UNITED STATES PATENT AND TRADEMARK OFFICE
`_________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_________________________
` NETNUT LTD.,
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`Petitioner
`
`v.
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`BRIGHT DATA LTD.,
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`Patent Owner
`
`_________________________
`
`Case IPR2021-01492
`Patent No. 10,257,319
`_________________________
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`PATENT OWNER’S PRELIMINARY RESPONSE
`UNDER 37 C.F.R. § 42.107
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`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`IPR2021-01492 of Patent No. 10,257,319
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`TABLE OF CONTENTS
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`INTRODUCTION ............................................................................................... 7
`I.
`II. FACTUAL BACKGROUND ............................................................................10
`A. DISTRICT COURT PROCEEDINGS ...........................................................11
`1. TESO LITIGATION ...................................................................................11
`2. TEFINCOM LITIGATION .........................................................................12
`3. NETNUT LITIGATION .............................................................................14
`B. PATENT OFFICE PROCEEDINGS .............................................................15
`1. CODE200/TESO IPRS ...............................................................................15
`2. TESO LT, UAB REEXAMS ......................................................................17
`III. THE BOARD SHOULD EXERCISE ITS DISCRETION AND DENY
`INSTITUTION PURSUANT TO 35 U.S.C. § 314(a) .............................................17
`A. ANALYSIS OF THE FINTIV FACTORS .....................................................18
`1. FINTIV FACTOR 1 FAVORS DENIAL ...................................................19
`2. FINTIV FACTOR 2 FAVORS DENIAL ...................................................20
`3. FINTIV FACTOR 3 FAVORS DENIAL ...................................................22
`4. FINTIV FACTOR 4 FAVORS DENIAL ...................................................29
`5. FINTIV FACTOR 5 FAVORS DENIAL ...................................................30
`6. FINTIV FACTOR 6 FAVORS DENIAL ...................................................33
`7. BALANCING THE FINTIV FACTORS ...................................................40
`B. ANALYSIS OF THE GENERAL PLASTIC FACTORS .............................41
`IV. OVERVIEW – THE ‘319 PATENT DISCLOSES AND CLAIMS
`METHODS THAT ARE NOT TAUGHT OR SUGGESTED BY ANY OF THE
`PRIOR ART ADVANCED BY PETITIONER.......................................................43
`A. THE CHALLENGED CLAIMS ....................................................................46
`B. PRIORITY DATE ..........................................................................................46
`C. PERSON OF ORDINARY SKILL IN THE ART .........................................46
`D. CLAIM CONSTRUCTION ...........................................................................48
`V. THE PRIMARY PRIOR ART REFERENCES ................................................52
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`IPR2021-01492 of Patent No. 10,257,319
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`A. CROWDS .......................................................................................................53
`B. BORDER ........................................................................................................55
`C. MORPHMIX ..................................................................................................58
`VI. THE FAILED GROUNDS OF ALLEGED INVALIDITY ...........................61
`A. FAILURE OF CROWDS (GROUNDS 1 AND 2) ........................................61
`B. FAILURE OF BORDER (GROUNDS 3 AND 4) .........................................64
`C. FAILURE OF MORPHMIX (GROUNDS 5 AND 6) ...................................66
`VII. CONCLUSION ..............................................................................................68
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`IPR2021-01492 of Patent No. 10,257,319
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`TABLE OF AUTHORITIES
`
`
`Cases
`Apple Inc. v. Fintiv Inc., IPR2020-00019, Paper 11 (PTAB March 20,
`2020)(precedential) ....................................................................................... passim
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 11 (PTAB May 13,
`2020)(informative) ................................................................................................21
`Boxcast Inc., v. Resi Media LLC, et al., Case No. 2:21-cv-00217-JRG, Dkt. 55 at 2
`(E.D. Tex. Dec. 1, 2021) .......................................................................................19
`Canon Inc. v. Optimum Imaging Technologies LLC, IPR2020-01321, Paper 10 at 6
`(PTAB March 1, 2021) .........................................................................................23
`General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357,
`Paper 19 (PTAB Sept. 6, 2017)(precedential) ......................................................41
`Harmonic Inc. v. Avid Tech, Inc., 815 F.3d 1356, 1367 (Fed. Cir. 2016) ...............17
`KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 421, 127 S. Ct. 1727, 167 L. Ed. 2d
`705 (2007) .............................................................................................................34
`NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept.
