UNITED STATES PATENT AND TRADEMARK OFFICE
`________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`ASSA ABLOY AB, ASSA ABLOY Inc.,
`ASSA ABLOY Residential Group, Inc., August Home, Inc., HID Global
`Corporation, and ASSA ABLOY Global Solutions, Inc.,
`Petitioners,
`
`v.
`
`CPC Patent Technologies PTY LTD.,
`Patent Owner.
`Case No. IPR2022-01006
`Patent No. 9,665,705
`______________________________________________________
`
`Before SCOTT A. DANIELS, BARRY L. GROSSMAN, and AMBER L. HAGY,
`Administrative Patent Judges.
`
`PETITIONERS’ REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`ASSA ABLOY AB, ASSA ABLOY Inc.,
`ASSA ABLOY Residential Group, Inc., August Home, Inc., HID Global
`Corporation, and ASSA ABLOY Global Solutions, Inc.,
`Petitioners,
`
`v.
`
`CPC Patent Technologies PTY LTD.,
`Patent Owner.
`Case No. IPR2022-01006
`Patent No. 9,665,705
`______________________________________________________
`
`Before SCOTT A. DANIELS, BARRY L. GROSSMAN, and AMBER L. HAGY,
`Administrative Patent Judges.
`
`PETITIONERS’ REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`D.
`
`APPLE IS NOT A REAL PARTY IN INTEREST. ...................................... 2
`A.
`This Petition was not filed at Apple’s behest. ...................................... 2
`B.
`The business relationship does not support an RPI theory .................. 2
`C.
`The Developer Agreement does not support Apple being an
`RPI. ....................................................................................................... 4
`Sending products to Apple for routine compliance/certification
`does not make Apple an RPI. ............................................................... 8
`CPC’s “clear beneficiary” argument is meritless. ................................ 8
`E.
`Petitioners challenged the ’039 Patent for their own benefit. .............. 9
`F.
`II. APPLE IS NOT IN PRIVITY WITH PETITIONERS. ................................. 9
`Factor 1: No agreement binds the Petitioners to the Apple
`action. ......................................................................................... 9
`Factor 2: No privity in business relationship between Apple and
`Petitioners. ................................................................................ 10
`Factors 3-4: Petitioners have no control or representation in the
`Apple action. ............................................................................ 10
`Factor 5: Petitioners are not acting as Apple’s proxy. ....................... 10
`Factor 6: No special statutory scheme foreclosing successive
`litigation. .................................................................................. 10
`
`-i-
`
`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`ASSA ABLOY AB et al v. CPC Patent Technologies Pty. Ltd. et al,
`No. 3-22-cv-00694 (D. Conn.).............................................................................. 3
`Bae Sys. Info. & Elec. Sys. Integration, Inc. v. Cheetah Omni, LLC,
`IPR2013-00175, Paper 20 (PTAB July 23, 2013) ............................................ 3, 6
`Bungie v. Worlds Inc.,
`IPR2015-01264, Paper 64 (PTAB Jan. 14, 2020) ............................................ 5, 6
`Dep’t of Justice v. Discovery Patents, LLC.,
`IPR2016-01041, Paper 29 (PTAB Nov. 9, 2017) ................................................. 6
`Google LLC et al v. Cywee Grp. Ltd.,
`IPR2018-01257, Paper 91 (PTAB Jan. 9, 2020) .............................................. 2, 6
`RR Donnelley & Sons Co. v. ScriptChek Visual Verification Sys., Inc.,
`IPR2021-00564, Paper 17 ..................................................................................... 7
`Taylor v. Sturgell,
`553 U.S. 880 (2008) .............................................................................................. 9
`Unified Pats. Inc. v. Am. Pats. LLC,
`IPR2019-00482, Paper 132 (PTAB Aug. 3, 2022) ............................................... 6
`Uniloc 2017 LLC v. Facebook Inc.,
`989 F.3d 1018 (Fed. Cir. 2021) .................................................................... 2, 3, 9
`Ventex Co., Ltd., v. Columbia Sportswear North America, Inc.,
`IPR2017-00651 (PTAB Jan. 24, 2019)................................................................. 6
`WesternGeco LLC v. ION Geophysical Corp.,
`889 F.3d 1308 (Fed. Cir. 2018) ...................................................................... 9, 10
`Wi-Fi One, LLC v. Broadcom Corp.,
`887 F.3d 1329 (Fed. Cir. 2018) .................................................................... 2, 4, 5
`
`-i-
`
`
`
`Worlds, Inc. v. Bungie, Inc.,
`903 F.3d 1237 (Fed. Cir. 2018) ............................................................................ 5
`
`-ii-
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`CPC Patent Technologies Pty. Ltd. (“CPC”) devotes its entire Patent Owner
`
`Preliminary Response (“POPR”) to a meritless real-party-in-interest (“RPI”) theory
`
`that is contrary to both fact and law. Apple was not involved at all in this petition
`
`and is not an RPI. Apple never knew the petition would be filed, never requested
`
`that it be filed, and never directed, controlled or contributed to it financially or
`
`otherwise. Petitioners filed their petition based on their own interests, without any
`
`consideration of Apple. Further, Apple has its own IPR petition challenging the
`
`patent-at-issue. Petitioners likewise had no involvement in Apple’s petition.
