Trials@uspto.gov
`571-272-7822
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`Paper 15
`Date: July 2, 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.
`
`IPR2021-00381
`Patent 10,491,982 B2
`
`
`Before DAVID C. McKONE, GREGG I. ANDERSON, and
`NORMAN H. BEAMER, Administrative Patent Judges.
`
`ANDERSON, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
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`
`
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`571-272-7822
`
`Paper 15
`Date: July 2, 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.
`
`IPR2021-00381
`Patent 10,491,982 B2
`
`
`Before DAVID C. McKONE, GREGG I. ANDERSON, and
`NORMAN H. BEAMER, Administrative Patent Judges.
`
`ANDERSON, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
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`IPR2021-00381
`Patent 10,491,982 B2
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`I. INTRODUCTION
`Apple, Inc. (“Petitioner”) filed a Petition requesting inter partes
`review of claims 1–5 and 14–20 of U.S. Patent No. 10,491,982 (Ex. 1001,
`“the ’982 patent”). Paper 2 (“Pet.”). Koss Corporation (“Patent Owner”)
`filed a Preliminary Response. Paper 10 (“Prelim. Resp.”). Upon our
`authorization, Petitioner filed a Preliminary Reply relating to discretionary
`denial based on the factors set forth in Apple Inc. v. Fintiv, Inc., IPR2020-
`00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) (“Fintiv”). Paper 11
`(“Prelim. Reply”); see also Section III.A below (Fintiv analysis). Patent
`Owner filed a Preliminary Sur-Reply. Paper 12 (“Prelim. Sur-Reply”).
`We have jurisdiction under 35 U.S.C. § 314. Upon considering the
`record developed thus far, for reasons discussed below, we institute inter
`partes review.
`
`II. BACKGROUND
`A. Real Parties in Interest
`Petitioner states it is the real party-in-interest. Pet. 85. Patent Owner
`states it is the real party in interest. Paper 4 (“Mandatory Notice by Patent
`Owner”), 1; see also Papers 6–9 (Updates to Mandatory Notice).
`B. Related Matters
`Both parties list the related lawsuit alleging infringement of the ’982
`patent, Koss Corporation v. Apple Inc., Case No. 6:20-cv-00665 (W.D.
`Tex.) (“District Court” or “District Court Lawsuit”). Pet. 86. Patent Owner
`lists the District Court Lawsuit and other lawsuits involving the ’982 patent,
`United States applications to which the ’982 patent claims priority, and
`pending inter partes reviews as Related Matters. Paper 9, 1–2.
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`1. Other Lawsuits
`Patent Owner identifies five other lawsuits involving the ’982 patent:
`Koss Corporation v. PEAG LLC d/b/a JLab Audio, Case No. 6:20-cv-00662
`(W.D. Tex.); Koss Corporation v. Skullcandy, Inc., Case No. 6:20-cv-00664
`(W.D. Tex);1 Apple Inc. v. Koss Corporation, Case No. 4:20-cv-05504
`(N.D. Cal.); Koss Corporation v. Apple Inc., Case No. 6-20-cv-00665
`(W.D. Tex.); and Koss Corporation v. Skullcandy, Inc., Case No. 2:21-cv-
`00203 (D. Utah). Paper 9, 1.
`2. United States Applications
`Patent Owner lists the following as Related Applications to which the
`’982 patent claims priority: PCT application No. PCT/US2009/039754,
`filed April 7, 2009 (the “PCT Application”) and provisional application
`Serial No. 61/123,265 filed April 8, 2008 (the “Provisional Application”).
`Paper 9, 1.
`
`3. Inter Partes Review Proceedings
`Patent Owner lists the following inter partes review proceedings2
`challenging patents that claim priority to the PCT Application and the
`Provisional Application:
`
`
`1 We understand this case was transferred to the District of Utah. See Bose
`Corporation v. Koss Corporation, IPR2021-00297, Paper 16, at 11 (PTAB
`June 3, 2021).
`2 Apple Inc. v. Koss Corporation, IPR2021-00255, filed November 25,
`2020, and Apple Inc. v. Koss Corporation, IPR2021-00600, filed March 7,
`2021, both challenging US Patent 10,298,451 B1, and Apple Inc. v. Koss
`Corporation, IPR2021-00686, filed March 22, 2021, challenging US Patent
`10,491,982 B1, are also pending inter partes reviews between these same
`parties.