`12, 2018)(precedential) .........................................................................................31
`Oyster Optics, LLC v. Infinera Corp., et al., Case No. 2:19-cv-00257-JRG, Dkt. 87
`at 5 (E.D. Tex. July 17, 2020) ...............................................................................20
`Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper 12 (PTAB Dec. 1,
`2020) .....................................................................................................................30
`Supercell Oy, v. Gree, Inc., IPR2020-00310, Paper 13 at 8-9 (PTAB June 18,
`2020) .....................................................................................................................32
`Statutes
`35 U.S.C. § 314(a) ...................................................................................................17
`35 U.S.C. § 314(b)(1)........................................................................................ 19, 21
`35 U.S.C. § 316(a)(11) .............................................................................................21
`Other Authorities
`U.S.P.T.O. Trial Practice Guide, November 2019 Update ........................................ 7
`Rules
`37 C.F.R. § 42.108(a) ...............................................................................................17
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`IPR2021-01492 of Patent No. 10,257,319
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`PATENT OWNER’S LIST OF EXHIBITS
`
`Description
`
`Jury Verdict (Dkt. 516) in the case of Bright Data Ltd. f/k/a
`Luminati Networks Ltd. v. Teso LT, UAB a/k/a UAB Teso LT, et al.,
`Case No. 2:19-cv-00395-JRG (E.D. Tex. Nov. 5, 2021)
`
`Plaintiff Bright Data Ltd.’s Disclosure of Proposed Claim Terms for
`Construction, dated December 8, 2021, in the case of Bright Data
`Ltd. v. NetNut Ltd., Case No. 2:21-cv-00225-JRG (E.D. Tex.)
`
`Docket Control Order (Dkt. 56) in the case of Bright Data Ltd. v.
`NetNut Ltd., Case No. 2:21-cv-00225-JRG (E.D. Tex. Oct. 22,
`2021)
`
`Order on Pretrial Motions and Motions in Limine (Dkt. 476) in the
`case of Bright Data Ltd. f/k/a Luminati Networks Ltd. v. Teso LT,
`UAB a/k/a UAB Teso LT, et al., Case No. 2:19-cv-00395-JRG (E.D.
`Tex. Sept. 9, 2021)
`
`Applicant Remarks, dated October 18, 2018, regarding Application
`No. 15/957,945 which issued as Patent No. 10,257,319 (previously
`submitted in IPR2020-01266 as EX. 2008)
`
`Declaration of Dr. V. Thomas Rhyne Declaration (previously
`submitted in IPR2020-01266 as EX. 2012)
`
`Plaintiff’s Sur-reply in opposition to Defendants’ Motion to Dismiss
`(Dkt. 47) in the case of Bright Data Ltd. f/k/a Luminati Networks
`Ltd. v. Teso LT, UAB a/k/a UAB Teso LT, et al., Case No. 2:19-cv-
`00395-JRG (E.D. Tex. May 5, 2020)
`
`Order (Dkt. 55) in the case of Boxcast Inc., v. Resi Media LLC, et
`al., Case No. 2:21-cv-00217-JRG (E.D. Tex. Dec. 1, 2021)
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`5
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`Exhibit
`Number
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`2001
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`2002
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`2003
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`2004
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`2005
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`2006
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`2007
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`2008
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`IPR2021-01492 of Patent No. 10,257,319
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`2009
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`2010
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`Order (Dkt. 87) in the case of Oyster Optics, LLC v. Infinera Corp.,
`et al., Case No. 2:19-cv-00257-JRG (E.D. Tex. July 17, 2020)
`
`Declaration of Mr. Thomas M. Dunham
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`I.
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`IPR2021-01492 of Patent No. 10,257,319
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`INTRODUCTION
`
`In this inter partes review (“IPR”) proceeding, NetNut Ltd. (“Petitioner” or
`
`“NetNut”) challenges the validity of claims 1-2, 12, 14-15, 17-19, and 21-29
`
`(“Challenged Claims”) of U.S. Patent No. 10,257,319 (the “‘319 Patent”) owned by
`
`Bright Data Ltd. (“Patent Owner” or “Bright Data). (Paper 2 at 10).1 NetNut alleges
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`anticipation and/or obviousness of the Challenged Claims based on primary
`
`references Crowds (EX. 1006), Border (EX. 1012), and MorphMix (EX. 1008).
