UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`
`ECOBEE TECHNOLOGIES, ULC,
`Petitioner
`
`v.
`
`ECOFACTOR, INC.,
`Patent Owner
`____________
`
`IPR2022-00983
`Patent No. 8,596,550
`____________
`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
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`
`
`
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`
`
`

`

`Table of Contents
`
`I.
`
`Introduction ............................................................................................................................. 1
`
`II. Petitioner’s Asserted Grounds and References ....................................................................... 2
`
`III. The Petition Fails to Establish a Reasonable Likelihood of Success on the Merits ............... 2
`
`A. Claims 1e and 9e require comparing computer-calculated setpoints with actual setpoints 3
`
`B. Ehlers in view of Wruck does not render obvious comparing computer-calculated
`setpoints with actual setpoints .................................................................................................... 4
`
`IV. Institution Should Be Denied Under the Fintiv Factors .......................................................... 7
`
`A. Parallel Proceedings ............................................................................................................ 8
`
`B. Factor 1 weighs against institution, as there is no stay in the district court now and no
`evidence exists that a stay may be granted in the future. .......................................................... 10
`
`C. Factor 2 weighs slightly against institution, as trial in the district court is scheduled to be
`completed less than one month after the FWD. ........................................................................ 12
`
`D. Factor 3 weighs against institution, as discovery is well underway and claim construction
`proceedings in the district court case will be almost completed as of the date the institution
`decision is due. .......................................................................................................................... 14
`
`E. Factor 4 weighs against institution, as there is overlap between this IPR and the district
`court case. ................................................................................................................................. 16
`
`F. Factor 5 weighs against institution, as Petitioner is a Respondent in the parallel district
`court case. ................................................................................................................................. 18
`
`G. Factor 6 weighs in against institution. .............................................................................. 18
`
`H. Summary Regarding Fintiv Factors .................................................................................. 19
`
`V. Conclusion ............................................................................................................................ 20
`
`
`
`i
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`

`

`Table of Authorities
`
`Cases
`Apple Inc., v. Fintiv, Inc.,
`IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) ............................................................ passim
`Apple Inc., v. Fintiv, Inc.,
`IPR2020-00019, Paper 15 (PTAB May 13, 2020) ............................................................. passim
`Cisco Systems, Inc. v. Ramot at Tel Aviv University Ltd.,
`IPR2020-00123, Paper 14 (PTAB May 15, 2020) .................................................................... 10
`Intel Corp. v. VLSI Tech. LLC,
`IPR2020-00158, Paper 16 (PTAB May 20, 2020) .............................................................. 10, 14
`NHK Spring Co. v. Intri-Plex Techs., Inc.,
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) ..................................................... 7, 12, 17, 20
`Statutes
`35 U.S.C. § 314(a) ................................................................................................................ 2, 7, 20
`
`
`
`
`
`
`ii
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`

`

`IPR2022-00983
`Patent No. 8,596,550
`
`Exhibits
`
`Description
`Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323 (D. Del. March
`2, 2012), Dkt. 20 (Ecobee’s Motion to Dismiss)
`Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323 (D. Del. March
`2, 2012), Dkt. 1 (Complaint)
`Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323 (D. Del. March
`2, 2012), Dkt. 18 (ecobee Opposition to Motion to Stay)
`Ecobee’s Disclosure of Initial Invalidity Contentions, March 17,
`2022 in Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323
`
`
`
`Exhibit No.
`2001
`
`2002
`
`2003
`
`2004
`
`
`
`iii
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`

