UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`SAMSUNG ELECTRONICS CO., LTD.; AND
`SAMSUNG. ELECTRONICS AMERICA, INC.,
`Petitioners,
`
`v.
`
`SOLAS OLED, LTD.,
`Patent Owner
`____________
`
`Case IPR2021-01254
`U.S. Patent No. 8,526,767
`____________
`
`
`PATENT OWNER PRELIMINARY RESPONSE
`
`
`
`
`
`
`
`____________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`SAMSUNG ELECTRONICS CO., LTD.; AND
`SAMSUNG. ELECTRONICS AMERICA, INC.,
`Petitioners,
`
`v.
`
`SOLAS OLED, LTD.,
`Patent Owner
`____________
`
`Case IPR2021-01254
`U.S. Patent No. 8,526,767
`____________
`
`
`PATENT OWNER PRELIMINARY RESPONSE
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`I. ALL FINTIV FACTORS WEIGH AGAINST INSTITUTION ........................ 1
`
`A. Factor 1 weighs against institution, as no court has granted a stay and no
`evidence exists that a stay may be granted. .................................................... 2
`
`B. Factor 2 weighs strongly against institution, as the EDTex trial is scheduled
`to begin eight months before the FWD deadline. ........................................... 5
`
`C. Factor 3 weighs against institution, as the court and parties in EDTex will
`have completed Markman proceedings, fact discovery, and expert reports on
`the ’767 patent. ............................................................................................... 7
`
`D. Factor 4 weighs strongly against institution, as there is substantial overlap
`between this IPR and the invalidity contentions in EDTex .......................... 10
`
`E. Factor 5 weighs against institution, as Petitioners are Defendants in the
`EDTex case (and also Plaintiffs in the SDNY case). ................................... 14
`
`F. Factor 6 weighs against institution, as several considerations, including the
`merits, support discretionary denial here. ..................................................... 14
`
`II. THE MERITS OF THE PETITION ARE QUESTIONABLE ........................ 16
`
`A. For Grounds 1–3, Baltierra fails to disclose or render obvious a “multi-touch
`state-machine module” with the claimed operation. .................................... 17
`
`B. For Grounds 4–6, Westerman fails to disclose or render obvious a “multi-
`touch state-machine module” with the claimed operation. .......................... 22
`
`C. For Grounds 4–6: Westerman fails to disclose or render obvious first /
`second “one-touch state machine modules” being “distinct.” ...................... 24
`
`III. SUMMARY OF FACTORS AND CONCLUSION ....................................... 26
`
`
`
`i
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`
`
`PATENT OWNER’S EXHIBIT LIST
`
`Description
`Ex.
`2001 Complaint, Solas OLED Ltd. v. Samsung Electronics Co., Ltd. et al., Case
`No. 2:21-cv-00105-JRG (“EDTex case”) Dkt. 1, (Mar. 22, 2021)
`2002 Amended Complaint, EDTex case, Dkt. 11 (Apr. 16, 2021)
`2003 Docket Control Order, EDTex case, Dkt. 45 (Aug. 16, 2021)
`2004 Amended Complaint, Samsung Electronics Co., Ltd. et al. v. Solas OLED
`Ltd. et al., Case No. 1:21-cv-05205-LGS (“SDNY case”), Dkt. 35
`(S.D.N.Y. Aug. 23, 2021)
`2005 Order Denying Stay Pending IPR, Solas OLED Ltd. v. Samsung Display
`Co. et al., No. 2:19-CV-00152-JRG, Dkt. 133, 2020 WL 4040716, at *1
`(July 17, 2020)
`2006 Scheduling Order, SDNY case, Dkt. 44 (Sept. 2, 2021)
`2007 Tiffany Hu, Gilstrap Holds Top Spot for Pandemic-Era Jury Patent Trials,
`LAW360 INTELLECTUAL PROPERTY (Oct. 26, 2021), available online at
`https://www.law360.com/articles/1434133/gilstrap-holds-top-spot-for-
`pandemic-era-jury-patent-trials
`Joint Claim Construction and Prehearing Statement, EDTex case, Dkt. 62
`(Oct. 23, 2021).