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`
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`Bright Data respectfully requests that the Patent Trial and Appeal Board
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`(“Board”) exercise its discretion and deny institution of this IPR of the ‘319 Patent
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`for at least two reasons.2
`
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`1 In this Patent Owner Preliminary Response (“POPR”), Bright Data is only
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`addressing select issues demonstrating that review should not be instituted. In so
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`doing, Bright Data is not acquiescing to other issues raised by NetNut and reserves
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`the right to address all issues and to challenge all points raised by NetNut in any
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`future response if proceedings are instituted. (See U.S.P.T.O. Trial Practice Guide,
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`November 2019 Update, at 49-52).
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`2 This POPR is substantially similar to Bright Data’s preliminary response in the
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`related IPR proceeding with NetNut: IPR2021-01493 regarding U.S. Patent No.
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`10,484,510 (the “‘510 Patent”). The ‘510 Patent is based upon a continuation of the
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`IPR2021-01492 of Patent No. 10,257,319
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`First, the Petition should be dismissed based upon at least the Fintiv factors
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`governing parallel district court proceedings.3 Specifically, the parallel district court
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`litigation between Bright Data (Patent Owner) and NetNut (Petitioner) - which
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`involves substantially the same claims4, and exactly the same primary prior art
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`references - begins jury selection on September 12, 2022, over six months before a
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`final written decision would be expected in this IPR. Additionally, by the time an
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`institution decision would be expected in this IPR, the District Court and the parties
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`will have invested significant resources in that litigation. Bright Data will also have
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`investigated significant resources in five sets of other proceedings involving the ‘319
`
`and ‘510 Patents, substantially the same claims, and exactly the same primary prior
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`application that issued as the ‘319 Patent. Both patents are at issue in the parallel
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`district court litigation between Bright Data and NetNut (Case No. 2:21-cv-00225).
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`3 See generally Apple Inc. v. Fintiv Inc., IPR2020-00019, Paper 11 (PTAB March
`
`20, 2020)(precedential)(“Fintiv”).
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`4 The ‘319 Patent contains 29 claims, with only claim 1 being independent. The ‘510
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`Patent contains 24 claims, with only claim 1 being independent.
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`8
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`art references.5 For at least these reasons, the Fintiv factors overwhelmingly support
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`IPR2021-01492 of Patent No. 10,257,319
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`the Board exercising its discretion to deny institution.
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`Second, the Challenged Claims of the ‘319 Patent are strongly novel and
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`nonobvious when compared to the primary prior art references. As explained below,
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`the primary prior art references and alleged combinations of references
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`fundamentally fail to teach or suggest the claimed combinations of elements recited
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`in the Challenged Claims to achieve the objectives and advantages of the ‘319
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`Patent.6 Thus, the substantive weaknesses of the Grounds further militates in favor
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`of denying institution.
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`5 There is also a sixth set of other proceedings challenging the ‘319 and ‘510 Patents,
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`involving substantially the same claims, but different grounds. (See section III.A.6.
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`discussing IPR2022-00135 and IPR2022-00138).
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`6 By way of example, a jury recently found the asserted claims of the ‘319 and ‘510
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`Patents were not anticipated by Crowds in Case No. 2:19-cv-00395, as further
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`explained below. (EX. 2001 at 5).
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`IPR2021-01492 of Patent No. 10,257,319
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`II. FACTUAL BACKGROUND
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`Bright Data provides the following recitation of factual, background
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`
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`information as relevant to the Board exercising its discretion to deny institution
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`based on the Fintiv factors (see section III.A.).7
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`As mentioned above and explained in detail below, there are five sets of other
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`proceedings involving the ‘319 and ‘510 Patents, substantially the same claims, and
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`exactly the same primary prior art references.
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`In the Eastern District of Texas, there are three relevant proceedings involving
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`the ‘319 and ‘510 Patents, one which has already reached a final jury verdict and
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`two which are expected to go to trial before a final written decision is due in this
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`IPR.
