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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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`APPLE INC.,
`Petitioner,
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`v.
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`KOSS CORPORATION,
`Patent Owner.
`_____________________
`
`CASE: IPR2021-00600
`U.S. PATENT NO. 10,298,451
`_____________________
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`PATENT OWNER’S PRELIMINARY RESPONSE
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`IPR2021-00600
`Patent Owner’s Preliminary Response
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`TABLE OF CONTENTS
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`I.
`II.
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`INTRODUCTION .......................................................................................... 1
`BACKGROUND ............................................................................................ 4
`A.
`’451 Patent ........................................................................................... 4
`B.
`Related Matters .................................................................................... 6
`III. THE BOARD SHOULD DENY INSTITUTION BECAUSE OF CO-
`PENDING LITIGATION INVOLVING THE ’451 PATENT ...................... 7
`A.
`Factor 1: The District Court Has Not Issued a Stay ............................ 8
`B.
`Factor 2: Proximity of the Scheduled Trial Date to the Board’s
`Statutory Deadline for Written Decision ........................................... 10
`Factor 3: The Parties and Court Will Have Invested Substantial
`Resources in the Texas Litigation Prior to the Institution Decision .. 14
`Factor 4: The Issues Raised in the Petition Overlap Substantially with
`Issues Raised in the Texas Litigation ................................................. 17
`Factor 5: Petitioner is a Defendant in the Texas Litigation .............. 20
`Factor 6: Other Considerations That Influence the Board’s Exercise
`of Discretion Weigh in Favor of Denying Institution ........................ 21
`G. Holistic Assessment of Fintiv Factors ............................................... 22
`IV. THE PETITION DOES NOT ESTABLISH A REASONABLE
`LIKELIHOOD THAT THE CHALLENGED CLAIMS WOULD HAVE
`BEEN OBVIOUS ......................................................................................... 24
`A. Overview of the Petition’s Obviousness Analysis ............................. 26
`B.
`Defects In The Petition’s First Example Scenario ............................. 28
`C.
`Defects In The Petition’s Second Example Scenario ......................... 31
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`C.
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`D.
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`E.
`F.
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`Patent Owner’s Preliminary Response
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`E.
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`D.
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`The Examples Do Not Demonstrate a POSITA Would Contemplate
`the Scherzer-Subramaniam Combination .......................................... 36
`The Petition’s Flawed Analysis Obscures Any Comparison of
`Scherzer and Subramaniam to the Challenged Claims ...................... 37
`CONCLUSION ............................................................................................ 38
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`V.
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`ii
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`IPR2021-00600
`Patent Owner’s Preliminary Response
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`TABLE OF AUTHORITIES
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` Page(s)
`
`Cases
`Apple Inc. v. ContentGuard Holdings, Inc.,
`IPR2015-00449, Paper 10, (PTAB July 15, 2015) ............................................ 37
`Apple Inc. v. Fintiv, Inc.,
`IPR2020-00019, Paper 11 (PTAB March 20, 2020) .................................. passim
`Apple Inc. v. Koss Corp.,
`IPR2021-00255, Paper 22 (PTAB June 3, 2021) ....................................... passim
`Apple Inc. v. Koss Corp.,
`IPR2021-00305, Paper 14 (PTAB June 3, 2021) ....................................... passim
`Cisco Sys., Inc. v. Monarch Networking Sols. LLC,
`IPR2020-01226, Paper 11 (PTAB Mar. 4, 2021) .............................................. 20
`Google LLC v. Personalized Media Commc’ns, LLC,
`IPR2020-00724, Paper 19 (PTAB Aug. 31, 2020) .............................................. 8
`Graham v. John Deere,
`383 U.S. 1 (1966) ....................................................................................... passim
`Harmonic Inc. v. Avid Tech.,
`815 F.3d 1356 (Fed. Cir. 2016) ........................................................................... 7
`Intel Corp. v. VLSI Tech. LLC,