`

`IPR2022-00983
`Patent No. 8,596,550
`
`I.
`
`Introduction
`
`The Petition challenges claims 1-16 of U.S. Patent No. 8,596,550 (Ex. 1001)
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`under two grounds of unpatentability. The Petition fails to establish a reasonable
`
`likelihood of success on the merits. The challenged claims require a computer to
`
`compare an automated setpoint (i.e., a computer-calculated setpoint) with an actual
`
`setpoint, which allows the patented system to determine if the setpoints that the
`
`computer is calculating are acceptable to the user, or if the user is fighting with or
`
`opting-out of the automated programming. The Petition fails to show that prior art
`
`discloses or renders obvious this limitation.
`
`Moreover, instituting review in this IPR would cause the parties and the Board
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`to incur significant inefficiencies and wasted efforts of the type warned of in Fintiv
`
`and NHK Spring. Over a year ago, on March 2, 2021, Petitioner ecobeee
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`Technologies, ULC1 filed a complaint in U.S. District Court for the District of
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`Delaware against Patent Owner EcoFactor for a declaratory judgement of non-
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`infringement of the ‘550 patent. Ecofactor filed its counter-claim on May 5, 2021.
`
`That district court case has progressed substantially, with discovery having been
`
`
`1 ecobee, Inc. was acquired by Generac Holdings Inc. After the acquisition, ecobee,
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`Inc. became ecobee Technologies ULC d/b/a/ ecobee, which is the Petitioner in this
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`proceeding. Ex. 2001, ecobee Motion to Dismiss at fn. 1.
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`
`
`1
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`

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`IPR2022-00983
`Patent No. 8,596,550
`opened, initial infringement and invalidity contentions having been served, and
`
`claim construction briefing to begin in August 2022. Further, fact discovery is
`
`scheduled to close sometime March 8, 2023, expert discovery is scheduled to close
`
`on June 19, 2023, and trial is scheduled to start on December 11, 2023, less than one
`
`month after the final written decision would be due in this IPR proceeding (should
`
`it be instituted). Moreover, the district court case involves the same claim
`
`construction standard and the same claims, invalidity theories, and prior art as this
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`IPR. Under the PTAB’s precedential orders in Fintiv and NHK Spring, the Board
`
`should exercise its discretion to deny institution under § 314(a).
`
`II.
`
`Petitioner’s Asserted Grounds and References
`
`The Petition asserts the following ground of unpatentability:
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`• “Claims 1-16 are obvious over Ehlers in view of Wruck.”
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`• “Claims 9-16 are obvious over Ehlers in view of Wruck and Harter.”
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`(Pet. at 12).
`
`III. The Petition Fails to Establish a Reasonable Likelihood of Success on
`the Merits
`Institution should be denied because the Petition fails to establish a reasonable
`
`likelihood of success on the merits. The challenged claims require a computer to
`
`compare an automated setpoint (i.e., a computer-calculated setpoint) with an actual
`
`setpoint. This comparison allows the patented system to determine if the setpoints
`
`that the computer is calculating are acceptable to the user, or if the user is fighting
`
`
`
`2
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`

`

`IPR2022-00983
`Patent No. 8,596,550
`with or opting-out of the automated programming. See, e.g., Ex. 1001 (’550 patent)
`
`at 5:54-6:30 (the server compares, for “time0,” the “actual setpoint as recorded at
`
`the thermostat (A0)” with “automated setpoint changes C that have been scheduled
`
`for the thermostat by server 106 at time0. Such changes may include algorithmic
`
`changes intended to reduce energy consumption, etc.”). The Petition fails to show
`
`that the prior art discloses or renders obvious this limitation.
`
`A. Claims 1e and 9e require comparing computer-calculated
`setpoints with actual setpoints
`Claim 1e recites, in part: “generating with one or more computer processors,
`
`a difference value based on comparing an actual setpoint at the first time for said
`
`thermostatic controller to the first automated setpoint for said thermostatic
`
`controller.” Claim 9e recites “comparing the actual setpoint at the first time for said
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`thermostatic controller to the first automated setpoint for said thermostatic
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`controller.”
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`Patent Owner agrees with Petitioner that “automated setpoint” should be
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`construed as a “computer-calculated temperature setting for a thermostat to achieve
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`or maintain.” Pet. at 12. For example, the ’550 patent discloses a server computer
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`that uses an algorithm to calculate “automated setpoints.” Ex. 1001 (’550 patent),
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`5:35-40 (“…using the ability to predict the rate of change to determine when the
`
`HVAC system must be turned on in order to reach the desired temperature at the
`
`desired time”), 5:54-6:30 (“automated setpoint changes C that have been scheduled
`
`
`
`3
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`

