IPR2021-01492 of Patent No. 10,257,319
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`_________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_________
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`NETNUT LTD.,
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`Petitioner,
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`v.
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`BRIGHT DATA LTD. (f/k/a Luminati Networks Ltd.),
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`Patent Owner.
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`_________
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`Cases IPR2021-01492
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`Patent No. 10,257,319
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`_________
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`PETITIONER’S PRE-INSTITUTION REPLY AS TO THE APPLE V. FIN-
`TIV ANALYSIS IN THE PATENT OWNER’S PRELIMINARY RESPONSE
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`_________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_________
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`
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`NETNUT LTD.,
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`Petitioner,
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`v.
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`BRIGHT DATA LTD. (f/k/a Luminati Networks Ltd.),
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`Patent Owner.
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`_________
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`
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`Cases IPR2021-01492
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`Patent No. 10,257,319
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`_________
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`PETITIONER’S PRE-INSTITUTION REPLY AS TO THE APPLE V. FIN-
`TIV ANALYSIS IN THE PATENT OWNER’S PRELIMINARY RESPONSE
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`IPR2021-01492 of Patent No. 10,257,319
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`The Petition in this case was filed very early. Unable to rebut Petitioner’s
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`diligence in requesting this proceeding, Patent Owner’s Preliminary Response in-
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`stead pursues lengthy arguments on a host of irrelevant considerations in an effort
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`to create a false impression of delay. The POPR has little to offer on the merits,
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`other than previously discredited claim construction arguments. The following will
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`recap the Fintiv factors as they stand and reply to Patent Owner’s (Bright Data’s)
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`erroneous and misplaced arguments.
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`1. Stays. Patent Owner argues that the district court will not issue a stay, and
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`that the Board should decline to act based on that prediction. But Patent Owner
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`fails to account for the early stage of the district court litigation: Markman briefing
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`has not begun and the district court has not issued any substantive orders. See Ex.
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`2003 (district court Docket Control Order). Patent Owner also fails to acknowledge
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`that the district court has demonstrated a willingness to stay proceedings where an
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`IPR has actually been instituted. See, e.g., Uniloc USA, Inc. v. Ringcentral, Inc.,
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`No. 17-cv-0354 (JRG) (Feb. 12, 2018) (benefits of stay post-institution outweighed
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`costs of postponing resolution of case, where claims had not yet been construed,
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`discovery was not complete, and there was “a significant likelihood that the out-
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`come of the IPR proceedings will streamline the scope of th[e] case”). The reality
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`is that this factor is neutral. See Google LLC v. RFCyber Corp., PGR2021-0029,
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`IPR2021-01492 of Patent No. 10,257,319
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`Paper 10 at 18-19 (PTAB July 23, 2021); see also Apple Inc. v. Fintiv, Inc.,
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`IPR2020-00019, Paper 15 at 12 (PTAB May 13, 2020).
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`2. Proximity of trial date. Assuming matters proceed as currently sched-
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`uled, the trial would begin in in September 2022, six months before a final written
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`decision is due in this case. See Ex. 2003. However, trial dates for this Patent
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`Owner have previously slipped, as reflected in the docket sheet (Ex. 1101) for Pa-
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`tent Owner’s recent trial (jury selection delayed from May 3 (id., D.I. 65) to Nov.
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`1, 2021 (id., D.I. 509)). Patent Owner has already sought two extensions in the re-
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`lated court proceeding, Ex. 1102 (D.I. 79, 80), including an extension that would
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`push back its own source code review by nearly a month, potentially impacting
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`other schedules, which was partially granted (for a week). Ex. 1103. In sum, this
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`factor does not favor discretionary denial nearly as strongly as Patent Owner ar-
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`gues.
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`3. Investment in parallel court proceedings; Petitioner’s diligence. The
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`parties have completed only limited work in the district court proceeding, for ex-
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`ample, only recently exchanging infringement and invalidity contentions and claim
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`constructions. No depositions have been taken or noticed. The majority of work in
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`fact discovery remains ahead—not to mention upcoming expert discovery, sum-
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`mary judgment proceedings, pretrial proceedings, and a jury trial. Patent Owner
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`IPR2021-01492 of Patent No. 10,257,319
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`dwells instead on what it says the parties “will have done” by March of 2023,
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`which of course may be more than has been done to date, but is irrelevant.
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`Patent Owner’s suggestion of “delay” from when “NetNut started its invalid-
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`ity campaign at the USPTO” is misguided and erroneous rhetoric and not part of
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`the Fintiv delay analysis. The events against which Patent Owner seeks to measure
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`alleged delay concern other patents, parties, and types of proceedings, as well as
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`the results of its own litigiousness; they lack the necessary nexus to what can fairly
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`be charged against the Petitioner.
