UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MICROSOFT CORPORATION,
`
`Petitioner,
`
`v.
`
`DAEDALUS BLUE, LLC,
`
`Patent Owner.
`
`Case No.: IPR2021-00831
`U.S. Patent No. 8,671,132
`
`PETITIONER’S PRELIMINARY REPLY
`[SEALED]
`
`PROTECTIVE ORDER MATERIAL
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MICROSOFT CORPORATION,
`
`Petitioner,
`
`v.
`
`DAEDALUS BLUE, LLC,
`
`Patent Owner.
`
`Case No.: IPR2021-00831
`U.S. Patent No. 8,671,132
`
`PETITIONER’S PRELIMINARY REPLY
`[SEALED]
`
`PROTECTIVE ORDER MATERIAL
`
`
`
`TABLE OF CONTENTS
`
`Page
`The Balance of the Fintiv Factors Strongly Supports Institution. ........ 1
`Patent Owner’s Allegations of Prior Invention of the ’132 Patent Fail.
` .............................................................................................................. 5
`
`I.
`II.
`
`PROTECTIVE ORDER MATERIAL
`
`i
`
`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Allergan, Inc. v. Apotex Inc.,
`754 F.3d 952 (Fed. Cir. 2014) .............................................................................. 7
`ATI Techs., ULC. v. Iancu,
`920 F.3d 1362 (Fed. Cir. 2019) ............................................................................ 6
`Brown v. Barbacid,
`436 F.3d 1376 (Fed. Cir. 2006) ............................................................................ 6
`Chegg, Inc. v. Netsoc, LLC,
`No. IPR2019-01171, Paper 39 (PTAB Dec. 2, 2020) .......................................... 7
`Fid. Info. Servs., LLC v. Groove Digital, Inc.,
`IPR2019-00193, Paper 58 (PTAB Apr. 30, 2020) ............................................... 6
`Juniper Networks v. WSOU Investments, LLC,
`IPR2021-00538, Paper 9 (PTAB Aug. 18, 2021) ..................................... 1, 2, 3, 4
`Merck Sharp & Dohme Corp. v. Actavis Labs. FL, Inc.,
`No. 15-vc-6075 (PGS)(DEA), 2017 WL 4366720 (D.N.J. Sept. 29,
`2017) ..................................................................................................................... 5
`In re Meyer Mfg. Corp.,
`411 F. App’x 316 (Fed. Cir. 2010) ....................................................................... 6
`Nvidia Corp. v. Invensas Corp.,
`IPR2020-00603, Paper 11 (PTAB Sept. 3, 2020) ................................................. 4
`Singh v. Brake,
`317 F.3d 1334 (Fed. Cir. 2003) ............................................................................ 7
`Spectralytics, Inc. v. Cordis Corp,
`576 F. Supp. 2d 1030 (D. Minn. 2008) ............................................................. 5, 6
`In re Steed,
`802 F.2d 1311 (Fed. Cir. 2015) ........................................................................ 6, 7
`
`PROTECTIVE ORDER MATERIAL
`
`ii
`
`
`
`Statutes
`35 U.S.C. § 102(a) ..................................................................................................... 5
`35 U.S.C. § 102(b) ..................................................................................................... 5
`
`PROTECTIVE ORDER MATERIAL
`
`iii
`
`
`
`LISTING OF EXHIBITS
`
`DESCRIPTION
`
`U.S. Patent No. 8,671,132 to Carlson et al. (the “132 Patent”)
`
`File History of U.S. Patent No. 8,671,132 (the “132 FH”)
`
`Declaration of Dr. Erez Zadok (“Zadok”) re U.S. Patent No.
`8,671,132
`
`Curriculum Vitae of Dr. Erez Zadok
`
`U.S. Patent No. 5,018,060 to Gelb (“Gelb”)
`
`IBM, Tivoli Storage Manager: A Technical Introduction (“Tivoli”)
`
`Excerpt from Brent Callaghan, NFS Illustrated (Addison Wesley
`Longman, Inc. 2000) (“Callaghan”)
`
`U.S. Patent No. 7,269,612 to Devarakonda (“Devarakonda”)
`
`Complaint for Patent Infringement, Daedalus Blue, LLC v.
`Microsoft Corporation, Case No. 6:20-cv-01152-ADA (Dec. 16,
`2020 W.D. Tex.)
