Trials@uspto.gov
`571-272-7822
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`Paper 22
`Date: June 3, 2021
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`KOSS CORPORATION,
`Patent Owner.
`
`
`IPR2021-00255
`Patent 10,298,451 B1
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`
`
`
`Before DAVID C. MCKONE, GREGG I. ANDERSON,
`and NORMAN H. BEAMER, Administrative Patent Judges.
`
`BEAMER, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
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`571-272-7822
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`Paper 22
`Date: June 3, 2021
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`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`KOSS CORPORATION,
`Patent Owner.
`
`
`IPR2021-00255
`Patent 10,298,451 B1
`
`
`
`
`Before DAVID C. MCKONE, GREGG I. ANDERSON,
`and NORMAN H. BEAMER, Administrative Patent Judges.
`
`BEAMER, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
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`IPR2021-00255
`Patent 10,298,451 B1
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`INTRODUCTION
`I.
`On November 25, 2020, Apple, Inc. (“Petitioner”) filed a Petition
`(“Pet.”) pursuant to 35 U.S.C. §§ 311–319 to institute an inter partes review
`of claims 1–21 of U.S. Patent No. 10,298,451 B1 (“the ’451 patent”).
`Paper 2. On March 8, 2021, Koss Corporation (“Patent Owner”) filed a
`Preliminary Response (“Prelim. Resp.”). Paper 6. Pursuant to our
`authorization, Petitioner and Patent Owner subsequently filed reply and sur-
`reply briefs, respectively, further addressing discretionary denial pursuant to
`35 U.S.C. § 314. Papers 20, 21 (“Reply”; “Sur-Reply”).
`The standard for instituting an inter partes review is set forth in
`35 U.S.C. § 314(a), which provides that an inter partes review may not be
`instituted unless the information presented in the Petition and any
`preliminary response shows that “there is a reasonable likelihood that the
`petitioner would prevail with respect to at least 1 of the claims challenged in
`the petition.”
`For the reasons explained below, we institute an inter partes review as
`to all challenged claims and on all grounds raised in the Petition.
`
`II. BACKGROUND
`A. The ’451 Patent
`The ’451 patent, titled “Configuring Wireless Devices For A Wireless
`Infrastructure Network,” was filed on August 7, 2018, issued on May 21,
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`2019, and lists related continuation applications dating to March 15, 2013.1
`Ex. 1001, codes (54), (22), (45), (63).
`The ’451 patent is directed to “permit[ing] a wireless device to receive
`data wirelessly via an infrastructure wireless network, without physically
`connecting the wireless device to a computer in order to configure it, and
`without having an existing infrastructure wireless network for the wireless
`device to connect to.” Ex. 1001, Abstr. Figure 1 of the ’451 patent is
`reproduced below.
`
`
`1 During prosecution, Applicant asserted an invention date of May 14, 2012,
`and, according to Petitioner, in the Texas litigation, Patent Owner asserts an
`invention date of July 10, 2010. Pet. 8–9 (citing Ex. 1002, 50–57). It is
`unnecessary to determine the applicability of these dates for purposes of this
`Decision, because the effective dates of the references are sufficiently early
`compared to the May 14, 2012, date, and no evidence has been provided in
`the record as to the July 10, 2010 date.
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`Figure 1 is a block diagram depicting earphones 14 which can communicate
`wirelessly with content access point (CAP) 16 via ad hoc communications
`link 18, which can be, for example, a Wi-Fi link or Bluetooth. Id. at 3:1–10.
`The ’451 patent explains that an ad hoc link is a point-to-point network that
`does not utilize preexisting structure such as wireless access points. Id. at
`3:10–15. CAP 16 can be connected to digital audio player (DAP) 20, such
`as a personal MP3 player, or computer 22, such as a laptop, via a USB
`connector. Id. at 3:17–36. Earphones 14 can also connect to access point 24
`via wireless infrastructure link 26. Id. at 3:36–40. The ’451 patent explains
`that a wireless infrastructure link is part of a network that utilizes a wireless
`access point and connects to an Internet service provider, such as Internet
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`28. Id. at 3:40–44. Both computer 22 and access point 24 connect to
`Internet 28. Id. at 3:45–40. Remote servers 30 are also connected to
`Internet 28. Id. at 3:49––50.
