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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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`APPLE INC.,
`Petitioner
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`v.
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`SCRAMOGE TECHNOLOGY, LTD.,
`Patent Owner
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`———————
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`IPR2022-00118
`U.S. Patent No. 10,804,740
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`PETITIONER’S AUTHORIZED REPLY
`TO PATENT OWNER’S PRELIMINARY RESPONSE
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`Petitioner’s Reply to Patent Owner’s Preliminary Response
`IPR2022-00118 (U.S. Patent 10,804,740)
`Pursuant to the Board’s email dated February 24, 2022, Petitioner files this
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`Reply to Patent Owner’s Preliminary Response (“POPR,” Paper 6).
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`I. THE FINTIV FACTORS FAVOR INSTITUTION
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`Due to developments in the District Court since the Petition was filed, the
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`Fintiv factors now more strongly favor institution. For example, under Factor 2, the
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`Markman hearing has been delayed and a trial date will not be set until after an
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`institution decision is due. Under Factor 4, Petitioner’s new Sand-type stipulation
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`eliminates overlap between this IPR and the District Court proceeding.
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`A. Factor 1 is neutral (possibility of a stay)
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`Patent Owner’s contention that it is “highly unlikely” Judge Albright would
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`grant a stay in the co-pending litigation is pure conjecture based on how Judge
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`Albright has ruled in different cases based on different facts. POPR at 29-31.
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`Factor 1 is neutral without “specific evidence” relating to this case. Sand
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`Revolution II, LLC v. Continental Intermodal Group – Trucking LLC, IPR2019-
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`01393, Paper 24 at 7 (June 16, 2020) (informative) (“Sand”) (finding Factor 1
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`neutral given only generalized evidence that WDTX routinely denies stays); Apple
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`Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 12 (May 13, 2020) (informative)
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`(finding Factor 1 neutral after “declin[ing]to infer” how WDTX would rule based
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`on actions taken in “different cases with different facts”).
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`1
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`Petitioner’s Reply to Patent Owner’s Preliminary Response
`IPR2022-00118 (U.S. Patent 10,804,740)
`B. Factor 2 weighs against denial (timing of trial)
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`This factor weighs strongly against denial because the District Court has not
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`set a trial date and will not set a trial date until after the Board’s institution
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`decision is due. Specifically, the District Court “expects to set [the trial] date at the
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`conclusion of the Markman Hearing.” Ex.1015 (original scheduling order), 4. The
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`Markman hearing, however, has been delayed to May 23, 2022—after the Board’s
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`institution decision which is due by May 16, 2022. See Ex.2015 (revised
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`scheduling order), 1. Without a trial date set, this factor weighs strongly against
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`denial. See Microchip Technology Inc. v. HD Silicon Solutions LLC, Paper 9 at 10,
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`IPR2021-01042 (PTAB Dec. 15, 2021) (finding that factor 2 “weighs strongly
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`against exercising discretion to deny inter partes review” in a case “without a trial
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`date set in the District Court Litigation.”).
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`Without a trial date, Patent Owner is left to speculate that the parallel
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`litigation is “on track for trial in March 2023” in light of a “related Google case.”
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`POPR, 32. Speculation is not a basis for discretionary denial. See, e.g., Progenity,
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`Inc. v. Natera, Inc., IPR2021-00279, Paper 12 at 29-30 (June 11, 2021) (finding
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`that factor 2 “does not weigh in favor of” denial where “there is no trial date
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`scheduled for the parallel proceeding” and “[w]hether the trial takes place before,
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`contemporaneously with, or after our final written decision statutory deadline
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`involves speculation.”); see also Intel Corp., v. FG SRC LLC, IPR2020-01449,
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`2
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`Petitioner’s Reply to Patent Owner’s Preliminary Response
`IPR2022-00118 (U.S. Patent 10,804,740)
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`Paper 13 at 15 (Mar. 3, 2021).
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`Even if trial did occur in March of 2023, the Board would issue its Final
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`Written Decision no more than two months later—a gap the Board routinely finds
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`does not warrant denial. See, e.g., MediaTek Inc. et al. v. Nippon Telegraph and
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`Telephone Corp., IPR2020-01607, Paper 12 at 14 (PTAB April 2, 2021) (finding
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`factor 2 “as slightly favoring proceeding” where “final decision will be within
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`three months of trial”); Western Digital Corp. et al. v. Martin Kuster, IPR2020-
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`01391, Paper 10 at 9 (PTAB February 16, 2021) (finding factor 2 neutral where
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`“there would be only a three-and-a-half month difference between the district court
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`trial date and the due date for the final written decision”); Progenity, IPR2021-
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`00279, Paper 12 at 29 (“Where the trial merely is estimated to occur about three
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`months before the final written decision falls due in this proceeding, concerns
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`about the Board duplicating efforts … are diminished.”).
