Trials@uspto.gov
`571-272-7822
`
`Paper 15
`Entered: October 13, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`BOSE CORP.,
`Petitioner,
`v.
`KOSS CORP.,
`Patent Owner.
`
`IPR2021-00680
`Patent 10,469,934 B2
`
`
`
`
`
`
`
`
`
`Before KARL D. EASTHOM, PATRICK R. SCANLON, and
`DAVID C. MCKONE, Administrative Patent Judges.
`EASTHOM, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`571-272-7822
`
`Paper 15
`Entered: October 13, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`BOSE CORP.,
`Petitioner,
`v.
`KOSS CORP.,
`Patent Owner.
`
`IPR2021-00680
`Patent 10,469,934 B2
`
`
`
`
`
`
`
`
`
`Before KARL D. EASTHOM, PATRICK R. SCANLON, and
`DAVID C. MCKONE, Administrative Patent Judges.
`EASTHOM, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`
`IPR2021-00680
`Patent 10,469,934 B2
`
`INTRODUCTION
`I.
`Bose Corp. (“Petitioner”) filed a Petition (Paper 2, “Pet.”) requesting
`an inter partes review of claims 1–22, 32–41, 47, and 49–62 of U.S. Patent
`No. 10,469,934 B2 (Ex. 1001, “the ’934 patent”). Koss Corp. (“Patent
`Owner”) filed a Preliminary Response (Paper 10, “Prelim. Resp.”).
`Thereafter, Petitioner filed an authorized Preliminary Reply (Paper 11,
`“Prelim. Reply”), and Patent Owner filed an authorized Preliminary Sur-
`reply (Paper 12, “Prelim. Sur-reply”). See Ex. 3001 (authorizing email).
`We have authority to determine whether to institute an inter partes
`review. See 35 U.S.C. § 314 (2018); 37 C.F.R. § 42.4(a) (2020). To
`institute an inter partes review, we must determine that the information
`presented in the Petition shows “a reasonable likelihood that the petitioner
`would prevail with respect to at least 1 of the claims challenged in the
`petition.” 35 U.S.C. § 314(a). For the reasons set forth below, we determine
`that the information presented in the Petition establishes a reasonable
`likelihood that Petitioner will prevail with respect to at least one challenged
`claim. Accordingly, we institute an inter partes review of the ’934 patent.
`II. BACKGROUND
`A. Real Parties in Interest
`The parties identify themselves as the real parties in interest. Pet. xix;
`Paper 3, 1.
`
`B. Related Matters
`The parties identify the following proceedings as related matters
`involving the ’934 patent:
`
`2
`
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`IPR2021-00680
`Patent 10,469,934 B2
`Koss Corp. v. Bose Corp., No. 6:20-cv-00661 (W.D. Tex.) (the “Bose
`Litigation”) (dismissed);1
`Koss Corp. v. Plantronics, Inc., No. 6:20-cv-00663 (W.D. Tex.)
`(transferred to N.D. Cal.);
`Koss Corp. v. Skullcandy, Inc., No. 6:20-cv-00664 (W.D. Tex.)
`(dismissed);
`Koss Corp. v. Apple Inc., No. 6:20-cv-00665 (W.D. Tex.) (the “Apple
`Litigation”);
`Bose Corp. v. Koss Corp., No. 1:20-cv-12193 (D. Mass.);
`Apple Inc. v. Koss Corp., No. 4:20-cv-05504 (N.D. Cal.);
`Apple Inc. v. Koss Corp., No. 6:21-cv-00495 (W.D. Tex.); and
`Koss Corp. v. Skullcandy, Inc., No. 2:21-cv-00203 (D. Utah).
`Pet. xx–xxi; Paper 3, 1; Paper 5, 1; Paper 7, 2.