`2009 Preliminary Infringement Contentions and Claim Chart, EDTex case, (July
`12, 2021)
`Invalidity Contentions Cover Pleading, EDTex case (Sept. 24, 2021)
`Invalidity Claim Chart for Baltierra, EDTex case
`Invalidity Claim Chart for Katou, EDTex case
`Invalidity Claim Chart for Warren, EDTex case
`Invalidity Claim Chart for Westerman, EDTex case
`
`2010
`2011
`2012
`2013
`2014
`
`2008
`
`
`
`
`
`ii
`
`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
`
`One of the primary objectives of the AIA was “to provide an effective and
`
`efficient alternative to district court litigation.” But this IPR cannot be an alternative
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`(much less an effective and efficient one) to a trial in the Eastern District of Texas
`
`between Petitioners and Patent Owner involving U.S. Patent No. 8,526,767 (“’767
`
`patent”), which is scheduled to be completed eight months before the FWD deadline.
`
`The parties have already invested significant resources in that case and at the time
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`of the institution decision, the parties in the EDTex will have completed fact
`
`discovery and exchanged expert reports. Further, the EDTex case and scheduled trial
`
`will involve the same claim construction standard, same invalidity theories, and
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`same prior art references and combinations that are at issue in this IPR.
`
`Under the PTAB’s precedential orders in NHK Spring and Fintiv, the Board
`
`should exercise its discretion to deny institution under § 314(a).
`
`I.
`
`ALL FINTIV FACTORS WEIGH AGAINST INSTITUTION
`35 U.S.C. § 314(a) gives the Board discretion to deny institution because of
`
`because of the advanced state of parallel proceedings on the same patent. See NHK
`
`Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12,
`
`2018) (precedential, designated May 7, 2019) (“NHK Spring”). The PTAB recently
`
`promulgated six factors for determining whether discretionary denial due to the
`
`advanced state of parallel proceedings is appropriate (the “Fintiv factors”):
`
`
`
`1
`
`
`
`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
`
`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.
`
`Apple Inc., v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020)
`
`(precedential, designated May 5, 2020) (“Fintiv Order”) at 6; Apple Inc., v. Fintiv,
`
`Inc., IPR2020-00019, Paper 15 (PTAB May 13, 2020) (order denying institution)
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`(“Fintiv ID”) at 7–8. Here, all six Fintiv factors weigh against institution.
`
`A.
`
`Factor 1 weighs against institution, as no court has granted a stay
`
`and no evidence exists that a stay may be granted.
`
`Factor 1 concerns whether the court in a related proceeding has granted a stay
`
`or evidence exists that one may be granted if a proceeding is instituted. Fintiv Order
`
`at 6; Fintiv ID at 12. This factor weighs against institution.
`
`The ’767 patent is at issue in the following Eastern District of Texas case
`
`before Judge Gilstrap, where the ’767 patent is the only asserted patent: Solas OLED
`
`
`
`2
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`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
`
`Ltd. v. Samsung Electronics Co., Ltd. et al., Case No. 2:21-cv-00105-JRG (E.D.
`
`Tex.) (“EDTex case”). See Exs. 2001, 2002 (Complaint). The EDTex case has a trial
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`scheduled for May 2022, with fact discovery closing and opening expert reports due
`
`on January 12, 2022. See Ex. 2003 (EDTex case scheduling order) at 1–3.
`
`The ’767 patent is also at issue in a Southern of District New York case
`
`brought by Samsung. See Samsung Electronics Co., Ltd. et al. v. Solas OLED Ltd.
