Trials@uspto.gov
`571-272-7822
`
`Paper 13
`Date: May 11, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`APPLIED MATERIALS, INC.,
`Petitioner,
`v.
`DEMARAY LLC,
`Patent Owner.
`
`IPR2021-00104
`Patent 7,381,657 B2
`
`
`
`
`
`
`
`
`
`Before CHRISTOPHER L. CRUMBLEY, KRISTINA M. KALAN, and
`KIMBERLY McGRAW, Administrative Patent Judges.
`McGRAW, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`571-272-7822
`
`Paper 13
`Date: May 11, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`APPLIED MATERIALS, INC.,
`Petitioner,
`v.
`DEMARAY LLC,
`Patent Owner.
`
`IPR2021-00104
`Patent 7,381,657 B2
`
`
`
`
`
`
`
`
`
`Before CHRISTOPHER L. CRUMBLEY, KRISTINA M. KALAN, and
`KIMBERLY McGRAW, Administrative Patent Judges.
`McGRAW, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`
`IPR2021-00104
`Patent 7,381,657 B2
`
`INTRODUCTION
`I.
`Applied Materials, Inc. (“Petitioner”) filed a Petition (Paper 1, “Pet.”)
`requesting an inter partes review of claims 1–21 of U.S. Patent
`No. 7,381,657 B2 (Ex. 1001, “the ’657 patent”). Demaray LLC (“Patent
`Owner”) filed a Preliminary Response to the Petition (Paper 7, “Prelim.
`Resp.”). Pursuant to our authorization (Paper 9), Petitioner filed a Reply
`(Paper 10, “Pet. Reply”), and Patent Owner filed a Sur-reply (Paper 12,
`“PO Sur-reply”).
`To institute an inter partes review, we must determine that the
`information presented in the Petition shows “there is a reasonable likelihood
`that the petitioner would prevail with respect to at least 1 of the claims
`challenged in the petition.” 35 U.S.C. § 314(a). For the reasons discussed
`below, after considering the parties’ submissions and the evidence of record,
`we determine that Petitioner has demonstrated a reasonable likelihood of
`prevailing with respect to at least one claim of the ’657 patent. Patent
`Owner has not provided us with a persuasive reason to exercise our
`discretion to deny institution. Thus, we institute an inter partes review.
`A. Related Proceedings
`The parties identify Demaray LLC v. Samsung Electronics Co., Ltd.
`et al., No. 6-20-cv-00636 (W.D. Tex.); Demaray LLC v. Intel Corp.
`No. 6-20-cv-00634 (W.D. Tex.) (collectively, the “Texas Litigations”);
`and Applied Materials, Inc. v. Demaray LLC, No. 5-20-cv-05676
`(N.D. Cal.) as related matters. Pet. 1; Paper 5, 2. Each of these
`proceedings involves the ’657 patent. Id.
`The parties further identify IPR2021-00106 as being filed by
`Petitioner against the ’657 patent. Pet. 2; Paper 5, 3. Patent Owner also
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`IPR2021-00104
`Patent 7,381,657 B2
`identifies IPR2021-00103 and IPR2021-00105, which challenge U.S.
`Patent No. 7,544,276 B2, as related matters. Paper 5, 3.
`B. Real Parties-In-Interest
`Petitioner identifies Intel Corporation, Samsung Electronics Co., Ltd.,
`Samsung Electronics America, Inc., Samsung Semiconductor, Inc., Samsung
`Austin Semiconductor, LLC, and itself as real parties-in-interest. Pet. 1.
`Patent Owner identifies itself as a real party-in-interest. Paper 5, 2.
