`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`BOSE CORPORATION,
`Petitioner,
`
`v.
`
`KOSS CORPORATION,
`Patent Owner.
`_____________________
`
`CASE: IPR2021-00680
`U.S. PATENT NO. 10,469,934
`_____________________
`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`
`
`
`
`
`
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`TABLE OF CONTENTS
`
`I.
`II.
`
`INTRODUCTION .......................................................................................... 1
`BACKGROUND ............................................................................................ 3
`A.
`The ’934 Patent .................................................................................... 3
`B.
`Related Patents ..................................................................................... 4
`C.
`Litigation Matters ................................................................................. 5
`D.
`PTAB Matters ....................................................................................... 7
`III. THE BOARD SHOULD DENY INSTITUTION BECAUSE OF CO-
`PENDING LITIGATION INVOLVING THE ’934 PATENT ...................... 7
`A.
`Factor 1: The District Court Has Not Issued a Stay ............................ 9
`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 in the Apple Litigation Will Have
`Invested Substantial Resources Prior to the Institution Decision ...... 13
`Factor 4: The Issues Raised in the Petition Overlap Substantially
`with Issues Raised in the Apple Litigation ........................................ 15
`Factor 5: Petitioner is a Defendant in Co-Pending Litigation ........... 17
`Factor 6: Other Considerations That Influence the Board’s
`Exercise of Discretion Weigh in Favor of Denying Institution ......... 18
`G. Holistic Assessment of Fintiv Factors ................................................ 21
`IV. THE PETITION DOES NOT ESTABLISH A REASONABLE
`LIKELIHOOD THAT THE CHALLENGED CLAIMS WOULD HAVE
`BEEN OBVIOUS ......................................................................................... 23
`A. Grounds 1A-1D Do Not Show that the Challenged Claims Would
`Have Been Obvious ............................................................................ 23
`
`C.
`
`D.
`
`E.
`F.
`
`
`- i -
`
`
`
`
`
`V.
`
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`1.
`
`2.
`
`3.
`
`4.
`
`Claim 1 is Directed to a Headphone Assembly that is
`Configured to Interact with Two Other Systems ..................... 25
`Schrager Does Not Teach a Remote, Network-Connected
`Server in Wireless Communications with a Mobile DAP ....... 26
`Goldstein Does Not Teach a Remote, Network-Connected
`Server in Wireless Communications with a Mobile DAP ....... 28
`The Schrager-Goldstein Combination Does Not Teach a
`Remote Network-Connected Server in Wireless
`Communication with a Mobile DAP ....................................... 30
`B. Grounds 2A-2D Do Not Show that the Challenged Claims Would
`Have Been Obvious ............................................................................ 37
`1.
`Rezvani-446 Does Not Teach a Mobile DAP in Wireless
`Communication with Both a Headphone Assembly and a
`Remote, Network-Connected Server ....................................... 38
`Rezvani-875 Does Not Teach a Mobile DAP in Wireless
`Communication with Both a Headphone Assembly and a
`Remote, Network-Connected Server ....................................... 41
`The Proposed Rezvani-Rezvani-Skulley-Hind Combination
`Does Not Teach a Mobile DAP in Wireless Communication
`with Both a Headphone Assembly and a Remote, Network-
`Connected Server ..................................................................... 42
`The Proposed Combinations for Grounds 2A-2D Rely on
`Hindsight Reconstruction ......................................................... 44
`CONCLUSION ............................................................................................. 48
`
`2.
`
`3.
`
`4.