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`Bose Corporation v. Koss Corporation, IPR2021-00297, filed
`December 7, 2020, challenging US Patent 10,368,155 B2;
`Apple Inc. v. Koss Corporation, IPR2021-00305, filed December 15,
`2020, challenging US Patent 10,506,325 B1;
`Apple Inc. v. Koss Corporation, IPR2021-00546, filed February 22,
`2021, challenging US Patent 10,206,025 B2;
` Apple Inc. v. Koss Corporation, IPR2021-00592, filed March 2,
`2021, challenging US Patent 10,469,934 B2;
`Apple Inc. v. Koss Corporation, IPR2021-00612, filed March 3,
`2021, challenging U.S. Patent 10,206,025;
`Apple Inc. v. Koss Corporation, IPR2021-00626, filed March 17,
`2021, challenging US Patent 10,206,025 B2;
`Bose Corporation v. Koss Corporation, IPR2021-00680, filed March
`17, 2021, challenging US Patent 10,469,934 B2;
`Apple Inc. v. Koss Corporation, IPR2021-00679, filed March 22,
`2021, challenging US Patent 10,506,325 B1; and
`Apple Inc. v. Koss Corporation, IPR2021-00693, filed March 23,
`2021, challenging US Patent 10,469,934 B2.
`Paper 9. 1–2.
`
`C. The ’982 Patent
`The application for the ’982 patent’s earliest priority dates are April
`7, 2009, to the PCT Application and April 8, 2008, to the Provisional
`Application. Ex. 1001, codes (60), (63).
`1. Background Technology
`The ’982 patent explains that wired headphones interconnecting
`headphones and a data storage unit are and “cumbersome.” Ex. 1001, 1:56–
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`59. “Recently, cordless headphones that connect wirelessly via IEEE
`802.11, e.g., via Bluetooth connection, to a laptop or personal computer but
`“such headphones are also quite large and not in-ear type phones.” Id. at
`1:66–2:4; see also Ex. 1003 ¶ 11 (describing Bluetooth as a wireless
`communication employing IEEE 802.11 (WiFi) and IEEE 802.15).
`2. The ’982 Patent’s Wireless Earphones
`The ’982 patent describes and claims “a wireless earphone that
`receives streaming audio data via ad hoc wireless networks and
`infrastructure wireless networks, and that transitions seamlessly between
`wireless networks.” Ex. 1001, 2:64–66. The ’982 patent defines “ad hoc
`wireless network” as “a network where two . . . wireless-capable devices,
`such as the earphone and a data source, communicate directly and
`wirelessly, without using an access point.” Id. at 3:8–14. Two discrete
`wireless earphones are described, each having a body and an “ear canal
`portion for insertion into the canal of the user of the earphone.” Id. at 3:25–
`27, 3:54–56.
`Figure 2A of the ’982 patent is reproduced below.
`
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`Figure 2A illustrates one of the communication modes for the wireless
`earphone.
`
`Ex. 1001, 2:36–38. Figure 2A illustrates a data source 20 in
`communication with earphone 10 over ad hoc wireless network 24. Id. at
`4:33–37. The earphone has a transceiver circuit to communicate wirelessly
`with a data source. Id. at 4:35–37. The data source may be a digital audio
`player (DAP). Id. at 4:39–40. The DAP transmits audio wirelessly to
`earphone(s) via an ad hoc network if the DAP and earphone(s) are “in
`range” of that network. Id. at 4:63–65. “When in range, the data source 20
`may communicate with the earphone 10 via the ad hoc wireless network 24
`using any suitable wireless communication protocol, including Wi-Fi (e.g.,
`IEEE 802.lla/b/g/n), WiMAX (IEEE 802.16), Bluetooth” and other
`communication protocols. Id. at 4:63–5:1.
`D. Illustrative Claim
`Claims 1–5 and 14–20 of the ’982 patent are challenged. Pet. 1, 32–
`85. Claims 2–5 and 14–20 depend directly or indirectly from claim 1. All
`claims are directed to a “system.” Claim 1 is reproduced below as
`illustrative.
