`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`
`APPLE INC.,
`Petitioner
`
`v.
`
`SCRAMOGE TECHNOLOGY LTD.,
`Patent Owner
`____________
`
`IPR2022-00573
`Patent 7,825,537
`____________
`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`
`
`
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`
`
`
`Table of Contents
`
`B.
`
`C.
`
`INTRODUCTION ............................................................................................. 1
`I.
`II. ALL FINTIV FACTORS WEIGH AGAINST INSTITUTION ........................ 1
`Factor 1: The district court has not granted a stay, nor is there any
`A.
`evidence that a stay will be granted. .................................................... 3
`Factor 2: The district court trial will occur before the deadline for a
`final decision in this proceeding. ......................................................... 5
`Factor 3: By the time an institution decision is reached, the parties and
`the court will have completed claim construction and discovery will
`be underway. ........................................................................................ 6
`Factor 4: There is complete overlap between this IPR and the district
`court proceedings. ................................................................................ 8
`Factor 5: Petitioner is a defendant in the district court litigation. ...... 10
`E.
`Factor 6: The petition is without merit and unlikely to succeed. ....... 10
`F.
`III. CONCLUSION ................................................................................................ 11
`
`
`D.
`
`
`
`
`
`
`
`i
`
`
`
`PATENT OWNER’S EXHIBIT LIST
`
`Exhibit No. Description
`
`2001
`
`2002
`
`2003
`
`2004
`
`2005
`
`2006
`
`2007
`
`2008
`
`2009
`
`Notice of IPR Petitions, Scramoge Technology Ltd. v. Apple Inc.,
`Case No. 6:21-cv-01071-ADA, Dkt. No. 30 (W.D. Tex. Feb. 16,
`2022)
`
`Scheduling Order, Scramoge Technology Ltd. v. Apple Inc., Case
`No. 6:21-cv-01071-ADA, Dkt. No. 36 (W.D. Tex. Apr. 27, 2022)
`
`Law360 Article: West Texas Judge Says He Can Move Faster
`Than PTAB
`
`Text Order Denying Motion to Stay Pending IPR, Solas OLED
`Ltd. v. Google, Inc., Case No. 6:19-cv-00515-ADA (W.D. Tex.
`June 23, 2020)
`
`Order Denying Motion to Stay Pending IPR, Multimedia Content
`Management LLC v. DISH Network L.L.C., Case No. 6:18-cv-
`00207-ADA, Dkt. No. 73 (W.D. Tex. May 30, 2019)
`
`Standing Order Governing Proceedings in Patent Cases, Judge
`Alan D. Albright
`
`Claim Construction Order, Solas OLED Ltd. v. Apple Inc., Case
`No. 6:19-cv-00537-ADA, Dkt. No. 61 (W.D. Tex. Aug. 30, 2020)
`
`Plaintiff Scramoge Technology Ltd.’s Preliminary Disclosure of
`Asserted Claims and Infringement Contentions to Apple Inc. in
`Scramoge Technology Ltd. v. Apple Inc., Case No. 6:21-cv-
`01071-ADA (W.D. Tex.)
`
`Defendant Apple Inc.’s Preliminary Invalidity Contentions in
`Scramoge Technology Ltd. v. Apple Inc., Case No. 6:21-cv-
`01071-ADA (W.D. Tex.)
`
`
`
`
`
`ii
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`I.
`
`INTRODUCTION
`Patent Owner Scramoge Technology Ltd. (“Patent Owner”) submits this
`
`preliminary response to Petitioner Apple Inc.’s (“Petitioner”) petition for inter
`
`partes review of U.S. Patent No. 7,825,537 (“the ’537 patent”).
`
`The Board should exercise its discretion to deny the petition in light of a
`
`parallel district court case involving the same patent, the same claims, the same prior
`
`art, and the same parties. By the time the Board reaches an institution decision in
`
`this proceeding, the parties and the district court will have already invested
`
`significant time and resources in the case—claim construction will be completed and
`
`discovery will be underway. The district court trial is also set to take place months
`
`before the deadline for a final written decision. Moreover, the petition fails on the
`
`merits as described above. Moreover, because the Fintiv factors so strongly favor a
`
`discretionary denial, the Board need not consider the merits. Thus, all six Fintiv
`
`factors strongly favor a discretionary denial.