`C. The ’657 Patent
`The ’657 patent, titled “Biased Pulse DC Reactive Sputtering of
`Oxide Films,” “relates to deposition of oxide and oxynitride films and, in
`particular, to deposition of oxide and oxynitride films by pulsed DC reactive
`sputtering.” Ex. 1001, code (54), 1:11–13. The ’657 patent discloses that
`RF sputtering has been typically used to deposit oxide dielectric films but
`arcing can occur between sputtering target tiles used to make such films,
`which causes contamination in the deposited films. Id. at 2:25–30. The
`’657 patent further states that reactors for RF sputtering, particularly their
`power systems, are complicated. Id. at 2:30–38. The ’657 patent discloses
`that reactive dc magnetron sputtering of nonconductive oxides is done rarely
`because insulating surfaces accumulate charge during deposition that results
`in arcing, damage to the sputtering power supply, and the production of
`particles that degrade the properties of deposited oxide films. Id. at 4:48–57.
`Figure 1A of the ’657 patent is reproduced below.
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`Patent 7,381,657 B2
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`Figure 1A depicts a pulsed DC sputtering reactor
`
`
`The ’657 patent describes reactor apparatus 10 for sputtering material from
`target 12. Id. at 5:13–15. Magnet 20 is used to scan across the top of the
`target 12, which reduces local erosion of target 12 during sputtering. Id. at
`5:35, 8:57–66. Substrate 16 is opposite and parallel to target 12. Id. at
`5:29–30. Substrate 16 is capacitively coupled to electrode 17 via insulator
`54. Id. at 5:32–36. Electrode 17 can be coupled to RF power supply 18. Id.
`at 5:34–35. The ’657 patent explains that RF power supply 18 is used to
`avoid columnar structures in a deposited film, which can be detrimental for
`optical wave guide applications. Id. at 5:66–6:6. The ’657 patent discloses
`that target 12 functions as a cathode when power is applied to the target 12,
`which creates plasma 53. Id. at 5:30–32.
`Target 12 is electrically coupled through filter 15 to pulsed DC power
`supply 14. Id. at 5:25–26. The ’657 patent discloses that the polarity of the
`power supplied to target 12 by pulsed DC power supply 14 oscillates
`between negative and positive potentials. Id. at 5:36–39. According to the
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`Patent 7,381,657 B2
`’657 patent, the insulating layer on the surface of target 12 discharges during
`the positive period, which prevents arcing. Id. at 5:39–41. The ’657 patent
`discloses that the pulsing frequency must exceed a critical frequency, which
`depends on a target material, cathode current, and reverse time. Id. at 5:41–
`43.
`
`Reactor apparatus 10 further includes filter 15, which prevents the RF
`power supply from coupling to into pulsed DC power supply 14. Id. at
`5:56–57. According to the ’657 patent, filter 15 can be a rejection filter,
`such as a 2 MHz band rejection filter when a 2 MHz power supply is used
`for RF power supply 18. Id. at 5:57–61. The ’657 patent discloses that the
`bandwidth of filter 15 can be approximately 100 kHz. Id. at 5:61–63.
`D. Illustrative Claim
`Of the challenged claims, claims 1 and 2 are independent. Claim 2 is
`representative and is reproduced below with bracketed material and
`formatting added.
`2. [a] A method of depositing an insulating film on a
`substrate, comprising:
`[b] providing a process gas between a target and a substrate;
`[c] [c1] providing pulsed DC power to the target [c2]
`through a narrow band rejection filter [c1] such that the voltage
`on the target alternates between positive and negative voltages;
`[d] providing an RF bias that corresponds to the narrow
`band rejection filter to the substrate; and
`[e] providing a magnetic field to the target;
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`Patent 7,381,657 B2
`[f] wherein an oxide material is deposited on the substrate,
`and the insulating film is formed by reactive sputtering in a
`mode between a metallic mode and a poison mode.
`Ex. 1001, 23:16–27.
`E. The Asserted Grounds of Unpatentability
`Petitioner contends that claims 1–21 of the ’657 patent are
`unpatentable on the following grounds. Pet. 3–5.
`Reference(s)
`Basis
`Barber,1 Hirose2
`§ 1033
`
`Claim(s) Challenged
`2–4, 6, 8, 10–12, 21
`
`Barber, Hirose, Dogheche4
`
`Barber, Hirose, Safi5
`
`Barber, Hirose, Aokura6
`
`Barber, Hirose, Segal7
`
`Barber, Hirose, Segal, Sakawaki8
`
`§ 103
`
`§ 103
`
`§ 103
`
`§ 103
`
`§ 103
`
`5, 7
`
`9
`
`12, 13
`
`14–18
`
`19
`
`
`1 US 6,342,134 B1, issued Jan. 29, 2002 (Ex. 1005).
