UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`TIANMA MICROELECTRONICS CO. LTD.,
`Petitioner,
`v .
`JAPAN DISPLAY INC. AND
`PANASONIC LIQUID CRYSTAL DISPLAY CO., LTD,
`Patent Owner
`_______________
`Case IPR No: IPR2021-01061
`Patent No. 10,423,034
`_______________
`
`PATENT OWNERS JAPAN DISPLAY INC. AND PANASONIC LIQUID
`CRYSTAL DISPLAY CO., LTD’S PRELIMINARY RESPONSE TO
`PETITION FOR INTER PARTES REVIEW OF UNITED STATES PATENT
`NO. 10,423,034 PURSUANT TO 35 U.S.C. § 313, 37 C.F.R. § 42.107
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`TABLE OF CONTENTS
`
`I.
`II.
`
`V.
`
`INTRODUCTION ........................................................................................... 1
`THE BOARD SHOULD EXERCISE ITS DISCRETION TO DENY
`INSTITUTION OF THE PETITION UNDER § 314(a) BASED ON
`THE FINTIV FACTORS ................................................................................. 2
`A.
`Fintiv Factor 1: Whether the court granted a stay or whether
`evidence exists that one may be granted if an IPR is instituted ............ 4
`Fintiv Factor 2: The proximity of the court’s trial date to the
`projected statutory deadline for the PTAB’s final written
`decision .................................................................................................. 7
`Fintiv Factor 3: The investment in the parallel proceeding by the
`court and the parties .............................................................................. 8
`Fintiv Factor 4: The overlap between issues raised in the petition
`and in the parallel proceeding .............................................................11
`Fintiv Factor 5: The petitioner and the defendant in the parallel
`proceeding are the same party .............................................................14
`Fintiv Factor 6: Other circumstances impact the PTAB’s exercise
`of discretion, including the merits .......................................................14
`The ’034 Patent ..............................................................................................15
`III.
`IV. Asserted Prior Art ..........................................................................................17
`A.
`U.S. Patent App. Pub. No. 2008/0007679 (“Ochiai”) (Ex.1005) .......17
`B.
`U.S. Patent No. 6,356,330 (“Ando”) (Ex.1006) .................................20
`THE PETITION FAILS TO ESTABLISH A REASONABLE
`LIKELIHOOD THAT ANY ONE OF THE CHALLENGED CLAIMS
`IS UNPATENTABLE. ..................................................................................22
`A.
`The Combination of Ochiai and Ando does not render claim 1
`obvious ................................................................................................24
`Ochiai in view of Ando and Hattori ....................................................42
`
`B.
`
`C.
`
`D.
`
`E.
`
`F.
`
`B.
`
`–ii–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`Ochiai in view of Ando and Yanagawa ..............................................43
`C.
`VI. CONCLUSION ..............................................................................................43
`CERTIFICATE OF WORD COUNT ......................................................................44
`CERTIFICATE OF SERVICE ................................................................................45
`
`–iii–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`EXHIBIT LIST
`
`Ex.2001
`
`First Amended Docket Control Order (Dkt. No. 140)
`
`Ex.2002
`
`Defendant’s Preliminary Invalidity Contentions
`
`Ex.2003
`
`Declaration of Thomas L. Credelle
`under 37 C.F.R. § 1.68
`
`Ex.2004
`
`Curriculum Vitae of Thomas L. Credelle
`
`Ex.2005
`
`Ex.2006
`
`Defendant’s Motion for Leave to Supplement Invalidity Contentions
`(Redacted) (Dkt. No. 131)
`
`Order granting Tianma Microelectronics Co. Ltd.’s Motion for
`Leave to Supplement Invalidity Contentions (Dkt. No. 142)
`
`–iv–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`I.
`
`INTRODUCTION
`
`Japan Display Inc. and Panasonic Liquid Crystal Display Co., Ltd. (together,
`
`“Patent Owner”) submit this Response to IPR2021-01061 for Inter Partes Review
`
`(“Petition”) of U.S. Patent No. 10,423,034 (“the ’034 Patent”) (Ex.1001) filed by
`
`Tianma Microelectronics Co., Ltd. (“Petitioner”). This Petition should be denied for
`
`at least two reasons: (1) weighing of the Fintiv factors for discretionary denial under
`
`35 U.S.C. § 314(a) heavily favors denial, and (2) Petitioner fails to establish a
`
`reasonable likelihood that any of the challenged claims is unpatentable.