`In addition, the parties identify the following inter partes review
`proceedings challenging the ’934 patent or patents related to the ’934 patent
`as related matters:2
`Bose Corp. v. Koss Corp., IPR2021-00297, filed December 7, 2020,
`challenging U.S. Patent No. 10,368,155 B2;
`Apple Inc. v. Koss Corp., IPR2021-00305, filed December 15, 2020,
`challenging U.S. Patent No. 10,506,325 B1;
`Apple Inc. v. Koss Corp., IPR2021-00381, filed January 4, 2021,
`challenging U.S. Patent No. 10,491,982 B1;
`Bose Corp. v. Koss Corp., IPR2021-00546, filed February 22, 2021,
`challenging U.S. Patent No. 10,206,025 B2;
`Apple Inc. v. Koss Corp., IPR2021-00592, filed March 2, 2021,
`challenging U.S. Patent No. 10,469,934 B2;
`
`
`1 Ex. 2003.
`2 Apple Inc. v. Koss Corp., IPR2021-00255, filed November 25, 2020, and
`Apple Inc. v. Koss Corp., IPR2021-00600, filed March 7, 2021, both
`challenging U.S. Patent No. 10,298,451 B1, are also pending.
`
`3
`
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`IPR2021-00680
`Patent 10,469,934 B2
`Bose Corp. v. Koss Corp., IPR2021-00612, filed March 3, 2021,
`challenging U.S. Patent No. 10,206,025 B2;
`Apple Inc. v. Koss Corp., IPR2021-00626, filed March 17, 2021,
`challenging U.S. Patent No. 10,206,025 B2;
`Apple Inc. v. Koss Corp., IPR2021-00679, filed March 22, 2021,
`challenging U.S. Patent No. 10,506,325 B1;
`Apple Inc. v. Koss Corp., IPR2021-00686, filed March 22, 2021,
`challenging U.S. Patent No. 10,491,982 B1; and
`Apple Inc. v. Koss Corp., IPR2021-00693, filed March 23, 2021,
`challenging U.S. Patent No. 10,469,934 B2.
`Pet. xx; Paper 3, 1; Paper 5, 1; Paper 7, 2.
`C. The ’934 Patent
`The ’934 patent, titled “System with Wireless Earphones,” issued
`November 5, 2019, with claims 1–62, and claims priority through several
`applications dating to April 7, 2008.3 Ex. 1001, codes (45), (54), (60), (63),
`1:3–30, 18:2–25:23. The ’934 patent relates to “a wireless earphone that
`comprises a transceiver circuit for receiving streaming audio from a data
`source, such as a digital audio player or a computer, over an ad hoc wireless
`network.” Id. at 1:67–2:3. The ’934 patent defines an “ad hoc wireless
`network” as “a network where two (or more) wireless-capable devices, such
`as the earphone and a data source, communicate directly and wirelessly,
`without using an access point.” Id. at 3:3–6. Some embodiments include
`two discrete wireless earphones, one in each ear. Id. at 3:47–48.
`
`
`3 Petitioner asserts that “the references are prior art” even “[i]f the claims are
`entitled to the earliest claimed priority––April 7, 2008.” See Pet. 3.
`
`4
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`IPR2021-00680
`Patent 10,469,934 B2
`Figure 2A of the ’934 patent follows:
`
`
`Figure 2A illustrates wireless earphone 10 connected via ad hoc wireless
`network 24 to data source 20. Ex. 1001, 4:26–28. “[D]ata source 20 may be
`a digital audio player (DAP), such as an [MP]3 player or an iPod, or any
`other suitable [DAP] device, such as a laptop or personal computer, that
`stores and/or plays digital audio files.” Id. at 4:32–36. “When in range, the
`data source 20 may communicate with the earphone 10 via the ad hoc
`wireless network 24 using any suitable wireless communication protocol,”
`including Wi-Fi, Bluetooth, and other communication protocols. Id. at
`4:56–61.
`In one embodiment, earphone 10 connects to network-enabled host
`server 40 via networks 30a, 42 so that host server 40 can transmit streaming
`digital audio to earphone 10. Ex. 1001, 5:56–62, Fig. 2D. Alternatively,
`host server 40 may transmit a network address to earphone 10 for streaming
`digital audio content server 70. Id. at 5:62–65, Fig. 2D. In this case,
`earphone 10 uses the received address to connect to content server 70 via
`networks 30a, 42 and receive digital audio from content server 70. Id. at
`5:66–6:2. In one embodiment, content server 70 is an Internet radio station
`
`5
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`Patent 10,469,934 B2
`server. Id. at 6:3–4. In addition, content server 70 may stream digital audio
`that it has received from data source 20 via networks 30b, 42. Id. at 6:7–12.