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`At the Patent Office, there are two sets of relevant proceedings involving the
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`‘319 and ‘510 Patents. First, there were two IPRs against the ‘319 and ‘510 Patents
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`that were denied institution. Second, there are two ex parte reexamination requests
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`against the ‘319 and ‘510 Patents that have recently been granted.
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`7 This information is also provided based on the 10/29/2021 conference call with the
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`Board, Bright Data, and NetNut regarding IPR2021-00458 and IPR2021-00465 in
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`which the Board noted the high volume of activity surrounding Bright Data’s
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`patents.
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`IPR2021-01492 of Patent No. 10,257,319
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`A. DISTRICT COURT PROCEEDINGS
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`1. TESO LITIGATION8
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`On 12/6/2019, Bright Data sued Teso LT, UAB, Oxysales, UAB, and
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`Metacluster LT, UAB (“Teso”) for infringement of the ‘319 and ‘510 Patents in the
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`Eastern District of Texas, Case No. 2:19-cv-00395.
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`On 6/29/2020, Teso served its invalidity contentions, alleging anticipation
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`and/or obviousness of claims 1-2, 14-15, 17-18, 21-22, and 24-27 of the ‘319 Patent,
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`and of claims 1-2, 8-11, 13, 15-16, 18-20, and 22-23 of the ‘510 Patent, based on
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`primary references Crowds, Border, and MorphMix.
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`On 12/7/2020, the Court entered a Claim Construction Order (Dkt. 191)(EX.
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`1017) construing terms in the ‘319 and ‘510 Patents.
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`On 2/5/2021, Teso submitted a Motion for Summary Judgment of Invalidity
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`(Dkt. 277) that the allegedly invalid claims of the ‘319 and ‘510 Patents are
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`anticipated by Crowds. (See Teso Litigation, Dkt. 282, redacted version of Dkt. 277).
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`This Motion was denied by the Court on 9/10/2021. (Teso Litigation, Dkt. 476).
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`On 8/6/2021, the Court entered a Supplemental Claim Construction Order
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`(Dkt. 453)(EX. 1020) regarding the term “second server” in the ‘319 and ‘510
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`8 Bright Data Ltd. f/k/a Luminati Networks Ltd. v. Teso LT, UAB a/k/a UAB Teso
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`LT, et al., Case No. 2:19-cv-00395-JRG (E.D. Tex.)(“Teso Litigation”).
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`Patents. The Court did not change the construction of this term, but provided
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`IPR2021-01492 of Patent No. 10,257,319
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`additional guidance for interpretation. (EX. 1020 at 11).
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`A jury trial was held the first week of November 2021. Bright Data presented
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`infringement of claims 1 and 26 of the ‘319 Patent, and of claims 1 and 22 of the
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`‘510 Patent, to the jury. Teso presented invalidity of these four claims based on
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`anticipation by Crowds to the jury.9
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`On 11/5/2021, the jury entered a verdict (Dkt. 516) finding these four claims
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`were NOT invalid.10 (EX. 2001 at 5).
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`2. TEFINCOM LITIGATION11
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`On 12/31/2019, Bright Data sued Tefincom SA d/b/a NordVPN (“Tefincom”)
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`for infringement of the ‘319 and ‘510 Patents in the Eastern District of Texas, Case
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`No. 2:21-cv-00414.
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`On 3/31/2021, Tefincom served
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`its
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`invalidity contentions, alleging
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`anticipation and/or obviousness of claims 1-2, 14-15, 17-18, 21-22, and 24-27 of the
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`9 Teso also presented invalidity based on lack of written description support.
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`10 The jury also found that Teso was a willful infringer. (EX. 2001 at 6).
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`11 Bright Data Ltd. f/k/a Luminati Networks Ltd. v. Tefincom SA d/b/a NordVPN,
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`Case No. 2:19-cv-00414-JRG (E.D. Tex.)(“Tefincom Litigation”).
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`12
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`‘319 Patent, and of claims 1-2, 8-11, 13, 15-16, 18-20, and 22-23 of the ‘510 Patent,
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`IPR2021-01492 of Patent No. 10,257,319
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`based on primary references Crowds, Border, and MorphMix.