`
`Petitioner essentially concedes that none of the Fintiv factors weigh in its
`
`favor but Factors 4 (lack of overlap) and 6 (strong merits), which it relies on to
`
`“outweigh the other relevant factors.” Pet. 8. Factors 4 and 6, however, do not
`
`weigh in Petitioner’s favor. Petitioner attempts to avert the overlap between the
`
`district court litigation and this Petition by stipulating that it will not pursue any
`
`ground that it raised or reasonably could have raised in this Petition. But by the time
`
`a decision on institution is due for this Petition, the parties will have already
`
`completed the vast majority of work related to invalidity and only trial will remain.
`
`Moreover, Factor 6 does not weigh in Petitioner’s favor because the merits of
`
`Petitioner’s arguments are not strong. Petitioner asserts the same combination of
`
`primary and secondary references for each of its three grounds. These two
`
`references are significantly diverse in the types of technology they disclose and
`
`–1–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`would not be obvious to combine. Moreover, the secondary reference, which is
`
`proposed to cure the deficiencies in the primary reference, does not disclose the
`
`claimed features that are conceded as missing from the primary reference. Further
`
`still, Petitioner misapplies the teaching of both the primary and secondary references
`
`to achieve its proposed combination.
`
`II.
`
`THE BOARD SHOULD EXERCISE ITS DISCRETION TO DENY
`INSTITUTION OF THE PETITION UNDER § 314(a) BASED ON THE
`FINTIV FACTORS
`
`The Petition seeks to review a patent asserted in a pending district court
`
`litigation between the same parties, plaintiff Japan Display Inc. and defendant
`
`Tianma Microelectronics Co. Ltd. (Japan Display Inc. v. Tianma Microelectronics
`
`Co. Ltd., Case No. 2:20-cv-00285 (E.D. Tex. Aug. 31, 2020)), which is scheduled
`
`to be completed more than eleven months before a final written decision would be
`
`due. Under Apple Inc. v. Fintiv, Inc., “a parallel proceeding in an advanced state
`
`implicates considerations of efficiency and fairness, which can serve as an
`
`independent reason to apply discretion to deny institution.” IPR2020-00019, Paper
`
`15 at 11 (P.T.A.B. May 13, 2020). Here, the district court case is already well-
`
`developed. The claim construction hearing was held on August 12, 2021, and the
`
`claim construction order issued on September 3, 2021. The parties have spent
`
`significant resources on discovery and related motion practice directly impacting
`
`invalidity, including challenges to the sufficiency of Defendant’s invalidity
`
`–2–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`contentions and Defendant’s motion to compel discovery related to prior art
`
`products. By the time a decision on institution will be due (January 21, 2022), fact
`
`and expert discovery will have long been closed and the deadline for expert reports
`
`(October 1, 2021) and dispositive motions (November 8, 2021) will have passed.
`
`See First Amended Docket Control Order (Ex.2001). The jury trial involving this
`
`patent is scheduled to begin on February 7, 2022, more than eleven months before
`
`the Board would issue a final written decision in this proceeding, if instituted
`
`(January 21, 2023). Thus, given the advanced stage of the district court case relative
`
`to the Petition, the Petition should be denied institution under 35 U.S.C. § 314(a) to
`
`avoid needless expenditure of the Board’s resources. See NHK Spring Co. v. Intri-
`
`Plex Techs., Inc., IPR2018-00752, Paper 8 (P.T.A.B. Sept. 12, 2018) (denying
`
`institution where the district court proceeding had progressed beyond the close of
`
`fact discovery and trial would take place before issuance of the Board’s final written
`
`decision); Fintiv, IPR2020-00019, Paper 15 at 13 (finding that scheduling of a
`
`district court trial two months before issuance of the Board’s final written decision
`
`weighed “somewhat in favor” of discretionary denial). Indeed, the Board has
`
`identified factors relating to “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” in line with NHK Spring—each of which supports denial here. Fintiv,
`
`IPR2020-00019, Paper 11 at 6. The Fintiv factors include:
`
`–3–
`
`

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`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`1.
`
`2.
`
`3.
`4.
`
`5.
`
`6.
`
`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;
`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.
`
`Id.