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`IPR2022-00983
`Patent No. 8,596,550
`for the thermostat by server 106 at time0. Such changes may include algorithmic
`
`changes intended to reduce energy consumption, etc.”). Accordingly, Claims 1e and
`
`9e each require the one or more computer processors to compare the computer-
`
`calculated setpoints associated with the scheduled setpoint programming with the
`
`actual setpoint programming.
`
`B.
`
` Ehlers in view of Wruck does not render obvious comparing
`computer-calculated setpoints with actual setpoints
`The Petition alleges that:
`
`Ehlers’s system can detect a manual change to a setpoint. (Ex. 1004,
`¶¶0242-0243, 0268, 0308, 0309)(Ex. 1002, ¶102). A POSITA would
`have understood that in order to perform the disclosed functions—
`namely tracking and learning from the user’s changes to setpoints,
`Ehlers’s system would logically detect when a user has made a manual
`change to the setpoint. (Ex. 1002, ¶102).
`
`Pet. at 37-38. 2 This argument does not establish a reasonable likelihood of success
`
`because it does not even address the requirements of 1e and 9e to compare an actual
`
`setpoint with an automated setpoint (i.e., a computer-calculated setpoint). The
`
`Petition only alleges that Ehlers “can detect a manual change to a setpoint” and that
`
`Ehlers learns what temperatures the user prefers. Pet. at 37-38. The Petition fails to
`
`
`2 For its analysis of Claim 9e in both Ground 1 and Ground 2, the Petition refences
`
`its analysis of Claim 1e in Ground 1. Pet. at 51-52, 63. Therefore, Patent Owner
`
`refers to the Petition’s analysis of Claim 1e in its preliminary response.
`
`
`
`4
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`IPR2022-00983
`Patent No. 8,596,550
`even allege that Ehlers compares the user’s actual setpoints with a setpoint that was
`
`calculated by a computer, even though this is the agreed construction for “automated
`
`setpoint.” Pet. at 12.
`
`In fact, the Petition does not identify what in Ehlers represents “the one or
`
`more automated setpoints” for purposes of claims 1e and 9e and does not apply the
`
`agreed construction for “automated setpoints.” Pet. at 37-38. The Declaration of
`
`David Auslander also fails to identify what in Ehlers represents “the one or more
`
`automated setpoints” for purposes of claims 1e and 9e and does not apply the agreed
`
`construction for “automated setpoints.” Ex. 1002, ¶ 102. This is insufficient to
`
`establish a reasonable likelihood of success.
`
`Similarly, where the Petition references Ehlers ¶¶0308-0309, the Petition does
`
`not identify what aspect of these disclosures relates to comparing an automated
`
`setpoint (i.e., a computer-calculated setpoint) with an actual setpoint. For example,
`
`the Petition does not explain why “set point pattern change tracking tables” discloses
`
`comparing an actual setpoint with a computer-calculated setpoint. Even assuming
`
`arguendo that “set point pattern change tracking tables” relates to comparing a user’s
`
`changes to actual setpoints over time, the Petition does not explain how tracking
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`patterns of setpoint changes over time relates to comparing with computer-
`
`calculated setpoints or determining when a user is fighting with or opting-out of
`
`computer-calculated setpoint programming. Pet. at 37-38.
`
`
`
`5
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`