`In operation, a user, via computer 22, may connect to the remote
`server system 30 to provision or initialize CAP 16 and earphones 14 for
`initial use, and to otherwise manage CAP 16 and earphones 14. Id. at 3:51–
`–54. Initial operation of earphones 14 involves plugging CAP 16 into
`DAP 20 or computer 22 (generally, “media devices”), enabling CAP 16 to
`transmit media content from the media devices to be played on
`earphones 14. Id. at 4:35–44. Earphones 14 can also be set up to receive
`content from server 30 via Internet 28 and access point 24, which is
`achieved by the user logging into a website via computer 22, with CAP 16
`connected to the computer. Id. at 4:45–5:22. While logged in, the user
`enters access point credentials and information identifying CAP 16 and
`earphones 14, which is stored in the users account on the server, and the
`access point credentials are also transferring to the earphones 14. Id. As
`stated in the ’451 patent:
`This process allows the earphones 14 to be configured for
`infrastructure network (and Internet) access without having to
`physically connect the earphones 14 to the computer 22 to
`configure them and without having an existing different
`infrastructure network that the earphones 14 need to connect to.
`Id. at 5:22–27. The ’451 patent also describes using devices such as video
`players, lighting systems, cameras, manufacturing equipment, medical
`devices, gaming systems, “or any other suitable controllable electronic
`equipment” in place of the earphones. Id. at Figs. 4, 5, 5:66, 6:10–15.
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`B. Illustrative Claim
`Independent claim 1 is reproduced below.
`1. A system comprising:
`a wireless access point;
`an electronic device;
`a mobile computer device that is in communication with
`the electronic device via an ad hoc wireless
`communication link; and
`one or more host servers that are in communication with
`the mobile computer device via the Internet,
`wherein the one or more host servers receive and
`store credential data for an infrastructure wireless
`network provided by the wireless access point,
`wherein:
`the mobile computer device is for transmitting to the
`electronic device, wirelessly via the ad hoc wireless
`communication link between the electronic device
`and the mobile computer device, the credential data
`for the infrastructure wireless network stored by the
`one or more host servers; and
`the electronic device is for, upon receiving the credential
`data for the infrastructure wireless network from the
`mobile computing device, connecting
`to
`the
`wireless access point via the infrastructure wireless
`network using the credential data received from the
`mobile computer device.
`Ex. 1001, 8:30–53.
`
`C. References
`Petitioner relies on the following references (Pet. 1–2):
`• Brown et al., U.S. Pat. No. 9,021,108 B2. Ex. 1004 (“Brown”).
`• Scherzer et al., US 2007/0033197 A1. Ex. 1005 (“Scherzer”).
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`• Baxter et al., US 2007/0245028 A1. Ex. 1008 (“Baxter”).
`• Drader et al., US 2011/0025879 A1. Ex. 1009 (“Drader”).
`• Ramey et al., US 2010/0307916 A1. Ex. 1010 (“Ramey”).
`• Gupta et al., US 2010/0165879 A1. Ex. 1011 (“Gupta”).
`Petitioner also filed the Declaration of Dr. Jeremy Cooperstock in support of
`the Petition. Ex. 1003 (“Cooperstock Decl.”).
`
`D. Asserted Grounds of Unpatentability
`Petitioner challenges the patentability of claims 1–14 of the ’451
`patent on the following grounds (Pet. 1):
`
`Claims Challenged
`1, 6, 11–13, 15–20
`2, 7–10, 21
`3–4
`5
`14
`
`35 U.S.C. §
`103
`103
`103
`103
`103
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`References
`Brown, Scherzer
`Brown, Scherzer, Baxter
`Brown, Scherzer, Drader
`Brown, Scherzer, Ramey
`Brown, Scherzer, Gupta
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`E. Real Parties in Interest
`The parties identify themselves as the real parties in interest. Pet. 78;
`Paper 4, 2.
`
`F. Related Proceedings
`The parties identify Koss Corporation v. Apple Inc., Case No. 6:20-
`cv-00665 (W.D. Tex.) and Apple Inc. v. Koss Corporation, Case No. 5:20-
`cv-05504 (N.D. Cal.) as related matters. Pet. 78; Paper 4, 2.
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`2.