`
`Absent any facts to support a viable RPI theory, CPC instead argues that a
`
`standard business relationship between Apple and Petitioners makes Apple an RPI
`
`and privy to Petitioners’ petitions. Not so. Petitioners and Apple have a standard
`
`business relationship like that of over 34 million application developers on Apple’s
`
`platform (EX-1023 at 6-7) and hundreds of MFi Program participants (collectively
`
`its business partners). EX-1024. It would be a radical departure from the law—and
`
`from common sense—to hold that Apple is an RPI any time one of its many
`
`business partners files an IPR petition. Such a precedent would be manifestly
`
`unfair and would encourage troubling gamesmanship by patent owners.
`
`Moreover, barring this petition based on CPC’s lawsuit against Apple would
`
`be inequitable, in violation of due process, and inconsistent with the general rule
`
`against nonparty preclusions in litigation.
`
`1
`
`
`
`I.
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`APPLE IS NOT A REAL PARTY IN INTEREST.
`A.
`This Petition was not filed at Apple’s behest.
`“[T]he heart of the [RPI] inquiry [is] focused on ‘whether a petition has been
`
`filed at a []party’s behest,” which may include, ‘whether a [ ]party exercises
`
`control over a petitioner’s participation in a proceeding, or whether a [] party is
`
`funding [] or directing the proceeding.’” Uniloc 2017 LLC v. Facebook Inc., 989
`
`F.3d 1018, 1027–28 (Fed. Cir. 2021) (internal citations omitted) (emphasis added).
`
`Petitioners’ verified responses to CPC’s Interrogatories confirm that Apple
`
`never provided any direction, control, or financing in this proceeding. EX-1022
`
`(Rog. Nos. 34). The only communication between Petitioners and Apple relating
`
`to this proceeding was in reaction to CPC’s requests for discovery, which occurred
`
`after the Petition was filed. Id. CPC does not even contend that Apple provided
`
`control, direction, or funding in this proceeding. Instead, CPC dreams up a theory
`
`based on a standard business relationship, which fails for the reasons below.
`
`The business relationship does not support an RPI theory
`B.
`Both the Federal Circuit and the Board have repeatedly rejected RPI
`
`arguments based on pre-existing business relationships. Wi-Fi One, LLC v.
`
`Broadcom Corp., 887 F.3d 1329, 1340 (Fed. Cir. 2018) (affirming Board’s
`
`decision that manufacturer petitioner’s customer is not an RPI); Google LLC et al
`
`v. Cywee Grp. Ltd., IPR2018-01257, Paper 91 at 28 (PTAB Jan. 9, 2020) (LG is
`
`not an RPI in Google’s Petition even though parties had a preexisting relationship);
`
`2
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`see also Uniloc 2017 LLC, 989 F.3d 1029; Bae Sys. Info. & Elec. Sys. Integration,
`
`Inc. v. Cheetah Omni, LLC, IPR2013-00175, Paper 20 (PTAB July 23, 2013).
`
`The Board should likewise find Apple not to be an RPI based on the
`
`common platform-developer relationship between Apple and Petitioners. CPC’s
`
`theory is based on a relationship governed by standard agreements, including a
`
`click-through application developer agreement accepted by 34 million Apple
`
`business partners. See EX-1023. To find that Apple is an RPI based on this
`
`standard business relationship would encourage gamesmanship and undermine the
`
`integrity of the PTAB—in essence allowing a patent owner to file suit against a
`
`defendant, and then, a year later, sue the defendant’s relevant business partners
`
`with the threat of unjustly time-barring their ability to file their own IPR petitions.