`
`
`
`
`- ii -
`
`
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte
`GmbH,
`IPR2019-01469, Paper 6 (PTAB Feb. 13, 2020) ................................................ 23
`Amazon.com, Inc. v. Barnesandnoble.com, Inc.,
`239 F.3d 1343 (Fed. Cir. 2001) .......................................................................... 48
`Apple Inc. v. ContentGuard Holdings, Inc.,
`IPR2015-00445, Paper 9 (PTAB July 9, 2015) .................................................. 47
`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) ......................................... 13, 24
`Apple Inc. v. Koss Corp.,
`IPR2021-00305, Paper 14 (PTAB June 3, 2021) ......................................... 13, 24
`Apple Inc. v. Koss Corp.,
`IPR2021-00381, Paper 15 (PTAB July 2, 2021) .............................. 13, 15, 16, 24
`Belden Inv. v. Berk-Tek LLC,
`805 F.3d 1064 (Fed. Cir. 2015) .......................................................................... 48
`Bose Corporation v. Koss Corporation,
`IPR2021-00297, Paper 16 (PTAB Jun. 3, 2021) .........................................passim
`General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha,
`IPR2016-01357, Paper 19, 16-17 (PTAB Sept. 6, 2017) ............................... 5, 14
`Google LLC v. Personalized Media Commc’ns, LLC,
`IPR2020-00724, Paper 19 (PTAB Aug. 31, 2020) ............................................. 12
`Harmonic Inc. v. Avid Tech.,
`815 F.3d 1356 (Fed. Cir. 2016) .......................................................................... 10
`
`- iii -
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`
`Intel Corp. v. VLSI Tech. LLC,
`IPR2019-01192, Paper 15 (PTAB Jan. 9, 2020) ................................................ 11
`KSR Int'l Co. v. Teleflex Inc.,
`550 U.S. 398 ........................................................................................................ 47
`Nautilus Hyosung Inc. v. Diebold, Inc.,
`IPR2016-00633, Paper 9 (PTAB Aug. 22, 2016) ......................................... 47, 48
`NHK Spring Co. v. Intri-Plex Techs., Inc.,
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) ........................................... 4, 14
`Samsung Elecs. Co., Ltd. v. Ancora Techs., Inc.,
`IPR2020-01184, Paper 11 (PTAB Jan. 5, 2021) .................................... 12, 19, 21
`SK Hynix v. Netlist,
`IPR2020-01421, Paper 10 (Mar. 16, 2021) ........................................................ 17
`Supercell Oy v. Gree, Inc.,
`IPR2020-01628, Paper 9, 14-15 (PTAB February 17, 2021) ............................. 14
`Verizon Bus. Network Servs. LLC v. Huawei Techs. Co.,
`IPR2020-01292, Paper 13 (PTAB Jan. 25, 2021) .................................. 17, 18, 21
`Statutes
`35 U.S.C. § 103 .......................................................................................................... 5
`35 U.S.C. § 314 ...................................................................................... 10, 13, 14, 17
`35 U.S.C. § 316 .................................................................................................. 11, 14
`Other Authorities
`37 C.F.R. § 42.107(a) ................................................................................................. 4
`37 C.F.R. § 42.108(c) ............................................................................................... 10
`
`
`
`
`
`
`
`- iv -
`
`
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`EXHIBIT LISTING
`
`Description
`Exhibit
`KOSS-2001 Docket Report, Koss Corp. v. Bose Corp., Case No. 6:20-cv-
`00661-ADA (W.D. Tex.) (as of July 15, 2021)
`
`KOSS-2002 Docket Report, Koss Corp. v. Apple Inc., Case No. 6:20-cv-00665-
`ADA (W.D. Tex.) (as of July 14, 2021)
`
`KOSS-2003 Order Granting Bose Corporation’s Motion to Dismiss for
`Improper Venue, Koss Corp. v. Bose Corp., Case No. 6:20-cv-
`00661-ADA, Dkt. 55 (W.D. Tex. Jun. 22, 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 (W.D. Tex. April 22, 2021)
`
`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
`
`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)
`
`KOSS-2007 U.S. Patent 8,190,203
`
`KOSS-2008 U.S. Patent 8,571,544
`
`KOSS-2009 U.S. Patent 9,049,502
`
`KOSS-2010 U.S. Patent 9,438,987
`
`KOSS-2011 U.S. Patent 9,497,535
`
`
`- v -
`
`
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`Exhibit
`KOSS-2012 U.S. Patent 9,729,959
`
`Description
`
`KOSS-2013 U.S. Patent 9,986,325
`
`KOSS-2014 U.S. Patent 10,206,025
`
`KOSS-2015 U.S. Patent 10,368,155
`
`KOSS-2016 Agreed Scheduling Order, Koss Corp. v. Apple Inc., Case No. 6:20-
`cv-00665-ADA, Dkt. 30 (W.D. Tex. Nov. 30, 2020)
`
`KOSS-2017
`
`Joint Motion to Amend Agreed Scheduling Order, Koss Corp. v.