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`III. ANALYSIS
`A. Discretionary Denial Under 35 U.S.C. § 314(a)
`Patent Owner argues the Board should exercise its discretion and deny
`institution for all grounds pursuant to 35 U.S.C. § 314, given the co-
`pendency of the Koss Corporation v. Apple Inc. litigation in Texas, and
`Petitioner opposes this request. Prelim. Resp. 4–18; Pet. 10–16; Reply 1–2.
`Institution of inter partes review is discretionary. See Harmonic Inc.
`v. Avid Tech., Inc., 815 F.3d 1356, 1367 (Fed. Cir. 2016) (“[T]he PTO is
`permitted, but never compelled, to institute an IPR proceeding.”); 35 U.S.C.
`§ 314(a). The Board has held that the advanced state of a parallel district
`court action is a factor that may weigh in favor of denying a petition under
`§ 314(a). See NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752,
`Paper 8 at 20 (PTAB Sept. 12, 2018) (precedential); Patent Trial and Appeal
`Board, Consolidated Trial Practice Guide, 58 & n.2 (Nov. 2019) (“Trial
`Practice Guide”), available at https://www.uspto.gov/sites/default/files/
`documents/tpgnov.pdf. We consider the following factors to assess
`“whether efficiency, fairness, and the merits support the exercise of
`authority to deny institution in view of an earlier trial date in the parallel
`proceeding”:
`1. whether the court granted a stay or evidence exists that
`one may be granted if a proceeding is instituted;
`proximity of the court’s trial date to the Board’s
`projected statutory deadline for a final written decision;
`investment in the parallel proceeding by the court and the
`parties;
`overlap between issues raised in the petition and in the
`parallel proceeding;
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`3.
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`4.
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`6.
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`5. whether the petitioner and the defendant in the parallel
`proceeding are the same party; and
`other circumstances that impact the Board’s exercise of
`discretion, including the merits.
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 at 5–6 (PTAB Mar. 20,
`2020) (precedential) (“Fintiv”). In evaluating these factors, we “take[] a
`holistic view of whether efficiency and integrity of the system are best
`served by denying or instituting review.” Id. at 6. As elaborated below,
`upon consideration of these factors, we decline to exercise our discretion to
`deny the Petition.
`
`1. Whether the court granted a stay or evidence exists that one may be
`granted if a proceeding is instituted
`Fintiv indicated that, in previous Board decisions, the existence of a
`district court stay pending Board resolution of an inter partes review has
`weighed strongly against discretionary denial, while a denial of such a stay
`request sometimes weighs in favor of discretionary denial. Fintiv, Paper 11
`at 6–8.
`Petitioner asserts that a stay of the Texas case would be appropriate if
`we institute an inter partes review, but does not contend that it has filed a
`motion for a stay. Pet. 10. Patent Owner notes that Petitioner has not
`moved for a stay of the Texas case, and argues, based on what it contends
`are similar circumstances, that the Texas court would not grant a stay of the
`Texas case. Prelim. Resp. 5–7.
`However, determining how the Texas court might handle a motion for
`stay that has not yet been filed invites conjecture. It would be improper to
`speculate, at this stage, what the Texas court might do regarding a motion to
`stay, given the particular circumstances of this case. Accordingly, this factor
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`is neutral to the exercise of our discretion. Cf. Sand Revolution II, LLC v.
`Continental Intermodal Group – Trucking LLC, IPR2019-01393, Paper 24 at
`7 (PTAB June 16, 2020) (informative) (“In the absence of specific evidence,
`we will not attempt to predict how the district court in the related district
`court litigation will proceed because the court may determine whether or not
`to stay any individual case, including the related one, based on a variety of
`circumstances and facts beyond our control and to which the Board is not
`privy.”); Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 12 (PTAB
`May 13, 2020) (informative) (“Fintiv II”) (“We decline to infer, based on
`actions taken in different cases with different facts, how the District Court
`would rule should a stay be requested by the parties in the parallel case here.
`This factor does not weigh for or against discretionary denial in this case”).
`
`2. Proximity of the court’s trial date to the Board’s projected statutory
`deadline for a final written decision
`In a November 30, 2020 Scheduling Order, the Texas court indicated
`that it “expect[ed] to set” April 18, 2022, as the date for Jury Selection Trial
`“at the conclusion of the Markman Hearing.” Ex. 1016 (Texas case
`Agreed/Proposed Scheduling Order), 4; Ex. 2004, docket entry 30.2 The
`Markman hearing took place on April 23, 2021, with a minute entry stating
`that “[t]he Court has set the jury trial date of April 18, 2022.” Ex. 3001,
`docket entry 72.