`2 US 6,485,602 B2, issued Nov. 26, 2002 (Ex. 1006).
`3 The Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
`(2011) (“AIA”), amended 35 U.S.C. § 103. Because the ’657 patent has an
`effective filing date prior to the effective date of the applicable AIA
`amendments, we refer to the pre-AIA versions of § 103.
`4 E. Dogheche, Growth and Optical Characterization of Aluminum Nitride
`Thin Films Deposited on Silicon by Radio-Frequency Sputtering, Appl.
`Phys. Lett. 74, 1209 (1999) (Ex. 1029).
`5 I. Safi, A Novel Reactive Magnetron Sputtering Technique for
`Producing Insulating Oxides of Metal Alloys and Other Compound
`Thin Films, Surface and Coatings Tech. 135, 48 (2000) (Ex. 1039).
`6 JP H10102247 A, published Apr. 21, 1998 (Ex. 1068) ((English translation
`(pp. 1–12); Verified Statement of Translation (p. 13); Japanese language
`document (pp. 14–24).
`7 US 2001/0047838 A1, published Dec. 6, 2001 (Ex. 1069).
`8 US 2001/0031383 A1, published Oct. 18, 2001 (Ex. 1043).
`
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`Patent 7,381,657 B2
`Reference(s)
`Barber, Hirose, Sill9
`
`Barber, Hirose, Sellers10
`
`Barber, Hirose, Belkind11
`
`Barber, Hirose, Belkind, Dogheche
`
`Barber, Hirose, Belkind, Safi
`
`Barber, Hirose, Belkind, Aokura
`
`Barber, Hirose, Belkind, Segal
`
`Barber, Hirose, Belkind, Segal,
`Sakawaki
`
`Barber, Hirose, Belkind, Sill
`
`Barber, Hirose, Belkind, Sellers
`
`Basis
`§ 103
`
`Claim(s) Challenged
`20
`
`§ 103
`
`§ 103
`
`§ 103
`
`§ 103
`
`§ 103
`
`§ 103
`
`§ 103
`
`§ 103
`
`§ 103
`
`1
`
`2–4, 6, 8, 10, 11, 12, 21
`
`5, 7
`
`9
`
`12, 13
`
`14–18
`
`19
`
`20
`
`1
`
`In support of its unpatentability arguments, Petitioner relies on the
`declaration of Dr. Vivek Subramanian. Ex. 1002 (“Subramanian
`Declaration”). Patent Owner relies on the declaration of Dr. Alexander
`Glew. Ex. 2002 (“Glew Declaration”).
`II. ANALYSIS
`
`A. Claim Construction
`We apply the same claim construction standard that would be used to
`construe the claim in a civil action under 35 U.S.C. § 282(b), including
`construing the claim accordance with the ordinary and customary meaning
`
`
`9 US 6,284,110 B1, issued Sept. 4, 2001 (Ex. 1057).
`10 US 5,651,865, issued July 29, 1997 (Ex. 1007).
`11 A. Belkind et al., Pulsed-DC Reactive Sputtering of Dielectrics:
`Pulsing Parameter Effects, Society of Vacuum Coaters, 43rd Annual
`Technical Conference Proceedings, 86 (2000) (Ex. 1008).
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`Patent 7,381,657 B2
`of such claim as understood by one of ordinary skill in the art and the
`prosecution history. 37 C.F.R. § 42.100(b) (2020). Under this standard,
`claim terms are given their ordinary and customary meaning as would have
`been understood by a person of ordinary skill in the art at the time of the
`invention and in the context of the entire patent disclosure. Philips v. AWH
`Corp., 415 F.3d 1303, 1312–14 (Fed. Cir. 2005) (en banc). Only terms that
`are in controversy need to be construed, and then only to the extent
`necessary to resolve the controversy. Vivid Techs., Inc. v. Am. Sci. & Eng’g,
`Inc., 200 F.3d 795, 803 (Fed. Cir. 1999); see also Nidec Motor Corp. v.