`
`et al., Case No. 1:21-cv-05205-LGS (S.D.N.Y.) (“SDNY case”). The SDNY case is
`
`a declaratory judgment action where Samsung brought eight counts against Solas
`
`and Neodron, including one count for declaratory judgment of non-infringement on
`
`the ’767 patent. See Ex. 2004 ¶¶ 76–89. Solas has moved to dismiss under the first-
`
`to-file rule because the SDNY case is duplicative of Solas’s earlier-filed actions in
`
`EDTex on the same patents (including the -105 EDTex case, filed many months
`
`earlier). See SDNY case, Dkt. 51. That motion has been fully briefed as of October
`
`15, 2021 and a decision is expected soon. See SDNY case, Dkt. Nos. 58, 65.
`
`For purposes of analyzing the Fintiv factors, Petitioner Solas focuses on the
`
`EDTex case because it is indisputably the first-filed action between the same parties
`
`on the ’767 patent. But if the SDNY case is not dismissed as Solas has requested, it
`
`would further weigh against institution because it would be yet another duplicative
`
`proceeding on the ’767 patent. In the SDNY case, fact discovery will close on
`
`
`
`3
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`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
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`January 6, 2022 and expert discovery will close on February 22, 2022. See Ex. 2006
`
`(S.D.N.Y. case scheduling order) ¶¶ 8(a) & 9(b).
`
`Defendants have not yet moved to stay the EDTex case, nor is there any
`
`evidence that the case will be stayed.1 The deadline for the institution decision in
`
`this IPR is January 29, 2022. By that time, the parties will have completed fact
`
`discovery and served expert reports in the EDTex case. See Ex. 2003 (Docket
`
`Control Order) at 3 (close of fact discovery January 12, 2022; opening expert reports
`
`due January 12, 2022). Moreover, trial is scheduled for May 23, 2022. It is unlikely
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`that Judge Gilstrap would grant a stay pending IPR at that late juncture, less than
`
`four months before trial and with the parties completing expert discovery and in the
`
`midst of dispositive motions briefing. See Ex. 2006 at 3 (expert discovery closing
`
`February 10, 2022, dispositive motions deadline February 14, 2022).
`
`For example, in substantially similar circumstances between the same parties,
`
`in Solas OLED Ltd. v. Samsung Display Co. et al., Judge Gilstrap denied Samsung’s
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`motion to stay pending IPR, which had been filed four months before the trial date
`
`and after both claim construction and fact discovery had closed. No. 2:19-CV-
`
`
`1 As for the SDNY case, Samsung filed the case and opposed Solas’s request to stay
`discovery and deadlines pending resolution of Solas’s motion to dismiss under the
`first-to-file rule. Samsung is therefore judicially estopped from seeking to stay the
`SDNY case, based on IPRs or other reasons.
`
`
`
`4
`
`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
`
`00152-JRG, Dkt. 133, 2020 WL 4040716, at *1–3 (E.D. Tex. July 17, 2020) (Ex.
`
`2005) In that case, the PTAB instituted IPR on three of three asserted patents, as
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`well as all asserted claims. That decision provides affirmative evidence that the
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`EDTex case is unlikely to be stayed even if this IPR is instituted.
`
`Because Samsung has not moved for a stay and there is no evidence the
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`EDTex case will be stayed, Factor 1 weighs against institution.
`
`B.
`
`Factor 2 weighs strongly against institution, as the EDTex trial is
`
`scheduled to begin eight months before the FWD deadline.
`
`Factor 2 relates to proximity of the court’s trial date to the Board’s projected
`
`statutory deadline for a final written decision. Fintiv Order at 9; Fintiv ID at 12. The
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`statutory deadline for this FWD is January 29, 2023. Meanwhile, the trial in the
`
`parallel EDTex case is set for May 23, 2022.
`
`Thus, the trial in the EDTex case will start more than eight months before the
`
`FWD deadline. Under Factor 2, this weighs strongly against institution. See Fintiv
`
`Order at 9 (“If 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
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`institution under NHK.”); Fintiv ID at 13 (finding a much shorter two-month gap
`
`between trial and FWD to “weigh[] somewhat” in favor of discretionary denial).