`
`As set forth below, a balancing of these factors demonstrates that efficiency
`
`and integrity of the America Invents Act are best served by denying institution of
`
`this Petition.
`
`A.
`
`Fintiv Factor 1: Whether the court granted a stay or whether
`evidence exists that one may be granted if an IPR is instituted
`
`“A district court stay of the litigation pending resolution of the PTAB trial
`
`allays concerns about inefficiency and duplication of efforts,” and thus “weigh[s]
`
`against exercising the authority to deny institution under NHK.” Fintiv, IPR2020-
`
`00019, Paper 11 at 6. The Defendant has not moved for a stay in view of this Petition
`
`and there is no reason to believe it will do so. The Patent Owner has no plans to
`
`move for a stay. Moreover, it is unlikely that Judge Gilstrap, the presiding judge in
`
`the district court case, would grant a stay at this late stage.
`
`–4–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
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`Judge Gilstrap uses a three-factor test to determine whether to grant a stay
`
`pending IPR: “(1) whether the stay will unduly prejudice the nonmoving party, (2)
`
`whether the proceedings before the court have reached an advanced stage, including
`
`whether discovery is complete and a trial date has been set, and (3) whether the stay
`
`will likely result in simplifying the case before the court.” Memorandum Opinion
`
`and Order, Solas OLED Ltd. v. Samsung Display Co., No. 2:19-cv-00152-JRG, 2020
`
`WL 1905361 (E.D. Tex. Apr. 17, 2020) (Dkt. No. 133) (quoting NFC Techs. LLC v.
`
`HTC Am., Inc., Case No. 2:13-cv-1058-WCB, 2015 1069111, at *2 (E.D. Tex. Mar.
`
`11, 2015). As a threshold issue, Judge Gilstrap “has a consistent practice of denying
`
`motions to stay when the PTAB has yet to institute post-grant proceedings.” Garrity
`
`Power Servs. LLC. v. Samsung Elecs. Co. Ltd., 2:20-cv-269-JRG, *2 (E.D. Tex. Feb.
`
`17, 2021) (citing Trover Group, Inc. v. Dedicated Micros USA, No. 2:13-cv-1047-
`
`WCB, 2015 WL 1069179, at *6 (E.D. Tex. Mar. 11, 2015) (Bryson, J.) (“This
`
`Court’s survey of cases from the Eastern District of Texas shows that when the
`
`PTAB has not yet acted on a petition for inter partes review, the courts have
`
`uniformly denied motions for a stay.”). Accordingly, any motion to stay related to
`
`this Petition would be considered premature until after an institution decision is
`
`made in January 2022. By that time, the first factor would weigh strongly against a
`
`stay because fact and expert discovery would be completed and trial would not be
`
`far off. Moreover, it is well established that Plaintiffs’ timely enforcement of their
`
`–5–
`
`

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`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
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`patent rights is entitled to some weight, even if that factor is not dispositive.
`
`Plaintiffs have also already incurred substantial expenses with this litigation, which
`
`would be further exacerbated by additional delay. Similarly, the second factor
`
`weighs against a stay for similar reasons – the case is in its later stages. Finally, the
`
`third factor – whether the stay will likely result in simplifying the case before the
`
`court – is at most neutral. The consolidated district court litigation involves fifteen
`
`patents. Including this Petition, Petitioner has challenged less than half of those
`
`patents via inter partes review. See IPR2021-01028, -01029, -01057, -01058, -
`
`01059 -01060, -01061. That is, the scope of the district court litigation is much
`
`broader than the instant Petition (and all the petitions combined). Thus, even if the
`
`Board were to institute all seven petitions, there would remain significant invalidity
`
`issues for the Court to resolve. Moreover, Petitioner has put forward a sizeable prior
`
`art products defense—identifying hundreds of prior art products for the asserted
`
`patents. Petitioner has also integrated technical information from these prior art
`
`products into its invalidity defenses. As a result, removing the printed publication
`
`prior art from Petitioner’s invalidity case would have only a minor impact, if any.
`
`Therefore, it is extremely unlikely that Judge Gilstrap would grant a stay, even if
`
`Petitioner requested one.