`Figure 3, reproduced below, depicts a block diagram of earphone 10
`(Ex. 1001, 2:31–32):
`
`
`As Figure 3 shows, earphone 10 includes transceiver circuit 100, power
`source 102, microphone 104, acoustic transducer 106 (e.g., a speaker), and
`antenna 108. Id. at 6:30–35. The body of earphone 10 houses transceiver
`circuit 100, power source 102, and acoustic transducer 106 in some
`embodiments, with microphone 104 and antenna 108 external to the body.
`Id. at 6:33–40.
`
`6
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`IPR2021-00680
`Patent 10,469,934 B2
`
`D. Illustrative Claim
`Claim 1, the sole independent claim of the challenged claims, is
`reproduced below:
`[1A] A headphone assembly comprising:
`[1B] first and second earphones, wherein each of the first and
`second earphones comprises an acoustic transducer; and
`[1C] an antenna for receiving wireless signals from a mobile,
`digital audio player via one or more ad hoc wireless
`communication links;
`[1D] a wireless communication circuit connected to the antenna,
`wherein the wireless communication circuit is for receiving and
`transmitting wireless signals to and from the headphone
`assembly;
`[1E] a processor;
`[1F] a memory for storing firmware that is executed by the
`processor;
`[1G] a rechargeable battery for powering the headphone
`assembly; and
`[1H] a microphone for picking up utterances by a user of the
`headphone assembly;
`[1I] and wherein the headphone assembly is configured to play,
`by the first and second earphones, digital audio content
`transmitted by the mobile, digital audio player via the one or
`more ad hoc wireless communication links;
`[1J] wherein 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, digital audio player;
`[1K] and wherein the headphone assembly is for receiving
`firmware upgrades transmitted from the remote, network-
`connected server.
`Ex. 1001, 18:2–33 (bracketed nomenclature added to conform to Petitioner’s
`format to identify each claim limitation). See Pet. 5–6.
`
`7
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`Patent 10,469,934 B2
`E. Asserted Grounds of Unpatentability
`Petitioner contends that the challenged claims would have been
`unpatentable on the following grounds:4
`35
`U.S.C.
`§
`103(a) Schrager,5 Goldstein6
`
`Claim(s) Challenged
`
`Reference(s)/Basis
`
`1–3, 5, 7, 9–11, 32–37, 39, 47,
`49, 51–57
`4, 6, 8, 12, 13, 38, 40, 41, 58–62 103(a) Schrager, Goldstein, Harada7
`14–16, 19, 21, 49–51
`103(a) Schrager, Goldstein, Skulley8
`103(a) Schrager, Goldstein, Skulley,
`Harada
`103(a) Rezvani-446,9 Rezvani-875,10
`Skulley, Hind11
`103(a) Rezvani-446, Rezvani-875,
`Skulley, Hind, Harada
`103(a) Rezvani-446, Rezvani-875,
`Oh,12 Hind
`103(a) Rezvani-446, Rezvani-875,
`Oh, Hind, Harada
`
`17, 18, 20, 22
`1–3, 5, 7, 9–11, 14–16, 19, 21,
`47, 49–53
`4, 6, 8, 12–13, 17–18, 20, 22,
`58–62
`32–37, 39, 54–57
`
`38, 40, 41
`
`
`4 The Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
`(2011) (“AIA”), amended 35 U.S.C. § 103. Because the ’934 patent’s
`effective filing date precedes the March 16, 2013, effective date of the
`applicable AIA amendments, the pre-AIA version of 35 U.S.C. § 103
`applies.
`5 US 7,072,686 B1, issued July 4, 2006 (Ex. 1101).
`6 US 2008/0031475 A1, published Feb. 7, 2008 (Ex. 1026).
`7 US 2006/0229014 A1, published Oct. 12, 2006 (Ex. 1098).