`[1.P]3 1. A system comprising:
`
`[1.a] headphones comprising a pair of first and second wireless
`earphones to be worn simultaneously by a user,
`
`
`
`
`3 For purposes of this Decision, we follow Petitioner’s format where each
`claim is identified by claim number followed by a letter or combination of
`letters and Roman numerals for each limitation. See Pet. 32–53 (limitations
`[1.P]–[1.d]).
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`[1.b] wherein the first and second earphones are separate such
`that when the headphones are worn by the user, the first
`and second earphones are not physically connected,
`
`a body portion that comprises:
`
`
`[1.c] wherein each of the first and second earphones
`comprises:
`
`[1.c.i]
`
`
`for
`[1.c.i.A] a wireless communication circuit
`receiving and transmitting wireless signals;
`
`
`[1.c.i.B] a processor circuit in communication with
`the wireless communication circuit; and
`
`[1.c.i.C] an ear canal portion that is inserted into an
`ear of the user when worn by the user; and
`
`[1.c.i.D] at least one acoustic transducer connected to
`the processor circuit; and
`
`
`[1.c.ii]
`
`an elongated portion4 that extends away from
`the body portion such that the elongated portion
`extends downwardly when the ear canal portion
`is inserted in the ear of the user;
`
`
`[1.c.iii] a microphone connected to the processor circuit
`and for picking up utterances of a user of the
`headphones;
`
`
`[1.c.iv] an antenna connected
`communication circuit; and
`
`to
`
`the wireless
`
`
`[1.c.v]
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`a rechargeable power source; and
`
`
`4 Other than the claims, “elongated portion” does not appear in the
`Specification.
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`[1.d] a mobile, digital audio player that stores digital audio
`content and that comprises a wireless transceiver for
`transmitting digital audio content to the headphones via
`Bluetooth wireless communication links, such that each
`earphone receives and plays audio content received
`wirelessly via the Bluetooth wireless communication links
`from the mobile, digital audio player.
`
`
`Ex. 1001, 18:8–40.
`
`E. Evidence of Record
`This proceeding relies on the following prior art references and
`expert testimony:
`Rosener, US 2008/0076489 A1, published Mar. 27, 2008 (Ex.
`1004);
`Hankey, US 2008/166001 A1, published July 10, 2008 (Ex.
`1005);
`Dyer, US 8,031,900 B2, issued Oct. 4, 2001 (Ex. 1006);
`Huddart, US 7,627,289 B2, issued Dec. 1, 2009 (Ex. 1007);
`Hankey Provisional,5 US 60/879,177, filed Jan. 6, 2007 (Ex.
`1008);
`Price, US 2006/0026304 A1, published Feb. 2, 2006 (Ex.
`1009);
`Paulson, US 7,551,940 B2, issued June 23, 2009 (Ex. 1010);
`Marek, US 5,371,454, issued Dec. 6, 1994 (Ex. 1011);
`Vanderelli, US 7,027,311 B2, issued Apr. 11, 2006 (Ex. 1012);
`
`and
`
`
`5 Hankey Provisional is a US provisional application related to Hankey.
`See Ex. 1005 at code (60).
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`35 U.S.C. §6
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`103
`
`Haupt, EP 2006/042749 A2, issued Apr. 27, 2006 (Ex. 1020,
`including English translation).
`Petitioner also relies on the Declaration of Dr. Jeremy Cooperstock
`(“Cooperstock Declaration,” Ex. 1003).