`
`CPC incorrectly argues that Petitioners’ Declaratory Judgment action (“DJ
`
`Action”) against CPC is an extension of CPC’s lawsuit against Apple. See ASSA
`
`ABLOY AB et al v. CPC Patent Technologies Pty. Ltd. et al, No. 3-22-cv-00694
`
`(D. Conn.). While it is true that CPC’s infringement allegations against Apple
`
`partially contributed to Petitioners’ reasonable apprehension of suit for its DJ
`
`Action, this is insufficient to establish that Apple is an RPI. First, the CPC v. Apple
`
`action is only one of many factors that precipitated Petitioners’ reasonable
`
`apprehension of suit. The primary factor, which CPC ignores, is CPC’s demand
`
`letter and accompanying infringement charts sent to Petitioners. DJ Action, Dkt. 1,
`
`¶¶5373. Second, with respect to the products at issue in Petitioners’ DJ Action,
`3
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`Petitioners do not sell those products to Apple, and vice versa. Neither Apple nor
`
`Petitioners are involved or liable in one another’s lawsuits. Third, Petitioners’ DJ
`
`complaint identifies products that are compatible with Google’s Android (EX-
`
`1027), confirming that Petitioners have reasons wholly independent of Apple to
`
`protect their interests against CPC. Finally, neither Petitioners nor Apple are
`
`participating in or control each other’s litigations. EX-1022 (Rog. Nos. 34). Thus,
`
`Petitioners’ statements in the DJ complaint (reflecting that Petitioners are Apple’s
`
`business partners) do not support Apple being deemed an RPI in this proceeding.
`
`CPC refers to additional discovery in which Petitioners expect to produce
`
`additional agreements between Petitioners and Apple. POPR at 2-3. Any such
`
`additional agreements will not change the analysis herein and will further reflect
`
`the standard business relationship discussed above. No amount of additional
`
`discovery will change the decisive facts—Apple has not and does not direct,
`
`control, fund or otherwise contribute to Petitioners petitions, and there are no
`
`indemnification requests between Apple and Petitioners relating to CPC’s patent
`
`assertions. EX-1022 (Rog. Nos. 4-5).
`
`The Developer Agreement does not support Apple being an RPI.
`C.
`The Federal Circuit has found that the existence of an agreement provides
`
`“essentially no evidence before the Board” to find existence of an RPI. Wi-Fi One,
`
`LLC, 887 F.3d 1340. In Wi-Fi One, even though Broadcom had a manufacturing
`
`agreement with D-Link, the Court found that the D-Link defendants were not RPIs
`4
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`in Broadcom’s IPR petition because “Broadcom clearly has an interest of its own
`
`in challenging the [] patent” as a manufacturer of “the assertedly infringing chips”
`
`and “there is no evidentiary support” that “Broadcom was acting at the behest or
`
`on behalf of the D-Link defendants.” Id. Likewise, under the Apple Developer
`
`Program License Agreement (“Developer Agreement”), Apple and Petitioners
`
`have a platform-developer relationship, which presents an even weaker common
`
`interest than the manufacturer-customer relationship in Wi-Fi One. Petitioners also
`
`sell many of the same products for use with Google’s Android. It is clear that
`
`Petitioners did not file their IPR petitions at Apple’s behest.
`
`Moreover, contrary to CPC’s argument, Worlds, Inc. v. Bungie, Inc. and the
`
`Board’s subsequent decision in Bungie v. Worlds Inc. are inapplicable here. POPR
`
`at 22. The Developer Agreement between Apple and Petitioners is easily
`
`distinguishable from the “DevPub Agreement between Bungie and Activision.”
`
`Worlds, Inc. v. Bungie, Inc., 903 F.3d 1237, 1244 (Fed. Cir. 2018).
`
`Although Apple’s Developer Agreement includes representations of non-
`
`infringement, such provisions are nothing like those in World’s agreement. The
`
`Board found that “unlike an opinion letter that opines merely as to whether rights
`
`are clear for use, the [DevPub] Agreement requires the ‘legal reviews’ to be
`
`conducted so as to ensure the rights are ‘fully cleared for use.’” Bungie v. Worlds
`
`Inc., IPR2015-01264, Paper 64 at 30 (PTAB Jan. 14, 2020) (emphasis original).