`8 US 6,856,690 B1, issued Feb. 15, 2005 (Ex. 1017).
`9 US 2007/0136446 A1, published June 14, 2007 (Ex. 1097).
`10 US 2007/0165875 A1, published July 19, 2007 (Ex. 1016).
`11 US 7,069,452 B1, issued June 27, 2006 (Ex. 1019).
`12 WO 2006/098584 A1, published Sept. 21, 2006 (Ex. 1099).
`
`8
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`IPR2021-00680
`Patent 10,469,934 B2
`Pet. 2–3. Petitioner supports its challenge with the Declaration of Tim A.
`Williams, Ph.D. (Ex. 1003) and the Declaration of John G. Casali, Ph.D.,
`CPE (Ex. 1005).
`
`III. ANALYSIS
`A. Level of Ordinary Skill in the Art
`Determining whether an invention would have been obvious under 35
`U.S.C. § 103 requires resolving the level of ordinary skill in the pertinent art
`at the time of the effective filing date of the claimed invention. Graham v.
`John Deere Co., 383 U.S. 1, 17 (1966). The person of ordinary skill in the
`art is a hypothetical person who knows the relevant art. In re GPAC, Inc.,
`57 F.3d 1573, 1579 (Fed. Cir. 1995). Factors in determining the level of
`ordinary skill in the art include the types of problems encountered in the art,
`the sophistication of the technology, and educational level of active workers
`in the field. Id. One or more factors may predominate. Id.
`Petitioner contends that a person having ordinary skill in the art
`“would have had background in wireless networks, including at least a
`bachelor’s degree in electrical engineering or a related field and experience
`with wireless networks, and would have worked on a team including
`members with headphone-design experience.” Pet. 6 (citing Ex. 1003
`¶¶ 30–37; Ex. 1005 ¶¶ 41–45). Patent Owner does not dispute Petitioner’s
`proposed level of ordinary skill in the art in its Preliminary Response, nor
`does it propose a different level of skill.
`Based on our review of the record, Petitioner’s stated level of ordinary
`skill in the art is reasonable because it is consistent with the evidence of
`record, including the asserted prior art. Accordingly, for the purposes of this
`Institution Decision, we adopt Petitioner’s definition.
`
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`Patent 10,469,934 B2
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`B. Claim Construction
`In inter partes reviews, the Board interprets claim language using the
`district-court-type standard, as described in Phillips v. AWH Corp., 415 F.3d
`1303 (Fed. Cir. 2005) (en banc). See 37 C.F.R. § 42.100(b) (2020). Under
`that standard, claim terms have their ordinary and customary meaning, as
`would be understood by a person of ordinary skill in the art at the time of the
`invention, in light of the language of the claims, the specification, and the
`prosecution history. See Phillips, 415 F.3d at 1313–14. Any extrinsic
`evidence should be considered in the context of the intrinsic evidence. See
`id. at 1317–19.
`Petitioner asserts that because “the prior art plainly discloses claim
`elements, express construction is unnecessary.” Pet. 7–8 (citing Nidec
`Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017
`(Fed. Cir. 2017)).
`Patent Owner also does not discuss claim construction explicitly in a
`separate claim construction section. See generally Prelim. Resp. However,
`addressing Petitioner’s grounds, Patent Owner argues that claim 1 “specifies
`that the remote, network-connected server is in wireless communication
`with the mobile DAP.” Id. at 26. In pertinent part, claim 1 recites “ [a]
`headphone assembly comprising . . . a processor . . . [1J] wherein the
`processor is configured to . . . initiate transmission of a request to a remote,
`network-connected server that is in wireless communication with the mobile,
`[DAP].” Notwithstanding Patent Owner’s argument and Petitioner’s
`showing that alleges the obviousness of a server wirelessly connected to a
`DAP (see infra §§ III.D.3, III.F.4), neither party addresses how a processor
`configured to initiate the claimed transmission to a server is structurally
`different from the same processor configured to initiate the claimed
`
`10
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`IPR2021-00680
`Patent 10,469,934 B2
`transmission to the same server that is in turn connected wirelessly to a
`DAP. But see In re Schreiber, 128 F.3d 1473, 1477 (Fed. Cir. 1997) (“It is
`well settled that the recitation of a new intended use for an old product does
`not make a claim to that old product patentable.”); In re Anderson, 662 F.