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`On 6/18/2021, the parties submitted a Joint Motion (Dkt. 62) to request that
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`the ultimate claim constructions for construed terms in the ‘319 and ‘510 Patents
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`adopted by the Court in the Teso Litigation shall apply as if ordered by the Court in
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`the Tefincom Litigation.12 On 6/16/2021, the Court entered an Order (Dkt. 63)
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`granting the Joint Motion (Dkt. 62).
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`Pursuant to the Docket Control Order (Dkt. 31), jury selection in the Tefincom
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`Litigation was scheduled for 1/3/2022. However, on 11/17/2021, the Court ordered
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`mediation based on the 11/5/2021 jury verdict in the Teso Litigation. On 11/19/2021,
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`the Court entered an Order (Dkt. 181) to continue the 1/3/2022 jury selection date to
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`allow the parties to focus on meaningful mediation.
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`As of the filing of this POPR, mediation between the parties is set to occur on
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`1/6/2022 and a status report is to be submitted to the Court within 3 days of the
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`mediation’s conclusion.
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`12 The parties both preserved and did not waive their right to appeal, including to the
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`U.S. Court of Appeals for the Federal Circuit, their claim construction and
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`indefiniteness positions.
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`13
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`IPR2021-01492 of Patent No. 10,257,319
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`3. NETNUT LITIGATION13
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`On 6/18/2021, Bright Data sued NetNut for infringement of the ‘319 and ‘510
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`Patents in the Eastern District of Texas, Case No. 2:21-cv-00225.
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`On 12/8/2021, Bright Data served its P.R. 4-1 Disclosure of proposed claim
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`terms for construction in the NetNut Litigation. There, Bright Data proposed the
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`parties use the Court’s Claim Construction Order (EX. 1017) from the Teso
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`Litigation.14 (EX. 2002 at 2). As of the filing of this POPR, NetNut has not yet
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`responded to Bright Data’s proposal.
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`On 12/17/2021, NetNut served its invalidity contentions, alleging anticipation
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`and/or obviousness of claims 1-2, 14-15, 17-18, and 21-27 of the ‘319 Patent, and
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`of claims 1-2, 8-11, 13, 15-16, 18-20, and 22-23 of the ‘510 Patent, based on primary
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`references Crowds, Border, and MorphMix.
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`13 Bright Data Ltd. v. NetNut Ltd., Case No. 2:21-cv-00225-JRG (E.D.
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`Tex.)(“NetNut Litigation”).
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`14 In using the Court’s claim constructions from the Teso Litigation, the parties
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`would preserve and not waive their rights to appeal, including to the U.S. Court of
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`Appeals for the Federal Circuit, any claim construction that departs from their
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`proposed constructions and positions.
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`14
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`IPR2021-01492 of Patent No. 10,257,319
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`Pursuant to the Docket Control Order (Dkt. 56), jury selection in the NetNut
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`Litigation is scheduled for 9/12/2022. (EX. 2003 at 1).
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`B. PATENT OFFICE PROCEEDINGS
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`1. CODE200/TESO IPRS15
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`On 7/14/2020, Code200, UAB
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`(“Code200”) and Teso
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`(together,
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`“Code200/Teso”) 16 filed an IPR petition challenging claims 1, 2, 14-15, 17-19, 21-
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`22, and 24-29 of the ‘319 Patent. (IPR2020-01266, Paper 5 at 5-6).
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`On 7/28/2020, Code200/Teso filed an IPR petition challenging claims 1, 2, 6-
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`11, 13, 15, and 16-24 of the ‘510 Patent. (IPR2020-01358, Paper 5 at 5-6).
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`Code200/Teso alleged anticipation and obviousness of certain claims of the
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`‘319 and ‘510 Patents based on primary references Crowds, Border, and MorphMix.
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`(IPR2020-01266, Paper 5 at 5-6; IPR2020-01358, Paper 5 at 5-6).
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`15 Code200, UAB et al., v. Luminati Networks Ltd. f/k/a Hola Networks Ltd.,
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`IPR2020-01266 (PTAB) and Code200, UAB et al., v. Luminati Networks Ltd. f/k/a
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`Hola Networks Ltd., IPR2020-01358 (PTAB).
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`16 See, e.g., Patent Owner’s Preliminary Response, IPR2020-01266, Paper 12, at 12-
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`13 for further explanation regarding the relationship between the petitioners
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`Code200 and Teso.