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`There is no reason to believe the May 23, 2022 trial will be postponed. See
`
`Fintiv ID at 13 (“We generally take courts’ trial schedules at face value absent some
`
`
`
`5
`
`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
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`strong evidence to the contrary.”). The EDTex case is before Judge Gilstrap, a judge
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`who has consistently kept patent litigation cases on schedule for trial, even while
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`other judges have postponed trials in view of COVID-19 concerns.
`
`Indeed, a recent Law360 article published this week (on October 26th) noted
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`that “Of the 18 patent jury trials that took place in the Eastern District of Texas from
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`August 2020 to September 2021, Judge Gilstrap handled 16 of those trials[.]” See
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`Ex. 2007, Tiffany Hu, Gilstrap Holds Top Spot for Pandemic-Era Jury Patent Trials,
`
`LAW360 INTELLECTUAL PROPERTY (Oct. 26, 2021), available at https://www.law360
`
`.com/articles/1434133/gilstrap-holds-top-spot-for-pandemic-era-jury-patent-trials.
`
`The article further noted that “Texas has seen the most patent jury trials during the
`
`COVID-19 pandemic, with Eastern District of Texas Judge Rodney Gilstrap holding
`
`the most trials since August of last year[.]” Id.
`
`Moreover, Judge Gilstrap already conducted a jury trial between the same
`
`parties in the -152 case cited above. Solas OLED Ltd. v. Samsung Display Co. et al.,
`
`No. 2:19-CV-00152-JRG (E.D. Tex.). In that case, Judge Gilstrap successfully
`
`conducted a jury trial in March 20212 in more difficult conditions since vaccines
`
`
`2 The jury found that Samsung willfully infringed Solas’s patents and awarded Solas
`$62.7 million in damages. -152 case, Dkt. 341. Judge Gilstrap enhanced the jury’s
`damages award to $77.7 million in view of Samsung’s willful infringement Id.
`
`
`
`6
`
`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
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`were only starting to become widely available. By May 2022, there is no reason to
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`believe the trial in the EDTex will be postponed in view of COVID-19. Nor is there
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`any other non-speculative reason to believe the scheduled trial will not occur.
`
`Because the trial in the EDTex case will be completed eight months before
`
`the FWD deadline in this IPR, Factor 2 weighs strongly against institution.
`
`C.
`
`Factor 3 weighs against institution, as the court and parties in
`
`EDTex will have completed Markman proceedings, fact discovery,
`
`and expert reports on the ’767 patent.
`
`Factor 3 relates to investment in parallel proceedings by the court and parties.
`
`Fintiv Order at 9; Fintiv ID at 14. Importantly, this factor is analyzed from the time
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`of the institution decision, which here is due January 29, 2022. The ’767 patent at
`
`issue in this IPR is the only asserted patent in the EDTex case. Therefore, the court
`
`and parties’ investments in the EDTex case are all related to the ’767 patent.
`
`By January 29, 2022, Judge Gilstrap will have issued a Markman order, and
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`the parties will have completed fact discovery and essentially expert reports. The
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`following scheduling deadlines in the EDTex case are relevant (see Ex. 2003):
`
`Event in EDTex Case (’767 Patent Only Asserted Patent)
`
`Date
`
`Solas serves infringement contentions
`
`Samsung serves invalidity contentions
`
`July 12, 2021
`
`Sept. 24, 2021
`
`
`
`7
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`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
`
`
`Event in EDTex Case (’767 Patent Only Asserted Patent)
`
`Date
`
`Parties complete claim construction proceedings, including
`briefing and expert declarations on claim construction
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`Nov.–Dec. 2021
`
`Court conducts Markman hearing
`
`Parties complete fact discovery
`
`Dec. 17, 2021
`
`Jan. 12, 2022
`
`Parties serve opening infringement and invalidity expert reports Jan. 12, 2022
`Deadline for IPR Institution Decision
`
`Jan. 29, 2022
`
`Parties serve rebuttal non-infringement and validity expert
`reports
`
`Parties complete expert depositions
`
`Parties to file dispositive motions
`
`Feb. 2, 2022
`
`Feb. 10, 2022
`
`Feb. 14, 2022
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`
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`As the schedule shows, by the time of the institution decision, the parties will
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`have essentially completed all expert reports (both opening and rebuttal) on the ’767
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`patent, including on invalidity. The parties would also in the process of completing
`
`expert depositions and preparing summary judgment motions.