`App’x 958, 963 (Fed. Cir. 2016) (nonprecedential) (“We also agree with the
`Board that the ‘for use’ claim language is a statement of intended use. The
`‘for use’ language does not add a structural limitation to the claimed system
`or method.”); ParkerVision, Inc. v. Qualcomm Inc., 903 F.3d 1354, 1361
`(Fed. Cir. 2018) (“[A] prior art reference may anticipate or render obvious
`an apparatus claim—depending on the claim language—if the reference
`discloses an apparatus that is reasonably capable of operating so as to meet
`the claim limitations . . . .”).
` At this preliminary stage, no need exists to construe explicitly any
`claim language because doing so would have no effect in the analyses below
`of Petitioner’s asserted grounds and will not assist in resolving the present
`controversy between the parties. See Nidec Motor, 868 F.3d at 1017 (stating
`that “we need only construe terms ‘that are in controversy, and only to the
`extent necessary to resolve the controversy’” (quoting Vivid Techs., Inc. v.
`Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999))).
`C. Discretion Under 35 U.S.C. § 314(a)
`Patent Owner argues that we should exercise discretion to deny
`institution under 35 U.S.C. § 314(a) in view of the Bose Litigation and the
`Apple Litigation. Prelim. Resp. 7–22; Prelim. Sur-reply. Petitioner
`disagrees. Pet. 99–102; Prelim. Reply. As noted above, the Bose Litigation
`has been dismissed. Ex. 2003. Accordingly, the analysis below focuses on
`the Apple Litigation.
`
`11
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`IPR2021-00680
`Patent 10,469,934 B2
`Institution of an inter partes review is discretionary. See 35 U.S.C.
`§ 314(a) (authorizing institution of an inter partes review under particular
`circumstances, but not requiring institution under any circumstances);
`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.”); SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1356 (2018)
`(“[Section] 314(a) invests the Director with discretion on the question
`whether to institute review . . . .” (emphasis omitted)); Harmonic Inc. v. Avid
`Tech., Inc., 815 F.3d at1356, 1367 (Fed. Cir. 2016) (“[T]he PTO is
`permitted, but never compelled, to institute an IPR proceeding.”).
`An advanced state of a parallel district court proceeding is a “factor
`that weighs in favor of denying the Petition under § 314(a).” NHK Spring
`Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 at 20 (PTAB Sept.
`12, 2018) (precedential) (“NHK”). Specifically, an early trial date is part of
`a “balanced assessment of all relevant circumstances in the case, including
`the merits.” Consolidated Trial Practice Guide November 2019 (“TPG”)13
`at 58. This balanced assessment involves consideration 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;
`
`
`13 Available at https://www.uspto.gov/TrialPracticeGuideConsolidated.
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`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.
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 at 5–6 (PTAB Mar. 20,
`2020) (precedential) (“Fintiv”). We address each factor below.
`1. Factor 1: whether the court granted a stay or evidence exists that one
`may be granted if a proceeding is instituted
`Petitioner argues that there is no “‘specific evidence’ how the [District
`Court] will rule regarding a stay” and in any event, Petitioner does not have
`a “significant relationship” with Apple so that this factor weighs against
`denial. Pet. 97 (citing Sand Revolution II v. Continental Intermodal Group–
`Trucking, IPR2019-01393, Paper 24, 7 (June 16, 2020) (informative)), 100
`(arguing that “Bose and Apple have no Valve-like ‘significant relationship,’
`as they are competitors accused of infringement based on different,
`competing products).14 Petitioner also states it is unknown if the District
`Court will grant a stay. Prelim. Reply 1.
`Patent Owner does not argue that Petitioner has any relationship with
`Apple. Patent Owner argues that Apple has not filed any motions to stay in
`the Apple Litigation and contends that it is unlikely the presiding judge in
`the Apple Litigation would grant such a motion if filed. Prelim. Resp. 9–10
`(citing Ex. 2002; Ex. 2017).