`Apple Inc., Case No. 6:20-cv-00665-ADA, Dkt. 85 (W.D. Tex.
`June 15, 2021).
`
`KOSS-2018 Claim Construction Order, Koss Corp. v. Apple Inc., Case No.
`6:20-cv-00665-ADA, Dkt. 83 (W.D. Tex. June 2, 2021).
`
` KOSS-2019 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)
`
`KOSS-2020 Order Denying Motion to Stay, Kerr Machine Co. v. Vulcan
`Industrial Holdings, et al., Case 6:20-cv-00200-ADA, Dkt. 76
`(W.D. Tex. April 7, 2021)
`
`KOSS-2021 Order Governing Proceedings - Patent Case, Judge Albright, W.D.
`Tex. Waco Division, Feb. 23, 2021
`
`
`- vi -
`
`
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`Description
`Exhibit
`KOSS-2022 Exhibit C1 to Apple Inc.’s Preliminary Invalidity Contentions,
`Koss Corp. v. Apple Inc., Case No. 6:20-cv-00665-ADA, January
`15, 2021 (W.D. Tex.)
`
`KOSS-2023
`
`Joint Claim Construction Statement, Koss Corp. v. Apple Inc., Case
`No. 6:20-cv-00665-ADA, Dkt. 68 (W.D. Tex. Apr. 14, 2021)
`
`KOSS-2024 Docket Report, Koss Corp. v. Skullcandy, Inc., Case No. 2:21-cv-
`00203 (D. Utah) (as of July 14, 2021)
`
`KOSS-2025 Patent 8,655,420
`
`KOSS-2026 Order Granting Defendants’ Motion to Transfer Venue Under 28
`U.S.C. § 1404(a), Koss Corp. v. Plantronics, Inc. et al., Case No.
`6:20-cv-00663, Dkt. 45 (W.D. Tex. May 20, 2021)
`
`KOSS-2027 Docket Report, Koss Corp. v. Plantronics, Inc. et al., Case No.
`4:21-cv-03854-JST (N.D. Cal.) (as of July 14, 2021)
`
`KOSS-2028 Order Granting Skullcandy, Inc.’s Motion to Dismiss for Improper
`Venue under Rule 12(b)(3), Koss Corp. v. Skullcandy, Inc., Case
`No. 6:20-cv-00664, Dkt. 38 (W.D. Tex. Mar. 31, 2021)
`
`KOSS-2029 Docket Report, Koss Corp. v. Skullcandy, Inc., Case No. 2:21-cv-
`00203 (D. Utah April 1, 2021)
`
`KOSS-2030 Defendant Apple Inc.’s Invalidity Contentions, Koss Corp. v.
`Apple Inc., Case No. 6:20-cv-00665-ADA, January 15, 2021 (W.D.
`Tex.)
`
`KOSS-2031 Docket Report, Apple Inc. v. Koss Corp., Case No. 4:20-cv-05504-
`JST (N.D. Cal.) (as of July 15, 2021)
`
`KOSS-2032 Letter from M. Rader to D. Ghavimi, April 6, 2021
`
`
`
`
`- vii -
`
`
`
`
`I.
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`INTRODUCTION
`Patent Owner, Koss Corporation (“Koss”), submits this Patent Owner
`
`Preliminary Response (“POPR”) pursuant to 37 C.F.R. § 42.107(a) to the Inter
`
`Partes Review (“IPR”) petition (“Petition”) filed by Bose Corporation (“Petitioner”)
`
`for claims 1-22, 32-39, 38-41, 47, and 49-62 (“Challenged Claims”) of U.S. Patent
`
`10,469,934 (“’934 Patent”).
`
`The Board should deny institution for several reasons.
`
`First, institution of the IPR would demand an untimely and inefficient
`
`proceeding that would effectively “second guess” the result of a jury trial in
`
`concurrent litigation. See NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-
`
`00752, Paper 8 at 11–21 (PTAB Sept. 12, 2018) (Precedential); Apple Inc. v. Fintiv,
`
`Inc., IPR2020-00019, Paper 11 at 2–3 (PTAB March 20, 2020) (Precedential).