`F. Prior Art and Asserted Grounds
`Petitioner asserts that claims 1–5 and 14–20 would have been
`unpatentable on the following grounds (Pet. 1–2, 18–85):
`Claim(s)
`Challenged
`1, 2, 18–20
`
`Reference(s)/Basis
`Rosener, Hankey or Rosener,
`Hankey, Dyer
`Rosener, Hankey, Haupt or Rosener,
`Hankey, Dyer, Haupt
`Rosener, Hankey, Price or Rosener,
`Hankey, Dyer, Price
`Rosener, Hankey, Paulson or
`Rosener, Hankey, Dyer, Paulson
`Rosener, Hankey, Huddart or
`Rosener, Hankey, Dyer, Huddart
`Rosener, Hankey, Huddart,
`Vanderelli or Rosener, Hankey,
`Dyer, Huddart, Vanderelli
`
`3–5
`
`14
`
`15
`
`16–17
`
`17
`
`
`
`103
`
`103
`
`103
`
`103
`
`103
`
`III. PROCEDURAL ISSUES
`Patent Owner alleges the advanced status of the District Court
`Lawsuit justifies discretionary denial. Prelim. Resp. 1–2. Both parties
`provided additional briefing on the Fintiv factors. See Prelim. Reply;
`
`
`6 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
`Stat. 284, 287–88 (2011), amended 35 U.S.C. §§ 102 and 103, effective
`March 16, 2013. Because the application that resulted in the ’982 patent
`has an effective filing date before this date, the pre-AIA versions of §§ 102
`and 103 apply.
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`Prelim. Sur-Reply. Petitioner also points out that Rosener was cited during
`prosecution, and addresses the issue thus raised under 35 U.S.C. § 325(d).
`Pet. 4–9. Both issues are addressed below.
`A. Discretion to Institute
`The Board has discretion not to institute trial. See 35 U.S.C.
`§§ 314(a) and 324(a) (each authorizing institution of a trial under particular
`circumstances, but not requiring institution under any circumstances);
`37 C.F.R. § 42.208(a) (stating “the Board will authorize the review to
`proceed on all of the challenged claims and on all grounds of
`unpatentability asserted for each claim.”); cf. 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.”);
`Harmonic Inc. v. Avid Tech, Inc., 815 F.3d 1356, 1367 (Fed. Cir. 2016)
`(explaining that under § 314(a), “the PTO is permitted, but never
`compelled, to institute a [inter partes review] proceeding”).
`Our precedential and informative decisions make clear that the Board
`may exercise discretion not to institute a trial before the Board in light of
`the advanced state of ongoing, parallel litigation. See NHK Spring Co. v.
`Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018)
`(precedential) (“NHK Spring”) and Apple Inc. v. Fintiv, Inc., IPR2020-
`00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) (“Fintiv I”); see also
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 (PTAB May 13, 2020)
`(informative) (denying institution in light of an ongoing, parallel district
`court proceeding) (“Fintiv II”); Sand Revolution II, LLC v. Cont’l
`Intermodal Grp. – Trucking LLC, IPR2019-01393, Paper 24 (PTAB
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`June 16, 2020) (informative) (Sand Revolution II) (applying Fintiv I factors
`in light of ongoing, parallel district court litigation and instituting trial).
`In NHK Spring, the Board considered the advanced state of a parallel
`district court proceeding as a factor favoring denial of institution of an inter
`partes review proceeding. NHK Spring at 19–20. The Board later
`identified a non-exclusive list of factors to consider when applying NHK
`Spring to determine if we should exercise discretion to not institute a trial in
`light of a parallel proceeding in an advanced state. Fintiv I at 5–6.
`Neither party contests the facts asserted by the other regarding the
`status of the District Court Lawsuit or other lawsuits pending in the
`Western District of Texas. In determining whether to exercise discretion to
`deny institution under 35 U.S.C. § 314(a), we consider the factors set forth
`in Fintiv I. Fintiv I at 9.
`Factor 1. Whether the court granted a stay or evidence exists that one
`may be granted if a proceeding is instituted.
`The Fintiv panel 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 I, Paper 11 at 6–8.
`Petitioner asserts that a stay of the District Court Lawsuit 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 or represented that it would do so.
`Prelim. Resp. 5–6.
`Determining how the District Court might handle a motion for stay
`that has not yet been filed invites conjecture. It would be improper to
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`speculate, at this stage, what the District Court might do regarding a motion
`to stay, and given the particular circumstances of this case. Accordingly,
`this factor is neutral to the exercise of our discretion. Cf. Sand Revolution
`II (“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.”); Fintiv II, Paper
`15 at 12 (“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”).
`Factor 2. Proximity of the court’s trial date to the Board’s projected
`statutory deadline for a final written decision.