`IPR2019-01192, Paper 15 (PTAB Jan. 9, 2020) ................................................. 7
`KSR Int’l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) .......................................................................................... 25
`MediaTek Inc. v. Nippon Tel. and Tel. Corp.,
`IPR2020-01607, Paper 12 (PTAB April 2, 2021) ............................................... 9
`Mintz v. Dietz & Watson, Inc.,
`679 F.3d 1372 (Fed. Cir. 2012) ......................................................................... 37
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`iii
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`Patent Owner’s Preliminary Response
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`In re Mouttet,
`686 F.3d 1322 (Fed. Cir. 2012) ......................................................................... 19
`Nautilus Hyosung Inc. v. Diebold, Inc.,
`IPR2016-00633, Paper 9 (PTAB Aug. 22, 2016) .............................................. 36
`NHK Spring Co. v. Intri-Plex Techs., Inc.,
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) ............................................... 1
`In re NTP, Inc.,
`654 F.3d 1279 (Fed. Cir. 2011) ................................................................... 25, 31
`Plas-Pak Indus., Inc. v. Sulzer Mixpac AG,
`600 Fed. App’x 755 (Fed. Cir. 2015) ................................................................ 34
`In re Ratti,
`270 F.2d 810 (CCPA 1959) ............................................................................... 34
`Samsung Elecs. Co., Ltd. v. Ancora Techs., Inc.,
`IPR2020-01184, Paper 11 (PTAB Jan. 5, 2021) ............................... 8, 18, 20, 21
`Sand Revolution II, LLC v. Continental Intermodal Grp. Trucking LLC,
`IPR2019-01393, Paper 24 (PTAB June 16, 2020) ............................ 9, 12, 13, 23
`In re Schweickert,
`676 F. App’x. 988 (Fed. Cir. 2017) ................................................................... 30
`SK Hynix v. Netlist,
`IPR2020-01421, Paper 10 (Mar. 16, 2021) ....................................................... 15
`Sotera Wireless, Inc. v. Masimo Corp.,
`IPR2020-01019, Paper 12 (PTAB Dec. 1, 2020) .............................................. 20
`Verizon Bus. Network Servs. LLC v. Huawei Techs. Co.,
`IPR2020-01292, Paper 13 (PTAB Jan. 25, 2021) ................................. 15, 16, 21
`Verizon Bus. Network Svs., LLC v. Huawei Tech. Co.,
`IPR2020-01278, Paper 12, 13 (PTAB Jan. 26, 2021) ....................................... 20
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`
`Statutes
`35 U.S.C. § 103 .................................................................................................. 3, 24
`35 U.S.C. § 314 ............................................................................................... passim
`35 U.S.C. § 316 .................................................................................................. 7, 10
`Other Authorities
`37 C.F.R. § 42.107(a) ............................................................................................... 1
`37 C.F.R. § 42.108(c) ............................................................................................... 7
`IPR202-00305, Paper 14 (PTAB June 3, 2021) ....................................................... 9
`IPR2021-00255, Paper 22 (PTAB June 3, 2021) ............................................ passim
`IPR2021-00305, Paper 14 ............................................................................... passim
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`EXHIBIT LISTING
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`Exhibit
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`Description
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`KOSS-2001 Docket Report, Koss Corp. v. Apple Inc., Case 6:20-cv-00665-
`ADA (W.D. Tex.) (as of June 15, 2021)
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`KOSS-2002
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`Joint Claim Construction Statement, Koss Corp. v. Apple Inc., Case
`No. 6:20-cv-00665-ADA, Dkt. 68 (W.D. Tex. Apr. 14, 2021)
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`KOSS-2003 Docket Report, Apple Inc. v. Koss Corp., Case 4:20-cv-05504-JST
`(N.D. Cal.) (as of June 15, 2021)
`
`KOSS-2004 Order Denying Defendant’s Motion to Transfer (Redacted/Public
`version), Koss Corp. v. Apple Inc., Case 6:20-cv-00665-ADA, Dkt.
`76 (April 22, 2021 W.D. Tex.)
`
`KOSS-2005 Order Granting Motion to Transfer, Apple Inc. v. Koss Corp., Case
`No. 20-cv-05504-JST, Dkt. 72 (N.D. Cal. May 12, 2021)
`
`KOSS-2006
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`Joint Motion to Consolidate Cases, Koss Corp. v. Apple Inc., Case
`No. 6:20-cv-00665-ADA, Dkt. 84 (W.D. Tex. June 8, 2021)
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`KOSS-2007 Order Resetting Markman Hearing, Koss Corp. v. Apple Inc., Case
`6:20-cv-00665-ADA, Dkt. 58 (Mar. 24, 2021 W.D. Tex.)