`
`Patent Owner is asserting the ’934 Patent against another party, Apple Inc.,
`
`(hereinafter “Apple”) in co-pending litigation in the Western District of Texas
`
`(“WDTX”). Koss Corp. v. Apple Inc., Case No. 6:20-cv-00665-ADA (W.D. Tex.)
`
`(“Apple Litigation”). KOSS-2002. Though Petitioner is not a party to the Apple
`
`Litigation, that litigation impacts the Fintiv analysis for the present Petition. Fintiv,
`
`IPR2020-00019, Paper 11 at 14. The Apple Litigation is heading for trial in April
`
`2022, which is six months before a final determination for this IPR, if it is instituted.
`
`KOSS-2016, 4; KOSS-2002, 15 (Dkt. 72) (“The Court has set the Jury Trial date of
`
`- 1 -
`
`
`
`
`April 18, 2022”); KOSS-2017, 8. Thus, the validity determinations from the trial in
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`the Apple Litigation will significantly predate a final determination for the present
`
`petition if this IPR is instituted, which is an inefficient use of resources and
`
`counterproductive to “an objective of the AIA ... to provide an effective and efficient
`
`alternative to district court litigation.” General Plastic Industrial Co., Ltd. v. Canon
`
`Kabushiki Kaisha, IPR2016-01357, Paper 19, 16-17 (PTAB Sept. 6, 2017)
`
`(precedential as to § II.B.4.i) (emphasis added).
`
`Second, the Board should deny institution because the Petition does not
`
`establish a reasonable likelihood that the challenged claims would have been
`
`obvious under 35 U.S.C. § 103. More specifically, the relied-upon references do not
`
`teach or suggest each element of the independent claims arranged as recited in the
`
`claims. The independent claims are directed to a headphone assembly configured
`
`to: (1) wirelessly communicate with a mobile, digital audio player (DAP) via one or
`
`more ad hoc wireless communication link; and (2) wirelessly communicate with a
`
`remote, network-connected server. For example, independent claims 1 and 58
`
`specify that the headphone assembly is configured to play digital audio content
`
`transmitted by the mobile, DAP via the one or more ad hoc links, and that a processor
`
`of the headphone assembly is configured to initiate transmission of a request to a
`
`remote-network connected server. According to independent claims 1 and 58, the
`
`
`- 2 -
`
`
`
`
`remote, network-connected server is also in wireless communication with the
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`mobile, DAP.
`
`However, the references relied upon for Ground 1A-1D at least fail to disclose
`
`a processor of a headphone assembly that is configured to initiate a request to a
`
`remote, network-connected server in wireless communication with a mobile DAP,
`
`as recited in claims 1 and 58. Moreover, the references relied upon for Grounds 2A-
`
`2D a least fail to disclose a mobile DAP in wireless communication with both a
`
`headphone assembly (via one or more ad hock communication links) and a remote,
`
`network-connected server (via wireless communication), as recited in claims 1 and
`
`58. The Petition, therefore, fails to establish a reasonable likelihood that the
`
`challenged claims would have been obvious to a person of ordinary skill in the art.
`
`These reasons are independent and the Board can deny institution for either
`
`of these reasons.
`
`II. BACKGROUND
`
`A. The ’934 Patent
`The ’934 Patent includes sixty-two (62) claims, of which claims 1 and 58 are
`
`independent. Claim 1 recites a headphone assembly that comprises first and second
`
`earphones, an antenna for receiving wireless signals from a mobile DAP via one or
`
`more ad hoc wireless communication links, a wireless communication circuit for
`
`receiving and transmitting wireless signals to and from the headphone assembly, a
`
`- 3 -
`
`
`
`
`processor, a memory for storing firmware executed by the processor, a rechargeable
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`battery, and a microphone. The processor is configured to, upon activation of a user-
`
`control of the headphone assembly, initiate transmission of a request to a remote,
`
`network-connected server that is in wireless communication with the mobile DAP.