`Zhongshan Board Ocean Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017)
`(applying Vivid Techs. in the context of an inter partes review).
`Neither party asserts a claim construction for the challenged claims.
`Pet. 11; see generally Prelim. Resp. On this record, we determine that no
`claim terms require express construction.
`B. Principles of Law
`“In an [inter partes review], the petitioner has the burden from the
`onset to show with particularity why the patent it challenges is
`unpatentable.” Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1363
`(Fed. Cir. 2016) (citing 35 U.S.C. § 312(a)(3) (requiring inter partes review
`petitions to identify “with particularity . . . the evidence that supports the
`grounds for the challenge to each claim”)). This burden of persuasion never
`shifts to Patent Owner. See Dynamic Drinkware, LLC v. Nat’l Graphics,
`Inc., 800 F.3d 1375, 1378 (Fed. Cir. 2015) (discussing the burden of proof in
`inter partes review).
`A claim is unpatentable under § 103(a) if the differences between the
`claimed subject matter and the prior art are such that the subject matter, as a
`whole, would have been obvious at the time the invention was made to a
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`person having ordinary skill in the art to which said subject matter pertains.
`KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007). The question of
`obviousness is resolved on the basis of underlying factual determinations,
`including (1) the scope and content of the prior art; (2) any differences
`between the claimed subject matter and the prior art; (3) the level of skill in
`the art; and (4) when in evidence, objective indicia of non-obviousness (i.e.,
`secondary considerations). Graham v. John Deere Co., 383 U.S. 1, 17–18
`(1966). “To satisfy its burden of proving obviousness, a petitioner cannot
`employ mere conclusory statements. The petitioner must instead articulate
`specific reasoning, based on evidence of record, to support the legal
`conclusion of obviousness.” In re Magnum Oil Tools Int’l, Ltd., 829 F.3d
`1364, 1380 (Fed. Cir. 2016).
`We analyze the asserted grounds of unpatentability in accordance with
`these principles to determine whether Petitioner has met their burden to
`establish a reasonable likelihood of success at trial.
`C. Level of Ordinary Skill in the Art
`Petitioner argues:
`A person of ordinary skill in the art (“POSITA”) would have had,
`at the time of the ’657 patent (March 2002): a Master’s degree in
`Electrical Engineering or Material Science (or an equivalent
`subject) plus at least two years of relevant experience (e.g.,
`sputtering deposition of films on substrates (Ex. 1001, 1:10–14,
`2:45–47)), or a Bachelor’s degree in Electrical Engineering or
`Material Science (or an equivalent subject) plus at least four
`years of relevant experience. More education can substitute for
`practical experience, and vice versa.
`Pet. 9 (citing Ex. 1002 ¶¶ 19–20). At this stage of the proceeding, Patent
`Owner does not articulate a level of skill for a POSITA. See generally
`Prelim. Resp. Neither party argues that the decision whether to institute trial
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`depends on our adoption of any particular definition of one of ordinary skill
`in the art.
`In light of the record before us, we adopt Petitioner’s proposal
`regarding the level of one of ordinary skill in the art, except that we delete
`the qualifier “at least” to eliminate vagueness as to the appropriate amount
`of relevant experience. The qualifier expands the range without an upper
`bound, i.e., encompassing an unlimited amount of years of experience, and
`thus, does not meaningfully indicate the level of ordinary skill in the art.
`The level of ordinary skill in the art is also reflected by the prior art of
`record. See Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001).
`D. Discretion under 35 U.S.C. § 314(a) Due to Parallel District Court
`Proceedings
`Patent Owner argues that the Board should exercise its discretion to
`deny institution under 35 U.S.C. § 314(a) because the trial in the Texas
`Litigations, which involve real parties-in-interest Samsung and Intel, is
`scheduled for December 27, 2021, which is approximately 4.5 months
`before our projected final written decision and that litigation is in advanced
`stage. Prelim. Resp. 4–8 (citing Ex. 2005, 4).