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`15
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`IPR2021-01492 of Patent No. 10,257,319
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`On 10/26/2020, Patent Owner submitted its preliminary response (Paper 12)
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`in IPR2020-01266 and on 11/20/20, Patent Owner submitted a similar preliminary
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`response (Paper 9) in IPR2020-01358.17
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`On 12/23/2020, the Board exercised its discretion and denied institution of
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`IPR of the ‘319 Patent. (IPR2020-01266, Paper 18 at 12). More specifically, the
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`Board exercised its discretion at least because:
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`“(1) the trial in the [Teso] Litigation is set to occur at least seven months
`before a Final Written Decision would be issued here; (2) the court and
`the parties have invested substantial time and effort in the [Teso]
`Litigation; and (3) there is almost complete overlap of issues and parties
`with
`this
`proceeding
`and
`the
`[Teso]
`Litigation.”
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`(Id.). Moreover, the Board did “not find that the merits outweigh[ed] the other Fintiv
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`factors favoring denial of institution.” (Id. at 11).
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`On 2/2/2021, the Board reached a similar conclusion and denied institution of
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`IPR of the ‘510 Patent. (IPR2020-01358, Paper 11 at 11).
`
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`17 As of the filing of those preliminary responses, the Court had not yet issued its
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`12/7/2020 Claim Construction Order (EX. 1017) in the Teso Litigation.
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`16
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`IPR2021-01492 of Patent No. 10,257,319
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`2. TESO LT, UAB REEXAMS18
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`On 10/1/2021, Teso LT, UAB alone filed an ex parte reexamination request
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`against claims 1-2, 12, 14-15, 17-19, 21-22, and 24-29 of the ‘319 Patent in Control
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`No. 90/014,875.
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`On 10/5/2021, Teso LT, UAB alone filed an ex parte reexamination request
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`against claims 1-2, 6-11, 13, and 15-24 of the ‘510 Patent in Control No. 90/014,876.
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`Teso LT, UAB alleged anticipation and obviousness of certain claims of the
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`‘319 and ‘510 Patents based on primary references Crowds, Border, and MorphMix.
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`On 11/12/2021, reexamination was ordered in Control No. 90/014,875 and on
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`11/22/2021, reexamination was ordered in Control No. 90/014,876.
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`III. THE BOARD SHOULD EXERCISE ITS DISCRETION AND DENY
`INSTITUTION PURSUANT TO 35 U.S.C. § 314(a)
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`The Board has discretion to deny institution of an IPR. (See 35 U.S.C. §
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`314(a); 37 C.F.R. § 42.108(a); Harmonic Inc. v. Avid Tech, Inc., 815 F.3d 1356,
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`1367 (Fed. Cir. 2016) (explaining that, under § 314(a), “the PTO is permitted, but
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`never compelled, to institute an IPR proceeding”); Cuozzo Speed Techs., LLC v. Lee,
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`136 S. Ct. 2131, 2140 (2016) (“[T]he agency’s decision to deny a petition is a matter
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`committed to the Patent Office’s discretion.”)).
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`18 Teso LT, UAB v. Bright Data Ltd., Control Nos. 90/014,875 and 90/014,876.
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`17
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`IPR2021-01492 of Patent No. 10,257,319
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`A. ANALYSIS OF THE FINTIV FACTORS
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`In the discussion that follows, Patent Owner will apply the Fintiv factors,
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`namely:
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`1. whether the court granted a stay or evidence exists that one may be granted if
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`a proceeding is instituted;
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`2. proximity of the court’s trial date to the Board’s projected statutory deadline
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`for a final written decision;
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`3. investment in the parallel proceeding by the court and the parties;
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`4. overlap between issues raised in the petition and in the parallel proceeding;
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`5. whether the petitioner and the defendant in the parallel proceeding are the
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`same party; and
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`6. other circumstances that impact the Board’s exercise of discretion, including
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`the merits.
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`Patent Owner respectfully submits that the Fintiv factors overwhelmingly favor
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`denial of institution. As compared to the parallel district court proceeding, the parties
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`are the same, the challenged claims are substantially the same, the primary prior art
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`references are exactly the same, and the district court trial is scheduled to begin in
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`September 2022, compared to an institution decision expected in this IPR in March
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`2022 and a final written decision in March 2023.