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`In a case where court proceedings were in at least a comparable state, and
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`where the petitioner filed its IPR eight months before its deadline to do so, the
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`Board found that “Petitioner’s diligence in filing the Petition also weighs in favor
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`of not exercising discretion to deny institution.” PEAG LLC v. VARTA Microbattery
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`Gmbh, IPR2020-01212, Paper 8 at 20 (Jan. 6, 2021). Here, the Petition was filed
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`ten months before the corresponding deadline—an even stronger showing of dili-
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`gence. This strongly weighs against exercising discretion to deny institution.
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`4. Overlap of issues. As the POPR acknowledges (at 29), there are four de-
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`pendent claims in this proceeding and five in the related proceeding (IPR2021-
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`01493), which are not at issue in the district court litigation. In addition, additional
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`grounds of invalidity, as well as unenforceability for inequitable conduct, not reme-
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`diable here, will be at issue in the district court case. See Ex. 1104. (NetNut’s
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`IPR2021-01492 of Patent No. 10,257,319
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`invalidity contentions). There is overlap, but the overlap is not nearly complete,
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`given the separate invalidity arguments made on the additional dependent claims in
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`this proceeding and the additional grounds asserted in the district court.
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`5. Identity of parties. The parties are the same.
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`6. Other circumstances, including the merits. Patent Owner’s arguments
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`about other USPTO proceedings challenging the ’319 and ’510 patents are irrele-
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`vant. If anything, those are reasons for the Board to institute (and then consolidate
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`or stay those other proceedings). The two granted reexaminations involving these
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`patents indicate the questionable patentability of the claims, which favors institu-
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`tion under Fintiv factor 6. Bright Data cites the fact that it won a jury verdict on
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`one of the invalidity references in this case, a determination that has neither bind-
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`ing (as against a third party) nor precedential weight (see Stevenson v. Sears, Roe-
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`buck & Co., 713 F.2d 705, 711 (Fed. Cir. 1983)), and no relevance to institution.
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`As to the merits, Bright Data continues to argue, using partial quotes that
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`contradict applicable rulings (see, e.g., POPR at 37-38), that clients and servers are
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`mutually exclusive categories, and that a “communication device” must somehow
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`do something more than communicate. In addition to being incoherent on their
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`face, these arguments have repeatedly been rejected by the court, which found that
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`the devices in question may be configured to operate in different roles and are
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`characterized by the function they perform (i.e., sending or receiving), not by any
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`IPR2021-01492 of Patent No. 10,257,319
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`physical properties. Exs. 1017 at 12, 1020 at 10, 1021 at 64. The Board likewise al-
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`ready rejected Patent Owner’s similar arguments in IPR2021-00458 and IPR2021-
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`00465. See, e.g., Exs. 1105 at 18-21, 1106 at 13-15 (device assuming two or more
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`roles, either at different times or simultaneously).
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`Conclusion. The record reflects that Petitioner was extraordinarily diligent
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`in filing its Petition, just two months after service in the district court and ten
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`months prior to the time allowed; that there has not been substantial investment in
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`the district court proceeding; the district court’s record of willingness to consider a
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`stay where an IPR has been instituted; and that Petitioner presents a strong show-
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`ing on the merits of unpatentability, with opposition of only a token nature. Patent
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`Owner’s attempts to rely on irrelevant collateral developments, such as reexamina-
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`tions on other patents and a prior jury determination, and to repeat previously re-
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`jected substantive arguments, highlight its weak position. On balance, these facts
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`outweigh the partial overlap of the issues between the proceedings and the fact that
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`the trial date is currently (though not immovably) set for six months before a final
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`written decision is due in this proceeding. The patent here cries out for Petitioner’s
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`requested review.
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`Accordingly, Petitioner respectfully submits that the Board should decline to
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`exercise its discretion under 35 U.S.C. § 314(a) to deny institution.
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`IPR2021-01492 of Patent No. 10,257,319
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`Respectfully submitted,
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`/Ronald Abramson/
`Ronald Abramson, Reg. No. 34,762
`Ari J. Jaffess, Reg. No. 74,558
`M. Michael Lewis, Reg. No. 50,478
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`Dated: January 18, 2022
`LISTON ABRAMSON LLP
`The Chrysler Building
`405 Lexington Avenue, 46 FL
`New York, NY 10174
`Telephone: (212) 822-0163
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`IPR2021-01492 of Patent No. 10,257,319
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that on January 17, 2022, a complete and entire
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`copy of this Petitioner’s Pre-Institution Reply to Patent Owner’s Preliminary Re-
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`sponse was provided to the Patent Owner by filing through the PTAB E2E System
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`and via email to Thomas M. Dunham <tomd@ruyakcherian.com> and Elizabeth A.
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`O'Brien <elizabetho@ruyakcherian.com> as authorized in Patent Owner’s manda-
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`tory notices.
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`Dated: January 18, 2022
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`/Ronald Abramson/
`Ronald Abramson
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