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`KOSS-2008 Claim Construction Order, Koss Corp. v. Apple Inc., Case No.
`6:20-cv-00665-ADA, Dkt. 84 (W.D. Tex. Jun. 2, 2021)
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`KOSS-2009 Order Denying Defendant’s Motion to Transfer, Kerr Machine Co.
`v. Vulcan Industrial Holdings, et al., Case 6:20-cv-00200-ADA,
`Dkt. 76 (W.D. Tex. April 7, 2021)
`
`KOSS-2010 Order Governing Proceedings - Patent Case, Judge Albright, W.D.
`Tex. Waco Division, Feb. 23, 2021
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`KOSS-2011 Petition for Inter Partes Review, IPR2020-00255, Paper 2 (PTAB
`Nov. 25, 2020)
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`vi
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`Exhibit
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`IPR2021-00600
`Patent Owner’s Preliminary Response
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`Description
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`KOSS-2012 R. Davis, “Albright Says He’ll Very Rarely Put Cases On Hold
`For PTAB,” Law 360, May 11, 2021
`(www.law360.com/ip/articles/1381597/albright-says-he-ll-very-
`rarely-put-cases-on-hold-for-ptab?nl_pk=c24deb67-194a-4b6c-
`918a-
`ea02a827e121&utm_source=newsletter&utm_medium=email&ut
`m_campaign=ip) (last accessed Jun. 11, 2021)
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`vii
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`I.
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`INTRODUCTION
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`IPR2021-00600
`Patent Owner Preliminary Response
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`Patent Owner, Koss Corporation (“Koss”), submits this Patent Owner
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`Preliminary Response (“POPR”) pursuant to 37 C.F.R. § 42.107(a) to the Inter
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`Partes Review (“IPR”) petition (“Petition”) filed by Apple Inc. (“Petitioner”) for
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`claims 1-21 (“Challenged Claims”) of U.S. Patent 10,469,451 (“’451 Patent,”
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`APPLE-1001).
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`The Board should deny institution for several reasons.
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`First, institution of the IPR would demand an untimely and inefficient
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`proceeding that would effectively “second guess” the result of a jury trial in
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`concurrent litigation. See NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-
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`00752, Paper 8 at 11–21 (PTAB Sept. 12, 2018) (Precedential); Apple Inc. v. Fintiv,
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`Inc., IPR2020-00019, Paper 11 at 2–3 (PTAB March 20, 2020) (Precedential).
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`Patent Owner is asserting the ’451 Patent against Petitioner in co-pending litigation
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`in the Western District of Texas (“WDTX”). Koss Corp. v. Apple Inc., Case No.
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`6:20-cv-00665-ADA (W.D. Tex.) (“Texas Litigation”). The trial in the Texas
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`Litigation was originally scheduled, and recently confirmed, to commence in April
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`2022 (APPLE-1016, 4; KOSS-2001, 15 (see Dkt. 72)), approximately five months
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`before a Final Written Decision (“FWD”) is expected to issue if the IPR is instituted.
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`Additionally, the Board has already instituted IPR2021-00255, which
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`challenges the very same claims of the ’451 Patent on grounds that raise substantially
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`IPR2021-00600
`Patent Owner Preliminary Response
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`the same art and arguments raised by the present Petition. IPR2021-00255, Paper
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`22 (PTAB June 3, 2021). The only differences are that: (i) Petitioner swapped the
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`“Brown” reference out of the earlier petition in favor of “Subramaniam” in the
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`present Petition; and (ii) Petitioner added a new Ground 1E to the present Petition
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`for two dependent claims, claims 11 and 15. Compare Pet. at 2 to KOSS-2011 at
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`Page 6 of 86 (see diagram below).
