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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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`IPR2022-00118
`Patent 10,804,740
`____________
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`PATENT OWNER’S PRELIMINARY RESPONSE SUR-REPLY
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`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`Table of Contents
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`Factor 1: It is undisputed that a stay is unlikely to be granted. ...................... 1
`Factor 2: The district court trial will begin before the FWD deadline. .......... 2
`Factor 3: There has been significant investment in the district court
`litigation. ........................................................................................................ 2
`Factor 4: Duplicative issues and inefficiencies remain. ................................. 3
`Factor 5: Petitioner is a defendant in the district court litigation. .................. 5
`Factor 6: The Petition is substantively weak. ................................................. 5
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`A.
`B.
`C.
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`D.
`E.
`F.
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`i
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`IPR2022-00118 (’740 Patent)
`Patent Owner Preliminary Response Sur-reply
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`The district court case concerns the same parties, same patent, same claims,
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`and the same invalidity references. Trial in the district court is also on track to occur
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`months before the deadline for a final written decision in this matter. IPRs were
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`intended to be “an effective and efficient alternative” to district court litigation, but
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`this IPR cannot be such an alternative under these circumstances. Allowing this IPR
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`to proceed simultaneously with the district court litigation would result in
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`duplicative work, risk conflicting decisions, and be an inefficient use of the Board’s
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`finite resources. Institution should be denied.
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`A.
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`Factor 1: It is undisputed that a stay is unlikely to be granted.
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`Petitioner does not dispute that the district court is unlikely to grant a stay in
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`the event the Petition is instituted. Indeed, Petitioner does not attempt to set forth
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`any argument or evidence that the district court is likely to grant a stay, and instead
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`argues that this factor is neutral without “specific evidence” relating to this case. But
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`contrary to Petitioner’s assertions, Patent Owner provides specific evidence,
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`including evidence regarding the stage of the litigation, and reasonably concludes
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`that a stay is unlikely under the applicable law—a position that Petitioner does not
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`and cannot refute. See Samsung Elecs. Co. Ltd. v. Evolved Wireless LLC, IPR2021-
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`00950, Paper 10 at 10–11 (PTAB Nov. 29, 2021) (“Evolved”) (finding this factor
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`weighed in favor of denial and denying institution where patent owner showed a stay
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`was unlikely based on the advanced stage of the case and past decisions denying
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`1
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`IPR2022-00118 (’740 Patent)
`Patent Owner Preliminary Response Sur-reply
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`stays). A stay is even less likely now given that the parties have completed claim
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`construction briefing, discovery has begun, and the Markman hearing is imminent.
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`Moreover, Petitioner still has not filed a motion to stay, and still has not indicated
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`that it even intends to file such a motion. Factor 1 weighs against institution.
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`B.
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`Factor 2: The district court trial will begin before the FWD deadline.
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`Petitioner does not seriously dispute that the district court case is on track for
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`trial in March 2023, which is months before a final written decision would be due.
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`And contrary to Petitioner’s assertions, this is more than sufficient to support a
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`discretionary denial, especially given Judge Albright’s strong policy against
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`schedule changes. Indeed, the Board has denied institution under nearly identical
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`circumstances. See, e.g., Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 7–8,
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`at 13 (PTAB May 13, 2020) (“Fintiv II”) (denying institution where the district court
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`trial was scheduled two months before the deadline for final written decision);
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`Evolved at 13 (same); Immersion Systems LLC v. Midas Green Techs., LLC,
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`IPR2021-01176, Paper 16 at 12–13 (PTAB Jan. 6, 2022) (“Midas”) (three months).
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`Factor 2 weighs against institution.
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`C.
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`Factor 3: There has been significant investment in the district court
`litigation.
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`Petitioner asserts that the Board should simply ignore both the parties’ and the
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`district court’s significant investment in the district court litigation because some of
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`2
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`IPR2022-00118 (’740 Patent)
`Patent Owner Preliminary Response Sur-reply
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`the work done in that case does not directly relate to invalidity issues. This is
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`contrary to the Board’s decisions finding that “substantive orders related to the
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`patent at issue,” including claim construction orders entered by the district court,
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`favor discretionary denial. Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 at 9–
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`10 (PTAB Mar. 20, 2020) (precedential, designated May 5, 2020) (“Fintiv I”). For
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`example, in Midas, the Board found the fact that a claim construction order had been
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`entered and discovery was underway was “not insignificant” and denied institution.
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`Midas at 13–14. The Board further found that “although it appears that much is left
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`to occur in the related district court litigation, the evidenced expended effort is
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`nevertheless not insubstantial.” Id. at 14.
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`The same reasoning applies here. Claim construction briefing is now
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`completed, discovery is open, and the parties have exchanged infringement and
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`invalidity contentions. This is not insubstantial. “[T]he level of investment and effort
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`already expended on claim construction and invalidity contentions” favors
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`discretionary denial. Fintiv II at 13–14.
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`D.
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`Factor 4: Duplicative issues and inefficiencies remain.