`The record indicates that no stay exists at present in the Apple
`Litigation. We decline to speculate on the likelihood of a stay if Apple were
`
`
`14 See Valve Corp. v. Electronic Scripting Products, Inc., IPR2019-00062,
`Paper 11 at 9 (PTAB April 2, 2019) (precedential) (“Valve II”) ([W]hen
`different petitioners challenge the same patent, we consider any relationship
`between those petitioners when weighing the General Plastic factors.”).
`
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`to file a motion after this Decision. Petitioner is not a party to the Apple
`Litigation. See Owens Corning Roofing & Asphalt, LLC v. Kirsch Research
`& Dev., LLC, IPR2020-01389, Paper 11 at 11 (PTAB Feb. 18, 2021)
`(determining Fintiv factors 1 and 2 weighed strongly against exercise of
`discretion where the petitioner was not alleged to be a party to parallel
`litigation scheduled for trial prior to the projected Final Written Decision
`deadline but was instead a defendant in a separate litigation that did not have
`a set trial date). No evidence of a significant relationship between Apple
`and Petitioner exists on this record. This factor weighs strongly against
`exercising our discretion to deny institution.
`2. Factor 2: proximity of the court’s trial date to the Board’s projected
`statutory deadline for a final written decision
`The parties agree that the District Court set trial to begin in the Apple
`Litigation on April 18, 2022, which is approximately six months before a
`final written decision would issue in this proceeding. See Pet. 97 (citing Ex.
`1082); Prelim. Resp. 10–11 (citing Ex. 2016, 4; Ex. 2002, 15; Ex. 2017, 8).
`Both parties speculate as to the likelihood that this trial date will 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. 92–93; Prelim. Resp. 11–13.
`The Board has assessed this factor on a case-by-case basis. On one
`hand, the Board has taken the district court’s trial schedule at “face value”
`and declined to question it “absent some strong evidence to the contrary.”
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 12–13 (PTAB May
`13, 2020) (informative). On the other hand, the Board has been persuaded
`by the uncertainty in the schedule (including that caused by the parties
`agreeing to jointly request rescheduling of the trial date on several
`
`14
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`occasions) despite a scheduled trial date. Sand Revolution, Paper 24 at 8–9.
`Moreover, as recognized in Sand Revolution, “even in the extraordinary
`circumstances under which the entire country is currently operating because
`of the COVID-19 pandemic, the Board continues to be fully operational.”
`Id. at 9.
`This factor looks at the proximity of the trial date to the date of our
`final decision to assess the weight to be accorded a trial date set earlier than
`the expected final written decision date. This proximity inquiry is a proxy
`for the likelihood that the trial court will reach a decision on validity issues
`before the Board reaches a final written decision. A trial set to occur soon
`after the institution decision is fairly likely to happen prior to the Board’s
`final decision, even if the trial date were postponed due to intervening
`circumstances. Given that the trial is currently scheduled for more than
`seven months from institution and approximately five months before the
`final decision, the efficiency and system integrity concerns that animate the
`Fintiv analysis are present but not strong.
`Furthermore, as noted above, Petitioner is not a party to the Apple
`Litigation. The Board has found that Fintiv factor 2 weighed strongly
`against exercise of discretion in similar circumstances. See Owens Corning,
`Paper 11 at 11. Accordingly, this factor weighs strongly against exercising
`our discretion to deny institution.
`3. Factor 3: investment in the parallel proceeding by the court
`and the parties
`If, at the time of the institution decision, the district court has issued
`substantive orders related to the challenged patent, such as a claim
`construction order, this fact weighs in favor of denial. See Fintiv, Paper 11
`at 9–10. On the other hand, if the district court has not issued such orders,
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`this fact weighs against discretionary denial. Id. at 10. Moreover, in
`evaluating this factor, “[i]f the evidence shows that the petitioner filed the
`petition expeditiously, such as promptly after becoming aware of the claims
`being asserted, this fact has weighed against exercising the authority to deny
`institution under NHK.” Id. at 11.
`Patent Owner argues that the claim construction process is complete
`in the Apple Litigation. Prelim. Resp. 14 (citing Ex. 2002, 14; Ex. 2018).