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`Grounds in IPR2021-00255
`KOSS-2011, Page 6 of 86
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`Grounds in IPR2021-00600
`Pet. at 2
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`The Board should exercise its discretion not to institute the present IPR in
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`light of the facts that: (i) both the Board and the Texas Litigation district court are
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`already tasked with considering essentially the same issues raised in the present
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`Petition; and (ii) the present Petition is more than three months behind the already-
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`instituted IPR for the ’451 Patent, IPR2021-00255, such that the FWD for the present
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`Petition is not expected until five months after the trial in the Texas Litigation.
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`IPR2021-00600
`Patent Owner Preliminary Response
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`Second, the Board should deny institution under 35 U.S.C. § 314(a) because
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`the Petition does not establish a reasonable likelihood that the challenged claims
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`would have been obvious under 35 U.S.C. § 103. The Petition asserts that
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`independent claims 1 and 18 are unpatentable under § 103 over a combination of
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`Scherzer (APPLE-1004) and Subramaniam (APPLE-1005); and the grounds for the
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`dependent claims build on the Scherzer-Subramaniam combination for the
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`independent claims. The Petition provides two example scenarios allegedly
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`demonstrating the advantages of the Scherzer-Subramaniam combination. See Pet.
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`at 32-35. The Petition’s two example scenarios, however, include unnecessary
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`requirements, are inconsistent with the references themselves, and are inconsistent
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`with the Petition’s alleged motivation to combine the references, as demonstrated
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`below. The deficiencies in the Petition’s two examples reveal that the Petition used
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`the independent claims as a roadmap to piece together the prior art. The Petition’s
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`obviousness analysis was susceptible to such a backwards approach because it did
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`not follow the proper legal framework for assessing obviousness under Graham v.
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`John Deere, 383 U.S. 1 (1966). The Petition fails to establish a reasonable likelihood
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`that Petitioner will prevail with respect to any Challenged Claim because the Petition
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`follows an improper obviousness analysis.
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`Patent Owner Preliminary Response
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`These reasons are independent and the Board can deny institution for either
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`of these reasons.
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`II. BACKGROUND
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`A.
`’451 Patent
`Wi-Fi consumer devices are increasing in popularity. One issue in using a
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`Wi-Fi consumer device is configuring the device to connect to an infrastructure Wi-
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`Fi network, i.e., a Wi-Fi network that is accessed via an access point and connected
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`to an Internet service provider. APPLE-1001, 3:40-44. Conventionally, Wi-Fi
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`consumer devices were provisioned with the log-on credentials for an infrastructure
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`Wi-Fi network by plugging the Wi-Fi consumer device into a computer and then
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`transferring the log-on credentials from the computer to the Wi-Fi consumer device.
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`The credentials can comprise the name/ID (e.g., SSID), password and/or encryption
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`type for the network. Id., 5:13-16.
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`This is often a cumbersome process that presents several challenges. For
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`example, a computer to plug the Wi-Fi consumer device may not be available, or the
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`Wi-Fi consumer device may be too small to have a port for a plug to the computer.
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`The ’451 Patent solves this problem by providing a way “for configuring a wireless
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`device to communicate via an infrastructure wireless network, such as an
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`infrastructure Wi-Fi network, without having to physically plug the wireless device
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`into a computer to configure” the wireless device, “and without having to have an
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`existing infrastructure wireless connection to the wireless device.” APPLE-1001,
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`2:51-58. The system and process could be used to “initially operate” the wireless
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`device, e.g. “out of the box.” Id. 4:35-36.
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`The ’451 Patent includes twenty-one (21) claims, of which claims 1 and 18
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`are independent. Claim 1 recites a system comprising a wireless access point, the
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`electronic device, a mobile computer device that is in communication with the
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`electronic device via an ad hoc wireless communication link, and one or more host
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`servers that are in communication with the mobile computer device via the Internet.
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`The electronic device could be wireless earphones, a video player, a lighting system,
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`a camera, a medical device, or a gaming system, for example. Id., 2:51-67, 6:10-15.
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`The one or more host servers receive and store the credential data for an
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`infrastructure wireless network provided by the wireless access point. According to
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`claim 1, the mobile computer device is for transmitting to the electronic device,
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`wirelessly via the ad hoc wireless communication link between the electronic device
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`and the mobile computer device, the credential data for the infrastructure wireless
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`network stored by the one or more host servers. The electronic device is for, upon
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`receiving the credential data for the infrastructure wireless network from the mobile
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`computing device, connecting to the wireless access point via the infrastructure
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`wireless network using the credential data received from the mobile computer
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`device.
