UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`ZYNGA INC.,
`Petitioner,
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`v.
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`IGT,
`Patent Owner.
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`Case IPR2022-00199
`Patent 7,168,089
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`PATENT OWNER’S PRELIMINARY SUR-REPLY
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`ZYNGA INC.,
`Petitioner,
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`v.
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`IGT,
`Patent Owner.
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`Case IPR2022-00199
`Patent 7,168,089
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`PATENT OWNER’S PRELIMINARY SUR-REPLY
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`Case IPR2022-00199
`U.S. Patent No. 7,168,089
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`Interference estoppel bars these proceedings. In Interference No. 105,747
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`(the “Interference”), Zynga sought authorization to challenge patentability of the
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`’089 patent, and was permitted to do so. Having had judgment entered against it in
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`that forum, Petitioner now seeks a do-over of what it raised there. But Petitioner
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`does not dispute that it could have, but chose not to, raise each and every ground
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`presented in the Petition years ago when it initiated the Interference. In an effort to
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`avoid interference estoppel, Petitioner tries to rewrite the regulation to graft on a
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`requirement that conflicts with the clear text of the rule and the policy behind it.
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`And Petitioner does not even attempt to rebut the claim preclusion arguments
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`raised by Patent Owner’s Preliminary Response. Paper 6 (“POPR”) at 18–19;
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`compare generally Paper 8 (“Reply”).
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`Petitioner’s Reply also fails to rebut the overwhelming weight of Fintiv
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`factors that favor discretionary denial. The Petition should not be instituted.
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`I.
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`INTERFERENCE ESTOPPEL BARS INSTITUTION
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`Rule 127 is clear: “a judgment disposes of all issues that were, or by motion
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`could have properly been, raised and decided,” and that “a losing party who could
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`have properly moved for relief on an issue, but did not so move, may not take
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`action in the Office after the judgment that is inconsistent with that party’s failure
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`to move.” 37 C.F.R. § 41.127; Blackford v. Wilder, 28 App. D.C. 535, 1907 C.D.
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`491 (Appeals D.C. 1907) (estoppel conclusive of “all matters which were
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`Case IPR2022-00199
`U.S. Patent No. 7,168,089
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`adjudicated and also of all matters which might have been adjudicated.”). As
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`Petitioner does not dispute that it could have raised the very same grounds in the
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`Interference that it chose to raise in the Petition, this alone should be dispositive.
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`Petitioner spends the bulk of its Reply attempting to sidestep interference
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`estoppel by mischaracterizing its conduct, and the Board’s, during the Interference.
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`For example, the Board did not “h[o]ld that Zynga could not bring a prior art
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`challenge in the interference” (Reply at 3 (emphasis removed))—rather, the Board
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`specifically authorized Zynga to bring a prior art challenge (Interference, Paper 22
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`at 3). Nor did “the Board ‘expressly prevent[]’ Zynga ‘from litigating’ the issue”
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`(Reply at 4)—rather, both parties fully briefed Zynga’s motion, which was before
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`the Board for final decision (Interference, Papers 91, 126, 139, 145).
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`Petitioner’s revisionist history attempts to muddy a straightforward
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`application of interference estoppel. But Petitioner does not dispute that, during
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`the Interference: (1) Petitioner sought authorization to file a “Motion for Judgment
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`of Invalidity” premised on “35 U.S.C. §§ 102(e)/103” (Interference, Paper 20 at 3);
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`(2) the Board authorized Petitioner to file that motion (Interference, Paper 22 at 3);
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`(3) Petitioner filed “Motion 3” seeking “Judgment That IGT’s Involved Claims
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`Are Unpatentable” (Interference, Paper 91 at cover); (4) that motion was fully
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`briefed before the Board (Interference, Papers 126, 139); (5) the Board denied
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`IGT’s motion for no interference-in-fact (Interference, Paper 50 at 7); and (6) that
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`U.S. Patent No. 7,168,089
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`the Board ultimately “enter[ed] judgment against Zynga” (Interference, Paper 146
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`at 1). In other words, the Board authorized Zynga to (and Zynga did in fact) raise
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`certain prior art invalidity grounds during the Interference. Then, Zynga lost.
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`Thus, when the Board “enter[ed] judgment against Zynga” (id.), the Board
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`“dispose[d] of all issues that were, or by motion could have properly been, raised
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`and decided” in the Interference. § 41.127(a)(1). Critically, Petitioner does not
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`dispute that during the Interference, it could have raised the same prior art grounds
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`that it now asserts. While there is no requirement for an interference party to raise,
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`or for the Board to address, patentability, an interference party who does should try
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`to raise all possible patentability issues if it hopes to avoid later estoppel. An
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`interference party fails to do so at its own peril. See Chemours Co. FC v.
