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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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`APPLIED MATERIALS, INC.
`Petitioner,
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`v.
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`DEMARAY LLC
`Patent Owner.
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`___________________
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`Case IPR2021-00105
`Patent No. 7,544,276
`___________________
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`PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
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`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313
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`Nothing in the Reply changes the conclusion that the Fintiv factors as a
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`Case IPR2021-00105
`Patent No. 7,544,276
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`whole favor discretionary denial under 35 U.S.C. § 314(a). In particular, the
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`district court case continues apace and the trial date remains December 27,
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`2021 this year, some five months before the expected due date for the FWD.
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`Fintiv Factor #1: No Evidence Of A Possible Stay
` Petitioner’s reply provides no evidence on the “specific facts or cases to
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`indicate the District Court would be inclined to stay the case.” Apple, Inc. v.
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`Fintiv, Inc., IPR2020-00019, Paper 15, at 12 (P.T.A.B. May 13, 2020)
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`(informative). Absent such facts, the Board should “decline to infer … how
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`the District Court would rule should a stay be requested.” Id.
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`Petitioner cites to Kuster v. W. Dig. Tech., Inc., No. 6:20-cv-00563-ADA
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`(W.D. Tex. March 12, 2021), to argue that a stay is likely. That case is
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`distinguishable because, there, the parties jointly requested a stay pending an
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`instituted IPR. Reply at 1. Petitioner cites no evidence that Judge Albright
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`would grant an opposed motion to stay. Id. Indeed, the opposite is likely the
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`case. See Cont’l Intermodal Grp. – Trucking LLC v. Sand Revolution LLC,
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`No. 7:18-cv-00147-ADA (W.D. Tex. July 22, 2020) (denying defendant’s
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`motion to stay pending IPR because “[t]he Court strongly believes [in] the
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`Seventh Amendment, … [and] Plaintiff opposes the stay” (emphasis added)).
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`The N.D. Cal. proceeding also does not help. First, Petitioner
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`voluntarily dismissed its original case after the district court determined it
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`lacked subject matter jurisdiction. Second, Petitioner does not assert that its
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`refiled complaint is materially different from the dismissed complaint (and it
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`isn’t). Further, as in the dismissed first N.D. Cal. action, the Court has
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`cancelled the hearing on Patent Owner’s motion to dismiss and will decide the
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`motion on paper. Third, in the refiled N.D. Cal. action, Petitioner has not
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`requested the court to enjoin the Texas proceedings. These facts undermine
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`Petitioner’s assertion that the N.D. Cal. action allegedly “favors institution.”
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`Instead, they show that the N.D. Cal. action does not affect the Texas actions.
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`Fintiv Factor #2: The Jury Trial Date Remains Unchanged
`Petitioner renews its speculation that the district court will move the trial
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`date. Reply at 2–3. As it now stands, the trial is still scheduled for
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`December 27, 2021, and Petitioner has not even asked the Court to move the
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`trial date. The parties thus still have to plan and act as if the case will go on
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`trial then. In addition, the Board routinely “declines to speculate” as to
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`whether a trial will take place as scheduled when there are also other scheduled
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`trials on same date. Cisco Sys., Inc v. Monarch Networking Sols. LLC,
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`IPR2020-01227, Paper 11, at 10–11 (P.T.A.B. Mar. 4, 2021).
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`Petitioner also argues that VLSI case scheduling supports its speculation
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`that the trial will be delayed. Reply at 3. VLSI case was delayed in large part
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`because Intel sought the Federal Circuit’s intervention to postpone the trial.
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`Now with guidance from the Federal Circuit, Patent Owner trusts that
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`Petitioner and the RPIs won’t try the same tactics.
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`Petitioner’s reference to the case scheduling in N.D. Cal. also does not
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`help because as explained above, that action currently has no effect on the
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`scheduling of the Texas actions.
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` In sum, the Board should accept the scheduled trial date at face value as
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`it did previously. Fintiv, Paper 15 at 5.