`
`Petitioner argues that the Board should not “speculate how the district court
`
`will proceed with respect to any motion” for stay because, given Petitioner’s motion
`
`–6–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
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`to transfer, “it remains uncertain when and where the related district court litigation
`
`will even be tried.” See Pet., 9. But on August 25, 2021, the Court issued an order
`
`denying Defendant’s Motion to Transfer, rendering this argument moot. See Japan
`
`Display, Case No. 2:20-cv-00283, Dkt. No. 115. Accordingly, for these reasons,
`
`this factor weighs in favor of the Board exercising its discretion to deny institution
`
`pursuant to § 314(a). At a minimum, since neither party has requested a stay, this
`
`factor does not weigh in favor or against denial under Fintiv. See Fintiv, IPR2020-
`
`00019, Paper 11, at 12.
`
`B.
`
`Fintiv Factor 2: The proximity of the court’s trial date to the
`projected statutory deadline for the PTAB’s final written decision
`
`As explained in Fintiv, “[i]f the court’s trial date is earlier than the projected
`
`statutory deadline, the Board generally has weighed this fact in favor of exercising
`
`authority to deny institution under NHK.” Id., 9. Such is the case here. As discussed
`
`above, the trial date is set for February 7, 2022, and the Board’s final written decision
`
`will be due—over eleven months later—on January 21, 2023. In Fintiv, the
`
`difference between the dates was only two months and the Board found that this
`
`factor weighed “somewhat in favor” of discretionary denial. Id., 13. Here, with
`
`more than eleven months between trial and the Board’s final written decision, this
`
`factor weighs even more heavily towards a discretionary denial of institution. See
`
`Intel Corp. v. VLSI Tech. LLC, IPR2020-00106, Paper 17, at 7 (P.T.A.B. May 5,
`
`2020) (seven-month gap); Vizio, Inc. v. Polaris PowerLED Techs., LLC, IPR2020-
`
`–7–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
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`00043, Paper 30, at 8 (P.T.A.B. May 4, 2020) (seven-month gap); NHK Spring,
`
`IPR2018-00752, Paper 8, at 20 (six-month gap); Supercell, IPR2020-00310, Paper
`
`13, at 10–12 (six-month gap).
`
`Petitioner argues that the current trial date is “speculative” given its Motion
`
`to Transfer to the Central District of California. Pet., 9-10; see Japan Display, Case
`
`No. 2:20-cv-00283, Dkt. No. 69. However, as noted above, the Court has denied
`
`Defendant’s Motion to Transfer, rendering this argument moot. See Japan Display,
`
`Case No. 2:20-cv-00283, Dkt. No. 115. Further, the Board takes the court’s current
`
`schedule at “face value.” See Fintiv, IPR2020-00019, Paper 15, at 13 (“We generally
`
`take courts’ trial schedules at face value absent some strong evidence to the
`
`contrary.”). Petitioner offers no other credible evidence demonstrating that the
`
`February 7, 2022 trial setting will be moved.
`
`Therefore, this factor weighs heavily in favor of discretionary denial.
`
`C.
`
`Fintiv Factor 3: The investment in the parallel proceeding by the
`court and the parties
`
`Given the activity in the case thus far, this factor strongly weighs in favor of
`
`discretionary denial. Petitioner states that “[b]y institution, the primary investment
`
`by the district court will be through any claim construction ruling.” Pet., 10. This
`
`admission alone is not insignificant, yet Petitioner’s assertion vastly understates the
`
`efforts that both the parties and the Court have expended in the district court
`
`–8–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`litigation thus far. The parties have exchanged opening, responsive, and reply claim
`
`construction briefs and conducted an expert deposition. The Court heard arguments
`
`on these issues and issued its Markman Order construing these terms. See Japan
`
`Display, Case No. 2:20-cv-00283, Dkt. No 123. Moreover, the parties have
`
`exchanged infringement contentions and invalidity contentions and held several
`
`30(b)(6) depositions and six inventor depositions, including an inventor deposition
`
`for the ’034 Patent. See Intel Corp. v. VLSI Tech. LLC, IPR2020-00498, Paper 16
`
`at 7-8 (P.T.A.B. August 19, 2021) (finding that issuance of a claim construction
`
`order and service of final infringement and invalidity contentions was sufficient
`
`investment to warrant discretionary denial.); E-One, Inc. v. Oshkosh Corp.,
`
`IPR2019-00161, Paper 16, at 7 (P.T.A.B. May 15, 2019) (denying institution under
`
`§ 314(a) where, inter alia, the district court had already “received briefing and heard
`
`oral argument on claim construction, and issued a claim construction ruling”).