`
`The headphone assembly is further for receiving firmware updates transmitted from
`
`the remote, network-connected server. BOSE-1001, 18:1-32.
`
`The Petition challenges thirty eight claims—the Challenged Claims—under
`
`eight total grounds, namely Grounds 1A-1D and Grounds 2A-2D, which allege that
`
`the Challenged Claims would have been obvious over various combinations of
`
`Schrager (BOSE-1101), Goldstein (BOSE-1026), Harada (BOSE-1098), Skulley
`
`(BOSE-1017), Rezvani-446 (BOSE-1097), Rezvani-875 (BOSE-1016), Hind
`
`(BOSE-1019), and Oh (BOSE-1099). Pet. at 2.
`
`B. Related Patents
`The ’934 Patent is the eleventh patent in a patent family dating back to a
`
`provisional application filed April 7, 2008 and a PCT application filed April 7,
`
`2009. BOSE-1001; KOSS-2007 to KOSS-2015; KOSS-2025. There are patents
`
`that issued after the ’934 Patent (U.S. Patents 10,491,982; 10,506,325; 10,848,850;
`
`10,506,325; and 10,757,498, 10,959,012, and 10,959,011) and one pending
`
`application in the family (17/178,946). See Paper 3 (Patent Owner’s Mandatory
`
`Notices, March 24, 2021).
`
`
`- 4 -
`
`
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`C. Litigation Matters
`Patent Owner sued Petitioner on the ’934 Patent (and two other patents) on
`
`July 22, 2020 in the WDTX (“Bose Texas Litigation”). KOSS-2001; BOSE-1055.
`
`That matter was dismissed on June 22, 2021 for improper venue. KOSS-2003. In
`
`between, Petitioner filed an action for a declaratory judgment of noninfringement
`
`for the ’934 Patent (and the other patents asserted in the Bose Texas Litigation) in
`
`the District Court of Massachusetts (“Bose Massachusetts Litigation”). BOSE-
`
`1123. The Bose Massachusetts Litigation was stayed pending the motion to dismiss
`
`in the Bose Texas Litigation. BOSE-1123, 2 (Dkt. 8). Thus, Patent Owner has not
`
`yet answered the complaint in the Bose Massachusetts Litigation. However, in light
`
`of the dismissal of the Bose Texas Litigation, it is expected that Patent Owner will
`
`counterclaim infringement of patents asserted in the Bose Texas Litigation
`
`(including the ’934 Patent), and Petitioner will assert a defense in the Bose
`
`Massachusetts Litigation that the asserted patents (including the ’934 Patent) are
`
`invalid.
`
`Petitioner is also asserting the ’934 Patent (and other patents) against Apple
`
`in the WDTX in the Apple Litigation. KOSS-2002. The trial in the Apple Litigation
`
`is scheduled to commence in April 2022. KOSS-2016, 4; KOSS-2002, 15 (Dkt. 72)
`
`(“The Court has set the Jury Trial date of April 18, 2022”); KOSS-2017, 8. In the
`
`Apple Litigation, the district court already held a Markman hearing on April 23,
`
`- 5 -
`
`
`
`
`2021 and issued the claim construction ruling on June 2, 2021. KOSS-2002, 13
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`(Dkt. 58), 14 (Dkt. 72), 14 (Dkt. 83); KOSS-2018. The district court also denied
`
`Apple’s motion to transfer the Apple Litigation to the Northern District of California
`
`(“NDCal”). KOSS-2004.
`
`Apple also filed a declaratory judgment action pertaining to the patents
`
`(including the ’934 Patent) asserted against it in the Apple Litigation in the NDCal.
`
`KOSS-2031. The district court in the NDCal, however, granted Patent Owner’s
`
`motion to transfer that action to the WDTX. KOSS-2031, 9 (Dkt. 72); KOSS-2005.
`
`Apple has petitioned the Federal Circuit for a writ of mandamus directing the WDTX
`
`to transfer the Apple Litigation to the NDCal. See In re Apple, Case No. 21-147
`
`(Fed. Cir.). The Federal Circuit has not ruled on the petition.