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`18
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`IPR2021-01492 of Patent No. 10,257,319
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`1. FINTIV FACTOR 1 FAVORS DENIAL
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`The first Fintiv factor is whether the court has granted a stay or evidence exists
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`that one may be granted if a proceeding is instituted.
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`At the time of filing this POPR, NetNut has not moved to stay the NetNut
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`Litigation. It is highly unlikely that Judge Gilstrap would grant a stay in the NetNut
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`Litigation prior to institution of this IPR. In a recent Order, dated December 1, 2021,
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`Judge Gilstrap denied a motion to stay and reaffirmed that: “this Court has a
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`consistent practice of denying motions to stay when the PTAB has yet to institute
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`post-grant proceedings.” (Boxcast Inc., v. Resi Media LLC, et al., Case No. 2:21-cv-
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`00217-JRG, Dkt. 55 at 2 (E.D. Tex. Dec. 1, 2021)(internal citations omitted), EX.
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`2008 at 2).
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`The statutory deadline for an institution decision in this proceeding is
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`3/27/2022. (35 U.S.C. § 314(b)(1)). Even if the Board grants institution of this IPR,
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`it is unlikely that Judge Gilstrap would grant a stay in the NetNut Litigation given
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`the advanced stage of the case as of 3/27/2022.
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`Pursuant to the Docket Control Order (Dkt. 56), by 3/27/2022, the parties in
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`the NetNut Litigation will have completed infringement contentions, invalidity
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`contentions, eligibility contentions, claim construction discovery, and claim
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`19
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`construction briefing.19 The parties will also have substantially completed document
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`IPR2021-01492 of Patent No. 10,257,319
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`production (by 1/26/2022) and will be nearing the deadline to complete fact
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`discovery and submit motions to compel discovery (by 4/13/2022).
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`In a recent Order, dated July 17, 2020, Judge Gilstrap denied a renewed
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`motion to stay after institution was granted in a related IPR and explained that:
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`“[w]hile fact discovery is almost but not yet completed, the case is clearly at an
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`advanced stage. Fact discovery is closing in about a month and trial is only six
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`months away. Further, the claim construction briefing and argument is completed.
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`As such, the Court finds that the late stage of this case weighs against granting a
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`stay.” (Oyster Optics, LLC v. Infinera Corp., et al., Case No. 2:19-cv-00257-JRG,
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`Dkt. 87 at 5 (E.D. Tex. July 17, 2020), EX. 2009 at 5).
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`Thus, with regard to the NetNut Litigation, the first Fintiv factor weighs in
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`favor of denial.
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`2. FINTIV FACTOR 2 FAVORS DENIAL
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`The second Fintiv factor is the proximity of the court’s trial date to the Board’s
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`projected statutory deadline for a final written decision.
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`19 The Claim Construction Hearing in the NetNut Litigation is currently scheduled
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`for 4/6/2022.
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`20
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`IPR2021-01492 of Patent No. 10,257,319
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`The statutory deadline for a final written decision in this proceeding is
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`3/27/2023. (35 U.S.C. § 314(b)(1); 35 U.S.C. § 316(a)(11)).
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`Petitioner argues that “a final written decision is likely before the EDTX
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`[NetNut] case goes to trial” such that “[t]his factor strongly favors institution.”
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`(Paper 2 at 11). Petitioner’s argument is belied by the facts.
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`The NetNut Litigation has
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`jury selection on 9/12/2022, which
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`is
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`approximately 6.5 months before the statutory deadline for a final written decision
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`in this proceeding.20 Petitioner knew or should have known of the Court’s usual
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`timeframe from the outset of the lawsuit. It is well-known that the Eastern District
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`of Texas brings cases to trial quickly. In Apple Inc. v. Fintiv, Inc., IPR2020-00019,
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`Paper 15 at 11 (PTAB May 13, 2020)(informative), the Board acknowledged that “it
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`always has been the case that some district courts move faster than others” and that
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`“under certain circumstances, considerations of the state of a parallel proceeding
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`may require petitioners to act more quickly than the maximum amount of time
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`permitted by Congress.” (Id.).