`For the reasons stated below, we are not persuaded to exercise our
`discretion to deny institution for this reason.
`Institution of an inter partes review is discretionary. See 35 U.S.C.
`§ 314(a) (authorizing institution of an inter partes review under particular
`circumstances, but not requiring institution under any circumstances);
`37 C.F.R. § 42.108(a) (“[T]he Board may authorize the review to proceed.”).
`Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016) (“[T]he
`agency’s decision to deny a petition is a matter committed to the Patent
`Office’s discretion.”); SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1356 (2018)
`
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`Patent 7,381,657 B2
`(“[Section] 314(a) invests the Director with discretion on the question
`whether to institute review . . . .” (emphasis omitted)); Harmonic Inc., 815
`F.3d at 1367 (“[T]he PTO is permitted, but never compelled, to institute an
`IPR proceeding.”).
`When determining whether to exercise discretion to deny institution
`due to an earlier trial date, we consider the following: (1) whether the district
`court granted a stay or evidence exists that one may be granted if this
`proceeding is instituted; (2) proximity of the district 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. Apple Inc. v. Fintiv,
`Inc., IPR2020-00019, Paper 11, 5–6 (Mar. 20, 2020) (precedential). In
`evaluating the factors, we take “a holistic view of whether efficiency and
`integrity of the [patent] system are best served by denying or instituting
`review.” Id. at 6.
`1. Whether a Stay Exists or Is Likely to Be Granted if a
`Proceeding Is Instituted
`As to factor 1, Petitioner asserts that it filed a motion in the Northern
`District of California for a preliminary injunction to enjoin the Texas
`Litigations from proceeding. Pet. 74 (citing Ex. 1078). This motion,
`however, has since been denied. Ex. 2004. Petitioner provides no other
`evidence indicating that a motion to stay the Texas Litigations has been filed
`by the parties to those actions or would be granted, if filed. In the absence
`of a motion for stay, we cannot assess Petitioner’s arguments to the District
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`Court that a stay is appropriate, nor Patent Owner’s opposition, if any. As a
`result, we have no basis to evaluate the likelihood a stay would be granted.
`Accordingly, we determine this factor to be neutral.
`Proximity of the Court’s Trial Date to the Board’s
`2.
`Projected Statutory Deadline
`Jury selection for the Texas Litigations is scheduled to begin on
`December 27, 2021, which predates our projected final written decision
`deadline by approximately four and a half months. See Ex. 2005
`(Scheduling Order), 4 (stating the court “expects to set this date [i.e.,
`December 27, 2021] at the conclusion of the Markman hearing” but that “if
`the actual trial date materially differs from the Court’s default schedule, the
`Court will consider reasonable amendments to the case schedule post-
`Markman that are consistent with the Court’s default deadlines”). Petitioner
`asserts that it is unlikely trial will start in December 2021, because the
`Markman hearing has been postponed pending resolution of a transfer
`motion, and the Court’s order governing patent proceedings sets a default
`trial date “52 weeks after Markman hearing (or as soon as practicable.).”
`Pet. Reply 2 (citing, inter alia, Judge Albright’s “Order Governing
`Proceedings - Patent Cases 022321.pdf” available at
`https://www.txwd.uscourts.gov/judges-information/standing-orders/).
`Petitioner further asserts that multiple trials have been scheduled for
`December 27, 2021, thus providing further evidence that the trial date will
`likely be rescheduled. Id.
`Although Patent Owner acknowledges that the Markman hearing has
`been cancelled, Patent Owner asserts that it expects the Markman hearing to
`be completed by mid-May 2021, and that as of yet, trial is still scheduled for
`December 27, 2021. PO Sur-reply 2–3.