`Patent Owner also points out that fact discovery opened on April 23, 2021,
`and closes on November 4, 2021, and final infringement and invalidity
`contentions were due on July 16, 2021. Id. (citing Ex. 2016, 3; Ex. 2017, 6–
`7). In addition, Patent Owner asserts that, at the time of this Institution
`Decision, the litigants are likely to have spent considerable resources
`preparing initial expert reports, which are due on November 19, 2021. Id.
`(citing Ex. 2016, 3; Ex. 2017, 6–7). Petitioner responds that much work
`remains in the Apple Litigation, asserting that dispositive motions are not
`due until four months after the date of this Institution Decision. Prelim.
`Reply. 3.
`On the current record, the Apple Litigation is still in the early stages,
`with very little investment pertaining to the invalidity issues raised in the
`Petition. Although the court has conducted a Markman hearing, Patent
`Owner does not indicate what relationship the claim construction disputes in
`the Apple Litigation have to the patentability issues presented in this
`proceeding. Fact discovery is not complete, and expert discovery has not
`started. Ex. 1082, 3. Patent Owner points to no other investment by the
`parties or the court in the Apple Litigation toward the patentability issues
`presented here. Cf. Sand Revolution, Paper 24 at 11 (“[W]e recognize that
`much work remains in the district court case as it relates to invalidity: fact
`
`16
`
`
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`IPR2021-00680
`Patent 10,469,934 B2
`discovery is still ongoing, expert reports are not yet due, and substantive
`motion practice is yet to come.”). On the current record, little evidence of
`risk exists of duplicating work performed in, or rendering inconsistent
`results with, the Apple Litigation.
`For the above reasons, this factor weighs against exercising our
`discretion to deny institution.
`4. Factor 4: overlap between issues raised in the petition and in the
`parallel proceeding
`Although Patent Owner argues that the validity issues in the Apple
`Litigation “significant[ly] overlap” those raised in the instant Petition, Patent
`Owner merely points to Apple’s use of Rezvani-875 as “one (and the first)
`of only four references for which Apple provided charts for the ’934
`[p]atent.” See Prelim. Sur-Reply 3 (citing Ex. 2022, 1; Ex. 2030, 25
`(arguing that “Exhibit C1–C4 to Apple’s invalidity contentions are Apple’s
`charts for the ’934 Patent”)). As Petitioner argues, however, Patent Owner
`fails to show much more than a possibility of some overlap. See Prelim.
`Reply 5 (“[Patent Owner] speculates Apple will rely on Rezvani-875, but it
`is one of 200+ references in Apple’s invalidity contentions and Apple’s trial
`strategy is unknown.”) (citing Ex. 2030, 1–7).
`Apple’s invalidity chart referenced by Patent Owner does not
`represent Apple’s final invalidity theory, because the District Court’s
`deadline for narrowing the number of claims asserted and the prior art
`references is October 21, 2021. See Ex. 1082, 3; Prelim. Resp. 16 (agreeing
`that the Apple Litigation is “subject to possible narrowing.”). As an
`example of changes, Apple’s District Court chart relied upon by Patent
`Owner implies a challenge to all 62 claims based on Patent Owner’s
`infringement assertions, but the parties agree that Petitioner challenges 17
`
`17
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`
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`IPR2021-00680
`Patent 10,469,934 B2
`claims here that Patent Owner does not assert against Apple in the District
`Court. See PO Resp. 16 (citing Ex. 2023, 2); Prelim. Reply 4 & n.4 (listing
`claims 9, 10, 14, 32–35, and 49–57).15 Petitioner contends that this lack of
`overlap as to these 17 claims it challenges here in relation to the claims not
`involved in the Apple Litigation prejudices Petitioner as to those claims.
`Prelim. Reply 4–5.