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`Mexichem Amanco Holdings SA, IPR2020-01667, Paper 10 at 13 (PTAB March
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`25, 2021) (a party that “decides not to raise issues it could have raised in the
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`interference, as Petitioner chose to do here, [it] does so at its own peril running the
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`risk it will be estopped from raising those issues in future PTO proceedings in the
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`event it loses the interference.”); see also 49 Fed. Reg. 48,416, 48,426, 48,440
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`(Dec. 1984) (Interference estoppel “works no hardship to him who is diligent in
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`pursuit of his rights…. So advised, it becomes his duty to put forward every claim
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`he has.”).
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`Case IPR2022-00199
`U.S. Patent No. 7,168,089
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`Here, Petitioner cites nothing supporting its claim that the Board must have
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`decided its prior art motion before estoppel may attach. See Reply at 3–4. There is
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`no such requirement. Instead, all that matters is that an issue was raised (here,
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`patentability), and the Board could have decided such issue. 37 C.F.R. § 41.127.
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`Thus, the Board could have still decided patentability notwithstanding the
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`judgment entered because “the Board’s authority to decide patentability questions
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`in an interference remains even where all questions of priority have been
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`resolved.” Chemours, Paper 10 at 13 n.10 (citing Schulze v. Green, 136 F. 3d 786,
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`792 (Fed. Cir. 1998); Wu v. Wang, 129 F. 3d 1237, 1241-42 (Fed. Cir. 1997)).
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`And, in any event, Zynga is not asking the Board to institute the same grounds that
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`it raised in the Interference. Interference estoppel explicitly extends to “all issues”
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`that “by motion could have properly been, raised and decided.” 37 C.F.R.
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`§ 41.127(a)(1) (emphasis added). At any time during the Interference, Petitioner
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`by motion could have properly raised the now-asserted grounds, and the Board
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`could have properly decided those grounds. No more is required.
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`Petitioner’s other counterarguments are easy to dismantle. First, Petitioner’s
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`“Example 5” theory from the MPEP makes no sense. For instance, Example 5
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`proposes that “applicant timely requested, but was not permitted, to show the claim
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`did not correspond to the count.” MPEP 2308.03. To the contrary, in the
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`Interference, Petitioner never requested to bring forward the counts it now asserts
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`Case IPR2022-00199
`U.S. Patent No. 7,168,089
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`in this proceeding, and thus, it would have been impossible for the Board to have
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`rejected such a proposal. Further, the Board did not “prevent[] Zynga from
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`obtaining a judgment on unpatentability” (Reply at 4); rather, as set forth above,
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`the Board authorized Zynga to make its unpatentability arguments, the parties
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`litigated the issue, and then Zynga lost the Interference.1 Thus, the straightforward
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`application of § 41.127, discussed above, is the proper analysis.
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`Second, Petitioner unsuccessfully attempts to distinguish Adama and
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`Chemours. But both opinions support the application of interference estoppel in
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`this case, as Petitioner’s statements admit. Under Adama, Petitioner recognizes
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`that “estoppel applies to … the prior art challenges that were not but could have
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`been raised.” Reply at 5. And under Chemours, Petitioner recognizes that
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`estoppel applies where a party “had a ‘repeated opportunity’ to raise a patentability
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`challenge but did not.” Reply at 6. These facts mirror the situation here, where
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`Petitioner attempts to assert prior art invalidity grounds that were not, but could
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`have been, raised in the Interference. Thus, for the reasons above and as set forth
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`in the POPR at 13–19, interference estoppel and/or issue preclusion bar this
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`proceeding.
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`1 While the MPEP examples support Patent Owner, Petitioner ignores that the
`MPEP is “not binding on the Board in its interpretation of the law as part of an
`adjudication in the same manner as statues or the rules found in title 37 of the Code
`of Federal Regulations.” Valeo N. Am., Inc. v. Magna Elecs., Inc., IPR2014-
`01208, Paper 49 at 46 (PTAB Dec. 21, 2015).
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`Case IPR2022-00199
`U.S. Patent No. 7,168,089
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`II. THE FINTIV FACTORS CONFIRM THAT THE BOARD SHOULD
`DENY INSTITUTION
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`A.
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`Factor 1: Likelihood of Stay
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`Petitioner argues in broad strokes that Patent Owner is merely speculating
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`about the District Court not granting Petitioner’s potential stay (if it moves for
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`one). Reply at 6–7. However, there is in fact “specific evidence” that Judge
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`Albright will not a grant a stay if one is sought, including public statements made
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`by the Court, his long track record of denying stays pending inter partes review
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`(“IPR”), and an analysis of facts in other decisions in which he has denied motions
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`to stay pending IPR. POPR at 21–27 (citing Sand Revolution II, LLC v. Cont’l
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`Intermodal Grp. – Trucking LLC, IPR2019-01393, Paper 24 at 7 (PTAB June 16,
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`2020)); see also id. at 19 (citing Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper
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`11 at 5–6 (PTAB Mar. 20, 2020)).