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`IPR2022-00983
`Patent No. 8,596,550
`Instead, both the Petition and the supporting declaration of David Auslander
`
`assume that Claims 1e and 9e only require “detect[ing] when a user has manually
`
`changed the setpoint.” Pet. at 38. This has no bearing on whether it would have been
`
`obvious to compare an actual setpoint with an automated setpoint to learn whether
`
`what the computer is doing is acceptable to the user. Pet. at 38. Indeed, the Petition
`
`repeatedly argues for Claims 1e and 9e that the limitation only requires comparing
`
`an actual setpoint with a scheduled setpoint, without regard for the agreed
`
`construction of “automated setpoint” as “computer-calculated.” See e.g., Pet. at 38-
`
`39 (“It would have been obvious to a POSITA to determine the amount by which
`
`the user changed a setpoint (e.g., +3 F or -2 F) in order to determine whether, and to
`
`what extent, the user’s manual entries caused the actual setpoint to differ from the
`
`automated setpoint.”). While the Petition parrots the claim language (“automated
`
`setpoint”), in fact, it only even purports to show comparisons between actual
`
`setpoints and scheduled setpoints or between actual setpoints and other actual
`
`setpoints. This is not sufficient.
`
`As to Wruck, the Petition’s allegations are conclusory and unsupported in
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`Wruck. Pet. at 39-40. Wruck is alleged to teach checking “whether the Delta value
`
`between the actual temporary setpoint and the scheduled setpoint is not equal to
`
`zero.” Pet. at 39. But displaying a user’s manual adjustment to a scheduled setpoint
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`has no bearing on whether it would be obvious to compare an automated setpoint
`
`
`
`6
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`

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`IPR2022-00983
`Patent No. 8,596,550
`with an actual setpoint. Pet. at 39-40. And the Petition never explains how Wruck
`
`describes or suggests any form of automated (computer-calculated) setpoint.
`
`Wruck’s disclosures that allegedly relate to checking if the actual setpoint is different
`
`from a scheduled setpoint simply are not relevant to the requirement in Claims 1e
`
`and 9e for a comparison of an actual setpoint to an automated setpoint.
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`Therefore, for the reasons set forth above, the Petition fails to demonstrate
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`that the cited prior art discloses the requirements of Claims 1e and 9e. Therefore, the
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`Petition should not be instituted.
`
`IV.
`
`Institution Should Be Denied Under the Fintiv Factors
`
`35 U.S.C. § 314(a) gives the Board discretion to deny institution because of
`
`efficiency considerations stemming from parallel proceedings on the same patent.
`
`See NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept.
`
`12, 2018) (precedential, designated May 7, 2019) (“NHK Spring”). The PTAB
`
`recently promulgated six factors for determining whether discretionary denial due to
`
`efficiency considerations relating to parallel proceedings is appropriate (the “Fintiv
`
`factors”):
`
`1. whether the court granted a stay or evidence exists that one may be
`
`granted if a proceeding is instituted;
`
`2.
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`proximity of the court’s trial date to the Board’s projected statutory
`
`deadline for a final written decision;
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`
`
`7
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`

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`IPR2022-00983
`Patent No. 8,596,550
`investment in the parallel proceeding by the court and the parties;
`
`overlap between issues raised in the petition and in the parallel
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`3.
`
`4.
`
`proceeding;
`
`5. whether the petitioner and the defendant in the parallel proceeding are
`
`the same party; and
`
`6.
`
`other circumstances that impact the Board’s exercise of discretion,
`
`including the merits.
`
`Apple Inc., v. Fintiv, Inc., IPR2020-00019, Paper 11 at 6 (PTAB Mar. 20, 2020)
`
`(precedential, designated May 5, 2020) (“Fintiv Order”); Apple Inc., v. Fintiv, Inc.,
`
`IPR2020-00019, Paper 15 (PTAB May 13, 2020) (order denying institution)
`
`(informative, designated July 13, 2020) (“Fintiv ID”) at 7–8. Here, all six Fintiv
`
`factors weigh against institution.
`
`A.
`
`Parallel Proceedings
`
`Over a year ago, on March 2, 2021, Petitioner ecobee Technologies, ULC
`
`(“ecobee”) filed a declaratory judgement action in U.S. District Court of Delaware
`
`against Patent Owner EcoFactor alleging that ecobee does not infringe the ‘550
`
`patent. Ex. 2002, Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323, Dkt. 1 (D. Del.
`
`March 2, 2021) (Complaint). EcoFactor filed a counterclaim on May 5, 2021. Pet. at
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`74; Ex. 1013, Count III.
`
`
`
`8
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`