`
`IBM Redbooks, How to order IBM Redbooks, available at
`https://www.redbooks.ibm.com/Redbooks.nsf/pages/howtobuy?Op
`en
`
`Affidavit of Duncan Hall (Internet Archive) re IBM, Tivoli Storage
`Manager: A Technical Introduction
`
`U.S. Copyright Office Record for Brent Callaghan, NFS Illustrated
`(Addison Wesley Longman, Inc. 2000)
`
`U.S. Library of Congress Certification for Brent Callaghan, NFS
`Illustrated (Addison Wesley Longman, Inc. 2000)
`
`EXHIBIT
`NO.
`1001
`1002
`
`1003
`
`1004
`1005
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`
`1013
`
`PROTECTIVE ORDER MATERIAL
`
`iv
`
`
`
`EXHIBIT
`NO.
`
`DESCRIPTION
`
`1014
`
`1015
`
`1016
`
`IBM, Tivoli Storage Manager for Windows, Managed System for
`SAN Storage Agent User’s Guide, Version 4, Release 2 (2001)
`retrieved from
`https://web.archive.org/web/20011118124435/http://www.tivoli.co
`m/support/public/Prodman/public_manuals/UG/STOR/TSM/GC35
`-0434-02.pdf
`
`Excerpt from Microsoft Computer Dictionary, Fifth Edition (2002)
`(“Microsoft Dictionary”)
`
`Patterson et al., SnapMirror®: File System Based Asynchronous
`Mirroring for Disaster Recovery, USENIX Association, FAST ’02:
`Conference on File and Storage Technologies, January 2002, pp.
`117-129. (“Patterson”)
`
`1017
`
`U.S. Patent No. 5,819,292 to Hitz et al. (“Hitz”)
`
`1018
`
`1019
`
`1020
`
`1021
`
`1022
`
`Sandberg et al., Design and Implementation of the SUN Network
`Filesystem, USENIX Conference & Exhibition, Portland Oregon,
`Summer 1985, pp. 119–130. (“Sandberg”)
`
`Hungate et al., Conference Report: Application Portability Profile
`and Open System Environment User’s Forum, Gaithersburg, MD,
`May 9-10, 1995, J. Res. Natl. Inst. Stand. Technol., Vol. 100, No.
`6, 1995, pp. 699-709. (“Hungate 1995”)
`
`Simple Mail Transfer Protocol, Network Working Group, Request
`for Comments: 2821 (April 2001) retrieved from
`https://tools.ietf.org/html/rfc2821
`
`Email from Jun Zheng dated May 4, 2021 in Daedalus Blue, LLC
`v. Microsoft Corporation, Case No. 6:20-cv-01152-ADA (W.D.
`Tex.)
`
`Declaration of Jared Bobrow in support of Petitioner’s Motion for
`Admission Pro Hac Vice (August 26, 2021).
`
`PROTECTIVE ORDER MATERIAL
`
`v
`
`
`
`EXHIBIT
`NO.
`
`DESCRIPTION
`
`1023
`
`1024
`
`1025
`
`Scott McKeown, “WDTX ‘Implausible Schedule’ & Cursory
`Markman Order Highlighted,” Ropes & Gray, Patents Post-Grant,
`Inside Views & News Pertaining to the Nation’s Busiest Patent
`Court, June 2, 2021.
`
`Dani Kass, Judge Albright Now Oversees 20% of New U.S. Patent
`Cases, Law360, March 10, 2021.
`
`Daedalus Blue, LLC’s Preliminary Infringement Contentions;
`Daedalus Blue, LLC v. Microsoft Corporation, Case No. 6:20-cv-
`01152-ADA (served May 20, 2021).
`
`PROTECTIVE ORDER MATERIAL
`
`vi
`
`
`
`I. The Balance of the Fintiv Factors Strongly Supports Institution.
`Patent Owner’s contention that the Fintiv factors favor denial of institution
`
`in this proceeding (POPR, 44-57) is groundless. Petitioner has acted diligently in
`
`pursuing this IPR, having filed its petition even before Patent Owner had identified
`
`the claims it intended to assert in District Court. Petitioner presents a strong
`
`showing on the merits that the ’132 patent is invalid. A final decision in this
`
`proceeding will issue before November 21, 2022, which is only a few days after
`
`the District Court’s estimated trial date of November 14, 2022. Finally, Petitioner
`
`is willing to enter into a stipulation that, if this proceeding is instituted and not later
`
`terminated, Petitioner will not rely in the District Court on the same grounds as
`
`instituted. Thus, the balance of the Fintiv factors clearly supports institution.