`
`Further, the Court has invested time conducting two hearings between the parties to
`
`resolve Plaintiff’s motion to compel invalidity contentions, discovery disputes, and
`
`Petitioner’s failed motion to transfer. The Court has also appointed a technical
`
`advisor (Don Tiller) to assist in the case and, as of this response, the parties have
`
`paid over $20,000.00 for Mr. Tiller’s services. See Japan Display, Case No. 2:20-
`
`cv-00283, Dkt. Nos. 88, 106. By the time an institution decision issues, fact and
`
`expert discovery will be complete; expert reports and dispositive motions will have
`
`–9–
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`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
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`been filed; and the parties will have filed their motions in limine and be preparing
`
`for trial. Accordingly, the district court case is far along enough that the parties and
`
`the Court have invested significant resources in the case.
`
`Petitioner asserts that it moved with “speed and diligence in bringing this
`
`challenge” by filing this Petition “five months after Patent Owner served its
`
`infringement contentions” as a way to counteract any claim that the investment in
`
`the case is already quite substantial. Pet. 11. But Petitioner omits that it benefited
`
`from a 90-day extension from its original answer deadline. The fact is that Petitioner
`
`waited nine months from the filing of the complaint to file this Petition. Petitioner’s
`
`unexplained delay in filing the instant Petition also weighs in favor of the Board
`
`exercising discretion to deny institution under § 314(a). Fintiv, IPR2020-00019,
`
`Paper 11, at 11–12 (“If … the evidence shows that the petitioner did not file the
`
`petition expeditiously . . . , or even if the petitioner cannot explain the delay in filing
`
`its petition, these facts have favored denial.”); see, e.g., Next Caller Inc. v. TrustID,
`
`Inc., IPR2019-00961, -00962, Paper 10, at 15–16 (P.T.A.B. Oct. 16, 2019)
`
`(“[Petitioner’s] delay in filing the Petition weighs in favor of the Board exercising
`
`discretion to deny institution under § 314.”). Indeed, the Board has recognized that
`
`“it may impose unfair costs to a patent owner if the petitioner, faced with the
`
`prospect of a looming trial date, waits until the district court trial has progressed
`
`–10–
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`

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`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
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`significantly before filing a petition at the Office.” Fintiv, IPR2020-00019, Paper
`
`11, at 11.
`
`Therefore, this factor weighs in favor of discretionary denial.
`
`D.
`
`Fintiv Factor 4: The overlap between issues raised in the petition
`and in the parallel proceeding
`
`Petitioner offers to stipulate that if the IPR is instituted, it “will not pursue in
`
`the related district court litigation any ground that it raised or reasonably could have
`
`raised in this Petition,” precluding any overlap. Pet. 12-13. Such stipulation,
`
`however, is a hollow promise since expert reports have already been served, and
`
`dispositive motions are due on November 8, 2021—prior to the institution deadline
`
`for this Petition. Given the late stage of the district court litigation, the parties will
`
`be forced to expend resources as if all of Petitioner’s prior art is in the case.
`
`The following table provides a comparison by claim of the references asserted
`
`in this Petition versus those asserted in Dr. Smith’s expert report on the ’034 patent
`
`that was recently served in the district court litigation. Yellow fill indicates the same
`
`ground being asserted in both proceedings. Blue fill indicates combinations that
`
`include alleged prior art products.
`
`–11–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`Expert Report1
`Claims
`1, 2, 4, 6 Ochiai in view of Ando
`Hirakata in view of Segawa
`Alleged Prior Art Product
`ACX399CMP-7
`in view of
`Ochiai & Ando
`
`Petition
`Ochiai in view of Ando
`
`3
`7
`
`8
`
`Ochiai in view of Ando
`Alleged Prior Art Product
`ACX399CMP-7
`in view of
`Ochiai & Ando
`Ochiai in view of Ando
`Ochiai
`in view of Ando &
`Yanagawa
`Hirakata in view of Segawa
`Alleged Prior Art Product
`ACX399CMP-7
`in view of
`Ochiai & Ando
`
`Ochiai in view of Ando
`Ochiai in view of Ando
`Ochiai in view of Ando & Hattori
`
`Ochiai in view of Ando
`Ochiai
`in view of Ando &
`Yanagawa
`
`The above table shows that all but two of the Petition’s grounds are also at issue in
`
`the district court litigation. Regarding claim 3, Petitioner states that “claim 3, which
`
`is not asserted in the related district court litigation, create[es] additional
`
`1 Petitioner’s expert report is designated as “HIGHLY-CONFIDENTIAL-SOURCE
`CODE” under the protective order entered in the district court case. In lieu of this
`expert report, Patent Owner has included Petitioner’s March 3, 2021 Preliminary
`Invalidity Contentions (Ex.2002), which show Hirakata, Yanagawa, Ochiai,
`Segawa, and Ando asserted against the ’034 patent.