`
`Accordingly, the Board should deny institution.
`
`II. ALL FINTIV FACTORS WEIGH AGAINST INSTITUTION
`
`35 U.S.C. § 314(a) gives the Board discretion to deny institution of the
`
`requested inter partes review due to the advanced state of parallel district court
`
`litigation regarding the same issues. See NHK Spring Co. v. Intri-Plex Techs., Inc.,
`
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential, designated May 7,
`
`
`
`1
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`2019) (“NHK Spring”). The Board has set forth six factors for determining whether
`
`discretionary denial due to such parallel litigation is appropriate (the “Fintiv
`
`factors”):
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`whether the court granted a stay or evidence exists that one may be
`granted if a proceeding is instituted;
`
`proximity of the court’s trial date to the Board’s projected statutory
`deadline for a final written decision;
`
`investment in the parallel proceeding by the court and the parties;
`
`overlap between issues raised in the petition and in the parallel
`proceeding;
`
`whether the petitioner and the defendant in the parallel proceeding are
`the same party; and
`
`other circumstances that impact the Board’s exercise of discretion,
`including the merits.
`
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 at 5–6 (PTAB Mar. 20, 2020)
`
`(precedential, designated May 5, 2020) (“Fintiv I”); Apple Inc. v. Fintiv, Inc.,
`
`IPR2020-00019, Paper 15 at 7–8 (PTAB May 13, 2020) (decision denying
`
`institution of inter partes review) (“Fintiv II”). “These factors relate to whether
`
`efficiency, fairness, and the merits support the exercise of authority to deny
`
`institution in view of an earlier trial date in the parallel proceeding.” Fintiv I at 6. In
`
`evaluating the factors, “the Board takes a holistic view of whether efficiency and
`
`integrity of the system are best served by denying or instituting review.” Id.
`
`
`
`2
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`
`As set forth below, all six Fintiv factors weigh against institution. The district
`
`court trial will precede any final written decision from the Board. To avoid
`
`duplication of efforts, wasting resources, and potentially inconsistent decisions, the
`
`Board should deny institution.
`
`A.
`
`Factor 1: The district court has not granted a stay, nor is there any
`evidence that a stay will be granted.
`
`There is presently one active district court case involving the ’537 patent
`
`pending in the Western District of Texas before Judge Albright: Scramoge
`
`Technology Ltd. v. Apple Inc., No. 6:21-cv-01071. On June 6, 2022, the parties in
`
`the district court cases involving Samsung (Scramoge Technology Ltd. v. Samsung
`
`Elecs. Co., Ltd., No. 6:21-cv-00902-ADA) and Google (Scramoge Technology Ltd.
`
`v. Google LLC, No. 6:21-cv-01138-ADA) filed joint motions to stay all deadlines
`
`and notice of settlements which were granted by the district court. The district court
`
`is aware of Petitioner’s pending IPR petition,1 but has not stayed the case pending
`
`IPR. Nor is there any evidence that the case will be stayed.
`
`
`1 Patent Owner filed a Notice of IPR Petition in the district court, which states that
`
`defendant/Petitioner filed an IPR petition regarding claims of the ’537 patent. Ex.
`
`2001 at 2.