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`Petitioner does not dispute that the district court case involves the same patent,
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`same claims, and the same invalidity references. And to erase any doubt as to the
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`complete overlap regarding invalidity arguments and evidence, Petitioner’s
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`invalidity contentions incorporate by reference its arguments and evidence in this
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`3
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`IPR2022-00118 (’740 Patent)
`Patent Owner Preliminary Response Sur-reply
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`IPR. Thus, this proceeding is entirely duplicative of the issues that will be addressed
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`by the district court.
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`In light of this overlap, Petitioner “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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`Reply at 5. This narrow stipulation is insufficient and fails to resolve concerns of
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`duplicative issues and inconsistent rulings. The stipulation only concerns the
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`particular obviousness combinations directed to particular claims for which trial is
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`instituted. Petitioner, however, would still be free to raise different combinations
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`based on the same references, or even the same combinations directed to different
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`claims. In addition, Petitioner would still be free to raise anticipation arguments
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`based on the same references. Thus, all four references at issue in this IPR will
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`continue to be litigated in district court.
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`Contrary to Petitioner’s assertions, its limited stipulation is not “nearly
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`identical” to the stipulation in Sand. Reply at 5. As explained by the Board in Sand,
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`the petitioners could have stipulated that they “would not pursue any ground raised
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`or that could have been reasonably raised in an IPR, i.e., any ground that could be
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`raised under §§ 102 or 103 on the basis of prior art patents or printed publications.”
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`Sand Revolution II, LLC, Continental Intermodal Grp. – Trucking LLC, IPR2019-
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`013393, Paper 24 at 12 n.5 (PTAB June 16, 2020). Such a stipulation “might better
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`4
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`IPR2022-00118 (’740 Patent)
`Patent Owner Preliminary Response Sur-reply
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`address concerns regarding duplicative efforts and potentially conflicting decisions
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`in a much more substantial way.” Id. “Likewise, such a stipulation might help ensure
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`that an IPR functions as a true alternative to litigation in relation to grounds that
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`could be at issue in an IPR.” Id.
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`Petitioners did not make the type of stipulation described in Sand, or even a
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`reasonable narrower one. Indeed, the Board found that the narrower stipulation
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`offered by the petitioner in Sand—which was still broader than Petitioner’s
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`stipulation here—only weighed “marginally in favor of not exercising discretion.”
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`Sand at 12; see also Evolved at 15 (finding this factor weighed against institution
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`despite Petitioner’s limited stipulation). Factor 4 thus weighs against institution.
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`E.
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`Factor 5: Petitioner is a defendant in the district court litigation.
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`There is no dispute that Petitioner is the defendant in the district court
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`litigation. Thus, this factor is not neutral—it weighs in favor of discretionary denial.
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`See Fintiv II at 15; Midas at 18; Evolved at 16. And even if the trial date were relevant
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`here, as discussed above, trial—and dispositive and pre-trial motions that could
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`implicate validity issues—will occur before the final written decision deadline.
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`Factor 5 weighs against institution.
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`F.
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`Factor 6: The petition is substantively weak.
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`Petitioner’s reply does not address this factor. Accordingly, Patent Owner
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`refers to and incorporates the arguments in its Preliminary Response.
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`5
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`Date: March 10, 2022
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`IPR2022-00118 (’740 Patent)
`Patent Owner Preliminary Response Sur-reply
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`Respectfully submitted,
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`By: /Brett Cooper/
`Brett Cooper, Reg. No. 55,085
`bcooper@raklaw.com
`rak_scramoge@raklaw.com
`Reza Mirzaie, Reg. No. 69,138
`rmirzaie@raklaw.com
`Russ, August & Kabat
`12424 Wilshire Blvd. 12th Floor
`Los Angeles, CA 90025
`Tel.: 310-826-7474
`Fax: 310-826-6991
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`Counsel for Patent Owner,
`Scramoge Technology, Ltd.
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`6
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`IPR2022-00118 (’740 Patent)
`Patent Owner Preliminary Response Sur-reply
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`CERTIFICATE OF SERVICE (37 C.F.R. § 42.6(e)(1))
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`The undersigned hereby certifies that the above document was served on
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`March 10, 2022 by filing this document through the Patent Trial and Appeal Board
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`End to End system, as well as delivering a copy via electronic mail upon the
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`following attorneys of record for the Petitioner:
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`Scott T. Jarratt (Reg No. 70,297)
`scott.jarratt.ipr@haynesboone.com
`Andrew S. Ehmke (Reg No. 50,271)
`andy.ehmke.ipr@haynesboone.com
`Calmann J. Clements (Reg No. 66,910)
`calmann.clements.ipr@haynesboone.com
`HAYNES AND BOONE, LLP
`2323 Victory Ave. Suite 700
`Dallas, TX 75219
`Phone: (972) 739-8663
`Fax: (214) 200-0853
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`/Brett Cooper/
`Brett Cooper, Reg. No. 55,085
`bcooper@raklaw.com
`rak_scramoge@raklaw.com
`Russ, August & Kabat
`12424 Wilshire Blvd. 12th Floor
`Los Angeles, CA 90025
`Tel.: 310-826-7474
`Fax: 310-826-6991
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