`
`Patent Owner is also asserting the ’934 Patent against two other parties:
`
`Plantronics, Inc. and Skullcandy, Inc. BOSE-1074; BOSE-1075. The Plantronics
`
`case was originally filed in WDTX but was transferred to NDCal. KOSS-2026. No
`
`trial date has been set. KOSS-2027. The Skullcandy case was also originally filed
`
`in WDTX, but it was dismissed for improper venue. KOSS-2028. Patent Owner re-
`
`filed the case in the District Court of Utah. KOSS-2029; KOSS-2024. No trial date
`
`has been set in that matter either and Defendants have sought a stay pending the IPRs
`
`(KOSS-2024, 8 (Dkt. 33)), which has not yet been ruled upon by the court.
`
`
`- 6 -
`
`
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`D.
`PTAB Matters
`The present Petition is one of three IPRs filed against the ’934 Patent. Apple
`
`filed IPR2021-00592 on March 2, 2021; Bose filed this petition on March 17, 2021;
`
`and Apple filed IPR2021-00693 on March 23, 2021. The Board has not yet made
`
`an institution decision on any of these IPRs.
`
`The present Petition is also one of three IPRs filed by Petitioner against Patent
`
`Owner—one for each of the patents asserted in the Bose Texas Litigation. Petitioner
`
`filed IPR2021-00297 for Patent 10,368,155 on December 7, 2020 and IPR2021-
`
`00612 for Patent 10,206,025 on March 3, 2021. The Board instituted IPR2021-
`
`00297 on June 3, 2021. Bose Corporation v. Koss Corporation, IPR2021-00297,
`
`Paper 16 (PTAB Jun. 3, 2021). The Board has not yet made an institution decision
`
`for IPR2021-00612.
`
`III. THE BOARD SHOULD DENY INSTITUTION BECAUSE OF CO-
`PENDING LITIGATION INVOLVING THE ’934 PATENT
`The Board “is permitted, but never compelled, to institute an IPR proceeding.”
`
`Harmonic Inc. v. Avid Tech., 815 F.3d 1356, 1367 (Fed. Cir. 2016); see also 35
`
`U.S.C. § 314(b) (“Director shall determine whether to institute an inter partes review
`
`….”); 37 C.F.R. § 42.108(c) (“Inter partes review shall not be instituted unless the
`
`Board decides that the information presented in the petition demonstrates that there
`
`is a reasonable likelihood that at least one of the claims challenged in the petition is
`
`
`- 7 -
`
`
`
`
`unpatentable.”). The Board may apply this discretion in consideration of “the
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`integrity of the patent system, [and] the efficient administration of the Office ….”
`
`35 U.S.C. § 316(b). The Board has denied institution “to minimize the duplication
`
`of work by two tribunals to resolve the same issue.” Intel Corp. v. VLSI Tech. LLC,
`
`IPR2019-01192, Paper 15 at 11 (PTAB Jan. 9, 2020).
`
`In Fintiv, the Board outlined six factors that inform its decision “to deny
`
`institution in view of an earlier trial date in [a] parallel proceeding.” Fintiv,
`
`IPR2020-00019, Paper 11 at 6. The Board weighs and considers the holistic effect
`
`of each of the following factors: (1) whether the court granted a stay or evidence
`
`exists that one may be granted if a proceeding is instituted; (2) proximity of the
`
`court’s trial date to the Board’s projected statutory deadline for a final written
`
`decision; (3) investment in the parallel proceeding by the court and the parties; (4)
`
`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 (6) other circumstances that impact the Board’s exercise of discretion,
`
`including the merits (collectively, “Fintiv factors”). Id. at 5–15.
`
`The Fintiv factors collectively justify denial of the Petition because the ’934
`
`Patent is being asserted presently against Apple in the Apple Litigation and the trial
`
`in that matter will take place six months before a final determination for the present
`
`
`- 8 -
`
`
`
`
`petition if it is instituted. Denying institution of the IPR is consistent with recent
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`Board decisions, preserves the integrity of the patent system, promotes the efficient
`
`administration of Office resources, and minimizes duplicative work by two different
`
`tribunals. See id.; Samsung Elecs. Co., Ltd. v. Ancora Techs., Inc., IPR2020-01184,
`
`Paper 11 at 18 (PTAB Jan. 5, 2021); Google LLC v. Personalized Media Commc’ns,
`
`LLC, IPR2020-00724, Paper 19 at 6, 11 (PTAB Aug. 31, 2020).