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`C. Factor 3 favors institution (investment in parallel proceeding)
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`Patent Owner identifies several litigation-related activities, including
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`Markman briefing, as evidence of significant investment in the parallel proceeding.
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`POPR, 34-35. Sand emphasized, however, that the focus of this factor is not the
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`total amount invested by the court and parties, but rather the amount invested “in
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`the merits of the invalidity positions.” Sand at 10. Here, as in Sand, “much of the
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`district court’s investment relates to ancillary matters untethered to the validity
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`3
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`Petitioner’s Reply to Patent Owner’s Preliminary Response
`IPR2022-00118 (U.S. Patent 10,804,740)
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`issue itself.” Id.
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`For example, final invalidity contentions are not due until after institution.
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`Ex.2015, 1. And, although Markman briefing will take place before institution, this
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`activity is ancillary to the invalidity issues raised in the Petition. Neither Petitioner
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`nor Patent Owner construe any terms in the Petition or POPR. See generally
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`Petition, POPR. Accordingly, even if the district court issues a Markman order
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`soon after institution, as speculated by Patent Owner, that order will not reflect any
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`investment in the merits of the invalidity issues here. Under similar circumstances,
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`the Board consistently finds that Factor 3 favors institution. See, e.g., Huawei
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`Tech. Co., Ltd., v. WSOU Invs., LLC, IPR2021-00229, Paper 10 at 12-13 (Jul. 1,
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`2021) (finding factor 3 favoring institution and noting that “while a Markman
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`hearing has occurred, much of the invested effort is unconnected to the
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`patentability challenges”); Apple Inc. v. Koss Corp., IPR2021-00381, Paper 15, at
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`16-17 (Jul. 2, 2021) (finding “little evidence of risk that we will duplicate work
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`performed in the District Court Lawsuit” when “there is no indication as to how
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`[the Markman] order might impact questions of patentability”).
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`As also in Sand, at the time of institution “much work” will remain in the
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`district court case as it relates to invalidity. Sand at 10-11. Fact and expert
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`discovery will not close for four and six months respectively, expert invalidity
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`reports will not be due for four months, and substantive motion practice on validity
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`4
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`Petitioner’s Reply to Patent Owner’s Preliminary Response
`IPR2022-00118 (U.S. Patent 10,804,740)
`issues will not have started. Ex. 1015, 3. This lack of investment in invalidity
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`matters, combined with Petitioner’s promptness in filing within two months after
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`being served infringement contentions “weigh[s] against” denial. Apple Inc. v.
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`Fintiv, Inc., IPR2020-00019, Paper 11 at 11 (Mar. 20, 2020) (precedential).
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`D. Factor 4 favors institution (overlap of issues)
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`Although the degree of overlap with the District Court on invalidity issues is
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`thus far speculative1, Petitioner nevertheless stipulates that it will not pursue in the
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`parallel district court proceeding (WDTX-6-21-cv-00579) the prior art obviousness
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`combinations on which trial is instituted for the claims on which trial is instituted.
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`In Sand, a nearly identical stipulation was found to effectively address the risk of
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`duplicative efforts. Sand at 11-12. Accordingly, this factor favors institution.
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`E. Factor 5 is neutral (overlapping parties)
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`Although Petitioner is the defendant in the parallel proceeding, the Board
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`has noted that this factor “could weigh either in favor of, or against, exercising
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`discretion to deny institution, depending on which tribunal was likely to address
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`the challenged patent first.” Google LLC v. Parus Holdings, Inc., IPR2020-00846,
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`Paper 9 at 21 (Oct. 21, 2020). This factor is therefore neutral because, without a
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`trial date, it is unknown which tribunal will address validity first. Id.
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`1 Only preliminary invalidity contentions have been served. See Ex.1015, 3.
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`5
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`Petitioner’s Reply to Patent Owner’s Preliminary Response
`IPR2022-00118 (U.S. Patent 10,804,740)
`Respectfully submitted,
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`/Scott T. Jarratt/
`Scott T. Jarratt
`Lead Counsel for Petitioner
`Registration No. 70,297
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`Date: March 3, 2022
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`6
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`Petitioner’s Reply to Patent Owner’s Preliminary Response
`IPR2022-00118 (U.S. Patent 10,804,740)
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`CERTIFICATE OF SERVICE
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`The undersigned certifies, under 37 C.F.R. § 42.6, that service was made on
`the Patent Owner as detailed below.
`Date of service March 3, 2022
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`Manner of service Electronic Service by E-mail
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`Documents served Petitioner’s Authorized Reply
`Preliminary Response.
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`Persons served Brett Cooper (bcooper@raklaw.com)
`Reza Mirzaie (rmirzaie@raklaw.com)
`rak_scramoge@raklaw.com
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`to Patent Owner’s
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`/Scott T. Jarratt/
`Scott T. Jarratt
`Lead Counsel for Petitioner
`Registration No. 70,297
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`7
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