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`Weighing all of this together, there is substantial uncertainty whether
`the Texas Litigations will proceed to trial on December 27, 2021 in view of
`a number of factors: the delay of the Markman hearing; the district court’s
`general schedule in its Order Governing Patent Proceedings; the possible
`delay due to the Transfer Motion; and the scheduling of two trials on the
`same day. The parties cite no evidence to suggest otherwise. While we
`cannot know at this date how long a potential delay might be, we note that
`Patent Owner’ suggestion of a mid-May 2021 Markman ruling, combined
`with the District Court’s default trial date of 52 weeks later, could result in
`the trial date occurring at the same time as, if not slightly after, our final
`written decision in this matter. Given the wide range of potential trial dates
`and the uncertainty surrounding them given the District Court’s cancellation
`of the Markman hearing, we cannot evaluate the proximity of the trial date
`to our statutory deadline, as required by the second Fintiv factor. As a
`result, we determine this factor to be neutral.
`3. Investment in the Parallel Proceeding by the Court and Parties
`Factor 3 does not weigh in favor of exercising discretion to deny
`institution. The Markman hearing has been delayed until the district court
`resolves the pending transfer motion. The deadlines for fact discovery and
`service of final infringement and invalidity contentions have likewise been
`delayed. See, e.g., PO Sur-reply 3 (stating that fact discovery will likely
`begin mid-May and that additional investment will continue until the
`expected final written decision deadline). Thus, as of this Decision, there
`has been a relatively small investment in the Texas Litigations by the
`parties to those actions, and significant effort remains to be expended.
`Patent Owner’s arguments regarding the accrual of investment after the
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`time of this Decision are unpersuasive, because we consider the investment
`“at the time of the institution decision.” Fintiv, Paper 11, 9–10.
`Moreover, Petitioner was diligent in filing its petition on October 22,
`2020, approximately three months after the complaints for the Texas
`Litigation were filed. See Paper 4 (Notice of Filing Date), 1; Ex. 1075
`(Complaint), 25 and Ex. 1076 (Complaint), 27 (both indicating that the
`complaints in the Texas Litigations were filed July 14, 2020).
`Considering Petitioner’s expeditious filing of the Petition and the
`relatively small amount of investment in the Texas Litigations, this factor
`weighs against exercising our discretion to deny institution.
`4. Overlap between Issues Raised in the Petition and in the Parallel
`Proceeding
`Petitioner asserts that there is no evidence that the same invalidity
`grounds sought here will be at issue in the Texas litigations (Pet. 76) and
`that the defendants in the Texas Litigations provided a stipulation that
`“ensures no overlap will exist with any asserted grounds upon institution”
`(Pet. Reply 5 (citing Ex. 2003, 27–30)). Patent Owner responds that there
`is substantial overlap between issues raised in the petition and the Texas
`Litigations because the real parties-in-interest “have included all the
`asserted combinations in the district court action and against all challenged
`claims” at issue in the present proceeding (Prelim. Resp. 7–8) and the
`stipulation does not obviate concerns relating to overlapping issues (PO
`Sur-reply 4). Patent Owner states the stipulation only applies to the
`“specific invalidity ground instituted by the PTAB” and “any invalidity
`ground based” on Barber if trial is instituted and that the defendants in the
`Texas Litigations can still raise any of the other cumulative prior art
`disclosed in their invalidity contentions. PO Sur-reply 4–5 (citing Ex.
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`2003, 27–40 & n.4); Sotera Wireless, Inc. v. Masimo Corp., IPR 2020-
`01019, Paper 12, 13–14 (PTAB Dec. 1, 2020) (precedential)).
`Because all of the art asserted in the present proceeding, including the
`primary references Barber and Hirose, are also asserted in the Texas
`Litigations, there is overlap between the issues raised in the petition and in
`the Texas Litigations. Ex. 2003, 9–10, 19, 22. We recognize that the Texas
`Litigation defendants have stipulated that, if inter partes review is instituted
`on a specific invalidity ground for an asserted patent (e.g., the ’657 patent),
`they agree “to not pursue invalidity contentions for that Asserted Patent in
`this litigation on that specific invalidity ground instituted by the PTAB.” Id.
`at 29. The defendants also stipulate that, if inter partes review is instituted
`on a specific invalidity ground that includes Barber for an asserted patent,
`they agree “to not pursue invalidity contentions in this litigation for any
`invalidity ground based on Barber.” Id. at 29–30. The defendants’
`stipulation, however, does not preclude them from relying on Barber “or any
`other reference as a state of the art reference to demonstrate the knowledge
`of state of the art by one of ordinary skill in the art at the relevant time.” Id.
