Trials@uspto.gov
`571-272-7822
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`Paper 9
`Date: September 1, 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.
`
`
`IPR2021-00600
`Patent 10,298,451 B1
`
`
`
`
`Before PATRICK R. SCANLON, DAVID C. MCKONE,
`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 9
`Date: September 1, 2021
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`KOSS CORPORATION,
`Patent Owner.
`
`
`IPR2021-00600
`Patent 10,298,451 B1
`
`
`
`
`Before PATRICK R. SCANLON, DAVID C. MCKONE,
`and NORMAN H. BEAMER, Administrative Patent Judges.
`
`BEAMER, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`
`
`
`IPR2021-00600
`Patent 10,298,451 B1
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`
`INTRODUCTION
`I.
`On March 7, 2021, 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 June 15, 2021, Koss Corporation (“Patent Owner”) filed a Preliminary
`Response (“Prelim. Resp.”). Paper 7.
`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
`The ’451 Patent
`A.
`The ’451 patent, titled “Configuring Wireless Devices For A Wireless
`Infrastructure Network,” was filed on August 7, 2018, issued on May 21,
`2019, and lists related continuation applications dating to March 15, 2013.1
`Ex. 1001, codes (54), (22), (45), (63).
`
`
`1 During prosecution, Applicant asserted an invention date of May 14, 2012,
`and, according to Petitioner, in co-pending district court litigation, Patent
`Owner asserts an invention date of July 12, 2010. Pet. 1; Ex. 1016, 4. No
`evidence has been provided in the record as to the July 12, 2010, date. In
`any event, it is unnecessary to determine the applicable priority date for
`purposes of this Decision, because, on the current record, the thus-far
`2
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`Patent 10,298,451 B1
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`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.
`
`
`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.
`
`unchallenged asserted effective dates of the references are sufficiently early
`compared to the asserted July 12, 2010, date.
`3
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`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, or it can be integrated into either of those devices. 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. Id. at 3:40–44. Both computer
`22 and access point 24 connect to communications network 28, which can be
`the Internet. Id. at 3:45–49. Remote servers 30 are also connected to the
`Internet. 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 connecting CAP 16 to
`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 user’s account on the server, and the
`access point credentials are also transferred to earphones 14. Id. As stated
`in the ’451 patent:
`
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`4
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`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.
`
`Illustrative Claim
`B.
`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
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`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.
`
`References
`C.
`Petitioner relies on the following references (Pet. 2):
`• Scherzer et al., US 2007/0033197 A1. Ex. 1004 (“Scherzer”).
`• Subramaniam, US 2011/0289229 Al. Ex. 1005 (“Subramaniam”).
`• Baxter et al., US 2007/0245028 A1. Ex. 1009 (“Baxter”).
`• Drader et al., US 2011/0025879 A1. Ex. 1010 (“Drader”).
`• Ramey et al., US 2010/0307916 A1. Ex. 1011 (“Ramey”).
`• Gupta et al., US 2010/0165879 A1. Ex. 1012 (“Gupta”).
`• Montemurro et al., US 9,949,305 B2. Ex. 1013 (“Montemurro”).
`Petitioner also filed the Declaration of Dr. Jeremy Cooperstock in support of
`the Petition. Ex. 1003 (“Cooperstock Decl.”).
`
`Asserted Grounds of Unpatentability
`D.
`Petitioner challenges the patentability of claims 1–21 of the ’451
`patent on the following grounds (Pet. 2):
`
`Claims Challenged
`1, 6, 12, 13, 16–20
`2, 7–10, 21
`
`35 U.S.C. §
`103
`103
`
`3–4
`
`5
`
`
`
`103
`
`103
`
`6
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`References
`Scherzer, Subramaniam
`Scherzer, Subramaniam,
`Baxter
`Scherzer, Subramaniam,
`Drader
`Scherzer, Subramaniam,
`Ramey
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`11, 15
`
`14
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`103
`
`103
`
`Scherzer, Subramaniam,
`Montemurro
`Scherzer, Subramaniam,
`Gupta
`
`Real Parties in Interest
`E.
`The parties identify themselves as the real parties in interest. Pet. 80;
`Paper 3, 1.
`
`Related Proceedings
`F.
`The parties identify Koss Corp. v. Apple Inc., Case No. 6:20-cv-00665
`(W.D. Tex.) (“the Texas case”), Apple Inc. v. Koss Corp., Case No. 5:20-cv-
`05504 (N.D. Cal.), and Apple Inc. v. Koss Corp., IPR2021-00255
`(“IPR255”) as related matters. Pet. 81; Paper 3, 1; Paper 6, 2.