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`Indeed, the parties have already invested substantially in litigating the ’767
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`patent. The parties exchanged infringement contentions and invalidity contentions
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`(a small portion of Samsung’s invalidity contentions being filed with this POPR as
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`Exs. 2009–2014). The parties have also produced thousands of documents, including
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`documents relating to invalidity and claim construction issues. The parties are also
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`in the midst of briefing claim construction, for which there are four disputed terms.
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`
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`8
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`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
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`See Ex. 2008 (EDTex case Joint Claim Construction Statement) at 1–14. The court
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`and parties’ investment will only accelerate in the next few months though
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`completing claim construction proceedings, fact discovery, and expert reports.
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`
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`The level of investment in EDTex case alone is far greater than in the Fintiv
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`v. Apple case where at the time of institution, fact discovery was still “in its early
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`stages.” Fintiv ID at 14. This is unsurprising because, as Fintiv recognizes, the level
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`of investment is closely related to proximity to trial. See Fintiv Order at 7, 9.
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`Whereas the institution decision in Fintiv arrived ten months before the scheduled
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`trial, here it would arrive less than four months before. See id. at 12–13. Thus, far
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`less work will remain before trial. Thus, whereas Factor 3 in Fintiv “weighed
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`somewhat in favor of discretionary denial,” here it weighs strongly. See id. at 14.
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`
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`Samsung argues that it filed the Petition promptly but that is not determinative
`
`on Factor 3. As an initial matter, the ’767 patent has relatively few claims (14 total)
`
`and the Petition challenges all claims of the patent. Thus, Petitioners did not need to
`
`wait for Solas’s infringement contentions in the EDTex case before filing this
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`Petition. This Petition was filed about four months after Solas filed its complaint in
`
`the EDTex case. Further, even if Petitioners were reasonably diligent in filing this
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`Petition, that does not change the substantial investments the court and parties have
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`already incurred and will occur by the time of the institution decision.
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`Accordingly, Factor 3 weighs against institution.
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`
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`9
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`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
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`Factor 4 weighs strongly against institution, as there is substantial
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`D.
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`overlap between this IPR and the invalidity contentions in EDTex
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`Factor 4 relates to overlap between issues raised in the petition and in the
`
`parallel proceeding. Fintiv Order at 12; Fintiv ID at 13. This factor weighs against
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`institution because there is significant overlap in challenged claims, prior art, and
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`invalidity theories and evidence between this IPR and the EDTex case.
`
`This IPR challenges claims 1 through 14 of the ’767 patent based on six
`
`grounds, with Baltierra and Westerman as primary obviousness references, and
`
`Warren and Katou as secondary combination references. The following is
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`Samsung’s statement of the precise relief requested in this IPR:
`
`Petitioner requests cancellation of Claims 1–14 of the ’767 Patent under 35
`U.S.C. § 103 on the following grounds:
`• Grounds 1 and 2: Claims 1 and 9–14 are rendered obvious by U.S. Patent
`Publication No. 2009/0284478 (“Baltierra”) alone or Baltierra in view of
`JP Patent Publication No. H09-231004 (“Katou”);
`• Ground 3: Claims 2-8 are rendered obvious by Baltierra in view of Katou
`and U.S. Patent Publication No. 2007/0176906 (“Warren”);
`• Grounds 4 and 5: Claims 1 and 9–14 are rendered obvious by U.S. Patent
`Publication No. 2008/0036743 (“Westerman”) alone or Westerman in
`view of Katou;
`• Ground 6: Claims 2–8 are rendered obvious by Westerman in view
`of Katou and Warren.
`
`
`
`10
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`
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`Pet. at 3–4 (emphasis added and citations omitted).