`

`IPR2022-00983
`Patent No. 8,596,550
`This Petition for inter partes review was filed on May 5, 2022, over 14 months
`
`after ecobee started the litigation and exactly one full year after EcoFactor filed its
`
`counterclaim. Contrary to ecobee’s assertions in its petition, the district court case is
`
`substantially advanced, as discovery has opened, the parties have exchanged initial
`
`infringement and invalidity contentions and claim construction has started. Ex. 1014,
`
`Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323, Dkt. 29 (D. Del. March 2, 2012)
`
`(Revised Scheduling Order) at 14. The claim construction briefing will be completed
`
`in November, 2022, and the Markman hearing is scheduled for December 8, 2022.
`
`Id. at 15.
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`Further, by the time the final written decision (“FWD”) would be due
`
`(November 2023) in this IPR proceeding (should it be instituted), both fact and
`
`expert discovery will have closed (March 8, 2023 and June 19, 2023, respectively),
`
`EcoFactor’s final infringement claim charts and ecobee’s final invalidity contentions
`
`will be due (January 12, 2023 and February 13, 2023, respectively), and case
`
`dispositive briefing will have been completed (July 6, 2023). Id. at 14-15. Moreover,
`
`the trial is scheduled to start less than one month after the final written decision
`
`would be due. Id. at 15. Certain findings in the district court case will likely be
`
`instructive and may be dispositive of certain issues in this IPR proceeding, including
`
`claim construction and invalidity.
`
`
`
`9
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`

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`IPR2022-00983
`Patent No. 8,596,550
`The district court case qualifies as a parallel proceeding that justifies
`
`discretionary denial. Parties expend enormous resources in district court cases, and
`
`district court is a forum where parties can litigate their disputes fully and fairly. See
`
`Fintiv Order at 6 (explaining that the Fintiv 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”); see also, e.g., Cisco Systems, Inc.
`
`v. Ramot at Tel Aviv University Ltd., IPR2020-00123, Paper 14 at 11 (PTAB May
`
`15, 2020) (denying institution where it “would be an inefficient use of Board, party,
`
`and judicial resources”); Intel Corp. v. VLSI Tech. LLC, IPR2020-00158, Paper 16
`
`at 14 (PTAB May 20, 2020) (same).
`
`As set forth herein, the Board should exercise its discretion to deny institution
`
`here.
`
`B.
`
`Factor 1 weighs against institution, as there is no stay in the
`district court now and no evidence exists that a stay may be
`granted in the future.
`Factor 1 concerns whether the district court granted a stay or evidence exists
`
`that one may be granted if a proceeding is instituted. Fintiv Order at 6; Fintiv ID at
`
`12. This factor weighs against institution.
`
`No stay has been issued in the concurrent Ecobee, Inc. v. EcoFactor, Inc.
`
`litigation. In fact, ecobee opposed EcoFactor’s motion to stay the litigation pending
`
`the decision in a parallel ITC proceeding involving the same patents. Ex. 2003,
`
`
`
`10
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`