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`B.
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`Factor 2: Proximity of Trial
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`Petitioner cannot dispute that the District Court trial is scheduled to occur
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`more than four months before the Board’s statutory deadline for a Final Written
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`Decision (“FWD”), and that this fact favors exercise of the Board’s discretion to
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`deny institution. See POPR at 27–29; Ex. 1007 at 4.
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`Instead, Petitioner engages in the very speculation it accuses Patent Owner
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`of, arguing that its pending motion for intra-district transfer could result in the
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`“potential for a much later trial date” and that “[m]any events could occur between
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`U.S. Patent No. 7,168,089
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`now and” the trial date. Reply at 7–8 (emphasis added). But Petitioner fails to cite
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`any actual evidence suggesting a transfer would be granted2 or evidence of what
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`speculative events may occur prior to trial.3 Petitioner is talking out of both sides
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`of its mouth, as it told Judge Albright that “Austin’s less congested docket suggests
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`that the case may be resolved more quickly if transferred there, weighing in favor
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`of transfer.” Ex. 2025 at 14. Petitioner is also speculating by assuming that an
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`intra-district transfer will affect the assigned judge or the schedule at all. See, e.g.,
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`Ex. 2020 (“Once assigned to Judge Albright, he retains supervision of the matter
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`even if the case transfers later to Austin . . . at the request of the litigants.”); Ex.
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`2026 at 6 (Judge Albright transferring case from Waco to Austin Division but
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`keeping case on his docket without any change to case schedule).
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`Petitioner also misrepresents that Patent Owner “significantly expanded the
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`number of accused products, which could lead to further delay.” Reply at 7. On
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`the contrary, the number of accused products has not changed since IGT served its
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`preliminary infringement contentions. The only change is that Petitioner is now
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`2 Such as, for example, public statements made by the presiding judge about his
`likelihood or not to grant an intra-district transfer (see POPR at 22–23 (citing Exs.
`2018, 2019, 2020 & 2021)) and previous decisions on the issue (see id. at 21–27);
`all of which in fact suggest that the motion to transfer will be denied.
`3 The Board “generally take[s] courts’ trial schedules at face value absent sufficient
`evidence to the contrary.” Verizon Bus. Network Servs. LLC v. Huawei Techs.,
`IPR2020-01291, Paper 13 at 11 (PTAB Jan. 25, 2021).
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`Case IPR2022-00199
`U.S. Patent No. 7,168,089
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`being compelled by the District Court to provide discovery on accused products for
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`which it improperly withheld relevant information. Ex. 2022 at 2, 7.
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`C.
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`Factor 3: District Court’s Investment
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`Petitioner again misrepresents the record in arguing that the District Court
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`has not made “significant investments” in the case. Reply at 8. Although it is true
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`that the District Court entered a “three-page claim construction order” that did not
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`itself include any analysis (id. at 9), Petitioner ignores that the District Court issued
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`preliminary claim constructions (Ex. 2027) and held a three-hour claim
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`construction hearing. Thus, Petitioner ignores all of the actual effort that went into
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`the claim construction decision by the District Court and attempts to downplay that
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`involvement and effort based on the form of order entered.
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`Petitioner also ignores other significant investments of judicial resources by
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`the District Court, including hearings and written orders on discovery disputes
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`between the parties. Exs. 2022, 2028. The District Court also has likely put
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`resources towards resolving Petitioner’s partial motion to dismiss before Petitioner
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`sought to withdraw the motion after it had been fully briefed and pending for
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`nearly 10 months. Ex. 2029; see also Ex. 2028.
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`D.
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`Factor 4: Overlap of Issues
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`Petitioner’s Reply does not dispute that this factor weighs against institution.
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`For example, Petitioner does not, and cannot, dispute that other invalidity
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`arguments that Petitioner asserts in the District Court cannot be resolved in an IPR,
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`such as those regarding Sections 101 or 112. See Ex. 2030 at 46–48, 61–66.
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`Moreover, the grounds asserted in the Petition are substantially the same as those
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`asserted in the District Court. In fact, subsequent to the POPR’s filing, Petitioner
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`served Final Invalidity Contentions that wholly incorporate its Petition in the
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`District Court. Id. at 49. Thus, to the extent the grounds in the Petition and
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`District Court were not exactly the same before, they are now.
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`Instead, Petitioner focuses on its narrow stipulation that if its Petition is
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`instituted, it will drop from the District Court action the prior art combinations at
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`issue here. Reply at 9–10. However, in doing so, Petitioner fails to address the
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`inefficiencies created by institution of the IPR in light of the multitude of
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`overlapping prior art combinations in the District Court action that would not be
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`withdrawn were institution granted. POPR at 33–35. These inefficiencies in view
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`of a narrow stipulation such as Petitioner’s have not been sufficient to warrant
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`institution. For example, Petitioner has only stipulated to drop “the same grounds”
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`from the District Court “if IPR is instituted.” Reply at 10. But nothing would
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`prevent Petitioner from asserting in the District Court other, different grounds
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`involving the same prior art asserted in the Petition.