`The District Court has indicated that it “expects to set” April 18,
`2022, as the date for Jury Selection Trial “at the conclusion of the Markman
`Hearing,” which was scheduled for April 22, 2001. Ex. 1016 (District
`Court Lawsuit, Agreed Scheduling Order), 3–4; Pet. 10. 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. 2031, docket entry
`72; see also Agreed [Proposed] Scheduling Order, Ex. 1016, 4 (scheduling
`trial for April 18, 2022).
`Petitioner, pointing to a journal article, contends that the trial date is
`uncertain due to the propensity of the District Court to reschedule trials
`once the PTAB has denied a related petition. Pet. 10–11 (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
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`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.
`Patent Owner responds that the District Court has not rescheduled the
`trial in the District Court Lawsuit (and has a policy against doing so), that
`the District 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. Prelim. Resp.
`6–8 (citing “Docket Report” for District Court Lawsuit (showing absence of
`any motion for extension of trial) (Ex. 2001); “Order Governing
`Proceedings – Patent Case” (Ex. 2002), 6).
`Assuming that April 18, 2022, is in fact the scheduled trial date and
`that date holds, it would be approximately three months prior to our
`expected statutory deadline for a final written decision. Both parties
`speculate as to the likelihood that a trial date set now would later be
`rescheduled in light of circumstances such as docket congestion and the
`global pandemic, with Petitioner arguing that a reschedule is likely and
`Patent Owner arguing the opposite. Pet. 11–12; Prelim. Resp. 8–10.
`Petitioner also points to additional uncertainty because it has filed a motion
`to transfer the District Court Lawsuit. Pet. 11. Patent Owner responds that
`we have declined to speculate on whether or not a motion to transfer will be
`granted. Prelim. Resp. 9 (citing Cisco Sys., Inc. v. Monarch Networking
`Sols. LLC, No. IPR2020-01227, Paper 11 at 10 (PTAB Mar. 4, 2021)).
`We recognize the Board has assessed this factor on a case-by-case
`basis. On one hand, in Fintiv I the Board took the district court’s trial
`schedule at “face value” and declined to question it “absent some strong
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`evidence to the contrary.” Fintiv II, Paper 15 at 12–13. On the other hand,
`in Sand Revolution the Board 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) 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. 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 approximately
`three months before the final decision, this factor weighs slightly towards
`exercising discretion to deny institution.
`Factor 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 I, 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
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`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 two months of receiving Patent Owner’s infringement contentions in
`the District Court. Pet. 12. According to Petitioner, at the time of the
`Petition, the District Court had not issued any substantive orders and claim
`construction briefs had not been served. Id. at 12–13.
`Patent Owner responds that the parties have exchanged preliminary
`infringement and invalidity contentions, and that, by the time of the
`institution decision, the District Court held a Markman hearing on April 23,
`2021,7 and fact discovery will have been open for three months by the
`deadline for mailing the institution decision. Prelim. Resp. 10–11 (citing
`Ex. 1016, 3); see also Claim Construction Order (Ex. 2032). Patent Owner
`argues the fact that the District Court Lawsuit is in its early stages is not
`determinative of the investment factor. Id. at 11 (citing Verizon Bus.
`Network Servs. LLC v. 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 two months after
`receiving Patent Owner’s preliminary infringement contentions in the
`District Court Lawsuit. See “Plaintiff’s Preliminary Infringement
`Contentions” (Ex. 1014); Ex. 1016, 2 (Nov. 6, 2020, date for serving
`preliminary infringement contentions); Paper 5 (according Petition filing
`date of January 4, 2021).
`
`
`7 As noted above, the Markman hearing took place on April 23, 3021. Ex.
`2031, docket entry 72; Ex. 2032.
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`It was reasonable for Petitioner to take about two months after the
`preliminary infringement contentions to prepare and file the Petition. “It 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 I, Paper 11 at 11.
`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 diligent in filing its Petition prior to
`learning which claims it will be facing in the District Court.
`On the current record, the District Court Lawsuit is still in the early
`stages, with very little investment pertaining to the invalidity issues raised
`in the Petition. The District Court Markman order does not include any
`analysis or indication of relevance to any particular claim of invalidity. Ex.
`2032. Indeed, neither party has proposed any terms for construction in this
`proceeding. Pet. 18; see generally Prelim. Resp. (claim construction not
`addressed). 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
`District 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
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`come.”). On the current record, we see little evidence of risk that we will
`duplicate work performed in the District Court Lawsuit, or render
`inconsistent results, should we proceed to a trial.