`Assuming that April 18, 2022 is in fact the scheduled trial date, it
`would be less than two months prior to our statutory deadline for a final
`written decision. Both parties speculate as to the likelihood that a trial date
`
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`2 See also Ex. 2001 entered in Apple Inc. v. Koss Corporation, IPR2021-
`00305.
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`set now would later be rescheduled in light of circumstances such as docket
`congestion and the global pandemic, with Petitioner arguing that a delay is
`likely and Patent Owner arguing the opposite. Pet. 11–12; Prelim. Resp. 9–
`12.
`
`In particular, Petitioner, pointing to a journal article, contends that the
`trial date is uncertain due to the propensity of the Texas court to reschedule
`trials once the PTAB has denied a related petition. Pet. 11 (quoting Ex.
`1018, 2 (“In the WDTX, 70% of trial dates initially relied upon by the PTAB
`to deny petitions have slid.”)). The journal article also concludes that “with
`COVID-19 delaying trials scheduled for the last 4–5 months, delays will
`certainly increase further as the courts work through their growing backlog.”
`Ex. 1018, 2.
`In response, Patent Owner cites the court’s statement in its “Order
`Governing Proceedings – Patent Case” that “[a]fter the trial date is set, the
`Court will not move the trial date except in extreme situations.” Prelim.
`Resp. 9 (citing Ex. 2001, 6). Patent Owner also responds that the Texas
`court has not rescheduled the trial in the Texas case (and has a policy against
`doing so), that the article Petitioner refers to was based on a small data set,
`and in any event indicates that relatively small changes in trial dates have
`occurred, that the Texas court has begun holding patent trials despite the
`global pandemic, and that availability of vaccines suggests that any current
`effects of the pandemic on trials will have abated by the trial date. Id. at 9–
`12 (citing Exs. 1018, 2003–2004, 2006–2008).
`We ascribe some uncertainty to the April 18, 2022, trial date, given
`that it is over ten months from now and much can change during this time.
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`Whether the Texas court’s trial takes place before, contemporaneously with,
`or after our final written decision statutory deadline involves speculation.
`The Board has assessed this second factor on a case-by-case basis.
`On one hand, Fintiv took the district court’s trial schedule at “face value”
`and declined to question it “absent some strong evidence to the contrary.”
`Fintiv II, Paper 15 at 12–13. On the other hand, Sand Revolution was
`persuaded by the uncertainty in the schedule (including that caused by the
`parties agreeing to jointly request rescheduling of the trial date on several
`occasions and the global pandemic) despite a scheduled trial date. Sand
`Revolution, Paper 24 at 8–9. Moreover, as recognized in Sand Revolution,
`“even in the extraordinary circumstances under which the entire country is
`currently operating because of the COVID-19 pandemic, the Board
`continues to be fully operational.” Id. at 9.
`This factor looks at the proximity of the trial date to the date of our
`final decision to assess the weight to be accorded a trial date set earlier than
`the expected final written decision date. This proximity inquiry is a proxy
`for the likelihood that the trial court will reach a decision on validity issues
`before the Board reaches a final written decision. Unlike the facts here, a
`trial set to occur soon after the institution decision is fairly likely to happen
`prior to the Board’s final decision, even if the trial date were postponed due
`to intervening circumstances.
`Given that the trial is currently scheduled for less than two months
`before the final decision, and that even then there is at least some persuasive
`evidence that delays are possible, the efficiency and system integrity
`concerns that animate the Fintiv analysis are not strong — this factor at most
`minimally weighs in favor of invoking our discretion to deny institution.
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`3. Investment in the parallel proceeding by the court and the parties
`If, at the time of the institution decision, the district court has issued
`substantive orders related to the challenged patent, such as a claim
`construction order, this fact weighs in favor of denial. See Fintiv, Paper 11
`at 9–10. On the other hand, if the district court has not issued such orders,
`this fact weighs against discretionary denial. Id. at 10. Moreover, in
`evaluating this factor, “[i]f the evidence shows that the petitioner filed the
`petition expeditiously, such as promptly after becoming aware of the claims
`being asserted, this fact has weighed against exercising the authority to deny
`institution under NHK.” Id. at 11 (footnote omitted).