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
`
`
`Samsung’s invalidity contentions in EDTex provides significant overlap. This
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`IPR and the invalidity contentions district court overlap for all eight claims of the
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`’767 patent asserted in the district court (claims 1–3, 6, 11–14), including each of
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`the four independent claims. The only difference is that this IPR challenges several
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`additional claims not asserted in the district court (claims 4–5, 7–10).
`
`This IPR also relies on obviousness theories for all grounds which overlap
`
`with Petitioner’s invalidity arguments in district court: (1) Baltierra alone or in
`
`combination with Katou or Warren, and (2) Westerman alone or in combination with
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`Katou or Warren. The following excerpts from Samsung’s invalidity contentions
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`claim charts show the overlap:
`
`
`
`11
`
`
`
`
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`Ex. 2011 at 1 (highlighting added).
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
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`
`
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`Ex. 2014 at 1 (highlighting added).
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`Indeed, Samsung’s invalidity contentions rely on the same references and
`
`obviousness theories as those asserted in this IPR. For example, in this IPR,
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`Petitioners assert that, for what it has identified as Elements 1[f], 12[e], 13[f], and
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`14[f], “to the extent it is determined that Baltierra does not teach a multi-touch state-
`
`machine module operable to recognize at least one multi-touch gesture, a POSITA
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`would have been motivated to combine Baltierra with Katou.” Pet. at 31. The
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`Petition cites Katou’s paragraphs 11–12 and 40–43, and Katou’s Figure 1, to support
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`its argument. See id. at 31–32. Those same portions of Katou are relied upon for the
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`
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`12
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`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
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`same elements and the same obviousness theory, as shown Samsung’s invalidity
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`claim chart for Baltierra. See Ex. 2011 at 138 (citing “KATOU at [0011]-[0012]”),
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`140 (citing “KATOU at [0040]-[0043]” and “KATOU at FIG. 1”).
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`
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`Both this IPR and district court proceedings are governed by the same Phillips
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`claim construction standard. Thus, this IPR involves the same claim construction
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`standard, and the same challenged claims, invalidity theories, prior art references,
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`and the same evidence at issue in the district court case. See NHK Spring at 19–20.
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`Here, just as in NHK Spring, “concerns of inefficiency and the possibility of
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`conflicting decisions [are] particularly strong.” Fintiv Order at 12.
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`
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`Further, that the IPR challenges additional dependent claims not asserted in
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`the district court is inconsequential. The Board should give little or no weight to
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`these unasserted claims. For example, they involve the same or similar issues as the
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`independent challenged in this IPR, and Samsung has not asserted that the dependent
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`claims involve materially different issues. Further, there is no prejudice to Samsung
`
`if its IPR invalidity challenges against those claims are not addressed. See PayPal,
`
`Inc. v. IOENGINE, LLC, IPR2019-00886, Paper 21 at 12, 18–19 (PTAB Oct. 3,
`
`2019) (Institution Decision) (denying institution of petition that challenges
`
`overlapping claims challenged in another petition when petitioner has not identified
`
`any prejudice associated with not instituting trial on the non-overlapping claims).
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`Accordingly, Factor 4 weighs strongly against institution.
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`
`
`13
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`
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`IPR2021-01254 (’767 PATENT)
`PATENT OWNER PRELIMINARY RESPONSE
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`Factor 5 weighs against institution, as Petitioners are Defendants
`
`E.
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`in the EDTex case (and also Plaintiffs in the SDNY case).
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`Factor 5 concerns whether the parties in the parallel proceeding are the same
`
`as in the IPR. Fintiv Order at 13; Fintiv ID at 15. This factor weighs against
`
`institution because Petitioners Samsung Electronics Co., Ltd. and Samsung
`
`Electronics America, Inc. are defendants in the EDTex case (and also declaratory
`
`judgment plaintiffs in the SDNY case). Patent Owner Solas, in turn, is the plaintiff
`
`in the EDTex case (and a defendant in the SDNY case). Indeed, Patent Owner and
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`Petitioners in this IPR are represented by the same counsel in the EDTex and SDNY
`
`cases as in this IPR.