`
`Moreover, “Activision would be funding, at least in part, the legal reviews,” and
`5
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`the Board agreed that “IPR petitions would have constituted ‘legal reviews’
`
`under…the Agreement.” Id. at 30-31. In contrast, Apple’s Developer Agreement
`
`requires its subscribers to represent and warrant, “[t]o the best of [the subscriber’s]
`
`knowledge and belief,” whether rights are clear for use and does not require its
`
`subscribers to take any action. EX-2009 at 16 (Section 3.2(d)). Subscribers are not
`
`required to make any “legal review,” let alone to fund any such effort. See id.
`
`Next, Ventex does not support CPC’s assertions regarding the
`
`indemnification clauses in the Developer Agreement. Ventex Co., Ltd., v.
`
`Columbia Sportswear North America, Inc., IPR2017-00651 (PTAB Jan. 24, 2019).
`
`The Board has repeatedly distinguished the Ventex exclusivity-plus-indemnity
`
`arrangement versus standalone indemnification provisions. Unified Pats. Inc. v.
`
`Am. Pats. LLC, IPR2019-00482, Paper 132 at 52 (PTAB Aug. 3, 2022)
`
`(exclusivity fee and arrangement); Google LLC, Paper 91 at 21 (finding no RPI
`
`where Google was not an exclusive seller of LG’s smart phones). There is no such
`
`exclusivity arrangement between Apple and Petitioners, nor has CPC alleged any.
`
`There have also been no indemnification communications between
`
`Petitioners and Apple related to CPC’s patent claims. EX-1022 (Rog. No. 5). The
`
`Board has also repeatedly refused to find indemnification provisions sufficient to
`
`establish an RPI. Bae Sys. Info., Paper 20 at 4 (“indemnification is not one of the
`
`‘substantive legal relationships’… binding a person not a party to a lawsuit to a
`
`judgment in that suit.”); Dep’t of Justice v. Discovery Patents, LLC., IPR2016-
`6
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`01041, Paper 29 at 8 (PTAB Nov. 9, 2017) (“[W]e are unaware of any inter partes
`
`review decision in which a[n] RPI finding was based solely on evidence of an
`
`indemnification clause, and we decline to do so here.”); RR Donnelley & Sons Co.
`
`v. ScriptChek Visual Verification Sys., Inc., IPR2021-00564, Paper 17 at 3536
`
`(finding no RPI where “the [] Petition was not filed at [indemnitee]’s ‘behest’”).
`
`Contrary to CPC’s argument, Apple’s purported right to approve of any
`
`settlement that affects Apple’s rights is not applicable here. POPR at 28. Any
`
`potential settlement in this proceeding does not “affect Apple’s rights or bind[]
`
`Apple,” and CPC has failed to provide any evidence to the contrary. Id. at 2629.
`
`Apple’s Developer Agreement states that “Apple may require You to carry
`
`certain levels of insurance for certain types of Applications and name Apple as an
`
`additional insured.” POPR at 30 (citing EX-2009 at 36, Section 6.1) (emphasis
`
`added). But this is inapplicable, and Petitioners do not have any insurance policy
`
`that names Apple as an insured party. EX-1022 (Rog. No. 2).
`
`Although CPC relies on the agreement’s appointment of Apple as the “agent
`
`pursuant to California Civil Code §§ 2295 et seq. for the marketing and end-user
`
`download of the Licensed Applications by end-users located in… United States,”
`
`CPC fails to explain how this provision is relevant to an RPI analysis (it is not).
`
`Nor does CPC cite to any authority on this point.
`
`In summary, the standard Apple Developer Agreement, which is believed to
`
`7
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`have been clicked-through and entered into by 34 million third-party application
`
`developers, is woefully insufficient to establish Apple as an RPI in this proceeding.
`
`D.
`
`Sending products to Apple for routine compliance/certification
`does not make Apple an RPI.
`CPC does not cite any authority supporting its RPI argument based on
`
`Petitioners’ routine submission of products to Apple. Because Petitioners sell some
`
`products compatible with Apple Wallet functionality, Petitioners provided the
`
`products to Apple for certification, as do many other companies. Similar
`
`submissions are required by Apple across at least 56 business partners. EX-1025,
`
`EX-1026. At least one of the August Smart Lock family of products and Yale
`
`Assure Lock family of products were submitted to Apple for certification, which
`
`Apple requires of hundreds of MFi Program participants, including Petitioners.
`
`EX-1022 (Rog. No. 1); see EX-1024. Petitioners submitted products to Apple for
`
`certification to ensure compliance with Apple Pay Technology’s security
`
`requirements (ASM Agreement) or compatibility with other Apple products (MFi
`
`Agreements). The submission of products for certification has no bearing on an
`
`RPI analysis.