`at 30 n.5.
`We recognize that the defendants’ stipulation does not state that they
`will not pursue any ground raised or that could have been reasonably raised
`in the Petition, similar to the “broad stipulation” discussed in Sotera. The
`narrower stipulation made by the Texas defendants, however, “mitigates to
`some degree the concerns of duplicative efforts between the district court
`and the Board, as well as concerns of potentially conflicting decisions.” See
`Sand Revolution II, LLC v. Cont’l Intermodal Group – Trucking LLC,
`IPR2019-01393, Paper 24 (PTAB June 16, 2020) (informative).
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`Accordingly, we find this factor weighs slightly against exercising our
`discretion to deny.
`5. Whether the Petitioner and the Defendant in the Parallel
`Proceeding Are the Same Party
`Petitioner argues that “Petitioner is not the same party in the Texas
`Litigations.” Pet. 76. Patent Owner contends that the defendants of the
`Texas Litigations are real parties-in-interest for this proceeding and have
`coordinated with Petitioner in filing this Petition. Prelim. Resp. 8. Patent
`Owner notes that Petitioner does not dispute Patent Owner’s argument for
`factor 5. PO Sur-reply 5.
`This factor considers the relationship between a Petitioner and a
`defendant to a court proceeding. Fintiv, Paper 11, 13–14 (“If a petitioner is
`unrelated to a defendant in an earlier court proceeding, the Board has
`weighed this fact against exercising discretion to deny institution.”). Here,
`Petitioner identifies the defendants of the Texas Litigations as real parties-
`in-interest. Pet. 1; Ex. 2003, 1. Petitioner also acknowledges that they have
`coordinated efforts with the defendants when preparing the petitions filed
`against the ’276 patent. Paper 2, 2. Thus, Petitioner and the Texas
`Litigations defendants are not “unrelated.” See Fintiv, Paper 11, 13–14. At
`the same time, Petitioner and the Texas defendants are not “the same party.”
`Although Petitioner and the Texas defendants are not “the same
`party,” because Petitioner and the Texas defendants are related, and because
`of the degree of involvement by the Texas defendants in the preparation of
`the instant Petition, we find this factor weighs slightly in favor of exercising
`discretion to deny institution.
`
`16
`
`
`
`IPR2021-00104
`Patent 7,381,657 B2
`6. Other Circumstances that Impact the Board’s Exercise of
`Discretion, Including the Merits
`Petitioner contends the strength of its asserted grounds challenging the
`claims of the ’657 favor institution (Pet. 77; Pet. Reply 4), while Patent
`Owner contends Petitioner’s failure to show a reasonable likelihood that it
`will prevail on its challenges supports denying institution (Prelim. Reply 8;
`PO Sur-reply 5). Patent Owner also urges the Board to strike Petitioner’s
`Reply arguments regarding Fintiv factor #6, because the Reply improperly
`reargues the merits of the challenges set forth in the Petition or seeks to
`bolster its proposed grounds of unpatentability. PO Sur-reply 5.
`As the Board explained in Fintiv, we considered this factor as “part of
`a balanced assessment of all the relevant circumstances in the case.” Fintiv,
`Paper 11, 14. The goal of that assessment is to determine “whether
`efficiency and integrity of the system are best served by denying or
`instituting review.” Id. at 6. The assessment requires consideration of the
`“strengths or weaknesses regarding the merits,” but “[t]his is not to suggest
`that a full merits analysis is necessary to evaluate this factor.” Id. at 15–16.
`For the reasons discussed below regarding Petitioner’s obviousness
`challenges, Petitioner has demonstrated a reasonable likelihood that it
`would prevail on its challenge, and thus this factor weighs against denying
`institution. We do not view statements made in Petitioner’s Reply
`addressing this factor as rearguing the merits of its challenges or bolstering
`its proposed grounds to a point that would require striking portions of
`Petitioner’s Reply regarding Fintiv factor #6. Reply. 5. Accordingly, this
`factor is neutral.