`
`III. ANALYSIS
`A. Discretion Under 35 U.S.C. § 314(a) Based on Multiple Petitions
`Patent Owner argues that we should exercise discretion and deny the
`Petition in this proceeding under 35 U.S.C. § 314(a), given that the Board
`has already instituted IPR255, challenging the same patent claims based on
`significant overlap of prior art references. Prelim. Resp. 1–2.
`The Board has discretion on whether to institute inter partes review.
`See SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1356 (explaining that section
`“314(a) invests the Director with discretion on the question whether to
`institute review” (emphasis omitted)); 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
`
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`§ 314(a), “the PTO is permitted, but never compelled, to institute an IPR
`proceeding”); see also 37 C.F.R. § 42.4(a) (“The Board institutes the trial on
`behalf of the Director.”).
`When determining whether to exercise our discretion under § 314(a)
`in a “serial petition” situation, we may consider the following non-exhaustive
`factors:
`
`4.
`
`1. whether the same petitioner previously filed a petition directed
`to the same claims of the same patent;
`2. whether at the time of filing of the first petition the petitioner
`knew of the prior art asserted in the second petition or should
`have known of it;
`3. whether at the time of filing of the second petition the petitioner
`already received the patent owner’s preliminary response to the
`first petition or received the Board’s decision on whether to
`institute review in the first petition;
`the length of time that elapsed between the time the petitioner
`learned of the prior art asserted in the second petition and the
`filing of the second petition;
`5. whether the petitioner provides adequate explanation for the
`time elapsed between the filings of multiple petitions directed
`to the same claims of the same patent;
`the finite resources of the Board; and
`the requirement under 35 U.S.C. § 316(a)(11) to issue a final
`determination not later than 1 year after the date on which the
`Director notices institution of review.
`Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper
`19 at 15–16 (PTAB Sept. 6, 2017) (precedential). The General Plastic
`factors are not dispositive, but part of a balanced assessment of the relevant
`circumstances in a proceeding, including the merits. See Patent Trial and
`Appeal Board, Consolidated Trial Practice Guide, 58 (Nov. 2019) (“Trial
`
`6.
`7.
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`8
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`Practice Guide”), available at https://www.uspto.gov/sites/default/files/
`documents/tpgnov.pdf.
`In addition, in deciding whether to exercise discretion to deny
`institution when a petitioner files two or more petitions challenging the same
`patent, we consider guidance in the Trial Practice Guide, which provides that
`“one petition should be sufficient to challenge the claims of a patent in most
`situations” and that “multiple petitions by a petitioner are not necessary in
`the vast majority of cases.” Trial Practice Guide 59. The Trial Practice
`Guide provides that “the Board recognizes that there may be circumstances
`in which more than one petition may be necessary” and that “two petitions
`by a petitioner may be needed, although this should be rare.” Id.
`Considering the above factors:
`1. This Petition is directed to the same claims as IPR255, filed
`November 25, 2020. Pet. 2; IPR255, Paper 2, 1.
`2. Petitioner represents that the new reference, Subramaniam, was
`found in a search conducted after November 6, 2020, when it
`first learned that Patent Owner was asserting an invention date
`of July 12, 2010, rather than the previously asserted invention
`date of May 14, 2012. Pet. 8–9.
`3. This Petition was filed March 7, 2021, before Patent Owner
`filed its Preliminary Response in IPR255 on March 8, 2021.
`Paper 2; IPR255 Paper 6.
`4. This Petition was filed less than four months after IPR255.
`Pet. 10.
`5. Petitioner explains that this Petition relies on the Subramaniam
`reference, located in the above-referenced search, with an
`asserted priority date of May 5, 2010 — the reliance motivated
`by Patent Owner’s November 6, 2020, new assertion in its
`preliminary infringement contentions of a July 12, 2010,
`invention date. Petition 3, 9.
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`6, 7. This Petition does not appear to raise significant new issues that
`would affect the finite resources of the Board or the timing of a
`final decision.