`
`The situation presented here is substantially the same as in Juniper Networks
`
`v. WSOU Investments, LLC, IPR2021-00538, Paper 9 (PTAB Aug. 18, 2021),
`
`where the Board found that the Fintiv factors favored institution. There, as here,
`
`Patent Owner contended that the Western District of Texas’s allegedly aggressive
`
`trial schedule should trump the USPTO’s role in deciding unpatentability. Juniper
`
`Networks, IPR2021-00538, Paper 9, at 8. The Board rejected this position, holding
`
`that because petitioner acted promptly in filing its IPR (there, within one month
`
`after receiving the Patent Owner’s preliminary infringement contentions), this
`
`factor favored institution. Id. at 12. Because there was also a strong showing on
`
`PROTECTIVE ORDER MATERIAL
`
`1
`
`
`
`the merits and the rest of the factors were either neutral or favored institution, the
`
`Board instituted review notwithstanding the allegedly aggressive trial schedule. Id.
`
`at 11-12, 18.
`
`Under Juniper, the Fintiv factors strongly favor institution here.
`
`The first Fintiv factor is the chance of a stay. Pet. 5. Patent Owner
`
`speculates that no stay will issue. POPR, 46. The Board, however, does not
`
`speculate about future actions of the District Court, such as entry of a stay. Juniper
`
`Networks, IPR2021-00538, Paper 9, at 8; Pet. 5. This factor is neutral.
`
`The second Fintiv factor is the district court trial date. Pet. 6. Contrary to
`
`Patent Owner’s plainly false statement, the District Court’s scheduling order states
`
`that trial date has not been set: “Jury Selection/Trial. The Court expects to set
`
`these dates at the conclusion of the Markman Hearing.” EX2004, 5. Plainly,
`
`these dates are estimated at this point in time. Regardless, the District Court’s
`
`estimated trial date is unlikely to hold given the volume of cases pending in the
`
`Waco Division. Ex. 1023 (analysis of Judge Albright’s “implausible schedule” for
`
`setting trials); Ex. 1024 (indicating that Judge Albright has 20% of all new patent
`
`cases filed in the US). Furthermore, the difference between the estimated trial date
`
`and the Board’s deadline for issuing a final written decision is only seven days.
`
`Thus, there is a reasonable possibility that the Board’s decision will issue before
`
`the end of the district court trial (or even prior to the start of the trial). This factor
`
`PROTECTIVE ORDER MATERIAL
`
`2
`
`
`
`favors institution, or at least is neutral. Juniper Networks, IPR2021-00538, Paper
`
`9, at 9-10; Pet. 6.
`
`The third Fintiv factor is the court’s investment in the district court action
`
`relative to the invalidity issues at the PTAB. Pet. 6. Where a petitioner is diligent
`
`in filing an IPR, this factor strongly favors institution. Juniper Networks,
`
`IPR2021-00538, Paper 9, at 12. Here, Petitioner filed this IPR on May 7, 2021,
`
`which was before Petitioner even received Patent Owner’s preliminary
`
`infringement contentions (on May 20, 2021). Ex. 1025.
`
`Patent Owner contends that the District Court has made “substantial”
`
`investments related to invalidity. POPR, 47-48. This is simply untrue. Patent
`
`Owner fails to identify any specific discovery directed to invalidity issues that has
`
`occurred or will occur prior to institution. Id. Moreover, no party has filed a
`
`motion relating to invalidity, and the current deadline for filing dispositive motions
`
`is in August 2022 -- long after the deadline for addressing institution. EX2004, 4.
`
`Juniper Networks, IPR2021-00538, Paper 9, at 12.
`
`The fourth Fintiv factor is the overlap of issues between this proceeding and
`
`the district court case. Pet. 6. Petitioner will stipulate that, if this proceeding is
`
`instituted and not later terminated, it will not assert the same grounds for invalidity
`
`in the District Court that are instituted here. With this stipulation, this factor favors
`
`institution. Juniper Networks, IPR2021-00538, Paper 9, at 16.
`
`PROTECTIVE ORDER MATERIAL
`
`3
`
`
`
`The fifth Fintiv factor favors institution. Where the Board is “likely to reach
`
`the merits at or around the same time as the district court case,” institution is
`
`favored. Nvidia Corp. v. Invensas Corp., IPR2020-00603, Paper 11 at 23 (PTAB
`
`Sept. 3, 2020); Pet. 6-7. As noted above, the Court’s trial date is still only an
`
`estimated date, which is unlikely to hold given the Court’s heavy patent docket.
