`___________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`APPLIED MATERIALS, INC.
`Petitioner,
`
`v.
`
`DEMARAY LLC
`Patent Owner.
`
`___________________
`
`Case IPR2021-00106
`Patent No. 7,381,657
`___________________
`
`PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-145
`
`10924969
`
`
`
`Case IPR2021-00106
`Patent No. 7,381,657
`Nothing in the Reply changes the conclusion that the Fintiv factors as a
`
`whole favor discretionary denial under 35 U.S.C. § 314(a). In particular, the
`
`district court case continues apace and the trial date remains December 27,
`
`2021 this year, some five months before the expected due date for the FWD.
`
`Fintiv Factor #1: No Evidence Of A Possible Stay
` Petitioner’s reply provides no evidence on the “specific facts or cases to
`
`indicate the District Court would be inclined to stay the case.” Apple, Inc. v.
`
`Fintiv, Inc., IPR2020-00019, Paper 15, at 12 (P.T.A.B. May 13, 2020)
`
`(informative). Absent such facts, the Board should “decline to infer … how
`
`the District Court would rule should a stay be requested.” Id.
`
`Petitioner cites to Kuster v. W. Dig. Tech., Inc., No. 6:20-cv-00563-ADA
`
`(W.D. Tex. March 12, 2021), to argue that a stay is likely. That case is
`
`distinguishable because, there, the parties jointly requested a stay pending an
`
`instituted IPR. Reply at 1. Petitioner cites no evidence that Judge Albright
`
`would grant an opposed motion to stay. Id. Indeed, the opposite is likely the
`
`case. See Cont’l Intermodal Grp. – Trucking LLC v. Sand Revolution LLC,
`
`No. 7:18-cv-00147-ADA (W.D. Tex. July 22, 2020) (denying defendant’s
`
`motion to stay pending IPR because “[t]he Court strongly believes [in] the
`
`Seventh Amendment, … [and] Plaintiff opposes the stay” (emphasis added)).
`
`The N.D. Cal. proceeding also does not help. First, Petitioner
`
`voluntarily dismissed its original case after the district court determined it
`
`10924969
`
`
`- 1 -
`
`
`
`
`lacked subject matter jurisdiction. Second, Petitioner does not assert that its
`
`Case IPR2021-00106
`Patent No. 7,381,657
`
`refiled complaint is materially different from the dismissed complaint (and it
`
`isn’t). Further, as in the dismissed first N.D. Cal. action, the Court has
`
`cancelled the hearing on Patent Owner’s motion to dismiss and will decide the
`
`motion on paper. Third, in the refiled N.D. Cal. action, Petitioner has not
`
`requested the court to enjoin the Texas proceedings. These facts undermine
`
`Petitioner’s assertion that the N.D. Cal. action allegedly “favors institution.”
`
`Instead, they show that the N.D. Cal. action does not affect the Texas actions.
`
`Fintiv Factor #2: The Jury Trial Date Remains Unchanged
`Petitioner renews its speculation that the district court will move the trial
`
`date. Reply at 2–3. As it now stands, the trial is still scheduled for December
`
`27, 2021, and Petitioner has not even asked the Court to move the trial date.
`
`The parties thus still have to plan and act as if the case will go on trial then. In
`
`addition, the Board routinely “declines to speculate” as to whether a trial will
`
`take place as scheduled when there are also other scheduled trials on same date.
`
`Cisco Sys., Inc v. Monarch Networking Sols. LLC, IPR2020-01227, Paper 11,
`
`at 10–11 (P.T.A.B. Mar. 4, 2021).
`
`Petitioner also argues that VLSI case scheduling supports its speculation
`
`that the trial will be delayed. Reply at 3. VLSI case was delayed in large part
`
`because Intel sought the Federal Circuit’s intervention to postpone the trial.
`
`10924969
`
`
`- 2 -
`
`
`
`
`Now with guidance from the Federal Circuit, Patent Owner trusts that
`
`Case IPR2021-00106
`Patent No. 7,381,657
`
`Petitioner and the RPIs won’t try the same tactics.
`
`Petitioner’s reference to the case scheduling in N.D. Cal. also does not
`
`help because as explained above, that action currently has no effect on the
`
`scheduling of the Texas actions.
`
` In sum, the Board should accept the scheduled trial date at face value as
`
`it did previously. Fintiv, Paper 15 at 5.
`
`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
`
`apace.1 Although the Markman hearing has now been cancelled until the
`
`completion of briefing of defendants’ transfer motions, the briefing on the
`
`transfer motion will close in April. Patent Owner anticipates that the Markman
`
`hearing will be held and constructions will be given by mid-May before the
`
`deadline for institution (upon which discovery will commence). The parties’
`
`investment will continue to accrue after institution but before the FWD
`
`deadline in preparation for the trial, including completion of fact and expert
`
`
`1 Petitioner contends that Patent Owner miscalculated the dates for final
`
`contentions. Petitioner relies on a revised scheduling order entered after Patent
`
`Owner’s preliminary response was filed. Compare Reply at 4, with Ex. 2005.