`

`IPR2022-00983
`Patent No. 8,596,550
`Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323, Dkt. 18 (D. Del. March 2, 2021)
`
`(ecobee Opposition to Motion to Stay). In light of ecobee’s opposition, the court
`
`denied EcoFactor’s motion to stay. Ex. 2005, Ecobee, Inc. v. EcoFactor, Inc., 1-21-
`
`cv-00323, Dkt. 26 (D. Del. March 2, 2012) (Order Denying EcoFactor’s Motion to
`
`Stay).
`
`Further, it is unlikely that the district court case will be stayed pending IPR.
`
`As noted above, ecobee has not requested any stay pending IPR in the district court
`
`case and in fact opposed a stay sought by EcoFactor. A stay is even more unlikely
`
`considering the advanced stage of the district court case, with both claim
`
`construction proceedings and fact discovery having already begun. EcoFactor
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`identified its “Accused Products and Damages Model” on November 12, 2021. Ex.
`
`1014, at 14. ecobee produced its “Core Technical Documents and Sales Figures” on
`
`December 15, 2021. Id. As noted previously, the parties have exchanged initial
`
`infringement and invalidity contentions. Id. This is all in stark contrast to ecobee’s
`
`erroneous statements that the “co-pending litigation is in its early stages” and
`
`“Neither the parties nor the court has invested substantial resources therein.”3 Pet. at
`
`
`3 The Revised Scheduling Order in the concurrent Ecobee, Inc. v. EcoFactor, Inc.,
`
`1-21-cv-00323 litigation, which ecobee provided as Ex. 1014 to its Petition, was
`
`entered on October 14, 2021, which is almost 7 months prior to ecobee filing the
`
`
`
`11
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`

`

`IPR2022-00983
`Patent No. 8,596,550
`68. Instituting this IPR will not promote judicial efficiency. Rather, substantial work
`
`in the district court would have been completed even before the due date of an
`
`institution decision in this IPR.
`
`C.
`
`Factor 2 weighs slightly against institution, as trial in the district
`court is scheduled to be completed less than one month after the
`FWD.
`Factor 2 relates to proximity of the court’s trial date to the Board’s projected
`
`statutory deadline for a final written decision. Fintiv Order at 9; Fintiv ID at 12. The
`
`statutory deadline for the FWD for this IPR Petition would be no later than
`
`November 17, 2023 (should it be instituted). This is less than one month before the
`
`scheduled trial date in the district court litigation of December 11, 2023. See Ex.
`
`1014 at 15.
`
`Under Factor 2, this weighs against institution. See Fintiv Order 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.”). As NHK Spring explained, one of the primary objectives of the AIA was
`
`
`instant Petition. Thus, at the time the Petition was filed, ecobee was well aware of
`
`the investments the parties had made as of the filing of ecobee’s Petition, as well as
`
`the substantial investments that will be made through the date of the FWD if this
`
`Petition is instituted.
`
`
`
`12
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`