`
`F.
`
`Factor 6 weighs against institution, as several considerations,
`
`including the merits, support discretionary denial here.
`
`Factor 6 relates to other circumstances that impact the Board’s exercise of
`
`discretion, including the merits. Fintiv Order at 14; Fintiv ID at 15. Here, Factor 6
`
`weighs against institution for at least three reasons. First, the merits of the Petition
`
`are not “particularly strong.” To the contrary, the Petition suffers from several
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`weaknesses, as discussed in in Section II below. Relatedly, any generic concerns
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`about improving “patent quality” are unfounded. Other than against Samsung in the
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`EDTex case (and Samsung’s own DJ action in SDNY), the ’767 patent is not being
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`asserted in any other cases or against any other party.
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`Second, Petitioner has advanced inconsistent claim construction positions
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`between the EDTex case and this IPR, which implicates concerns unfairness to
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`Patent Owner. In the EDTex case, Petitioners (who are represented by the same
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`counsel as this IPR) identified several terms as requiring construction or alleged to
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`be indefinite, and its proposals are reflected in the October 22, 2021 Joint Claim
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`Construction Statement. See Ex. 2008 at 1–14. Specifically, they asserted the terms
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`“the position-processing logic being accommodated in” and “the gesture processing
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`logic” from claims 11 and 13 are indefinite. See Ex. 2008 at 4, 11.
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`But in this IPR, Petitioners identified no terms as requiring construction or not
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`amenable to interpretation, and states that they “do[] not believe that any term
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`requires explicit construction to resolve the issues presented in this Petition.” Pet. at
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`9. To date, Petitioners have not notified the Board of its claim construction positions
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`taken in the EDTex case, which are different from the positions in their IPR Petition.
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`And Petitioners appear to recognize the tension between its indefiniteness / claim
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`construction positions in district court and the invalidity arguments it advances in
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`this IPR. At their Petition at 9, n. 4, Petitioners state that they “reserve[] the right to
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`revisit claim construction” and “will request leave to submit the district court’s claim
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`construction order as soon as it becomes available.”
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`Petitioners’ approach before two tribunals is potentially unfair to Patent
`
`Owner and should be discouraged. For example, Petitioners advance indefiniteness
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`15
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`IPR2021-01254 (’767 PATENT)
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`in district court to invalidate the patent. If the EDTex court reject Petitioners’
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`argument, then it will take a second bite at invalidity in this IPR, where Petitioners
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`and its experts purportedly have no problem understanding the claim terms and
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`allegedly mapping them to the prior art.
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`Third, under Samsung’s own representations, it may not even be entitled to
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`seek inter partes review on the ’767 patent. Samsung has taken the position that
`
`because of a provision of an agreement that Samsung executed, the parties’ patent
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`disputes on the ’767 patent must be exclusively litigated in the Southern District of
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`New York. On that basis, Samsung moved to dismiss EDTex case or alternatively
`
`transfer the case to SDNY. See EDTex case, Dkt. Nos. 17, 22, 28, 36; see also Ex.
`
`2004 (Samsung’s Amended SDNY Complaint).
`
`To be clear, Solas disagrees with Samsung’s position and has opposed the
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`motion to dismiss or transfer the EDTex case to SDNY. But Samsung’s positions
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`are inconsistent. If the parties’ disputes on the ’767 patent must be litigated in New
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`York, then it would not be appropriate to litigate this IPR before the PTAB.
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`Samsung’s inconsistency provides yet another reason for the Board to exercise its
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`discretion to deny institution of this IPR.
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`II. THE MERITS OF THE PETITION ARE QUESTIONABLE
`Petitioners’ arguments on the merits suffer from several weaknesses that
`
`apply to all grounds and challenged claims. Patent Owner addresses the Petition’s
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`16
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`merits below, particularly to show that the merits are not “particularly strong” and
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`therefore do not support institution under Fintiv Factor 6. These arguments also
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`show that Petitioners have not established a reasonable likelihood of success and
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`provide independent bases for denying institution of this IPR.