`
`–12–
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`

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`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
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`nonoverlapping issues.” Pet., 13. But claim 3 is a dependent claim that Petitioner
`
`argues is subsumed under dependent claim 8 and Petitioner has asserted the same
`
`combination of Ochiai and Ando against both claims. See Pet., 67-70, 76-79
`
`(Petitioner argues for claim 8 that “provided on” the second substrate does not mean
`
`“formed on” that substrate; thus, under Petitioner’s construction, claim 8 requires
`
`the spacer to be “formed on” the first substrate, like claim 3.). Accordingly, under
`
`Petitioner’s invalidity theory, the addition of claim 3 requires no additional prior art
`
`references or analysis apart from claim 8 and, therefore, no nonoverlapping issues.
`
`Regarding claim 7, Petitioner does not specifically assert the Hattori reference as a
`
`combination in the district court litigation, but Hattori is cited throughout.
`
`The district court litigation also includes Hirakata and Segawa references for
`
`claims 1, 2, 4, 6, and 8, but these references are supplemental to the Ochiai and Ando
`
`combination and do “not negate that the same combinations of references asserted
`
`in the Petition also are asserted in the Petitioner’s [Invalidity Contentions].” Intel,
`
`IPR2020-00498, Paper 16 at 7-8. The district court litigation further includes an
`
`alleged prior art product in combination with the same references asserted in the
`
`petition.
`
`Petitioner also recently filed a motion to amend its invalidity contentions to
`
`include references “raised in Inter Partes Review (IPR) petitions that Tianma
`
`Microelectronics filed in June.” See Defendant’s Motion for Leave to Supplement
`
`–13–
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`

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`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
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`Invalidity Contentions 1 (Ex.2005). On September 15, 2021, the Court granted
`
`Tianma’s motion. See Order granting Tianma Microelectronics Co. Ltd.’s Motion
`
`for Leave to Supplement Invalidity Contentions (Ex.2006). Thus, Petitioner has the
`
`opportunity to supplement its invalidity case with any prior art raised in this Petition.
`
`As a result, the invalidity case in the district court will completely overlap with the
`
`grounds raised in this Petition. Because there is overlap of issues raised in the
`
`Petition and the district court case, this favor weighs heavily in favor of denial.
`
`E.
`
`Fintiv Factor 5: The petitioner and the defendant in the parallel
`proceeding are the same party
`
`The Petitioner is the Defendant in the district court action and the Patent
`
`Owner is the Plaintiff in the district court litigation. Therefore, this factor weighs
`
`heavily in favor of discretionary denial.
`
`F.
`
`Fintiv Factor 6: Other circumstances impact the PTAB’s exercise
`of discretion, including the merits
`
`Fintiv provides for taking into account the merits of the Petition in considering
`
`whether the discretionary denial should be granted. Fintiv, IPR2020- 00019, Paper
`
`11 at 15. Fintiv stated that a full analysis is not necessary, but rather “the parties
`
`may point out, as part of the factor-based analysis, particular ‘strengths or
`
`weaknesses’ to aid the Board in deciding whether the merits tip the balance one way
`
`or another.” Id.
`
`–14–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`Contrary to Petitioner’s assertion, the merits of this Petition are not strong.
`
`As explained in further detail below, each of Petitioner’s grounds are based on a
`
`primary/second reference combination (Ochiai/Ando) that involve significantly
`
`different liquid crystal display technologies that would not be obvious for a POSITA
`
`to combine. Ochiai discloses a FFS-mode transflective liquid crystal display with a
`
`bisected common electrode structure. Ando discloses an interdigitated IPS-mode
`
`configuration
`
`that removes
`
`the common electrode (i.e., a common-less
`
`configuration). Further, even if these references could be combined, Ando fails to
`
`disclose the features required by claim 1 that are missing in Ochiai. Further still,
`
`Petitioners proposed combinations ignore the teachings in each reference.
