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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`_________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_________________
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`APPLIED MATERIALS, INC.,
`Petitioner,
`
`v.
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`DEMARAY LLC,
`Patent Owner.
`
`_________________
`
`Case IPR2021-00104
`Patent 7,381,657 B2
`_________________
`
`PETITIONER’S REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
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`
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`IPR2021-00104
`U.S. Patent No. 7,381,657
`In response to the Board’s order (Paper 9)1, Petitioner submits this reply to
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`Patent Owner’s (“PO”) preliminary response (Paper 7) (“POPR”). As explained
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`before (Paper 1, 73-77) and below, the Fintiv factors favor institution.
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`As to factor 1, PO relies on Cont’l Intermodal Grp., asserting that Judge
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`Albright’s proclivity is to deny stays. (POPR, 5.) But unlike the three year
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`pendency before IPR institution in that case, the related Texas litigation
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`commenced only months ago. (EXS. 1075, 1076.) Nonetheless, the Board should
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`not speculate the likelihood of stay, especially since Judge Albright’s has recently
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`granted a joint motion to stay pending IPR. Kuster v. Western Digital Tech., Inc.,
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`WDTX-6-20-cv-00563 (March 12, 2021); Western Digital Corp. et al v. Kuster,
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`IPR2020-01391, Paper 10 at 8-9 (March 11, 2021) (declining to speculate on
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`likelihood of a stay after institution); Samsung Electronics America, Inc. v. Snik
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`LLC, IPR2020-01427, Paper 10 at 10 (March 9, 2021) (similar). The NDCA
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`court’s denial of an injunction (POPR, 5; Ex. 2004, 1) does not tip the scale in
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`PO’s favor, especially since Petitioner’s declaratory judgement (“DJ”) action has
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`since been refiled. Applied Materials, Inc. v. Demaray LLC, Case No. 20-cv-
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`1 The order precludes filing of additional evidence. (Id. at 3.) However, if the
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`Board would like, Petitioner will provide copies of the case docket entries cited
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`herein.
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`1
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`
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`IPR2021-00104
`U.S. Patent No. 7,381,657
`09341, Dkt No. 1 (N.D. Cal. Dec. 24, 2020). If anything, that action favors
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`institution given the stay pending resolution of PO’s dismissal motion to be heard
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`April 8. Id., Dkt No. 27 at 11-12 (Jan. 14, 2021); id., Dkt No. 29 (Jan. 21, 2021).
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`As to factor 2, while PO notes that trial in the Texas litigation is set for
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`December 27, 2021 (POPR, 5-6), Judge Albright has scheduled another trial on the
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`same day as trial in both the Intel and Samsung cases, which suggests dates will
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`need to be revised. See, e.g., Neodron Ltd. v. STMicroelectronics, Inc., No. 6:20-
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`cv-560, Dkt No. 30 (W.D. Tex. Dec. 23, 2020). Indeed, the Court’s latest
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`scheduling order moved the Markman hearing to April 6, 20212 and indicates that
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`“the Court will consider reasonable amendments to the case schedule post-
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`Markman that are consistent with the Court’s default deadlines in light of the
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`actual trial date.” Demaray LLC v. Intel Corp., No. 6:20-cv-634 Dkt No. 49 at 4
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`n.4 (W.D. Tex. Feb. 22, 2021). The Court’s order governing patent proceedings
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`issued one day later sets a default trial date “52 weeks after Markman hearing (or
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`as soon as practicable).”3 Scheduling trial 52 weeks or more post-Markman is
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`2 The Court later indicated Markman will not be held until the defendants’ transfer
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`motion is resolved. Demaray, No. 20-cv-00634 Dkt No. 65 (Mar. 17, 2021).
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`3 Judge Albright’s “Order Governing Proceedings - Patent Cases 022321.pdf”
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`available at https://www.txwd.uscourts.gov/judges-information/standing-orders/.
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`2
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`
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`IPR2021-00104
`U.S. Patent No. 7,381,657
`consistent with the Court’s recent practice. For example, the trial referenced by
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`PO (POPR, 6) occurred nearly 63 weeks post-Markman, with two more addressing
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`other patents scheduled to occur nearly 70 and 78 weeks post-Markman. See VLSI
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`Tech. LLC v. Intel Corp., 1:19-cv-977 Dkt No. 96 (W.D. Tex. Dec. 12, 2019), Dkt
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`No. 427 (W.D. Tex. Feb. 4, 2021).
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`Thus, even without any other delays4, trial is likely to be within a month of
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`the Board’s anticipated FWD.5 The Board has instituted trial where a litigation
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`trial date precedes FWD by much more. Sand Revolution II, LLC v. Cont’l
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`Intermodal Grp–Trucking LLC, IPR2019-01393, Paper 24 at 8-10 (June 16, 2020)
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`(informative) (factor 2 favored institution despite WDTX trial preceding FWD by
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`five months); Western Digital Corp., IPR2020-01391 at 9-10 (factor 2 being
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`neutral despite WDTX trial predating FWD by three and a half months); Apple
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`Inc. v. Parus Holdings, Inc., IPR2020-00686, Paper 9 at 11–13, 22 (instituting trial
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`where WDTX trial was two months before FWD). Even if somehow the
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`4 See HP Inc. v. Slingshot Printing LLC, IPR2020-01085, Paper 12 at 7 (Jan. 14,
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`2021) (WDTX civil trials “may possibly slip” due to “months of backlogged
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`trials”).