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`IPR2021-00600
`Patent Owner Preliminary Response
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`The Petition raises six total grounds, Grounds 1(A)–1(F), which collectively
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`allege that the Challenged Claims would have been obvious over various
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`combinations of Scherzer, Subramaniam, Baxter, Drader, Ramey, Montemurro, and
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`Gupta. Pet. at 2.
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`B. Related Matters
`Patent Owner is asserting the ’451 Patent, along with four other patents,
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`against Petitioner in the Texas Litigation. KOSS-2002. Petitioner filed two IPRs
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`for each of the five patents asserted against Petitioner in the Texas Litigation.
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`IPR2021-00255 (also for the ‘451 Patent); IPR2021-00305; IPR2021-00381;
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`IPR2021-00546; IPR2021-00592; IPR2021-00600 (the Petition at issue in this
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`POPR); IPR2021-00626; IPR2021-00679; IPR2021-00686; and IPR2021-00693.
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`The Board instituted the IPRs for IPR2021-00255 and IPR2021-000305 on June 3,
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`2021. IPR2021-00255, Paper 22; IPR2021-00305, Paper 14. The Board has not
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`rendered institution decisions yet in the other IPRs.
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`In the Texas Litigation, the district court held a Markman hearing on April 23,
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`2021 and issued the claim construction ruling on June 2, 2021. KOSS-2001, 14
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`(Dkt. 58), 15 (Dkt. 72), 16 (Dkt. 83); KOSS-2007; KOSS-2008. The district court
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`has scheduled the trial to start on April 18, 2022. APPLE-1018, 4; KOSS-2001, 15
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`(Dkt. 72) (“The Court has set the Jury Trial date of April 18, 2022”).
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`IPR2021-00600
`Patent Owner Preliminary Response
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`Petitioner filed a declaratory judgement action pertaining to the five asserted
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`patents (including the ’451 Patent) in the Northern District of California (“NDCal”).
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`KOSS-2003. The district court in the NDCal granted Patent Owner’s motion to
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`transfer the NDCal case to the WDTX. The litigants recently filed a motion in the
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`WDTX to consolidate Patent Owner’s case and the declaratory judgment action
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`before Judge Albright in the WDTX. KOSS-2006.
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`III. THE BOARD SHOULD DENY INSTITUTION BECAUSE OF CO-
`PENDING LITIGATION INVOLVING THE ’451 PATENT
`The Board “is permitted, but never compelled, to institute an IPR proceeding.”
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`Harmonic Inc. v. Avid Tech., 815 F.3d 1356, 1367 (Fed. Cir. 2016); see also 35
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`U.S.C. § 314(b) (“Director shall determine whether to institute an inter partes review
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`….”); 37 C.F.R. § 42.108(c) (“Inter partes review shall not be instituted unless the
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`Board decides that the information presented in the petition demonstrates that there
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`is a reasonable likelihood that at least one of the claims challenged in the petition is
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`unpatentable.”). The Board may apply this discretion in consideration of “the
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`integrity of the patent system, [and] the efficient administration of the Office ….”
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`35 U.S.C. § 316(b). The Board has denied institution “to minimize the duplication
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`of work by two tribunals to resolve the same issue.” Intel Corp. v. VLSI Tech. LLC,
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`IPR2019-01192, Paper 15 at 11 (PTAB Jan. 9, 2020).
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`In Fintiv, the Board outlined six factors that inform its decision “to deny
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`institution in view of an earlier trial date in [a] parallel proceeding.” IPR2020-
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`00019, Paper 11 at 6. The Board weighs and considers the holistic effect of each of
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`the following factors: (1) whether the court granted a stay or evidence exists that one
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`may be granted if a proceeding is instituted; (2) proximity of the court’s trial date to
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`the Board’s projected statutory deadline for a final written decision; (3) investment
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`in the parallel proceeding by the court and the parties; (4) overlap between issues
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`raised in the petition and in the parallel proceeding; (5) whether the petitioner and
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`the defendant in the parallel proceeding are the same party; and (6) other
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`circumstances that impact the Board’s exercise of discretion, including the merits
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`(collectively, “Fintiv factors”). Id. at 5–15.