`
`Taken together, the Fintiv factors weigh in favor of denying institution.
`
`Therefore, the Board should exercise its discretion to deny institution of the Petition.
`
`III. THE ’034 PATENT
`
`The ’034 patent discloses “a liquid crystal display device having a structure
`
`in which the interval between the TFT substrate and the opposed substrate is defined
`
`by a column and oriental disturbance and transmittance reduction due to formation
`
`of the column are suppressed.” ’034 Patent at 2:47-52. In particular, the ’034 patent
`
`discloses that by locating the “column” (i.e., spacer) “at a crossing point between a
`
`scanning line and a drain line, problems due to formation of the column, including
`
`reduction of transmittance and light leakage due to orientation disturbance can be
`
`–15–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`reduced.” Id., 4:26-30.2 In combination with spacer placement, the ’034 patent
`
`further discloses forming unique combination of layer structures, including
`
`insulation layers, metal layers, and contact holes, to improve device performance.
`
`For example, the ’034 patent discloses that “the width of the scanning line is made
`
`wider in a position where the column is formed” and “the width of the drain line is
`
`made narrower in a position where the width of the scanning line is wider” to reduce
`
`light leakage and suppress parasitic capacitance. Id., 4:44-52; see also Id., 6:34-45;
`
`10:16-27; 12:14-24; Fig. 1 (discloses a first embodiment) (annotated below).
`
`2 Petitioner states that “[a]s the patent recognizes it was well known before February
`26, 2008, . . . to position columnar spacers at intersections of LCD drain and
`scanning lines” and cites ’034 patent, 1:29-2:43. Pet., 1. But this section discuses
`Japanese Patent Laid-open Publication No. Hei 11-84386, which “discloses a
`structure in which a column is formed on either the opposed substrate or the TFT
`substrate in a position on a capacitance line . . . .” ’034 patent at 2:30-36 (emphasis
`added).
`
`–16–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`Drain Line
`
`Pixel Electrode
`
`Column
`
`Scanning
`Line
`
`R B G
`Red Blue Green
`Color Filters
`
`Contact Holes
`1-4
`
`Semiconductor
`layer
`
`’034 patent, Fig. 1 (annotated)
`IV. ASSERTED PRIOR ART
`A.
`U.S. Patent App. Pub. No. 2008/0007679 (“Ochiai”) (Ex.1005)
`
`Ochiai is aimed at solving problems unique to IPS type transflective liquid
`
`crystal display devices. Transflective liquid crystal display devices “hav[e] a
`
`transmissive part and a reflective part in one subpixel.” Ochiai, ¶[0005]. The
`
`reflective part has a reflective electrode formed over the counter electrode. Id.,
`
`¶[0082]. Consequently, when no voltage is applied “the transmissive part 30 is
`
`normally black and the reflective part 31 is normally white.” Id., ¶[0081].
`
`–17–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`Ochiai discloses two specific problems with transflective display devices.
`
`First, Ochiai explains that “when the transmissive part [of the subpixel] is normally
`
`black, the reflective part becomes normally white, namely the relative shades are
`
`reversed between the transmissive part and the reflective part.” Id., ¶[0008]. As a
`
`solution, Ochiai discloses bisecting the counter electrode (CT)
`
`into portions one each for the transmissive part and the
`reflective part in each subpixel and reference voltages
`reverse to each other in polarity . . . are applied to the
`counter electrode (CT) of the transmissive part 30 and the
`counter electrode (CT) of the reflective part 31, the
`reversal of relative brightness between the transmissive
`part 30 and the reflective part 31 can be prevented.
`Id., ¶[0009], Fig. 1B (annotated below).
`
`–18–
`
`

`

`Patent Owner’s Preliminary Response to Petition for Inter Partes Review of U.S. Patent No. 10,423,034
`
`Bisected
`Common
`Electrode
`
`Pixel Electrode
`(PIX)
`
`Ochiai, Fig. 1B (annotated)
`
`Second, Ochiai also discloses a problem with forming the through-hole that is
`
`required in IPS devices to connect the pixel electrode to the TFT element in that the
`
`fabrication process to form the reflective electrode (in the reflective part) damages
`
`th