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`5 The Texas court has not yet decided the defendants’ transfer motion, which if
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`granted, will undoubtedly delay any trial past the anticipated FWD deadline.
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`3
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`
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`IPR2021-00104
`U.S. Patent No. 7,381,657
`December 2021 trial date is maintained (or moved earlier), other factors outweigh
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`this trial date issue, such as Petitioner’s diligence, defendants’ stipulation, and lack
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`of relevant investment as noted below. SK Hynix Inc. et al. v. Netlist, Inc.,
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`IPR2020-01421, Paper 10 at 6–13 (Mar. 16, 2021). Indeed, the lack of a trial date
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`in the pending NDCA DJ action, and that any such trial will likely occur after
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`FWD, favors institution. Dolby Labs., Inc. v. Intertrust Technologies Corp.,
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`PTAB-IPR2020-01123, Paper 10, at 16 (Jan. 6, 2021).
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`As to factor 3, PO is wrong that significant resources will be expended by
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`the Board’s May 16 institution deadline. (POPR 6.) Other than Markman-related
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`activities, there has been little investment in the Texas litigation—particularly on
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`validity. Indeed, contrary to PO’s miscalculation (id.), final contentions are not
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`due until June 1, which is after the institution deadline. Demaray, Case No. 20-cv-
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`00634 Dkt No. 49 at 3. PO’s reliance on anticipated post-institution activities
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`(POPR, 7) is also misplaced as the focus under this factor “is the actual
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`investment…at the time [the Board] decide[s] whether to institute.” Dolby Labs.,
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`PTAB-IPR2020-01123 at 19-20. Even so, activities unrelated to validity should
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`“not weigh in [the Board’s] consideration of this issue.” Western Digital Corp.,
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`IPR2020-01391 at 11. PO’s reliance on Bentley Motors is misplaced as its
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`litigation was further along compared to the Texas litigation here. Bentley Motors
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`Ltd. v. Jaguar Land Rover Ltd., IPR2019-01539, Paper 16, at 8-10 (Oct. 2, 2020)
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`4
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`IPR2021-00104
`U.S. Patent No. 7,381,657
`(eight month difference). Further, PO does not dispute Petitioner’s diligence in
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`filing its IPRs—all done despite PO’s delays in the Texas litigation. Ex. 2003, 2-3;
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`Demaray, Dkt No. 43 (Jan. 31, 2021) at 73:15-74:15 (ordering PO to amend its
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`infringement contentions); id., Dkt No. 49 (Feb. 22, 2021) (shifting Markman
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`deadlines until after PO amends contentions).
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`As to factor 4, despite PO’s concerns about non-asserted prior art (which
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`Petitioner disputes) and PO’s suggestion otherwise (POPR, 8), the defendants’
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`stipulation ensures no overlap will exist with any asserted grounds upon institution.
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`(Ex. 2003, 27-30.) Last, without disputing Petitioner’s diligence, PO relies on
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`Sections III-V of its POPR in support of factor 6. (POPR, 8; Paper 1, 76.) PO’s
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`misunderstandings of the prior art and/or Petitioner’s positions do not overcome
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`the overwhelming evidence of unpatentability here. While unable to address PO’s
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`substantive failings here,6 Petitioner believes it is helpful to point out that PO’s
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`acknowledgement that Barber discloses applying a bipolar pulsed DC power to a
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`target and an RF bias to a substrate both supports the strength of the asserted
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`grounds and narrows issues for trial. (Compare Paper 1, 15-17, 28 and 67-72 with
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`POPR at 12, 20.)
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`6 PO should likewise be precluded from rearguing or bolstering its merit positions
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`in its sur-reply. (Paper 9, 3.)
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`5
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`
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`Dated: March 22, 2021
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`IPR2021-00104
`U.S. Patent No. 7,381,657
`Respectfully submitted,
`
`By: /Joseph E. Palys/
` Joseph E. Palys (Reg. No. 46,508)
` Counsel for Petitioner Applied
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`6
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`IPR2021-00104
`U.S. Patent No. 7,381,657
`CERTIFICATE OF SERVICE
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`I hereby certify that on March 22, 2021, I caused a true and correct copy of
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`the foregoing Petitioner’s Reply to Patent Owner’s Preliminary Response to be
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`served electronically on counsel for Patent Owner at the following addresses:
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`hzhong@irell.com
`mwells@irell.com
`bhattenbach@irell.com
`DemarayIPRs@irell.com
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`
`By:
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`
`
`/Joseph E. Palys/
` Joseph E. Palys (Reg. No. 46,508)
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