`
`
`
`3
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`
`To the contrary, the district court has entered a scheduling order and the case
`
`is set for trial on July 31, 2023. See Ex. 2002 (Scheduling Order) at 5. Petitioner has
`
`not filed a motion to stay, likely because Judge Albright does not favor stays pending
`
`IPR proceedings. See Ex. 2003 (Law360 Article: West Texas Judge Says He Can
`
`Move Faster Than PTAB) (Judge Albright: “It’s my job to give people the
`
`opportunity to have their cases tried in a federal court . . . and I probably can get a
`
`patent trial resolved more quickly than the PTAB can.”). Indeed, Petitioner does not
`
`indicate in its Petition that it intends to seek a stay, and only admits that “[n]o motion
`
`to stay has been filed.” Petition at 77. See Samsung Elecs. Co. Ltd. v. Evolved
`
`Wireless LLC, IPR2021-00950, Paper 10 at 10–11 (PTAB Nov. 29, 2021)
`
`(“Evolved”) (finding this factor weighed in favor of denial and denying institution
`
`where patent owner showed a stay was unlikely based on the advanced stage of the
`
`case and the court’s past decisions denying stays).
`
`Regardless, by the deadline for an institution decision (September 16, 2022),
`
`discovery will be well underway and claim construction will nearly be completed
`
`(the Markman hearing is scheduled for August 3, 2022). See Ex. 2002 at 3. Thus,
`
`even if Petitioner ultimately files a motion to stay, it is highly unlikely that Judge
`
`Albright would grant a stay at that late juncture in the case. See, e.g., Ex. 2004 (Order
`
`denying motion to stay pending IPR where plaintiff had served its preliminary
`
`infringement contentions and where claim construction was scheduled to begin
`
`
`
`4
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`before the IPR institution deadline); Ex. 2005 at 5 (Order denying stay pending IPR
`
`even though discovery had not yet begun, as the district court had already “invested
`
`significant resources and time in construing all the contested claim terms”).
`
`As explained by the Board, a stay of the district court litigation pending
`
`resolution of the PTAB proceedings “allays concerns about inefficiency and
`
`duplication of efforts.” Fintiv I at 6; Fintiv II at 12. But here, the district court has
`
`not stayed the pending litigation, nor is there any evidence that a stay will be granted.
`
`Allowing this IPR to proceed simultaneously with the district court litigation would
`
`be wasteful and inefficient. This factor weighs against institution.
`
`B.
`
`Factor 2: The district court trial will occur before the deadline for
`a final decision in this proceeding.
`
`The statutory deadline for a final written decision in this proceeding is
`
`September 16, 2023, which can be extended to March 16, 2024 for good cause or in
`
`the case of joinder. 37 C.F.R. § 42.100. Meanwhile, the pending case is set for trial
`
`on July 31, 2023. Thus, trial in the district court litigation will occur months before
`
`the deadline for a final written decision, which weighs against institution. See Fintiv
`
`I at 9 (“If the court’s trial date is earlier than the projected statutory deadline, the
`
`Board generally has weighed this fact in favor of exercising authority to deny
`
`institution under NHK.”); Fintiv II at 13 (finding this factor weighed in favor of
`
`discretionary denial and denying institution where the district court trial was
`
`
`
`5
`
`
`
`
`scheduled to occur two months before the deadline for the Board to reach a final
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`written decision).
`
`Petitioner argues that this factor weighs against a discretionary denial because
`
`the district court had not set a trial date at the time the Petition was filed. Petition at
`
`77. But the district court subsequently issued a scheduling order setting a trial date.
`
`Ex. 2002 at 5. And Judge Albright’s standing order governing proceedings in patent
`
`cases expressly states that “[a]fter the trial date is set, the Court will not move the
`
`trial date except in extreme situations.” Ex. 2006 at 9 (emphasis added).
`
`Because the district court trial will occur before the deadline for a final written
`
`decision in this matter, this factor weighs in favor of a discretionary denial. Fintiv II
`
`at 13.
`
`C.
`
`Factor 3: By the time an institution decision is reached, the parties
`and the court will have completed claim construction and discovery
`will be underway.
`
`This factor relates to the “amount and type of work already completed in the
`
`parallel litigation by the court and the parties at the time of the institution decision.”
`
`Fintiv I at 9 (emphasis added). For example, “if, at the time of the institution
`
`decision, the district court has issued substantive orders related to the patent at issue
`
`in the petition,” this factor favors denial. Id. at 9–10. Claim construction orders
`
`entered by the district court likewise “indicate that the court and parties have
`
`invested sufficient time in the parallel proceeding to favor denial.” Id. at 10.