`
`17
`
`
`
`IPR2021-00104
`Patent 7,381,657 B2
`7. Evaluating the Fintiv Factors
`We have considered the circumstances and facts before us in view of
`the Fintiv factors. Because our analysis is fact driven, no single factor is
`determinative of whether we exercise our discretion to deny institution under
`§ 314(a). We take “a holistic view of whether efficiency and integrity of the
`system are best served by denying or instituting review” when evaluating
`these factors. Fintiv, Paper 11, 6.
`Based on the facts of this case, the potential overlap of issues and the
`potential for an earlier trial date for the Texas Litigations is outweighed by
`the uncertainty in that trial date due to the Transfer Motion, the relatively
`small investment by the parties and the district court, Petitioner’s diligence
`in filing the Petition, the stipulation by the defendants in the Texas
`Litigations, and the relationship of Petitioner to the Texas defendants.
`Accordingly, evaluating all of the factors on this record, we determine that
`the circumstances presented here do not support exercising our discretion
`under § 314(a) to deny institution of inter partes review.
`E. Discretion under 35 U.S.C. § 314(a) Due to Parallel Petitions
`Petitioner filed two petitions challenging the patentability of claims of
`the ’657 patent. The first petition, filed in the present proceeding, challenges
`claims 1–21 on grounds based on Barber and Hirose and other references,
`while the second petition, filed in IPR2021-00106, challenges claims 1–8
`and 10–17 based on Licata, Kelly, and Collins and other references. Pet. 3–
`5; IPR2021-00106, Paper 1, 7–8. Pursuant to the Board’s Consolidated Trial
`Practice Guide, Petitioner filed a Notice Regarding Multiple Petitions.
`Paper 2 (“Notice”); PTAB Consolidated Trial Practice Guide, 59–60
`(Nov. 2019) (available at https://www.uspto.gov/
`TrialPracticeGuideConsolidated).
`
`18
`
`
`
`IPR2021-00104
`Patent 7,381,657 B2
`Petitioner requests that we institute in both IPRs, but that we consider
`the Petition in this proceeding first. Notice, 1. Patent Owner filed a
`Response to Petitioner’s Notice stating that Petitioner has not shown
`justification for two petitions. Paper 8, 1–5.
`Because Petitioner ranked this Petition first and Patent Owner does
`not object, we decline to exercise our discretion to deny institution under
`35 U.S.C. § 314(a) in this proceeding based on the filing of an additional
`petition challenging the same patent. In a separate decision, we address the
`petition filed in IPR2021-00106.
`F. Discretion under 35 U.S.C. § 325(d)
`Patent Owner argues that the Petition should be denied under
`35 U.S.C. § 325(d) because Petitioner relies on art in substantially the same
`manner as art previously before the Office and presents arguments that are
`the same or substantially the same as arguments previously before the
`Office. Prelim. Resp. 61–67.
`To evaluate whether to exercise discretion under 35 U.S.C. § 325(d),
`the Board uses the following two-part framework: (1) whether
`the same or substantially the same art previously was presented
`to the Office or whether the same or substantially the same
`arguments previously were presented to the Office; and (2) if
`either condition of first part of the framework is satisfied,
`whether the petitioner has demonstrated that the Office erred in
`a manner material to the patentability of challenged claims
`Advanced Bionics LLC v. MED-EL Elektromedizinische Geräte GmbH,
`IPR2019-01469, Paper 6 at 8 (PTAB Feb. 13, 2020) (precedential).
`Advanced Bionics Framework Part (1)
`1.
`For part (1) of the Advanced Bionics framework, Patent Owner
`contends that Petitioner relies on Barber and Hirose in substantially the same
`manner as the Examiner relied on Smolanoff during prosecution of the ’657
`
`19
`
`
`
`IPR2021-00104
`Patent 7,381,657 B2
`patent. Prelim. Resp. 62–64. For example, Patent Owner states that “during
`the prosecution, the examiner initially found that Smolanoff taught all
`limitations but the claimed
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