost all of
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`which was affirmed on appeal). See Petition at 5 (graphic chart), 14-15 (textual
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`chart). And, as in IPR2020-00994, BMW is re-using the same prior art
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`combinations and claim constructions to narrow the substantive issues.
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`B.
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`The General Plastic Factors Favor Institution
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`Patent Owners argue that the General Plastic factors favor discretionary
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`denial, but that test is ill-suited here. The General Plastic test, as expanded by
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`Valve I, Valve II and others, is to prevent petitioners from gaining an unfair
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`advantage by lying in wait with known art and coordinating with co-defendants to
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`file follow-on petitions after seeing a patent owner’s preliminary response. That is
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`2
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`Petitioners’ Reply to Preliminary Response
`U.S. Patent No. 7,237,634
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`far from the case here.
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`Under Factor 1, like in IPR2020-00994, BMW is “challenging claims not
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`previously challenged in any prior petition, is not a co-defendant in pending
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`litigation involving the same products or technology as the prior IPRs, and is a
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`competitor of Ford and VW,” such that there is no “‘significant relationship’ with
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`Ford and VW.” Accord IPR2020-00994, Paper 19, at 16. More specifically,
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`BMW is challenging 17 claims that were not previously challenged and one claim
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`that was previously found invalid in a FWD.2 Moreover, except for the one
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`previously invalidated claim, none of the challenged claims went through an IPR
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`trial.3 Also, BMW and the previous petitioners are all competitors that sell
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`different hybrid vehicles, and their only commonality is having been sued by
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`Patent Owners (albeit on different sets of claims). Factor 1 thus favors institution.
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`Patent Owners’ analysis of Factors 2, 4, and 5 do not really make sense here,
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`2 Claims 49, 105, 188-189, 199-206, 208, and 211-214 have not previously been
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`challenged. Claims 68, 242, and 268 were found invalid, but the parties settled
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`after appeal remand. Claims 242 and 268 have now been disclaimed. Paper 8 at 5.
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`3 Ford challenged claims 33-44, 46, 50 and 52-55 in 2015, but the Board denied
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`Institution on those grounds (“Non-instituted Ford IPRs”). Paper 1 at 5-6 (Claim
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`37 inadvertently omitted from prior identification).
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`3
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`Petitioners’ Reply to Preliminary Response
`U.S. Patent No. 7,237,634
`but nonetheless favor institution too. Patent Owners complain about the “five-year
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`time gap” since the previous challenges to the ’634 Patent, Paper 8 at 15, but that
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`delay is solely of their own making. BMW had no reason to challenge the ’634
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`Patent until Patent Owners sued in November 2019. And then, BMW filed its
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`petition quickly, several months before the statutory bar. If Patent Owners were
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`concerned about timing of parallel proceedings, they could have identified their
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`asserted claims with their lawsuit or sued BMW years earlier when they sued
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`BMW’s competitors. BMW should not be punished for Patent Owners’ lack of
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`diligence, or denied access to IPR’s efficiencies. Accord IPR2020-00994, Paper
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`19, at 16-17, 20 (Factors 2 and 4 were neutral, Factor 5 favored institution).
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`Factor 3 does not apply to 17 of the challenged claims, because those claims
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`have never been subject to IPR, and thus could not have been part of a Preliminary
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`Response or Board decision. Moreover, the sole basis for the Board to deny
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`institution in the Non-instituted Ford IPRs was the initial determination that a
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`single limitation of independent claim 33 (“monitoring patterns of vehicle
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`operations over time”), from which the other 17 claims depended, was missing
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`from the asserted prior art (“Ibaraki ’882”). Paper 1, at 5-6. That art is not used in
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`any grounds here. If instituted, this will be the first time that the Board institutes a
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`trial and evaluates the patentability of those claims on a full record and on different
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`combinations of art than were previously at issue. Importantly, the Board has
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`4
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`Petitioners’ Reply to Preliminary Response
`U.S. Patent No. 7,237,634
`already found in relation to the ’347 Patent that this “monitoring patterns of vehicle
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`operations over time” limitation is likely disclosed in BMW’s asserted
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`combinations of prior art. See IPR2020-00994, Paper 19, at 29-33. A further
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`reference used here, Quigley, also shows that “monitoring patterns of vehicle
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`operation over time” was well known. Paper 1 at 23-29.
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`Factor 3 favors institution because this Petition promotes efficiency by
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`presenting an unusually straightforward task for the Board, just like in the recently
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`instituted IPR2020-00994. The Board has found 156 claims of the ’634 Patent
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`invalid in prior IPR proceedings. The vast majority of those cancelled claims’
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`limitations are identical to the limitations of the claims challenged here. As such,
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`BMW has streamlined its petition to re-use much of the same prior art that was
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`previously found to invalidate claims of this patent, because the Board is already
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`familiar with it and because of its preclusive effect on Patent Owners (and not for
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`purposes of “cherry-picking” or “harassment”). Not using the same art for the
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`same features would be inefficient, could potentially result in inconsistent findings
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`regarding previously canceled claims, and would likely elicit cries of unfairness
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`from Patent Owners having to analyze it anew. The Petition also relies on a
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`declaration from Dr. Gregory Davis, whose testimony the Board already credited
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`in finding many claims of the ’634 Patent unpatentable. Dr. Davis incorporates
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`much of the same testimony here. Likewise, BMW has not presented arguments
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`5
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`Petitioners’ Reply to Preliminary Response
`U.S. Patent No. 7,237,634
`against any of Patent Owners’ prior constructions in order to gain some advantage,
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`but has instead agreed to use them for this IPR so as to further simplify the
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`proceeding, as the Board recognized in IPR2020-00994, Paper 19 at 19-20.