`Focusing on timeliness, Petitioner argues that it filed the Petition
`within three weeks of receiving Patent Owner’s infringement contentions in
`the Texas case. Pet. 12–13. According to Petitioner, at the time of the
`Petition, the Texas court had not issued any substantive orders and claim
`construction briefs had not been served. Id.
`Patent Owner responds that the parties have begun Markman briefing,
`exchanged preliminary infringement and invalidity contentions, and that, by
`the time of the institution decision, the Texas court will have held a
`Markman hearing (on April 22, 2021) and fact discovery will have begun.
`Prelim. Resp. 12. (Indeed, the Markman Hearing took place as scheduled.
`Ex. 3001, docket entry 72.) Patent Owner disputes that Petitioner was
`timely, arguing that Petitioner waited several months from Patent Owner’s
`Complaint in the Texas case to file the Petition. Id. at 13. In any case,
`Patent Owner argues that investment is more important than timeliness in
`evaluating this factor. Id. (citing Verizon Bus. Network Servs. LLC v.
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`Huawei Techs. Co., IPR2020-01292, Paper 13 at 14, 15 (PTAB Jan. 25,
`2021)).
`We find that Petitioner was expeditious in filing its Petition. As
`Petitioner argues, it filed the Petition approximately three weeks after
`receiving Patent Owner’s preliminary infringement contentions in the Texas
`case. See Ex. 1014 (preliminary infringement contentions); Ex. 1016, 2
`(Nov. 6, 2020, date for serving preliminary infringement contentions);
`Paper 3 (according Petition filing date of November 25, 2020). As
`Petitioner notes, Patent Owner’s preliminary infringement contentions
`asserted infringement of all but two claims of the ’451 patent along with
`claims of several other patents. Petition 13 n. 3; Ex. 1014, 4. Thus, it was
`reasonable for Petitioner to take three weeks to prepare its petitions.
`Although, as Patent Owner argues, Petitioner was aware of the ’451 patent
`when it was served with the complaint, Patent Owner’s Complaint merely
`alleged the infringement of “at least claim 1 of the ’451 patent.” See Ex.
`2005 ¶ 90. “[I]t is often reasonable for a petitioner to wait to file its petition
`until it learns which claims are being asserted against it in the parallel
`proceeding. Thus, the parties should explain facts relevant to timing.”
`Fintiv, Paper 11 at 11. Indeed, Patent Owner is not expected to finally state
`which claims it is asserting until after January 20, 2022. Ex. 1016, 3 (Oct.
`21, 2021, “Deadline for the first of two meet and confers to discuss
`significantly narrowing the number of claims asserted and prior art
`references at issue.”), 4 (January 20, 2022, “Deadline for the second of two
`meet and confers to discuss narrowing the number of claims asserted and
`prior art references at issue to triable limits.”). Thus, Petitioner has been
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`diligent in filing its Petition prior to learning which claims it will be facing
`in the Texas case.
`On the current record, the Texas case is still in the early stages, with
`very little investment pertaining to the invalidity issues raised in the Petition.
`Although the Texas court has conducted a Markman hearing, Patent Owner
`does not indicate what relationship the parties’ claim construction disputes
`in the Texas court have to the claim construction and validity issues they
`raise in this proceeding. Indeed, neither party has proposed any terms for
`construction in this proceeding. Fact discovery has just begun, final
`infringement and invalidity contentions are not yet due, and expert discovery
`is months away. Ex. 1016, 3. Patent Owner points to no other investment
`by the parties or the Texas court toward the patentability issues presented
`here. Cf. Sand Revolution, Paper 24 at 11 (“[W]e recognize that much work
`remains in the district court case as it relates to invalidity: fact discovery is
`still ongoing, expert reports are not yet due, and substantive motion practice
`is yet to come.”). On the current record, we see little evidence of risk that
`we will duplicate work performed in the Texas case, or render inconsistent
`results, should we proceed to a trial.
`Because the Texas case is in its early stages and Petitioner
`demonstrated diligence in filing its Petition, this factor weighs against
`exercising discretion to deny the Petition.
`
`4. Overlap between issues raised in the petition and in the parallel
`proceeding
`“[I]f the petition includes the same or substantially the same claims,
`grounds, arguments, and evidence as presented in the parallel proceeding,
`this fact has favored denial.” Fintiv, Paper 11 at 12. “Conversely, if the
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`petition includes materially different grounds, arguments, and/or evidence
`than those presented in the district court, this fact has tended to weigh
`against exercising discretion to deny institution under NHK.” Id. at 12–13.