`
`A.
`Factor 1: The District Court Has Not Issued a Stay
`This factor cuts in favor of discretionary denial. According to Petitioner,
`
`“[w]ithout ‘specific evidence’ how the court will rule regarding a stay, this factor is
`
`neutral.” Pet. at 97. However, there is specific evidence that the presiding judge in
`
`the Apple Litigation, Judge Albright, is unlikely to grant a stay in the Apple
`
`Litigation given the advanced status of the Apple Litigation. Judge Albright has, by
`
`his own admission, only put “one or two” cases on hold so that the Board can review
`
`the patent, absent a joint motion to stay. KOSS-2019. Regarding the factual
`
`circumstances that led to the granting of those “one or two” motions to stay, Judge
`
`Albright explained that the plaintiff had earlier sued other defendants on the same
`
`patent in a different district and those other defendants had their petitions instituted,
`
`such that IPRs were well underway by the time patent owner filed the later
`
`complaints in the Western District of Texas. Id. These circumstances are not present
`
`in the Apple Litigation.
`
`
`- 9 -
`
`
`
`
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`In the Apple Litigation, claim construction is complete and fact discovery has
`
`commenced (KOSS-2016, 3; KOSS-2017, 6-7; KOSS-2018), which, according to
`
`Judge Albright, indicates that the Apple Litigation is in a later stage and warrants
`
`the preservation of a trial date in spite of institution. KOSS-2020 (Judge Albright
`
`denying a defendant’s motion to stay pending an IPR).
`
`The unlikelihood of a stay is highlighted by that fact that Apple has not moved
`
`to stay the Apple Litigation in light of instituted IPRs for three other patents involved
`
`in the Apple Litigation. See Apple Inc. v. Koss Corp., IPR2021-00255, Paper 22
`
`(PTAB June 3, 2021) (for U.S. Patent 10,298,451); Apple Inc. v. Koss Corp.,
`
`IPR2021-00305, Paper 14 (PTAB June 3, 2021) (for U.S. Patent 10,506,325); Apple
`
`Inc. v. Koss Corp., IPR2021-00381, Paper 15 (PTAB July 2, 2021) (for U.S. Patent
`
`10,491,982); KOSS-2023, 2 (identifying patents in Apple Litigation). The Board
`
`instituted two of these IPRs more than one month ago. The fact that Apple has still
`
`not sought a stay shows that a stay of the Apple Litigation is even less likely.
`
`Accordingly, the first Fintiv factor weighs in favor of discretionary denial of
`
`institution and, at a minimum, should be viewed merely as neutral.
`
`B.
`
`Factor 2: Proximity of the Scheduled Trial Date to the Board’s
`Statutory Deadline for Written Decision
`The institution decision will issue by October 15, 2021. 35 U.S.C.
`
`§ 314(b)(1). If instituted, the FWD will issue by October 15, 2022. 35 U.S.C.
`
`
`- 10 -
`
`
`
`
`§ 316(a)(11). The trial in the Apple Litigation, however, is scheduled for April 18,
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`2022 (KOSS-2016, 4; KOSS-2002, 15 (Dkt. 72); KOSS-2017, 8), which is six
`
`months prior to the expected FWD if the IPR is instituted. The Board has
`
`consistently found that such a significant gap weighs in favor of a discretionary
`
`denial of institution. See, e.g. NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-
`
`00752, Paper 8 at 20 (PTAB Sept. 12, 2018) (Precedential) (denying institution
`
`under § 314(a) when a gap from March 25, 2019 to September 2019 (roughly six
`
`months) was expected between the FWD and the start of a trial); Cisco Systems, Inc.
`
`v Ramot at Tel Aviv University Ltd., IPR2020-00484, Paper 10, 16-17 (PTAB August
`
`18, 2020) (denying institution under § 314(a) when a six-month gap was expected
`
`finding all factors except Factor 1 favor discretionary denial); Supercell Oy v. Gree,
`
`Inc., IPR2020-01628, Paper 9, 14-15 (PTAB February 17, 2021) (denying institution
`
`under § 314(a) when a six-month gap was expected finding factors 2-5 collectively
`
`outweigh factor 6).