`

`IPR2022-00983
`Patent No. 8,596,550
`“to provide an effective and efficient alternative” to parallel litigation. NHK Spring
`
`at 19–20 (quoting General Plastic at 16–17) (emphasis added).
`
`Although Fintiv involved a situation where the trial occurred before the FWD,
`
`here the FWD would occur no later than November 17, 2023, which is less than one
`
`month before the scheduled start of the trial. Critically, the FWD would be over 4
`
`months after “Case Dispositive Briefing” occurs on July 6, 2023. Ex. 1014, at 15.
`
`Even though the trial is scheduled after the FWD is due, by that time the parties will
`
`have prepared for all issues and filed any dispositive briefing, including any issues
`
`and briefing directed toward invalidity due to prior art. Thus, the present IPR
`
`proceeding (if instituted) would not be an “efficient alternative” to the parallel
`
`litigation, as the parallel litigation will be complete except for trial by the time the
`
`FWD issues.
`
`The Petition’s arguments regarding Factor 2 (Pet. at 68) are wrong. For
`
`example, ecobee argues that “the co-pending litigation is in its early stages” and that
`
`“Neither the parties nor the court has invested substantial resources therein.” Pet. at
`
`68. But as noted above, the parties have already exchanged initial infringement and
`
`invalidity contentions, and exchanged proposed claim terms for construction for
`
`claim construction briefing. Ex. 1014 at 14. Further, substantial work will have been
`
`undertaken by both parties by the time the FWD is due, including the completion of
`
`
`
`13
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`IPR2022-00983
`Patent No. 8,596,550
`claim construction, fact and expert discovery, and briefing on any dispositive
`
`motions. Id. at 14-15.
`
`Here, this IPR cannot be an alternative to a trial in the district court set to
`
`occur shortly after the date of the FWD deadline. This alone provides a compelling
`
`reason for the Board to exercise its discretion to deny institution. Fintiv ID at 13;
`
`Intel Corp. v. VLSI Tech. LLC, IPR2020-00158, Paper 16 (PTAB May 20, 2020) at
`
`9.
`
`D.
`
`Factor 3 weighs against institution, as discovery is well underway
`and claim construction proceedings in the district court case will
`be almost completed as of the date the institution decision is due.
`Factor 3 relates to investment in the parallel proceeding by the court and the
`
`parties. Fintiv Order at 9; Fintiv ID at 14. Here, the parties and the district court have
`
`already (and will continue to) invest enormous effort and resources.
`
`Importantly, this factor is judged from the date of the institution decision,
`
`which is expected to be in no later than November 17, 2022. See Fintiv Order at 9
`
`(considering “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”)
`
`(emphasis added).
`
`The initial district court case was filed over 17 months ago, back in March
`
`2021, and the parties have expended substantial resources since then with the
`
`exchange of various initial contentions, including initial invalidity contentions. Ex.
`
`
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`14
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`IPR2022-00983
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`1014 at 14. Fact discovery began months ago and ecobee has already produced its
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`“Core Technical Documents and Sales Figures” on December 15, 2021, almost five
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`months before it filed this Petition. Id. at 14. Further, as of the institution date (no
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`later than November 17, 2022), substantive claim construction briefing will have
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`been completed. Id. at 14-15.
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`Further, the Petition could have been filed much sooner, but Petitioner waited
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`until May 5, 2022 to file the Petition—15 months after the ‘550 patent was asserted
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`against ecobee in the ITC (see Ex. 2003 at 5), 14 months after the district court case
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`began on March 3, 2021, and one full year after EcoFactor filed its cross-complaint.
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`ecobee argues that it waited the full year because it “hoped that a victory at the ITC
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`would end the dispute.” Pet. at 75. But this position ignores that ecobee, back on
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`July 13, 2021, when it opposed a stay of the district court litigation, specifically
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`understood and recognized that “the ITC’s rulings are not binding on the District
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`Court.”4 Ex. 2003, Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323, Dkt. 18 at 2 (D.
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`Del. March 2, 2012). Thus, ecobee has been well aware since the very beginning of
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`the district court litigation that EcoFactor could continue to assert the ‘550 patent.
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`Despite this knowledge, ecobee chose to delay filing its IPR petition.
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`4 Moreover, ecobee’s reasons for delaying filing the Petition are contradicted by its
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`opposition to staying (and thus delaying) the parallel district court proceeding.
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`IPR2022-00983
`Patent No. 8,596,550
`Moreover, this delay is inexcusable particularly since Petitioner submitted
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`initial invalidity contentions in the district court case almost two months before (on
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`March 17, 2022) it filed the Petition here, asserting the same Ehlers and Harter
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`references as relied upon here. Ex. 2004, Ecobee’s Disclosure of Initial Invalidity
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`Contentions, March 17, 2022 in Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323, Ex.
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`2004. Appendix B-3, at 1. Thus, Petitioner failed to file the Petition “expeditiously.”
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`See Fintiv Order at 11. Petitioner was “aware of the claims being asserted” when
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`EcoFactor filed the ITC complaint (almost 15 months earlier on February 25, 2021),
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`when ecobee requested a declaratory judgment that it does not infringe the ‘550