`We determine that this is an instance in which more than one petition
`is justified. IPR255 was based, in part, on the Brown reference, which on its
`face would appear to have a priority date of September 27, 2010, which falls
`later than the newly asserted invention date. IPR255, Paper 2, 2. Once
`Petitioner was made aware of the new date, it was reasonable to search for
`an alternative to Brown with an earlier priority date. Subramaniam was the
`result of that search. Nothing in the record suggests that Petitioner unduly
`delayed its search for this reference, or its preparation and filing of the
`present petition, once Subramaniam was found. Accordingly, we decline to
`exercise discretion to deny institution based on the previous IPR255 Petition.
`See Trial Practice Guide, 59 (“[T]he Board recognizes that there may be
`circumstances in which more than one petition may be necessary, including,
`for example, . . . when there is a dispute about priority date requiring
`arguments under multiple prior art references.”).
`
`B. 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 Texas case, and Petitioner opposes this request. Prelim.
`Resp. 1, 7–24; Pet. 11–17.
`In exercising its discretion on whether to institute inter partes review,
`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
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`10
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`2.
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`3.
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`4.
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`Patent 10,298,451 B1
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`(PTAB Sept. 12, 2018) (precedential); Trial Practice Guide at 58 & n.2. 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;
`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.
`
`6.
`
`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
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`request sometimes weighs in favor of discretionary denial. Fintiv, Paper 11
`at 6–8.
`Petitioner states that it will pursue a stay if we institute an inter partes
`review. Pet. 11. However, as Patent Owner points out, Petitioner did not
`seek a stay after institution of IPR255. Prelim. Resp. 9. Patent Owner also
`argues, based on the fact that claim construction is complete and fact
`discovery has commenced, and given the Texas court’s standard practice,
`that the Texas court would not grant a stay of the Texas case. Id. at 9–10
`(citing Ex. 1018, 3).2
`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
`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
`
`
`2 Throughout its Preliminary Response, Patent Owner cites to “Exhibit
`1016” for this and other scheduling facts, but we understand that the correct
`citation is to Exhibit 1018, a November 25, 2020 “Agreed [Proposed]
`Scheduling Order.”
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`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. 1018 (Texas case
`Agreed/Proposed Scheduling Order), 4; Ex. 2001, docket entry 30. 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. 2001,
`docket entry 72.
`Assuming that April 18, 2022, is in fact the scheduled trial date, it
`would less than five months prior to our 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 delay is
`likely and Patent Owner arguing the opposite. Pet. 12–13; Prelim. Resp. 13–
`14.
`
`In particular, Petitioner cites a Federal Circuit decision considering a
`likely trial date, which states that, as of November, 2020, the Texas court
`averaged 25.9 months to trial, and that “a court’s general ability to set a fast-
`paced schedule is not particularly relevant” in light of this historical time to
`trial statistic. Pet. 12 (citing In re Apple Inc., 979 F.3d 1332, 1343–44 (Fed.
`Cir. 2020)). Also, Petitioner, pointing to a July 2020 journal article,
`contends that the trial date is uncertain due to the propensity of the Texas
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`court to reschedule trials once the PTAB has denied a related petition. Id. at
`13 (quoting Ex. 1020, 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. 1020, 2.3
`In response, Patent Owner argues that, unlike the case of Sand
`Revolution (IPR2019-01393, Paper 24 at 9), in which the Board instituted
`trial in the face of a five-month gap between the District Court trial date and
`the Board’s Final Decision deadline, in this case the parties have not sought,
`and the district court has not granted, any extensions to the trial date.
`Prelim. Resp. 12–13. Patent Owner also argues that the April 18, 2022, trial
`date is firm given the court’s April 23, 2021, minute entry stating that “[t]he
`Court has set the jury trial date of April 18, 2022.” Id. at 13 (citing Ex.
`2001, docket entry 72). In addition, Patent Owner cites the court’s
`statement, in denying Petitioner’s motion to transfer, that the rate at which
`the court disposes of patent cases makes it unlikely that the trial date will
`change despite the high caseload for patent cases in that forum. Id. at 14
`(citing Ex. 2004, 25–26). Finally, 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.” Id. (citing Ex. 2010, 5).
`
`
`3 Petitioner also relied on the fact that it had moved to transfer the Texas
`case to the Northern District of California. Pet. 14. However, that motion as
`been denied, and the Federal Circuit has denied Petitioner’s Mandamus
`Petition with respect to that motion. Prelim. Resp. 11; Ex. 2013.