`
`Supra, at 2-3. Furthermore, even were the trial to commence on the estimated
`
`date, trial would occur within days of the Board’s deadline for a final written
`
`decision. Indeed, the Board could issue its decision prior to even the estimated
`
`trial date, and thus it is unclear which proceeding will conclude first. Pet. 6-7;
`
`Juniper Networks, IPR2021-00538, Paper 9, at 16.
`
`The sixth Fintiv factor, the merits of the IPR, strongly favors institution.
`
`Pet. 7. Daedalus’ POPR fails to dispute the vast majority of Petitioner’s invalidity
`
`arguments in the Petition.1 Daedalus only disputes a single limitation from each
`
`independent claim. POPR, 23, 40. This factor thus strongly favors institution.
`
`1 Out of respect for the scope of the reply authorized by the Board, Petitioner
`
`reserves its substantive arguments on the lack of merit of Patent Owner’s POPR for
`
`its post-institution Reply.
`
`PROTECTIVE ORDER MATERIAL
`
`4
`
`
`
`II.
`
`Patent Owner’s Allegations of Prior Invention of the ’132 Patent Fail.
`Patent Owner alleges that the inventors of the ’132 patent conceived of their
`
`invention at least as early as April 26, 2001 and reduced it to practice on
`
`March 14, 2003 by filing the ’132 Patent. POPR, 20-22. Patent Owner then
`
`alleges that, based on this alleged conception and reduction to practice, Tivoli and
`
`Devarakonda are not prior art to the ’132 patent. POPR, 22-23, 39-40. Patent
`
`Owner is incorrect.
`
`Addressing Tivoli first, Patent Owner fundamentally misapprehends the law.
`
`Tivoli was published on June 15, 2001 and was publicly available at least on
`
`November 28, 2001. Pet. 16-17. The ’132 patent was filed on March 14, 2003.
`
`Therefore, Tivoli is prior art to the ’132 patent under 35 U.S.C. § 102(b). The law
`
`does not permit a patent owner to antedate a § 102(b) reference. See, e.g., Merck
`
`Sharp & Dohme Corp. v. Actavis Labs. FL, Inc., No. 15-vc-6075 (PGS)(DEA),
`
`2017 WL 4366720, at *13 (D.N.J. Sept. 29, 2017) (“A pre–AIA 35 U.S.C. § 102(a)
`
`reference, unlike a pre–AIA 35 U.S.C. § 102(b) reference, can be antedated, and
`
`thereby render the reference not a prior art reference.”); Spectralytics, Inc. v.
`
`Cordis Corp, 576 F. Supp. 2d 1030, 1043 (D. Minn. 2008) (“If [a] reference is not
`
`§ 102(b) art … the patent applicant may antedate the reference.”). Thus, Grounds
`
`1 and 2 at a minimum must be instituted.
`
`PROTECTIVE ORDER MATERIAL
`
`5
`
`
`
`Turning to Devarakonda, which is used only in Ground 3, Patent Owner
`
`contends that the inventors invented the claims of the ’132 Patent before
`
`Devarakonda, because they allegedly conceived on April 26, 2001 (before
`
`Devarakonda’s filing date of May 31, 2002) and they were diligent in reducing the
`
`claimed inventions to practice from Devarakonda’s filing date to the reduction to
`
`practice date of March 14, 2003. POPR, 20-22. Patent owner, however, fails to
`
`support its allegations of diligence with sufficient evidence. Id. To establish
`
`diligence in reducing an invention to practice, a patent owner “must have
`
`reasonably continued activity to reduce the invention to practice.” ATI Techs.,
`
`ULC. v. Iancu, 920 F.3d 1362, 1369 (Fed. Cir. 2019). Thus, a party must “account
`
`for the entire period during which diligence is required.” In re Meyer Mfg. Corp.,
`
`411 F. App’x 316, 319 (Fed. Cir. 2010) (quoting Gould v. Schawlow, 363 F.2d
`
`908, 918-19 (C.C.P.A. 1966)). The burden of proving diligence falls on Patent
`
`Owner. In re Steed, 802 F.2d 1311, 1316 (Fed. Cir. 2015). Diligence cannot be
`
`established by uncorroborated inventor testimony. Brown v. Barbacid, 436 F.3d
`
`1376, 1380 (Fed. Cir. 2006); Fid. Info. Servs., LLC v. Groove Digital, Inc.,
`
`IPR2019-00193, Paper 58 at 34, 40-41 (PTAB Apr. 30, 2020).