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`patent (14 months earlier on March 3, 2021), when EcoFactor filed its counter claims
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`(one year earlier on May 5, 2021), and when Defendant served initial invalidity
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`contentions (two months earlier on March 17, 2021). This unjustified delay
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`prejudiced Patent Owner. For example, Petitioner’s timing imposes unfair costs to
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`Patent Owner, ensuring that the Patent Owner would continue to invest heavily
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`through claim construction and fact and expert discovery, all of which will involve
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`significant costs and expenses.
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`Accordingly, Factor 3 weighs against institution.
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`E.
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`Factor 4 weighs against institution, as there is overlap between
`this IPR and the district court case.
`Factor 4 relates to overlap between issues raised in the petition and in the
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`parallel proceeding. Fintiv Order at 12; Fintiv ID at 13. This factor weighs against
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`Patent No. 8,596,550
`institution because the same claims and claim construction standard are at issue in
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`both proceedings, and there is substantial overlap in invalidity theories and prior art.
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`For example, this IPR challenges claims 1-16 of the ‘550 patent based on
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`Ehlers in view of Wruck in Ground 1 and Ehlers in view of Wruck and Harter in
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`Ground 2. Pet. at 12.
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`ecobee asserts substantially overlapping prior art and invalidity theories in the
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`district court case, asserting Ehlers ‘330 against the ‘550 patent. In the district court
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`case, ecobee provided invalidity contentions chart “Appendix B-3,” which charts
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`Ehlers and the knowledge of a POSITA against claims 1, 5-7, 9, 13-15, and 17 of
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`the ‘550 patent. Ex. 2004. Moreover, Harter is also asserted as a secondary reference
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`against the ‘550 in ecobee’s district court invalidity contentions “B” exhibits. See,
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`e.g., Ex. 2004, Appendix B-3 to ecobee’s Initial Invalidity Contentions, at 1
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`(“Claims 1, 5-7, 9, 13-15 and 17 of the ‘550 patent are anticipated and/or rendered
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`obvious by Ehlers ‘330 alone or in combination with: (1) U.S. Patent No. 7,784,704
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`(“Harter”).”)
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`Further, both this IPR and the district court proceedings are governed by the
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`same Phillips claim construction standard. Thus, this IPR involves the same claim
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`construction standard, claims, invalidity theories, and prior art. See NHK Spring at
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`19–20. Here, just as in NHK Spring, “concerns of inefficiency and the possibility of
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`conflicting decisions [are] particularly strong.” Fintiv Order at 12.
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`Finally, ecobee alleges that system prior art, such as the ecobee EB-STAT-02
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`Smart Thermostat, invalidates the claims of the ‘550 patent. Ex. 2004 at 9. Even with
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`the IPR proceedings, nothing prevents ecobee from asserting invalidity defenses at
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`trial. Thus, the IPR, if instituted, will not remove prior art invalidity as an issue in
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`the parallel district court litigation.
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`Therefore, this factor weighs against institution.
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`F.
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`Factor 5 weighs against institution, as Petitioner is a Respondent
`in the parallel district court case.
`Factor 5 concerns whether the petitioner and the respondents in the parallel
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`proceeding are the same parties. Fintiv Order at 13; Fintiv ID at 15. This factor
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`weighs against institution because Petitioner ecobee is the plaintiff / cross-defendant
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`in the district court case. Ex. 2002, Ecobee, Inc. v. EcoFactor, Inc., 1-21-cv-00323,
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`Dkt. 1 (D. Del. March 2, 2012) (Complaint); see also Ex. 2001, Ecobee, Inc. v.
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`EcoFactor, Inc., 1-21-cv-00323, Dkt. 20 (D. Del. March 2, 2012) (Ecobee’s Motion
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`to Dismiss), at fn. 1 (confirming that ecobee, Inc., which was acquired by Generac
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`Holdings Inc., became ecobee Technologies ULC d/b/a/ ecobee, which is the
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`Petitioner in this proceeding.).
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`G.
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`Factor 6 weighs in against institution.
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`Factor 6 relates to other circumstances that impact the Board’s exercise of
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`discretion. Fintiv Order at 14; Fintiv ID at 15. Here, Factor 6 supports discretionary
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`IPR2022-00983
`Patent No. 8,596,550
`denial for several reasons. As set forth above, the merits of the Petition are not
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`strong, as it fails to establish that the cited prior art meets Claims 1e and 9e.
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`In addition, having an IPR Final Written Decision issue less than o