`As Petitioner notes (Pet. 13, n. 3), Patent Owner asserts all but two
`claims of the ’451 patent against Petitioner in the Texas case (Ex. 1014, 4),
`but is expected, pursuant to the Texas court’s scheduling order, to
`“significantly narrow[] the number of claims asserted” (Ex. 1015, 10). As a
`result, Petitioner argues, “the number of claims adjudicated at the district
`court will likely be significantly less than the number of claims addressed
`here.” Pet. 14. Petitioner asks us to address claims that might be dropped
`from the Texas case because of the “likelihood of these unaddressed claims
`being reasserted against future products.” Id. at 14–15.
`Patent Owner responds that this narrowing will not take place until
`January 2022, before which there will be significant opportunity for
`duplication between the Texas case and this proceeding. Prelim. Resp. 14
`(citing Ex. 1016, 3–4). Moreover, Patent Owner argues, there may still be
`overlapping issues even if there are less overlapping claims. Id.
`In the Texas case, Petitioner:
`stipulates that if the PTAB institutes the petition filed on
`November 25, 2020 (IPR2021-00255) on the grounds
`presented, which are directed against the same patent in suit,
`Apple will not seek resolution within the litigation of any
`ground of invalidity that utilizes, as a primary reference, US
`Patent No. 9,021,108 (“Brown”), which is the primary reference
`in the grounds asserted in the November 25, 2020 petition.
`Ex. 2009, 2. Petitioner acknowledges that the extent of any overlap will be
`difficult to ascertain until the Texas case has progressed further. Reply 1.
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`Nevertheless, with this stipulation, Petitioner argues, “the stipulation
`sufficiently ‘reduces the risks posed by the overlap between the
`Proceedings.’” Id. at 2 (quoting Tide Int’l (USA), Inc. v. UPL NA Inc.,
`IPR2020-01113, Paper 12, 19) (PTAB).
`Patent Owner argues that Petitioner’s stipulation is not as broad as
`that addressed in Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019,
`Paper 12, 18–19 (PTAB) (finding that “a stipulation that, if IPR is instituted,
`they will not pursue in the District Court Litigation any ground raised or that
`could have been reasonably raised in an IPR,” weighed strongly in favor of
`not exercising discretion to deny institution). Prelim. Resp. 15; Sur-Reply 2.
`Patent Owner further argues that Petitioner’s stipulation is “illusory”
`because:
`It applies only when either Brown or Scherzer is used as the
`“primary
`reference”
`in
`the district court.
` However,
`“characterization . . . of prior art as ‘primary’ and ‘secondary’ is
`merely a matter of presentation with no legal significance.” In
`re Mouttet, 686 F.3d 1322, 1333 (Fed. Cir. 2012).
`Sur-Reply 1. Moreover, Patent Owner argues, a stipulation that requires the
`Texas court to interpret its meaning, including the meaning of primary
`reference, invites side litigation. Id, at 1.
`According to Fintiv,
`weighing the degree of overlap is highly fact dependent. For
`example, if a petition involves the same prior art challenges but
`challenges claims in addition to those that are challenged in the
`district court, it may still be inefficient to proceed because the
`district court may resolve validity of enough overlapping claims
`to resolve key issues in the petition. . . . The existence of non-
`overlapping claim challenges will weigh for or against
`exercising discretion to deny institution under NHK depending
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`on the similarity of the claims challenged in the petition to
`those at issue in the district court.
`Fintiv, Paper 11 at 13.
`We agree with both parties (Prelim. Resp. 14; Reply 1) that
`ascertaining the degree of overlap between this proceeding and the Texas
`case is speculative given the early stage of the Texas case. As the
`Scheduling Order in the Texas case makes clear, Patent Owner is not
`obligated to focus its asserted claims until January 2022, and Petitioner is
`not obligated to focus the asserted prior art until then. Ex. 1016, 4 (January
`20, 2022, “Deadline for the second of two meet and confers to discuss
`narrowing the number of claims asserted and prior art references at issue to
`triable limits.”). However, given that the Texas court has ordered Patent
`Owner to discuss “significantly narrowing the number of claims asserted”
`(Ex. 1015, 10), it is likely that this proceeding will address claims ultimately
`not asserted in the Texas case, reducing the overlap between this proceeding
`and the Texas case.
