UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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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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`IPR2022-00351
`Patent 10,622,842
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`PATENT OWNER’S PRELIMINARY RESPONSE SUR-REPLY
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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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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`IPR2022-00351
`Patent 10,622,842
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`PATENT OWNER’S PRELIMINARY RESPONSE SUR-REPLY
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`TABLE OF CONTENTS
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`A. Factor 1: It is undisputed that a stay is unlikely to be granted. ...................... 1
`B. Factor 2: Trial will likely begin before the FWD deadline. ........................... 2
`C. Factor 3: There has been significant investment in the district court. ........... 2
`D. Factor 4: Duplicative issues and inefficiencies remain. ................................. 3
`E. Factor 5: Petitioner is a defendant in the district court litigation. .................. 5
`F. Factor 6: The petition is substantively weak. ................................................. 5
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`IPR2022-00351 (’842 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. IPRs were intended to be “an effective and
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`efficient alternative” to district court litigation, but this IPR cannot be such an
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`alternative under these circumstances. Allowing this IPR to proceed simultaneously
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`with the district court litigation would result in duplicative work, risk conflicting
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`decisions, and be an inefficient use of the Board’s finite resources. Institution should
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`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. Instead, Petitioner argues that this factor is neutral
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`without “specific evidence” relating to this case. Reply at 1. But contrary to
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`Petitioner’s assertions, Patent Owner did provide specific evidence, including
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`evidence regarding the stage of the litigation, and reasonably concluded under the
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`applicable law that a stay is unlikely. See Samsung Elecs. Co. Ltd. v. Evolved
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`Wireless LLC, IPR2021-00950, Paper 10 at 10–11 (PTAB Nov. 29, 2021)
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`(“Evolved”) (finding this factor weighed in favor of denial and denying institution
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`where patent owner showed a stay was unlikely based on the advanced stage of the
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`case and past decisions denying stays).
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`On the other hand, Petitioner did not set forth any argument or evidence that
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`the district court is likely to grant a stay. Nor has Petitioner indicated that it even
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`1
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`IPR2022-00351 (’842 Patent)
`Patent Owner Preliminary Response Sur-reply
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`intends to file such a motion. Accordingly, this factor weighs against institution. See
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`Google LLC v. EcoFactor, Inc., IPR2021-01578, Paper 9 at 8 (Mar. 18, 2022)
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`(finding this factor weighed against institution where there was “no evidence that
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`Petitioner had requested a stay” and a stay was unlikely given the stage of the
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`proceeding).
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`B.
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`Factor 2: Trial will likely begin before the FWD deadline.
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`Prior to transfer, the district court case was on track for trial in March 2023—
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`at least five months before a final written decision would be due. And while the
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`expected trial date is less certain now that the case has been transferred, there is no
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`reason to believe that the trial will occur after the final written decision deadline.
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`Accordingly, this factor also favors denial. See, e.g., Apple Inc. v. Fintiv, Inc.,
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`IPR2020-00019, Paper 15 at 7–8, at 13 (PTAB May 13, 2020) (“Fintiv II”) (denying
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`institution where the district court trial was scheduled two months before the
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`deadline for final written decision); Evolved at 13 (same); Immersion Systems LLC
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`v. Midas Green Techs., LLC, IPR2021-01176, Paper 16 at 12–13 (PTAB Jan. 6,
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`2022) (“Midas”) (three months).
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`C.
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`Factor 3: There has been significant investment in the district court.
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`Petitioner asserts that the Board should simply ignore 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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`the work done in that case does not directly relate to invalidity issues. This is
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`2
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`IPR2022-00351 (’842 Patent)
`Patent Owner Preliminary Response Sur-reply
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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, the parties have exchanged infringement and invalidity contentions, and
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`discovery is well underway (Ex. 1022). This is not insubstantial. “[T]he level of
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`investment and effort already expended on claim construction and invalidity
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`contentions” favors 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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`IPR2022-00351 (’842 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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`Given this overlap, Petitioner stipulates that “it will not pursue in the parallel
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`district court proceeding the prior art obviousness combinations on which trial is
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`instituted for the claims on which trial is instituted.” Reply at 3. This narrow
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`stipulation is insufficient and fails to resolve concerns of duplicative issues and
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`inconsistent rulings. The stipulation only concerns the particular obviousness
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`combinations directed to particular claims for which trial is instituted. Petitioner,
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`however, would still be free to raise different combinations based on the same
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`references, or even the same combinations directed to different claims, as well as
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`anticipation arguments based on the same references. Thus, all of the references at
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`issue in this IPR will 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 3. 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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`01393, Paper 24 at 12 n.5 (PTAB June 16, 2020). Such a stipulation “might better
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`address concerns regarding duplicative efforts and potentially conflicting decisions
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`4
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`IPR2022-00351 (’842 Patent)
`Patent Owner Preliminary Response Sur-reply
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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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`Petitioner 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 does not favor institution, it favors discretionary denial.
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`See Fintiv II at 15; Midas at 18; Evolved at 16.
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`F.
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`Factor 6: The petition is substantively weak.
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`This factor favors denial for the reasons set forth in the POPR.
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`Date: June 1, 2022
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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
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`5
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`IPR2022-00351 (’842 Patent)
`Patent Owner Preliminary Response Sur-reply
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`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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`IPR2022-00351 (’842 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 June
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`1, 2022 by filing this document through the Patent Trial and Appeal Board End to
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`End system, as well as delivering a copy via electronic mail upon the following
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`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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