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`The Fintiv factors collectively justify denial of the Petition because the ’451
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`Patent is being asserted presently against Petitioner in the Texas Litigation. Denying
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`institution of the IPR is consistent with recent Board decisions, preserves the
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`integrity of the patent system, promotes the efficient administration of Office
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`resources, and minimizes duplicative work by two different tribunals. See id.;
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`Samsung Elecs. Co., Ltd. v. Ancora Techs., Inc., IPR2020-01184, Paper 11 at 18
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`(PTAB Jan. 5, 2021); Google LLC v. Personalized Media Commc’ns, LLC,
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`IPR2020-00724, Paper 19 at 6, 11 (PTAB Aug. 31, 2020).
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`A.
`Factor 1: The District Court Has Not Issued a Stay
`When a Petitioner represents it will move to stay a district court lawsuit if
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`institution is granted, the first Fintiv factor should be viewed as neutral. See Sand
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`IPR2021-00600
`Patent Owner Preliminary Response
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`Revolution II, LLC v. Continental Intermodal Grp. Trucking LLC, IPR2019-01393,
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`Paper 24 at 7 (PTAB June 16, 2020); MediaTek Inc. v. Nippon Tel. and Tel. Corp.,
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`IPR2020-01607, Paper 12 at 12 (PTAB April 2, 2021) (“Petitioner represents it will
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`move to stay the District Court Lawsuit if institution is granted but does not know
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`how the District Court will rule … [t]hus, this factor should be viewed as neutral.”).
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`Petitioner represented that it will move to stay the Texas Litigation if
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`institution is granted. Pet. at 11. However, in related proceedings IPR2021-00255
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`and IPR2021-00305, Petitioner has not moved to stay the Texas Litigation, even
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`though institution was granted. IPR2021-00255, Paper 22 (PTAB June 3, 2021);
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`IPR2021-00305, Paper 14 (PTAB June 3, 2021).
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`Even if Petitioner eventually moves to stay the Texas Litigation, it is highly
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`unlikely that Judge Albright will grant such a motion. During his two and a half
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`years on the bench, Judge Albright, by his own admission, has only put “one or two”
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`cases on hold so that the Board can review the patent, absent a joint motion to stay.
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`KOSS-2012. Judge Albright explained that he granted those “one or two” motions
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`to stay because the plaintiff had earlier sued other defendants on the same patent in
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`a different district and those other defendants had their petitions instituted, such that
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`IPRs were well underway by the time patent owner filed the later complaints in the
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`Western District of Texas. Id. These circumstances are not present in the Texas
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`IPR2021-00600
`Patent Owner Preliminary Response
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`Litigation.
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`In fact, in the Texas Litigation, claim construction is complete and fact
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`discovery has commenced (APPLE-1016, 3), which, according to Judge Albright,
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`indicates that the Texas Litigation is in a later stage and warrants the preservation of
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`a trial date in spite of institution. KOSS-2009 (Judge Albright denying defendant’s
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`motion to transfer) (citing Cf. Freescale Semiconductor, Inc. v. Amtran Tech. Co.,
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`Ltd., A-12-CV-644-LY, 2014 WL 12570609, at *3 (W.D. Tex. Feb. 10, 2014)).
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`Accordingly, even though Petitioner represented that it intends to move to stay
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`the Texas Litigation if institution is granted, Pet. at 11, the Texas Litigation has
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`progressed beyond the point that Judge Albright will grant such a motion. The first
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`Fintiv factor, therefore, weighs in favor of discretionary denial of institution and, at
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`a minimum, should be viewed merely as neutral.
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`B.
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`Factor 2: Proximity of the Scheduled Trial Date to the Board’s
`Statutory Deadline for Written Decision
`The institution decision will issue by September 16, 2021. 35 U.S.C.
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`§ 314(b)(1). If instituted, the FWD will issue by September 16, 2022. 35 U.S.C.
