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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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`IPR2022-00573
`Patent 7,825,537
`____________
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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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`A.
`B.
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`C.
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`D.
`E.
`F.
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`Table of Contents
`Factor 1: It is undisputed that a stay is unlikely to be granted. ...................... 1
`Factor 2: The district court trial will occur before the deadline for a final
`decision in this proceeding. ............................................................................ 1
`Factor 3: There has been significant investment in the district court
`litigation. ........................................................................................................ 3
`Factor 4: Duplicative issues and inefficiencies remain. ................................. 4
`Factor 5: Petitioner is a defendant in the district court litigation. .................. 5
`Factor 6: The petition is without merit and unlikely to succeed. ................... 5
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`i
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`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`The district court case concerns the same parties, patent, claims, and invalidity
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`references. On balance, the Fintiv factors weigh against institution. Institution
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`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. Petitioner does not present any argument or
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`evidence that the district court is likely to grant a stay, and instead argues that this
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`factor is neutral without “specific evidence” relating to this case. To the contrary,
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`Patent Owner provides specific evidence, including of the stage of the litigation, to
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`reasonably conclude that a stay is unlikely under the applicable law. See Samsung
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`Elecs. Co. Ltd. v. Evolved Wireless LLC, IPR2021-00950, Paper 10 at 10–11 (PTAB
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`Nov. 29, 2021) (“Evolved”). Moreover, Petitioner has not moved for a stay and has
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`not indicated that it intends to so move. Factor 1 weighs against institution.
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`B.
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`Factor 2: The district court trial will occur before the deadline for
`a final decision in this proceeding.
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`Petitioner does not dispute that the district court case is scheduled for trial on
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`July 31, 2023, well before the September 16, 2023 final written decision deadline.
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`Instead, Petitioner relies upon the PTO Director’s June 21, 2022 Memo and recent
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`time-to-trial statistics to assert that the trial date “for purposes of Fintiv” is January
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`2024. In doing so, Petitioner misconstrues the Memo, which does not dictate that
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`1
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`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`the trial date “for purposes of Fintiv” should be based on recent time-to-trial
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`statistics, but rather cautions that the “court’s scheduled trial date … is not by itself
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`a good indicator of whether the district court trial will occur before the statutory
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`deadline.” Memo at 8 (emphasis added). Judge Albright has set a trial date and “will
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`not move the trial date except in extreme situations.” Ex. 2006 at 9 (emphasis
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`added). Patent Owner relied on more than just the scheduled trial date to indicate
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`that the trial will precede the final written decision deadline.
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`While Petitioner relied on the statistics as suggested by the Memo, its
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`approach is also incongruous with the Memo, which dictates the PTAB should also
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`consider additional factors “such as the number of cases before the judge in the
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`parallel litigation and the speed and availability of other case dispositions.” Memo
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`at 9. Petitioner, in addition to ignoring Patent Owner’s evidence, does not cite to
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`anything other than the statistics. Petitioner could have cited statistics or examples
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`that Judge Albright allows scheduled trial dates to slip, but did not do so. The only
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`reasonable inference is that none exist and there is no reasonable basis to conclude
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`that anything other than the scheduled trial date should be considered in the analysis
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`of Factor 2.
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`Finally, Petitioner argues that the gap between trial date and final written
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`decision deadline is so short that discretionary denial is not warranted. Yet the Board
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`has exercised that discretion and denied institution under nearly identical
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`2
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`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response Sur-Reply
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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”); Evolved at 13; Immersion Systems LLC v.
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`Midas Green Techs., LLC, IPR2021-01176, Paper 16 at 12–13 (PTAB Jan. 6, 2022)
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`(“Midas”). Petitioner’s cited cases are inapposite. Each of them was issued during
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`the first half of 2021 while the COVID pandemic was still creating significant trial
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`date uncertainty. Under the present circumstances, the uncertainty surrounding
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`COVID has passed and the Court has issued a firm trial date. See Ex. 2002 at 5.
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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 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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`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”). In
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`Midas, for example, the Board found that, although much was left to occur in the
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`case, the expended effort in early discovery and claim construction was “not
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`insubstantial” and denied institution. Midas at 13–14. The same reasoning applies
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`here. Claim construction briefing will be completed in a matter of days, discovery
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`3
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`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`will open in a matter of weeks, and the parties have exchanged infringement and
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`invalidity contentions. “[T]he level of investment and effort already expended on
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`claim construction and invalidity contentions” favors 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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`claims, and invalidity references. To erase any doubt as to the complete overlap
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`regarding invalidity arguments and evidence, Petitioner’s invalidity contentions
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`incorporate this IPR by reference. This proceeding is entirely duplicative.
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`Petitioner “stipulates that it will not pursue … 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 4. This narrow stipulation is insufficient, only concerning the obviousness
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`combinations directed to particular claims for which trial is instituted. Petitioner
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`would still be free to raise anticipation arguments or other combinations based on
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`the same references, or even the same combinations directed to different claims.
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`This limited stipulation is not “nearly identical” to the stipulation in Sand. As
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`explained in Sand, Petitioner could have stipulated that it “would not pursue any
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`ground raised or that could have been reasonably raised in an IPR, i.e., any ground
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`that could be raised under §§ 102 or 103 on the basis of prior art patents or printed
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`publications.” Sand Revolution II, LLC, Continental Intermodal Grp. – Trucking
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`LLC, IPR2019-013393, Paper 24 at 12 n.5 (PTAB June 16, 2020). Such a stipulation
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`4
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`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`“might better address concerns regarding duplicative efforts and potentially
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`conflicting decisions in a much more substantial way … [and] might help ensure that
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`an IPR functions as a true alternative.” Id. Factor 4 favors denial. Even had Petitioner
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`made the type of stipulation described in Sand, it would have only weighed
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`“marginally in favor of not exercising discretion.” Sand at 12; Evolved at 15.
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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 the precursor dispositive motions that could
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`implicate validity issues will occur before the final written decision deadline.
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`F.
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`Factor 6: The petition is without merit and unlikely to succeed.
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`Petitioner argues that, pursuant to the Memo, institution should not be denied
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`because the Petition makes a compelling case that the testimony of Dr. Szepesi
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`“plainly shows that the ’537 patent claims no more than well-known subject matter.”
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`Reply at 5. Petitioner provides no further explanation as to how that testimony, or
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`the Petition, is compelling, only alluding to the fact that Patent Owner did not
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`challenge the Petition on the merits. Factor 6 is neutral at best, and when viewed in
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`light of the other five Fintiv factors, weighs against institution.
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`5
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`Date: July 7, 2022
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`IPR2022-00573 (’537 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`Respectfully submitted,
`
`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
`
`Counsel for Patent Owner,
`Scramoge Technology, Ltd.
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`6
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`IPR2022-00573 (’537 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 July
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`7, 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
`
`/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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