`14
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`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) 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 more than seven months
`from institution and less than five months before the final decision, the
`efficiency and system integrity concerns that animate the Fintiv analysis are
`present but not strong — this factor somewhat 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, this fact weighs in favor
`of denial. See Fintiv, 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. 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 its filing of the Petition
`was timely — four months after receiving Patent Owner’s preliminary
`infringement contentions in the Texas case, and approximately a month-and-
`a-half after it served preliminary invalidity contentions. Pet. 14 (citing Ex.
`1016; Ex. 1018, 2–3). As discussed above, this Petition was a follow-on to
`that of IPR255, prompted by Patent Owner’s claim, set forth for the first
`time in its preliminary infringement contentions, that it was entitled to an
`invention date (“[a]t least as early as July 12, 2010”) that pre-dated a
`reference relied on by Petitioner in IPR255. Id. at 15 (citing Ex. 1016, 4).
`Petitioner submits that, as of the filing of the Petition, no substantive orders
`had issued from the Texas court and the litigation was in its early stages. Id.
`at 14–15.
`Patent Owner responds that Markman briefing took place, a Markman
`hearing has been held, and on June 2, 2021, a claim construction order
`issued. Prelim. Resp. 15 (citing Exs. 2007, 2008). Also, Patent Owner
`
`
`
`16
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`
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`IPR2021-00600
`Patent 10,298,451 B1
`
`points out that fact discovery opened on April 23, 2021, and closes
`November 4, 2021, and asserts that fact discovery will be substantially
`complete by the institution decision date. Id. (citing Ex. 1018, 3). Also,
`final infringement and invalidity contentions were exchanged on June 17,
`2021. Ex. 1018, 3.
`Patent Owner also disputes that Petitioner was timely, comparing the
`timing unfavorably to that of the Petition in IPR255: the IPR255 Petition
`was filed three weeks after the preliminary infringement contentions, versus
`four months in the present case. Prelim. Resp. 16–17.
`As discussed above, the four month time lapse between filing the
`preliminary infringement contentions and filing the present Petition was
`reasonable, given that the new asserted invention date necessitated a new
`prior art search. Also, on the current record, there has been relatively little
`investment in the Texas case pertaining to the invalidity issues raised in the
`Petition. The Texas Markman hearing only considered one term in the ’451
`patent, and held without discussion that it was to be construed in accord with
`its “[p]lain and ordinary meaning.” Ex. 2008, 2. Fact discovery is not
`complete, and expert discovery has not started. Ex. 1018, 3. 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.
`
`
`
`17
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`IPR2021-00600
`Patent 10,298,451 B1
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`
`Because significant activity remains to be completed in the Texas
`case, and Petitioner demonstrated diligence in filing its Petition, this factor
`weighs somewhat 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
`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, Patent Owner is expected, pursuant to the Texas
`court’s scheduling order, to “significantly narrow[] the number of claims
`asserted.” Pet. 16 (citing Ex. 1017, 10). As a result, Petitioner argues, “[t]he
`number of claims adjudicated at the district court will likely be significantly
`less than the number of claims addressed here.” Id. 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. Patent Owner responds that its current preliminary
`infringement contentions are directed to 19 of the 21 claims in the ’451
`patent, and the mere possibility of additional non-overlapping claims does
`not support an assertion that there will be no overlap between issues raised
`here and the related litigation. Prelim. Resp. 17–18.
`Also, in the Texas case, Petitioner stipulates that it will not seek
`resolution in the trial of invalidity based on any ground “that utilizes, as a
`primary reference, U.S. Patent Application Publication No. 2007/0033197
`
`
`
`18
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`(‘Scherzer’).” Ex. 1022. As discussed below, Petitioner relies on Scherzer
`for its challenges here. Patent Owner argues that this stipulation is
`insufficient because it allows Petitioner to rely on Scherzer as a “secondary”
`reference in its final invalidity contentions. Prelim. Resp. 18. Indeed, as
`Patent Owner points out, Petitioner is relying on Scherzer as a secondary
`reference in IPR255. Id. at 19. Patent Owner notes that “characterization
`. . . of prior art as ‘primary’ and ‘secondary’ is merely a matter of
`presentation with no legal significance.” Id. (quoting from In re Mouttet,
`686 F.3d 1322, 1333 (Fed. Cir. 2012)). Patent Owner argues that a
`stipulation that requires the Texas court to interpret its meaning, including
`the meaning of primary reference, invites side litigation. Id. at 19–20.
`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. 1018, 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. 1017, 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.
`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
`
`
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`19
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`Patent 10,298,451 B1
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`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). However, 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
`IPR functions as a true alternative to litigation in relation to
`grounds that could be at issue
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