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`A.
`
`For Grounds 1–3, Baltierra fails to disclose or render obvious a
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`“multi-touch state-machine module” with the claimed operation.
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`Each of the challenged claims of the ’767 patent recites “a multi-touch state-
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`machine module operable to: receive, directly from the first one-touch state-machine
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`module, the first output; receive, directly from the second one-touch state-machine
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`module, the second output; and recognize, based on at least the first and second
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`outputs, at least one multi- touch gesture.” See claim element 1[f], 13[e], 13[f], 14[f].
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`This limitation requires that the multi-touch state-machine must operate based on
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`the received outputs of the first and second single-touch state machines.
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`Petitioners identify Baltierra’s “monitoring state machine 122” as the claimed
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`“multi-touch state-machine module.” Pet at 30. But the monitoring state machine
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`122 does not satisfy the recited limitation. In particular, the Petition does not (and
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`cannot) show that Baltierra’s monitoring state machine 122 recognizes any multi-
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`touch gesture, as required by the ’767 patent claims. Perhaps recognizing this
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`deficiency, the Petition attempts to include an alternative theory in which the
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`limitation is met by “monitoring state machine 122 and identifier module 104.” Pet.
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`at 30 (emphasis added). This theory fares no better. The identifier module 104
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`recognizes gestures, but not based on the output of any single-touch state machine
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`and not based on the output of monitoring state machine 122.
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`Baltierra’s data flow for detecting and recognizing touches is depicted in
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`Figure 1, which shows a data flow passing from physical touch sensors to the input
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`controller 116 (green), the identifier module 104 (blue), the application 110 (red):
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`
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`Ex. 1005, Fig. 1 (color annotations added). The identifier module might be
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`configured to recognize and act upon different gestures. For example, Baltierra’s
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`Table 1, which lists physical gestures and mapped functions that can be used by
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`identifier module 104 and/or library 118, lists eleven different gestures. Id. ¶ 26.
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`18
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`IPR2021-01254 (’767 PATENT)
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`Baltierra’s primary gesture recognition data flow, therefore, matches the ’767
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`Patent’s disparagement of prior art in which “it is difficult to reliably and efficiently
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`add code to identify a new gesture into an existing block of code for distinguishing
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`between a significant number of gestures, for example at least 3 or 4, perhaps 10 to
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`20.” Ex. 1001 at 2:66-3:2; see also id. at Fig. 3 and 13:64-14:9 (explaining difficulty
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`of adding additional multi-touch gestures to a singular state machine).
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`To overcome limitations of a single-module design such as in Baltierra, the
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`’767 patent teaches separating (1) a “one-touch state-machine module[s]” that each
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`generates an output based on a one-touch gesture and (2) a “multi-touch state-
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`machine module” that uses those outputs to “recognize . . . at least one multi-touch
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`gesture.” See ’767 patent, cl. 1. Baltierra’s identifier module 104 cannot disclose the
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`’767 patent’s “multi-touch state-machine module” because it does not use the output
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`of any one-touch state machine to recognize gestures. Instead, it operates directly on
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`the output of the input controller 116—just as the ’767 patent teaches not to do.
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`Baltierra includes a separate “contact state machine 120” and “monitoring
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`state machine 122” to “switch or determine the identifier module [104]’s input
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`mode.” Ex. 1005 ¶ 30. But this but does not alleviate the problem that identifier
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`module 104 must implement potentially eleven or more gestures in one module. For
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`example, Baltierra does not teach that monitoring state machine 122 is capable of
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`IPR2021-01254 (’767 PATENT)
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`identifying any gestures at all. As shown in Figure 1, the data flow to monitoring
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`state machine 122 is entirely separate from the gesture recognition data flow:
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`
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`Id. Fig. 1 (color annotations added). The monitoring state machine 122 cannot be the
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`claimed “multi-touch state-machine module” because it does not “recognize . . . at
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`least one mul
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