`
`§ 316(a)(11). The trial in the Texas Litigation, however, is scheduled for April 18,
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`2022 (APPLE-1016, 4; KOSS-2001, 15, Dkt. 72), five months prior to the FWD if
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`the IPR is instituted.
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`IPR2021-00600
`Patent Owner Preliminary Response
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`According to Petitioner, “[t]he current trial date is particularly uncertain since
`
`Apple has moved to transfer the case to another venue, and thus, should not be given
`
`any significant weight.” Pet. at 14. However, Judge Albright recently denied
`
`Petitioner’s motion to transfer (KOSS-2004) and the district court in the NDCal
`
`transferred the declaratory judgment action filed by Petitioner to the WDTX (KOSS-
`
`2005). Petitioner and Patent Owner have jointly moved to consolidate the two cases
`
`before Judge Albright in the WDTX (KOSS-2006) and thus, the Texas Litigation
`
`will not be moved to another venue.
`
`Petitioner also asserts, “[t]rial dates upward of six months before the FWD are
`
`insufficient to deny institution.” Pet. at 12. The Board, however, has not established
`
`a bright line rule for the duration of the gap between the trial and the FWD.
`
`Moreover, “[the] 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.” Apple Inc. v Koss Corporation, IPR2021-00255, Paper 22 at 12 (PTAB
`
`June 3, 2021) (evaluating a three-month gap between trial and expected FWD).
`
`In two recent institution decisions involving Petitioner, Patent Owner, and two
`
`patents that are also involved in the Texas Litigation, the Board found that a less
`
`than two-month gap between the trial and the expected FWD “at most minimally
`
`weighs in favor of invoking our discretion to deny institution” and, ultimately, did
`
`
`- 11 -
`
`
`
`
`not deny institution under Fintiv. IPR2021-00255, Paper 22 at 12; IPR2021-00305,
`
`IPR2021-00600
`Patent Owner Preliminary Response
`
`Paper 14 at 13-14. The facts have changed, however, with respect to the present
`
`Petition such that the Board’s analysis in those two institution decisions are less
`
`applicable to the present Petition for two major reasons.
`
`First, the gap between the trial and the expected FWD date is approximately
`
`five-months for this Petition, significantly larger than the gap considered by the
`
`Board in IPR2021-00255 and IPR2021-00305. Although the Board in Sand
`
`Revolution found that a five-month gap can “marginally” favor institution, the
`
`factual circumstances in the Texas Litigation are substantially different and favor
`
`discretionary denial of institution. In Sand Revolution, the litigants requested, and
`
`the district court granted, numerous extensions to the scheduling order, which
`
`rendered the five-month gap insufficient to mitigate the uncertainty of the scheduled
`
`trial date:
`
`For the reasons above, particularly because of the number of times the
`parties have jointly moved for and the district court agreed to extend
`the scheduling order dates, the inclusion of the qualifier “or as
`available” for each calendared trial date, that the currently scheduled
`trial date is in relatively close proximity to the expected final decision
`in this matter, and the uncertainty that continues to surround the
`scheduled trial date, we find that this factor weighs marginally in favor
`of not exercising discretion to deny institution under 35 U.S.C.
`§ 314(a).
`
`
`
`Sand Revolution, IPR2019-01393, Paper 24 at 9–10 (emphases added).
`
`- 12 -
`
`
`
`
`
`IPR2021-00600
`Patent Owner Preliminary Response
`
`The Board must assess this second factor on a case-by-case basis (IPR2021-
`
`00255, Paper 22 at 12) and in the Texas Litigation, the parties have not sought, and
`
`the district court has not granted, any extensions to the trial date—let alone “the
`
`number of times,” as was the case in Sand Revolution. IPR2019-01393, Paper 24 at
`
`9; see also KOSS-2001 (docket report from Texas Litigation showing absence of
`
`any motion for extension of trial).
`
`Second, the likelihood of the trial taking place in April 2022 is greater now in
`
`light of recent events, including:
`
`1) The District Court confirmed that the “Court has set the Jury Trial date
`
`of April 18, 2022” in the Minute Entry from the Markman hearing, held April 23,
`
`2021. KOSS-2001, 15 (Dkt. 72). This statement by the Court affirms the trial date
`
`sent in the original Scheduling Order. APPLE-1016, 4.