`The Petition’s chart above (§ II.E) reveals that Petitioner only
`employs Rezvani-875 in half the grounds. As Patent Owner recognizes,
`Apple’s District Court chart based on Rezvani-875 is only one of four charts
`that Apple filed in the District Court with respect to the ’934 patent, Apple’s
`invalidity theories are subject to narrowing so that Apple may not rely on
`Rezvani-875, and in any event, the Apple Litigation will not address 17
`challenged claims at issue here and that Patent Owner asserted against
`Petitioner in the Bose Litigation. See Prelim. Sur-Reply 3; Prelim. Reply 4
`& n.4. Accordingly, Patent Owner’s assertions of overlap amount to
`showing a possibility of only some overlap by Apple, who is not affiliated
`with Petitioner. For these reasons, this factor weighs against exercising our
`discretion to deny institution.
`5. Factor 5: whether the petitioner and the defendant in the parallel
`proceeding are the same party
`There is no dispute that Petitioner is not a defendant in the Apple
`Litigation. However, “[e]ven when a petitioner is unrelated to a
`
`
`15 Patent Owner asserts that Apple’s final invalidity contentions “are due the
`day after the filing” of the Preliminary Response (filed July 15, 2021).
`Prelim. Resp. 16–17. Nevertheless, Patent Owner’s Preliminary Sur-reply
`(filed Aug. 23, 2021) does not contend that Apple filed final invalidity
`contentions. See Prelim. Sur-Reply 5 (pointing out that Petitioner argues “it
`will be harmed if institution is denied”).
`
`18
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`IPR2021-00680
`Patent 10,469,934 B2
`defendant, . . . if the issues are the same as, or substantially similar to, those
`already or about to be litigated . . . the Board may, nonetheless, exercise the
`authority to deny institution.” Fintiv, Paper 11 at 14. As discussed above in
`connection with factor 4, the current record only shows a possibility that
`some issues, but not all, will be the same as or substantially similar to, the
`issues raised in the Apple Litigation. Accordingly, this factor weighs against
`exercising discretion to deny institution.
`6. Factor 6: other circumstances that impact the Board’s exercise of
`discretion, including the merits
`The factors considered in the exercise of discretion are part of a
`balanced assessment of all the relevant circumstances in the case, including
`the merits. Fintiv, Paper 11 at 14. For example, if the merits of a ground
`raised in the petition seem particularly strong on the preliminary record, this
`fact has favored institution. Id. at 14–15. By contrast, if the merits of the
`grounds raised in the petition are a closer call, then that fact has favored
`denying institution when other factors favoring denial are present. Id. at 15.
`In Sand Revolution, the panel determined that this factor weighed in favor of
`not exercising discretion when the petitioner had “set forth a reasonably
`strong case for the obviousness of most challenged claims.” Sand
`Revolution, at 13. Here, Patent Owner argues that the asserted grounds “are
`not strong” and should be denied on the merits. Prelim. Resp. 19–20;
`Prelim. Sur-reply 5. Petitioner, on the other hand, argues that the merits of
`its arguments are strong. Pet. 102; Prelim. Reply 5.
`For the reasons discussed below regarding Petitioner’s obviousness
`challenges, Petitioner’s challenges based on § 103 are at least reasonably
`strong. For example, the current record shows that the combination of
`Schrager and Goldstein and the combination of Rezvani-446, Rezvani-875,
`
`19
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`IPR2021-00680
`Patent 10,469,934 B2
`Skulley, and Hind, would have rendered claim 1 obvious. See infra §§ III.D,
`III.F. Accordingly, this factor weighs against exercising discretion to deny
`institution.
`
`7. Conclusion
`The Board takes “a holistic view of whether efficiency and integrity
`of the system are best served by denying or instituting review” under
`§ 314(a) when evaluating the Fintiv factors. Fintiv, Paper 11, 6. Evaluating
`all of the factors on this record, we determine that the circumstances here do
`not support exercising our discretion under § 314(a) to deny institution of
`inter partes review.
`D. Ground 1A: Asserted Obviousness Based on Schrager and Goldstein
`Petitioner asserts that claims 1–3, 5, 7, 9–11, 32–37, 39, 47, 49, and
`51–57 are unpatentable under 35 U.S.C. § 103(a) based on Schrager and
`Goldstein. Pet. 8–28. Patent Owner disagrees. Prelim. Resp. 23–37.
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