`In any case, Petitioner’s stipulation allays at least some of Patent
`Owner’s concerns of duplication. See Sand Revolution, Paper 24 at 11–12
`(A stipulation that “if the IPR is instituted, Petitioner will not pursue the
`same grounds in the district court litigation” “mitigates to some degree the
`concerns of duplicative efforts between the district court and the Board, as
`well as concerns of potentially conflicting decisions.”). We agree with
`Patent Owner that a stipulation closer to that in Sotera would make overlap
`even less likely. As the Sand Revolution case stated,
`A broader stipulation of that nature, not at issue here, might
`better address concerns regarding duplicative efforts and
`potentially conflicting decisions in a much more substantial
`way. Likewise, such a stipulation might help ensure that an
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`IPR functions as a true alternative to litigation in relation to
`grounds that could be at issue in an IPR. Further still,
`Petitioner could have expressly waived in the district court any
`overlapping patentability/invalidity defenses. Doing so might
`have tipped this factor more conclusively in its favor.
`Sand Revolution, Paper 24, at 12 n.5. Nevertheless, as it did in Sand
`Revolution, this factor “weighs marginally in favor of not exercising
`discretion to deny institution under 35 U.S.C. § 314(a).” Id. at 12; see also
`Tide Int’l, Paper 12 at 17 (“We agree with Petitioner that its stipulation . . . ,
`and subsequent clarification that it will also not pursue ‘iterations . . . that
`treat CN ’588 and JP ’902 as primary references’ . . ., reduces the risk of
`duplicative efforts and potentially conflicting decisions to a degree.”);
`Samsung Elecs. Am., Inc. v. Snik LLC, IPR2020-01428, Paper 10, 12 (PTAB
`Mar. 9, 2021) (A stipulation that the petitioner would “not rely on . . . the
`primary prior-art reference in this proceeding . . . as its primary reference in
`the district-court litigation . . . will likely help to streamline the issues
`somewhat.”).
`
`5. Whether the petitioner and the defendant in the parallel proceeding are
`the same party
`If the petitioner here was unrelated to the defendant in the parallel
`proceeding, that might weigh against discretionary denial. See Fintiv,
`Paper 11 at 13–14. Here, however, Petitioner is the defendant in the parallel
`proceeding. This fact could weigh either in favor of, or against, exercising
`discretion to deny institution, depending on which tribunal was likely to
`address the challenged patent first. Given the current information
`concerning the relative timing of the proceedings, we accord this factor as
`neutral.
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`6. Other circumstances that impact the Board’s exercise of discretion,
`including the merits.
`Additional factors we can consider include the merits.
`For example, if the merits of a ground raised in the petition
`seem particularly strong on the preliminary record, this fact has
`favored institution. In such cases, the institution of a trial may
`serve the interest of overall system efficiency and integrity
`because it allows the proceeding to continue in the event that
`the parallel proceeding settles or fails to resolve the
`patentability question presented in the PTAB proceeding.
`Fintiv, Paper 11 at 14–15 (footnotes omitted).
`As explained below, on the preliminary record, we are persuaded that
`Petitioner has demonstrated a reasonable likelihood that it would prevail
`with respect to its challenge of claims, albeit we have some reservations
`concerning Patent Owner’s argument that Petitioner is relying on improper
`hindsight in its obviousness analysis. Thus, this factor is neutral.
`
`7. Holistic Assessment of Fintiv Factors
`We consider the above factors and take “a holistic view of whether
`efficiency and integrity of the system are best served by denying or
`instituting review.” Fintiv, Paper 11 at 6.
`In particular, trial is currently scheduled less than two months prior to
`our expected final written decision, and whether the Texas court will issue a
`stay upon our institution decision is speculative. Petitioner has been diligent
`in filing its Petition before Patent Owner has finally indicated which claims
`it will assert in the Texas case. Although the Texas court has held a claim
`construction hearing, Patent Owner has not alleged that any matters decided
`during that hearing have any bearing on invalidity. Otherwise, the Texas
`court has yet to invest significantly in validity issues that might overlap with
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`the patentability disputes presented to us. Thus, we are unlikely to duplicate
`work performed by the Texas court or issue inconsistent results. At
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