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`BMW’s approach to this Petition promotes efficiency so that the Board need not
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`re-analyze the myriad limitations in claims that were previously found invalid.
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`It is also most efficient for the Board to institute proceedings because the
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`challenged claims in the ’634 Patent, the asserted prior art, and the expert
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`declaration, all substantially overlap with the claims and prior art under review in
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`the recently instituted IPR on the ’347 Patent and the pending IPR petition for the
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`’761 Patent. Consistency and efficiency will be best served by having the same
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`panel simultaneously review the overlapping invalidity issues and subject matter
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`across these three related patents and proceedings.
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`The remaining “efficiency analysis” of Factors 6 and 7 weighs heavily in
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`favor of institution, as discussed above. The District Court would be a much less
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`efficient venue for determining the issues raised by the Petition, particularly as the
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`District Court proceedings have now been stayed. BMW1086. The Board’s finite
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`resources will not be strained here, since BMW relies on the Board’s prior
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`determinations with respect to the previously challenged (and cancelled) claims,
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`“so that the resolution of the disputed substantive issues is efficiently focused” on
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`the few differences in the claims presented here. Accord IPR2020-00994, Paper
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`6
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`Petitioners’ Reply to Preliminary Response
`U.S. Patent No. 7,237,634
`19, at 21-22. Indeed, prompted by the filing of this petition, Patent Owners have
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`already disclaimed two of the challenged claims (242 and 268) whose features
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`have previously been found in the prior art by the Board based on the earlier
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`petitions. To the extent there are any concerns related to overlap if the current stay
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`is not extended by the District Court, BMW will stipulate not to offer an expert
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`report in the District Court on any grounds instituted by the Board. See also
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`IPR2020-00994, Paper 19, at 17-20 (Factors 6, 7 favored institution).
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`B.
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`The Fintiv Factors Favor Institution
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`Patent Owners do not raise the six Fintiv factors for discretionary denial, but
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`they favor institution. See Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15, at
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`2, 7-8 (PTAB May 13, 2020). The District Court proceedings have been stayed
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`until at least February 26, 2021 and that date will likely be extended based on
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`further institutions. BMW1086. IPR would thus provide the most efficient
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`resolution to the invalidity issues on the ’634 Patent, particularly as two of the
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`three judges are intimately familiar with the ’634 Patent and the primary prior art
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`used by BMW and at least one of the related IPRs has already been instituted.
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`While the Board’s review has a statutory end date, any jury trial happening during
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`COVID is far from certain and subject to a backlog of cases to be tried. In
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`contrast, the Board can render its decision in an expeditious manner through
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`wholly remote proceedings, as it has for the past nine months.
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`7
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`Dated: December 9, 2020
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`Petitioners’ Reply to Preliminary Response
`U.S. Patent No. 7,237,634
`Respectfully submitted,
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`/Jeffrey D. Sanok/
`Jeffrey D. Sanok (Reg. No. 32,169)
`Vincent J. Galluzzo (Reg. No. 67,830)
`Crowell & Moring LLP
`1001 Pennsylvania Avenue NW
`Washington, DC 20004-2595
`Tel.: (202) 624-2500
`Fax.: (202) 628-8844
`jsanok@crowell.com
`vgalluzzo@crowell.com
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`Scott L. Bittman (Reg. No. 55,007)
`Jacob Z. Zambrzycki (pro hac vice to be filed)
`Crowell & Moring LLP
`590 Madison Avenue, 20th Floor
`New York, NY 10022-2544
`Telephone No.: (212) 223-4000
`Facsimile No.: (212) 223-4134
`sbittman@crowell.com
`jzambrzycki@crowell.com
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`Counsel for Petitioners
`Bayerische Motoren Werke Aktiengesellschaft
`and BMW of North America, LLC
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`8
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`Petitioners’ Reply to Preliminary Response
`U.S. Patent No. 7,237,634
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`Certificate of Service
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`Pursuant to 37 C.F.R. § 42.6(e)(4), I certify that the foregoing
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`PETITIONERS’ REPLY TO PATENT OWNERS’ PRELIMINARY RESPONSE
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`was served electronically by filing this document through the PTAB E2E system,
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`as well as by e-mailing copies to the following address for counsel of record for
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`Patent Owners:
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`Ruffin B. Cordell
`Indranil Mukerji
`Brian J. Livedalen
`Timothy W. Riffe
`FISH & RICHARDSON P.C.
`3200 RBC Plaza
`60 South Sixth Street
`IPR36351-0018IP1@fr.com
`PTABInbound@fr.com
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`Respectfully submitted,
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`/Jeffrey D. Sanok/
`Jeffrey D. Sanok
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`Dated: December 9, 2020
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