`
`2) As noted above, Petitioner moved to transfer the Texas Litigation to
`
`NDCal. KOSS-2001, 12 (Dkt. 34). Petitioner also filed a declaratory judgment
`
`action in the NDCal. KOSS-2003. However, the district court in the Texas
`
`Litigation recently denied Petitioner’s motion to transfer the WDTX case to NDCal
`
`(KOSS-2004) and the district court in the NDCal case transferred the NDCal case to
`
`the WDTX. KOSS-2003, 10; KOSS-2005. Thus, the trial date is unlikely to move
`
`
`- 13 -
`
`
`
`
`because of a transfer to another venue.1
`
`IPR2021-00600
`Patent Owner Preliminary Response
`
`3) Judge Albright recently expressed confidence in his court’s ability to
`
`maintain a trial schedule despite his heavy caseload. In denying Petitioner’s motion
`
`to transfer, Judge Albright remarked that the rate at which the WDTX disposes of
`
`patent cases makes it unlikely that the trial date will change despite the high caseload
`
`for patent cases in the WDTX. KOSS-2004, 25-26.
`
`The recent developments corroborate Judge Albright’s recently issued
`
`standing order governing patent cases, which states “[a]fter the trial date is set, the
`
`Court will not move the trial date except in extreme situations.” KOSS-2010, 5.
`
`Accordingly, there is less uncertainty here than in the two prior institution
`
`decisions (IPR2021-00255 and IPR2021-00305) that the Texas Litigation trial will
`
`occur prior—five months prior—to the FWD if the IPR is instituted. Thus, Fintiv
`
`factor two weighs in favor of denying institution.
`
`C.
`
`Factor 3: The Parties and Court Will Have Invested Substantial
`Resources in the Texas Litigation Prior to the Institution Decision
`“[D]istrict court claim construction orders may indicate that the court and
`
`
`1 Petitioner recently petitioned to the Federal Circuit for a writ of mandamus in light
`
`of the denial of the motion to transfer. See In re Apple, Inc., Case No. 21-147 (Fed.
`
`Cir.).
`
`
`- 14 -
`
`
`
`
`parties have invested sufficient time in the parallel proceeding to favor denial.”
`
`IPR2021-00600
`Patent Owner Preliminary Response
`
`Fintiv, IPR2020-00019, Paper 11 at 9–10. The Fintiv analysis also considers “the
`
`amount and type of [all] work already completed” to determine whether “the parallel
`
`proceeding is more advanced ... and instituting would lead to duplicative costs.” Id.
`
`In the Texas Litigation, the time-consuming claim construction process is
`
`already complete. The district court held the Markman hearing on April 23, 2021
`
`(KOSS-2007) and Judge Albright issued the Claim Construction Order on June 2,
`
`2021. KOSS-2008. Further, the Board has explained that “the appropriate time to
`
`evaluate the investment of the parties in [a] Parallel Proceeding is at the time of the
`
`institution decision and not at the time of the filing of the petition.” Verizon Bus.
`
`Network Servs. LLC v. Huawei Techs. Co., IPR2020-01292, Paper 13 at 14 (PTAB
`
`Jan. 25, 2021). The litigants’ workload in the Texas Litigation is only going to
`
`increase leading up to the institution decision now that the Markman process is
`
`complete. See e.g., SK Hynix v. Netlist, IPR2020-01421, Paper 10 at 9-10 (Mar. 16,
`
`2021) (“most of the work in a patent case occurs after the Markman hearing.”).
`
`For example, factual discovery opened on April 23, 2021 and closes
`
`November 4, 2021; it will be substantially complete by the institution decision date.
`
`The litigants’ final infringement and invalidity contentions are also due June 17,
`
`2021 (APPLE-1016, 3), and by the time of the Board’s institution decision, the
`
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`- 15 -
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`
`
`
`litigants are likely to have spent considerable resources preparing their initial expert
`
`IPR2021-00600
`Patent Owner Preliminary Response
`
`reports, which are due a mere two months after the institution decision deadline.
`
`APPLE-1016, 3 (opening expert reports due November 19, 2021). The Board has
`
`found that similar invest
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