`On balance, this factor weighs against exercising our discretion to
`deny the Petition. Petitioner has been diligent in filing the Petition, doing
`so without the benefit of Patent Owner’s final identification of claims being
`asserted in the District Court Lawsuit. As mentioned above, the District
`Court has held a Markman hearing but beyond speculation there is no
`indication as to how that order might impact questions of patentability.
`Patent Owner points to no other investment that bears on questions of
`patentability or implicates risk of duplication or inconsistent results
`between the Board and the District Court.
`Factor 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 I, Paper 11 at 12. “Conversely, if the
`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.
`Petitioner argues “at present there is no overlap between the [District
`Court Lawsuit] and any IPR resulting from this petition.” Pet. 13. As a
`result of the District Court “Order Governing Proceedings – Patent Case”
`(Ex. 1015, 10), 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
`
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`dropped from the District Court Lawsuit because of the “likelihood of these
`unaddressed claims being reasserted against future products.” Id.
`Patent Owner responds that this narrowing will not take place until
`January 2022, before which there will be significant opportunity for
`duplication between the District Court Lawsuit and this proceeding.
`Prelim. Resp. 12. Moreover, Patent Owner argues, there may still be
`overlapping issues because Petitioner’s Invalidity Contentions (Ex. 2007)
`include Grounds 1(A), 1(C), and 1(E) exactly as asserted here. Id. at 12–13
`(citing Pet. 1 (Ground 1(A), 1(C) and 1(E)). Id. at 13 (citing Pet. 1
`(Grounds 1(C) and (E)).
`In the District Court Lawsuit, Petitioner
`stipulates that if the Patent Trial and Appeal Board (PTAB)
`institutes this petition on the grounds presented, then the
`Defendant, Apple Inc. (“Apple”), will not seek resolution
`within this litigation of any ground of invalidity that utilizes, as
`a primary reference, US Patent Application Publication No.
`2008/0076489 (“Rosener”), which is the primary reference in
`the grounds asserted in the IPR petition.
`Letter between counsel in the District Court Lawsuit dated March 22, 2021
`(Ex. 2022) (“Stipulation”).
`Petitioner argues the District Court is “fully capable of interpreting
`and enforcing the stipulation.” Prelim. Reply 1–2. In any event, Petitioner
`argues the Stipulation is “case-specific, and in this context, it is clear
`Rosener may not be used in the same way as used in the underlying IPR
`petition.” Id. at 2.
`Patent Owner argues the Stipulation’s characterization of Rosener as
`a “primary reference” requires a determination which is “illusory.” Prelim.
`Resp. 14; see also Prelim. Sur-Reply 1 (citing In re Mouttet, 686 F.3d 1322,
`1333 (Fed. Cir. 2012) (“[C]haracterization . . . of prior art as ‘primary’ and
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`IPR2021-00381
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`‘secondary’ is merely a matter of presentation with no legal significance.”).
`Patent Owner contrasts the Stipulation with the much broader stipulation
`we have found to “better addresses concerns of duplicative efforts and
`potentially conflicting decisions in a more substantial way.” Prelim. Resp.
`15–17 (citing Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019,
`Paper 12 at 18–19 (PTAB Dec. 1, 2020) (precedential) (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). Moreover, Patent Owner argues, a stipulation that requires the
`District Court to interpret its meaning, including the meaning of primary
`reference, invites side litigation. Reply 2.
`According to Fintiv I,
`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
`on the similarity of the claims challenged in the petition to
`those at issue in the district court.
`Fintiv I, Paper 11 at 13.
`Ascertaining the degree of overlap between this proceeding and the
`District Court Lawsuit is speculative given the early stage of the litigation.
`As the Scheduling Order in the District Court Lawsuit 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
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`confers to discuss narrowing the number of claims asserted and prior art
`references at issue to triable limits.”). However, given that the District
`Court has ordered Patent Owner to discuss “significantly narrowing the
`number of claims asserted,” it is likely that this proceeding will address
`claims ultimately not asserted in the District Court Lawsuit, reducing the
`overlap between the two. See Ex. 1016, 3.
`In any case, the 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
`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
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