`
`
`
`6
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`
`Here, the district court has entered a scheduling order that includes all the
`
`deadlines leading up to trial. The parties have already exchanged preliminary
`
`infringement and invalidity contentions—including Apple’s 10 invalidity contention
`
`claim charts totaling nearly 324 pages for the ’537 patent alone. Further, by the
`
`September 16, 2022 institution decision deadline, discovery will be underway, and,
`
`more importantly, claim construction will have been completed. Ex. 2002 at 4. As
`
`of the date of this response, Apple has filed its opening claim construction brief. The
`
`Markman hearing is set for August 3, 2022, and Judge Albright typically provides
`
`preliminary claim constructions at the hearing, then enters a final claim construction
`
`order within just a couple weeks after the hearing. See, e.g., Ex. 2007 at 2 (August
`
`30, 2020 Claim Construction Order entering constructions provided at Markman
`
`hearing held on August 14, 2020). Thus, the parties and the court will have invested
`
`significant time and resources in the litigation by the time the Board reaches an
`
`institution decision in this matter. This favors discretionary denial. Fintiv I at 10;
`
`Fintiv II at 13–14 (finding that “the level of investment and effort already expended
`
`on claim construction and invalidity contentions” favored denial where, as here, the
`
`parties had exchanged final contentions, a Markman hearing was held, the court had
`
`entered a claim construction order).
`
`Petitioner’s assertion that the investment in the district court case has been
`
`“minimal” (Petition at 77) is without merit. Those arguments are based on the filing
`
`
`
`7
`
`
`
`
`date of its petition, rather than the date of institution, and should thus be rejected.
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`See Fintiv I at 9.
`
`D.
`
`Factor 4: There is complete overlap between this IPR and the
`district court proceedings.
`
`This factor looks at “whether all or some of the claims challenged in the
`
`petition are also at issue in district court,” and whether the “petition includes the
`
`same or substantially the same claims, grounds, arguments, and evidence” as the
`
`parallel district court case. Fintiv I at 12–13.
`
`Here, Petitioner has challenged most of the claims of the ’537 patent. Patent
`
`Owner’s infringement contentions in the district court identify independent claims
`
`1, 12, and 28, as well as dependent claims 2–5, 9–11, and 13–16, as the asserted
`
`claims for the district court case, and the petition challenges those claims in addition
`
`to dependent claims 6–8, and 17–22. Ex. 2008 at 1. The fact that the Petition
`
`challenges the additional dependent claims does not warrant institution. See, e.g.,
`
`Next Caller Inc. v. TRUSTID, Inc., IPR2019-00961, Paper 10 at 14 (PTAB Oct. 16,
`
`2019) (denying institution where the district court case involved only a subset of the
`
`challenged claims).
`
`Further, Petitioner’s invalidity contentions in the district court case identify
`
`the same Baarman, Partovi and Flowerdew references asserted in the petition as prior
`
`art that anticipates and/or renders obvious the asserted claims. Ex. 2009 at 13, 15.
`
`
`
`8
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`Thus, there is also complete overlap with respect to Petitioner’s invalidity arguments
`
`and evidence. Indeed, Petitioner’s invalidity contentions in the district court case
`
`expressly “incorporate[] by reference any invalidity contentions, invalidity
`
`charts, and invalidity positions in . . . Fantasia Trading LLC d/b/a Ankerdirect v.
`
`Scramoge Technology Limited, IPR2022-00499.”2 3 Id. at 8. That the district court
`
`case involves additional prior art references not asserted in this IPR is “not relevant
`
`to the question of the degree of overlap for this factor.” Fintiv II at 15.