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`Fintiv Factor #3: The Parties And Court Have Continued To Invest
`Resources Into The Parallel Texas Litigations
`Petitioner does not dispute that the Texas Litigations are proceeding
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`apace.1 Although the Markman hearing has now been cancelled until the
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`completion of briefing of defendants’ transfer motions, the briefing on the
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`transfer motion will close in April. Patent Owner anticipates that the Markman
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`hearing will be held and constructions will be given by mid-May before the
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`deadline for institution (upon which discovery will commence). The parties’
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`investment will continue to accrue after institution but before the FWD
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`1 Petitioner contends that Patent Owner miscalculated the dates for final
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`contentions. Petitioner relies on a revised scheduling order entered after Patent
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`Owner’s preliminary response was filed. Compare Reply at 4, with Ex. 2005.
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`deadline in preparation for the trial, including completion of fact and expert
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`discovery (which will surely encompass validity issues), pre-trial motion
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`practice, trial preparation, trial and post-trial motions. Petitioner does not
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`dispute that Bentley Motors Ltd. v. Jaguar Land Rover Ltd., IPR2019-01539,
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`Paper 16, at 9–10 (P.T.A.B. Oct. 2, 2020), appropriately weighed additional
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`investment by the parties after institution but before the FWD when denying
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`institution. Factor 3 weighs in favor of denying institution.
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`Further, there is no evidence that institution or even a FWD could
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`simplify issues or conserve party or judicial resources. For example, regardless
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`who invalidates the patent, the effect is the same. Conversely, if the validity of
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`the patent is upheld, Petitioner will still pursue at least its prior use based
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`defenses. Institution of the IPR thus will not result in savings of resources that
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`the parties or the district court will spend.
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`Fintiv Factor #4: Stipulation Does Not Lessen Overlap Of Issues
`Petitioner’s stipulation fails to eliminate “overlap of issues.” In addition
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`to reserving the right to reassert “any specific invalidity ground” based on
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`some perceived change in legal authority, the Texas defendants (RPIs here)
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`only stipulated that they would not pursue in district court the “specific
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`invalidity ground instituted by the PTAB” and to not pursue “any invalidity
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`ground based” on Licata if a trial is ordered. Ex. 2003, 27–30 & n.4. The
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`stipulation is not enough to obviate concerns relating to overlapping issues,
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`including because the Texas defendants explicitly reserved the use of a
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`reference as background art or for other Asserted Patents. Id., 30 n.5. And the
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`Texas defendants can still raise any of the other cumulative prior art (including
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`reactors that they contend are used by Licata) disclosed in their invalidity
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`contentions. Cf. Sotera Wireless, Inc. v. Masimo Corp., IPR 2020-01019,
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`Paper 12, 13–14 (P.T.A.B. Dec. 1, 2020) (precedential) (endorsing “broad
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`stipulation” to “not pursue ‘any ground raised or that could have been
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`reasonably raised’”). The factor weighs in favor of denying institution.
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`Fintiv Factors #5 and #6
`Petitioner does not dispute Patent Owner’s weighing of Factor #5. As to
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`factor #6, Petitioner has blatantly disregarded the Court’s order forbidding it to
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`“reargue the merits of the challenge in the Petition or seek to bolster its
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`proposed grounds of unpatentability.” Paper 9 at 3. That is improper. The
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`Board should therefore strike Petitioner’s reply regarding Fintiv factor #6 and
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`not consider it.2 Petitioner should also be admonished for this conduct.
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`Dated: March 31, 2021
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`2 For avoidance of doubt, Patent Owner disagrees with Petitioner’s
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`Respectfully submitted,
`Hong Zhong
`H. Annita Zhong, Reg. No. 66,530
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`characterization of its alleged acknowledgement or position on the merits.
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`CERTIFICATE OF SERVICE
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`Case IPR2021-00105
`Patent No. 7,544,276
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`Pursuant to 37 C.F.R. § 42.6, the undersigned certifies that on March 31,
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`2021, a copy of the foregoing document PATENT OWNER’S SUR-REPLY
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`TO PETITIONER’S REPLY TO PATENT OWNER’S PRELIMINARY
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`RESPONSE was served, by electronic mail, as agreed to by the parties, upon
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`the following:
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`PAUL HASTINGS LLP
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`Naveen Modi, Reg. No. 46,224
`PH-Applied_Materials-Demaray-IPR@paulhastings.com
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`Joseph E. Palys, Reg. No. 46,508
`PH-Applied_Materials-Demaray-IPR@paulhastings.com
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`Howard Herr (pro hac admission to be requested)
`PH-Applied_Materials-Demaray-IPR@paulhastings.com
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`By: /Susan M. Langworthy/
` Susan M. Langworthy
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