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`Petitioner also argues that “[t]he present [NetNut] Petition arises in a different
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`posture [from the Code200/Teso Petition]” such that the “timing” favors institution.
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`(Paper 2 at 2). This argument is also wrong.
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`20 6 months, 15 days excluding the end date.
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`21
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`IPR2021-01492 of Patent No. 10,257,319
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`The Code200/Teso Petition was denied when the Teso trial date was seven
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`months prior to the deadline for a final written decision in that proceeding.
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`(IPR2020-01266, Paper 18 at 12).21 Here, the NetNut Petition is in a similar posture.
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`The NetNut Petition should be denied given that the NetNut trial date is six and a
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`half months prior to the deadline for a final written decision in this proceeding.
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`Thus, with regard to the NetNut Litigation, the second Fintiv favor weighs in
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`favor of denial.
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`3. FINTIV FACTOR 3 FAVORS DENIAL
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`The third Fintiv factor is the investment in the parallel district court
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`proceeding by the Court and the parties.
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`Petitioner argues that “[t]here have been no substantive proceedings in the
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`[NetNut] litigation, which favors institution.” (Paper 2 at 2). Petitioner’s argument
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`is belied by the facts. By the 3/27/2022 deadline for an institution decision in this
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`proceeding, the parties will have invested significant resources in the NetNut
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`Litigation. (See section III.A.1.).
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`21 The Board reached a similar conclusion in IPR2021-01358 and denied institution
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`of IPR of the ‘510 Patent. (IPR2020-01358, Paper 11, at 10-11).
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`22
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`IPR2021-01492 of Patent No. 10,257,319
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`By the 3/27/2023 deadline for a final written decision in this proceeding, the
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`parties will have completed trial in the NetNut Litigation. Regardless of any
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`argument by Petitioner as to a possible continuance, pursuant to the Docket Control
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`Order (Dkt. 56, EX. 2003), the Claim Construction Hearing is scheduled for
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`4/6/2022 (*)22, the deadline to complete fact discovery and file motions to compel
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`discovery is 4/13/2022; the deadline to complete expert discovery is 5/31/2022; the
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`deadline to file pre-trial motions is 6/6/2022 (*); and the deadline to file pretrial
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`disclosures (e.g., witness lists, deposition designations, and exhibit lists) is
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`6/29/2022 (*). Further, the deadline to file motions in limine is 7/20/2022 and the
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`deadline to file a joint pretrial order, joint proposed jury instructions, joint proposed
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`verdict form and updated disclosures is 8/1/2022 (*). None of these deadlines are
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`likely to change, even if the trial date is ultimately changed due to the COVID-
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`pandemic. Additionally, there are many cases where the Board has declined to
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`speculate about whether there may be further delays in the district court. (See, e.g.,
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`Canon Inc. v. Optimum Imaging Technologies LLC, IPR2020-01321, Paper 10 at 6
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`(PTAB March 1, 2021)).
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`22 The deadlines marked with an asterisk are court-set deadlines that cannot be
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`changed by the parties without showing good cause, which requires more than joint
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`agreement by the parties.
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`23
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`IPR2021-01492 of Patent No. 10,257,319
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`The District Court and the parties will have already invested significant
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`resources in the NetNut Litigation by the time the Board makes its institution
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`decision in March 2022. The District Court and the parties will have invested even
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`more resources, including preparing for and conducting the jury trial in September
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`2022, before the time the Board issues its final written decision in March 2023.
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`Additionally, Petitioner fails to sufficiently address (a) the delay in filing the
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`Petition and (b) knowledge of the primary prior art references.
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`a. Delay in Filing the Petition
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`“As a matter of petition timing, notwithstanding that a defendant has one year
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`to file a petition, it may impose unfair costs to a patent owner if the petitioner, faced
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`with the prospect of a looming trial date, waits until the district court trial has
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`progressed significantly before filing a petition at the Office.” (Fintiv at 11).
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`Petitioner fails to sufficiently address the delay in filing the NetNut Petition.
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`Petitioner argues that:
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`“Petitioner was not even sued on the Patent until a year after [the
`Code200/Teso Petition in] IPR2021-01266. [The Code200/Teso
`Petition in] IPR2021-01266 was filed on July 14, 2020, only shortly
`after the time Petitioner was being sued in an earlier filed EDTX actio