`
`In sum, this IPR and the district court case involve the same claims—which
`
`will be construed under the same Phillips standard—and the same prior art (and, as
`
`discussed below, the same parties), which raises substantial “concerns of
`
`
`2 The present IPR and Fantasia Trading LLC d/b/a Ankerdirect v. Scramoge
`
`Technology Limited, IPR2022-00499, share a “substantially identical” petition
`
`(Motion for Joinder, Paper No. 3 at 3) and, by request of the parties, the Board
`
`granted an extension request for preliminary response due dates to “simplif[y]
`
`joinder issues” (Order, Paper No. 8 at 2–3).
`
`3 Though Petitioner had not yet served its invalidity contentions at the time the
`
`petition was filed, notably, Petitioner did not dispute that it intends to raise the same
`
`invalidity arguments and evidence in the district court. Petition at 78. Nor can it in
`
`light of this express incorporation by reference.
`
`
`
`9
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`inefficiency and the possibility of conflicting decisions.” Fintiv I at 12. This factor
`
`thus weighs in favor of a discretionary denial. See Fintiv II at 15; NHK Spring at 19–
`
`20; see also, Next Caller, IPR2019-00961, Paper 10 at 14 (denying institution where
`
`the district court case involved only a subset of the challenged claims).
`
`E.
`
`Factor 5: Petitioner is a defendant in the district court litigation.
`
`There is no dispute that Petitioner is the defendant in the district court
`
`litigation. “Because the petitioner and the defendant in the parallel proceeding are
`
`the same party, this factor weighs in favor of discretionary denial.” Fintiv II at 15.
`
`Petitioner asserts that the Board should simply ignore this factor because
`
`“most Petitioners in IPR proceedings” are also defendants in district court litigation.
`
`Petition at 78. This argument is without support and contrary to precedent, and
`
`should thus be rejected. Fintiv requires due consideration of this factor, regardless
`
`of how common it is for the Petitioner to also be a defendant in the litigation.
`
`F.
`
`Factor 6: The petition is without merit and unlikely to succeed.
`
`The Board may consider other circumstances in the exercise of its discretion,
`
`including the merits of the case. Fintiv I at 14. However, “a full analysis of the merits
`
`is not necessary to evaluate this factor.” Fintiv II at 17. Although Patent Owner chose
`
`to reserve its arguments on the merits at this stage, when considered together with
`
`the five other Fintiv factors discussed above, this factor still favors discretionary
`
`denial.
`
`
`
`10
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`III. CONCLUSION
`
`The Petition should be denied because Petitioner has not established a
`
`reasonable likelihood of invalidity under any ground or challenged claim. As set
`
`forth above, all six Fintiv factors strongly favor discretionary denial, and the petition
`
`should be denied for this reason alone.
`
`
`
`Date: June 16, 2022
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`By: /s/ 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
`
`Counsel for Patent Owner,
`Scramoge Technology, Ltd.
`
`
`
`11
`
`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`
`
`
`
`
`CERTIFICATION REGARDING WORD COUNT
`
`Pursuant to 37 C.F.R. §42.24(d), Patent Owner hereby certifies, in accordance
`
`with and reliance on the word count provided by the word-processing system used
`
`to prepare this PATENT OWNER’S PRELIMINARY RESPONSE, that the
`
`words in this paper is 3081. Pursuant to 37 C.F.R. § 42.24, this word count is in
`
`compliance with the word limit set forth in 37 C.F.R. § 42.24(b)(1) excluding the
`
`portions exempted under 37 C.F.R. § 42.24(a)(1).
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`By: /s/ Brett Cooper
`
`Brett Cooper, Reg. No. 55,085
`
`
`
`
`
`
`
`
`
`
`
`Date: June 16, 2022
`
`
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`
`
`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response
`
`
`
`CERTIFICATE OF SERVICE (37 C.F.R. § 42.6(e)(1))
`
`The undersigned hereby certifies that the above document was served on June
`
`16, 2022 by filing this document through the Patent Trial and Appeal Board End to
`
`End system, as well as delivering a copy via electronic mail upon the following
`
`attorneys of record for the Petitioner:
`
`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
`
`/s/ 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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`
`
`
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