`
`CPC’s “clear beneficiary” argument is meritless.
`E.
`CPC makes a meritless argument that “Apple would be a clear beneficiary if
`
`[Petitioners’] IPRs were to succeed.” POPR at 3637. However, “a common desire
`
`among multiple parties to see a patent invalidated, without more, does not establish
`
`8
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`privity,” nor does it establish RPI. WesternGeco LLC v. ION Geophysical Corp.,
`
`889 F.3d 1308, 1321 (Fed. Cir. 2018); see also Uniloc 2017 LLC, 989 F.3d 1028.
`
`CPC’s “second bite at the IPR apple” argument is also meritless. Apple has
`
`no need for this proceeding because of its own IPR (now instituted). Further, Apple
`
`had no notice of, participation in, or control in this proceeding.
`
`Petitioners challenged the ’039 Patent for their own benefit.
`F.
`CPC’s allegation that Petitioners challenged the ’039 Patent “for Apple’s
`
`benefit” is baseless, speculative, and does not concern the patent-at-issue. POPR at
`
`38. Although CPC did not send Petitioners an ’039 Patent infringement chart, as
`
`explained in the DJ Action, “[b]ased on [CPC’s] broad infringement allegations
`
`against Apple, it is likely that [CPC] would consider HID’s and Hospitality’s
`
`products and software solutions to be covered by the ’039 patent.” DJ Action, Dkt.
`
`1, ¶105. Petitioners filed their ’039 petition for their own interests. Apple had no
`
`notice of, participation in, or control of the petition. EX-1022 (Rog. Nos. 34).
`
`II.
`
`APPLE IS NOT IN PRIVITY WITH PETITIONERS.
`CPC’s privity arguments are baseless. As to the “privity” test, none of the
`
`Supreme Court’s Taylor exceptions apply to the general common-law rule against
`
`nonparty preclusion. See Taylor v. Sturgell, 553 U.S. 880, 893895 (2008).
`
`Factor 1: No agreement binds the Petitioners to the Apple action.
`CPC does not contend that there is any such agreement, and there is none.
`
`9
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`Factor 2: No privity in business relationship between Apple and Petitioners.
`This exception does not apply to platform-developer relationships, even with
`
`an indemnification clause. WesternGeco, 889 F.3d at 13211322; Section I(B)-(D).
`
`Factors 3-4: Petitioners have no control or representation in the Apple action.
`Petitioners had no notice of, participation in, or control over the Apple
`
`action. EX-1022 (Rog. Nos. 34). Petitioners are not represented by Apple and do
`
`not “ha[ve] a full and fair opportunity to litigate the validity of the patent” in the
`
`Apple action. See WesternGeco LLC, 889 F.3d 1319.
`
`Factor 5: Petitioners are not acting as Apple’s proxy.
`Petitioners have not received advice, direction or funding from Apple related
`
`to their petition, and Apple filed its own petition on this patent. EX-1022 (Rog.
`
`Nos. 34). Therefore, Petitioners are not “serving as a proxy to allow [Apple] to
`
`litigate the patent validity question[.]” WesternGeco LLC, 889 F.3d 1319.
`
`Factor 6: No special statutory scheme foreclosing successive litigation.
`CPC does not even contend that this factor applies.
`
`For the reasons above, Apple is not an RPI or in privity with Petitioners.
`
`Dated: October 27, 2022
`
`Respectfully Submitted,
`
` / Dion M. Bregman /
`Dion M. Bregman, Reg. No. 45,645
`
`10
`
`
`
`IPR2022-01006
`U.S. Patent No. 9,665,705
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. § 42.6(e), the undersigned certifies that a complete
`
`and entire copy of PETITIONERS’ REPLY TO PATENT OWNER’S
`
`PRELIMINARY RESPONSE was served on October 27, 2022, via email on
`
`Patent Owner’s counsel of record in this proceeding:
`
`Andrew C. Ryan (ryan@cantorcolburn.com)
`
`Steven M. Coyle (scoyle@cantorcolburn.com)
`
`Nicholas A. Geiger (ngeiger@cantorcolburn.com)
`
`Dated: October 27, 2022
`
`Respectfully Submitted,
`
` / Dion M. Bregman /
`Dion Bregman (Reg. No. 45,645)
`
`11
`
`
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