`
`Here, patent owner relies on the testimony of two of the named inventors,
`
`Dr. Pease and Ms. Duyanovich. EX2002, 2003. For corroboration, Patent Owner
`
`relies on various design documents and business plans. EX2013-2017. Critically,
`
`PROTECTIVE ORDER MATERIAL
`
`6
`
`
`
`however, Patent Owner’s allegedly corroborating evidence stops at February 2002,
`
`more than a year prior to the alleged reduction to practice date of March 14, 2003.
`
`EX2017. Patent Owner’s declarants acknowledge that each of these documents
`
`only evidence alleged diligence “as of that date” (referring to the date of each
`
`document). EX2002, ¶¶ 20-24; EX2003, ¶ 21. Thus, there is no corroboration of
`
`any inventor’s diligence for the entire period from at least March 2002 through
`
`March 14, 2003 when the ’132 patent was filed. This is fatal to Patent Owner’s
`
`attempt to swear behind Devarakonda. In re Steed, 802 F.2d at 1319-20
`
`(upholding PTAB’s finding of inadequate diligence and reduction to practice
`
`evidence where “there [were] significant gaps of time between each of the
`
`[relevant pieces of evidence] that amount[ed] to entire years of diligence being
`
`omitted.”) (quotations omitted); Chegg, Inc. v. Netsoc, LLC, No. IPR2019-01171,
`
`Paper 39, at 43-44 (PTAB Dec. 2, 2020) (“The absence of corroborating evidence
`
`dooms Patent Owner’s attempt to antedate Collins.”) (citing Perfect Surgical
`
`Techniques, Inc. v. Olympus Am., Inc., 841 F.3d 1004, 1007 (Fed. Cir. 2016)).
`
`Furthermore, Patent Owner wholly fails to connect the evidence of diligence to the
`
`claimed features of the alleged invention. Allergan, Inc. v. Apotex Inc., 754 F.3d
`
`952, 968 (Fed. Cir. 2014) (rejecting evidence of diligence because “it does not
`
`relate to the claimed invention”) (emphasis added); Singh v. Brake, 317 F.3d 1334,
`
`1343 (Fed. Cir. 2003) (rejecting evidence of diligence because the evidence was
`
`PROTECTIVE ORDER MATERIAL
`
`7
`
`
`
`“unexplained as to content and relevance to the invention”);. Its evidence merely
`
`lays out high-level design concepts and discussions of the early planning stages of
`
`the project that allegedly lead to the ’132 Patent.
`
`Thus, there is no basis to deny institution based on Patent Owner’s wholly
`
`deficient attempt to swear behind Tivoli and Devarakonda.
`
`Dated: September 17, 2021
`
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`
`/Don Daybell/
`By:
`Don Daybell
`Lead Counsel for Petitioner
`Reg. No. 50,877
`2050 Main Street, Suite 1100
`Irvine, CA 92614-8255
`T: (949) 567-6700
`F: (949) 567-6710
`Email: D2DPTABDocket@orrick.com
`
`Jared Bobrow
`Pro Hac Vice
`1000 Marsh Road
`Menlo Park, CA 94025-1015
`T: (650) 614-7400
`F: (650) 614-7401
`Email: PTABDocketJ3B3@orrick.com
`Attorneys for Petitioner Microsoft Corporation
`
`PROTECTIVE ORDER MATERIAL
`
`8
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that on September 17, 2021, a copy of
`
`PETITIONER’S PRELIMINARY REPLY was served in its entirety by filing
`
`through the Patent Trial and Appeal Board End to End System, as well as via
`
`electronic mail, upon the following attorneys of record for the Patent Owner:
`
`Lauren N. Robinson
`Brenda Entzminger
`BUNSOW DE MORY LLP
`701 El Camino Real
`Redwood City, CA 94063
`
`lrobinson@bdiplaw.com
`bentzminger@bdiplaw.com
`BDIP_DaedalusMsftIPR@bdiplaw.com
`
`Attorneys for Patent Owner Daedalus Blue, LLC
`
`/Karen Johnson/
` Karen Johnson
`
`
`
`PROTECTIVE ORDER MATERIAL
`
`9
`
`
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