`
`10924969
`
`
`- 3 -
`
`
`
`
`discovery (which will surely encompass validity issues), pre-trial motion
`
`Case IPR2021-00106
`Patent No. 7,381,657
`
`practice, trial preparation, trial and post-trial motions. Petitioner does not
`
`dispute that Bentley Motors Ltd. v. Jaguar Land Rover Ltd., IPR2019-01539,
`
`Paper 16, at 9–10 (P.T.A.B. Oct. 2, 2020), appropriately weighed additional
`
`investment by the parties after institution but before the FWD when denying
`
`institution. Factor 3 weighs in favor of denying institution.
`
`Further, there is no evidence that institution or even a FWD could
`
`simplify issues or conserve party or judicial resources. For example, regardless
`
`who invalidates the patent, the effect is the same. Conversely, if the validity of
`
`the patent is upheld, Petitioner will still pursue at least its prior use based
`
`defenses. Institution of the IPR thus will not result in savings of resources that
`
`the parties or the district court will spend.
`
`Fintiv Factor #4: Stipulation Does Not Lessen Overlap Of Issues
`Petitioner’s stipulation fails to eliminate “overlap of issues.” In addition
`
`to reserving the right to reassert “any specific invalidity ground” based on
`
`some perceived change in legal authority, the Texas defendants (RPIs here)
`
`only stipulated that they would not pursue in district court the “specific
`
`invalidity ground instituted by the PTAB” and to not pursue “any invalidity
`
`ground based” on Licata if a trial is ordered. Ex. 2003, 27–30 & n.4. The
`
`stipulation is not enough to obviate concerns relating to overlapping issues,
`
`10924969
`
`
`- 4 -
`
`
`
`
`including because the Texas defendants explicitly reserved the use of a
`
`Case IPR2021-00106
`Patent No. 7,381,657
`
`reference as background art or for other Asserted Patents. Id., 30 n.5. And the
`
`Texas defendants can still raise any of the other cumulative prior art (including
`
`reactors that they contend are used by Licata) disclosed in their invalidity
`
`contentions. Cf. Sotera Wireless, Inc. v. Masimo Corp., IPR 2020-01019,
`
`Paper 12, 13–14 (P.T.A.B. Dec. 1, 2020) (precedential) (endorsing “broad
`
`stipulation” to “not pursue ‘any ground raised or that could have been
`
`reasonably raised’”). The factor weighs in favor of denying institution.
`
`Fintiv Factors #5 and #6
`Petitioner does not dispute Patent Owner’s weighing of Factor #5. As to
`
`factor #6, Petitioner has blatantly disregarded the Court’s order forbidding it to
`
`“reargue the merits of the challenge in the Petition or seek to bolster its
`
`proposed grounds of unpatentability.” Paper 9 at 3. That is improper. The
`
`Board should therefore strike Petitioner’s reply regarding Fintiv factor #6 and
`
`not consider it.2 Petitioner should also be admonished for this conduct.
`
`Dated: March 31, 2021
`
`Respectfully submitted,
`
`
`
`
`
`2 For avoidance of doubt, Patent Owner disagrees with Petitioner’s
`
`/Hong Zhong/
`H. Annita Zhong, Reg. No. 66,530
`
`
`characterization of its alleged acknowledgement or position on the merits.
`
`10924969
`
`
`- 5 -
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`Case IPR2021-00106
`Patent No. 7,381,657
`
`Pursuant to 37 C.F.R. § 42.6, the undersigned certifies that on March 31,
`
`2021, a copy of the foregoing document PATENT OWNER’S SUR-REPLY
`
`TO PETITIONER’S REPLY TO PATENT OWNER’S PRELIMINARY
`
`RESPONSE was served, by electronic mail, as agreed to by the parties, upon
`
`the following:
`
`PAUL HASTINGS LLP
`
`Naveen Modi, Reg. No. 46,224
`PH-Applied_Materials-Demaray-IPR@paulhastings.com
`
`Joseph E. Palys, Reg. No. 46,508
`PH-Applied_Materials-Demaray-IPR@paulhastings.com
`
`Howard Herr (pro hac admission to be requested)
`PH-Applied_Materials-Demaray-IPR@paulhastings.com
`
`
`
`
`
`
`
`
`
`
`
`
`By: /Pia S. Kamath/
` Pia S. Kamath
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`10924969
`
`
`- 6 -
`
`