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`E.
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`Factor 5: Petitioner asks the Board to ignore this factor.
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`U.S. Patent No. 7,168,089
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`Petitioner admits the parties in the District Court action and the IPR are the
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`same, but argues only “[t]hat is true in most IPRs” (Reply at 10), apparently
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`suggesting that this factor should be discounted or ignored. However, Petitioner
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`cites no authority for the proposition that this or any other Fintiv factor should be
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`given less or no weight in the overall discretionary denial analysis because the
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`same facts are found in some number of other IPRs. It is undisputed that Fintiv
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`factor 5 favors the exercise of discretion in denying the instant Petition.
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`F.
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`Factor 6: Other considerations.
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`In its POPR, Patent Owner described numerous specific deficiencies in the
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`substance of the Petition, including with respect to the primary references,
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`Goldberg and Olden, which are alleged to invalidate each challenged independent
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`claim. POPR at 37–44; see also Paper 1 at 7. In a mere paragraph of its Reply,
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`Petitioner appeals to some unidentified “collective teachings” of the prior art that it
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`suggests, without citation, “render the claims obvious.” Reply at 10. But this
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`nonspecific rebuttal confirms the weaknesses of the Petition. Moreover,
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`Petitioner’s infringement claims in the related district court litigation do not
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`somehow cure those deficiencies. See id. (referring to IGT’s “infringement
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`allegations”). Finally, Petitioner does not respond to Patent Owner’s argument
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`regarding “software” (POPR at 40–44) other than to cite back to the Petition
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`(Reply at 10). Patent Owner therefore rests on the POPR on this point.
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`Dated: April 18, 2022
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`Respectfully submitted,
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`Case IPR2022-00199
`U.S. Patent No. 7,168,089
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`
`
`/ Jeffrey W. Lesovitz /
`Jeffrey W. Lesovitz (Reg. No. 63,461)
`jlesovitz@bakerlaw.com
`Postal and Hand-Delivery Address:
`BAKERHOSTETLER
`1735 Market Street
`Suite 3300
`Philadelphia, PA 19103-7501
`Telephone: (215) 564-2406
`Facsimile: (215) 568-3439
`
`Leif R. Sigmond, Jr. (Reg. No. 35,680)
`lsigmond@bakerlaw.com
`Postal and Hand-Delivery Address:
`BAKERHOSTETLER
`One North Wacker Dr
`Suite 4500
`Chicago, IL 60606
`Telephone: (312) 416-6275
`Facsimile: (312) 416-6201
`
`Jennifer M. Kurcz (Reg. No. 54,481)
`jkurcz@bakerlaw.com
`Postal and Hand-Delivery Address:
`BAKERHOSTETLER
`One North Wacker Dr
`Suite 4500
`Chicago, IL 60606
`Telephone: (312) 416-6282
`Facsimile: (312) 416-6201
`
`Daniel J. Goettle (Reg. No. 50,983)
`dgoettle@bakerlaw.com
`Postal and Hand-Delivery Address:
`BAKERHOSTETLER
`1735 Market Street
`Suite 3300
`
`
`
`
`
`
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`Case IPR2022-00199
`U.S. Patent No. 7,168,089
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`Philadelphia, PA 19103-7501
`Telephone: (215) 564-8974
`Facsimile: (215) 568-3439
`
`Attorneys for Patent Owner
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`Case IPR2022-00199
`U.S. Patent No. 7,168,089
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` CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6(e), I certify that I caused to be served a true and
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`correct copy of the foregoing document by electronic service to the following
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`counsel on April 18, 2022:
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`K. Patrick Herman
`Orrick, Herrington & Sutcliffe LLP
`51 West 52nd Street
`New York, NY 10019
`P52PTABDocket@orrick.com
`
`T. Vann Pearce, Jr.
`Orrick, Herrington & Sutcliffe LLP
`1152 15th Street, N.W.
`Washington, DC 20005-1706
`TVPPTABDocket@orrick.com
`
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`Respectfully submitted,
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`
`
`/ Jeffrey W. Lesovitz /
`Jeffrey W. Lesovitz (Reg. No. 63,461)
`jlesovitz@bakerlaw.com
`Postal and Hand-Delivery Address:
`BAKERHOSTETLER
`1735 Market Street
`Suite 3300
`Philadelphia, PA 19103-7501
`Telephone: (215) 564-2406
`Facsimile: (215) 568-3439
`
`Attorney for Patent Owner
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