`
`Moreover, it is highly likely that the trial in the Apple Litigation will take
`
`place as scheduled. Judge Albright recently denied Apple’s motion to transfer
`
`(KOSS-2004) and the district court in the NDCal transferred Apple’s declaratory
`
`judgment action to the WDTX. KOSS-2005. Apple and Patent Owner subsequently
`
`moved jointly to consolidate the two cases before Judge Albright in the WDTX.
`
`
`- 11 -
`
`
`
`
`KOSS-2006. Thus, the Apple Litigation is unlikely to be moved to another venue.1
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`Also, directly addressing Petitioner’s speculation about Judge Albright’s
`
`docket, Pet. at 97, Judge Albright recently expressed confidence in his court’s ability
`
`to maintain a trial schedule despite his heavy caseload. In denying Apple’s motion
`
`to transfer, Judge Albright remarked that the rate at which WDTX disposes of patent
`
`cases makes it unlikely that the trial date, at least for the Apple Litigation, will
`
`change despite the WDTX’s high caseload for patent cases. KOSS-2004, 25-26.
`
`This comports with 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-2021, 5.
`
`In a recent institution decision involving Apple, Patent Owner, and a patent
`
`that is also involved in the Apple Litigation, the Board stated: “[g]iven that the trial
`
`is currently scheduled approximately three months before the final decision, this
`
`factor weighs slightly towards exercising discretion to deny institution.” Apple Inc.
`
`v. Koss Corp., IPR2021-00381, Paper 15 at 14 (PTAB July 2, 2021). Here, the
`
`
`1 Apple petitioned the Federal Circuit for a writ of mandamus directing the WDTX
`
`to transfer the Apple Litigation to the NDCal. See In re Apple, Case No. 21-147
`
`(Fed. Cir.). The Federal Circuit has not ruled on the petition.
`
`
`- 12 -
`
`
`
`
`factual circumstances have changed such that the second Fintiv factor weighs
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`strongly in favor of discretionary denial of institution. The gap between the trial and
`
`the expected FWD date has expanded to six months for the present Petition, twice
`
`as large as the gap considered by the Board in IPR2021-00381. Accordingly, it is
`
`fairly certain that the Apple Litigation trial will occur prior—six months prior—to
`
`the FWD if the IPR is instituted.
`
`Thus, Fintiv factor two weighs strongly in favor of denying institution.
`
`C.
`
`Factor 3: The Parties and Court in the Apple Litigation Will
`Have Invested Substantial Resources Prior to the Institution
`Decision
`The parties and court will have invested substantial resources in the Apple
`
`Litigation by the time the Board issues an institution decision. The Petition
`
`exclusively discusses the parties’ investment in the Bose Litigation. Pet. at 98.
`
`Patent Owner, Apple, and the district court, however, have invested significant
`
`resources in the Apple Litigation. In fact, by the time that Petitioner filed the
`
`Petition, the parties in the Apple Litigation had: served preliminary infringement and
`
`invalidity contentions; exchanged claim terms for construction; exchanged proposed
`
`claim constructions; disclosed extrinsic evidence related to claim construction; and
`
`filed opening and responsive claim construction briefs. KOSS-2002, 10-13; KOSS-
`
`2016, 2-3.
`
`Further, “the appropriate time to evaluate the investment of the parties in [a]
`
`- 13 -
`
`
`
`
`Parallel Proceeding is at the time of the institution decision and not at the time of the
`
`IPR2021-00680
`Patent Owner Preliminary Response
`
`filing of the petition.” Verizon Bus. Network Servs. LLC v. Huawei Techs. Co.,
`
`IPR2020-01292, Paper 13 at 14 (PTAB Jan. 25, 2021). Here, leading up to the
`
`institution decision, which is due by October 15, 2021 (35 U.S.C. § 314(b)), the
`
`parties and court will invest substantially more resources now that the claim
`
`construction 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.”); Fintiv, IPR2020-00019, Paper 11 at 9–10 (district court c