`
`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. IPR2022-01093
`Patent No. 8,620,039
`______________________________________________________
`
`PETITIONERS’ REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`TABLE OF CONTENTS
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`
`Page
`
`
`I.
`
`APPLE IS NOT A REAL PARTY IN INTEREST. ...................................... 2
`This Petition was not filed at Apple’s behest. ...................................... 2
`A.
`The business relationship does not support an RPI theory .................. 3
`B.
`C.
`The Developer Agreement does not support Apple being an
`RPI. ....................................................................................................... 5
`Routine product certification does not make Apple an RPI................. 8
`D.
`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. ....................................................................................... 10
`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
`
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`-i-
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`
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`TABLE OF AUTHORITIES
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`
`
` Page(s)
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`
`
`Cases
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`Apple Inc. v. CPC Patent Technologies PTY, LTD., IPR2022-00601,
`Paper 11 (PTAB Sept. 28, 2022) .......................................................................... 9
`
`ASSA ABLOY AB et al v. CPC Patent Technologies Pty. Ltd. et al,
`No. 3-22-cv-00694 (D. Conn.).............................................................................. 3
`
`ASSA ABLOY AB et al v. CPC Patent Technologies Pty. Ltd.,
`IPR2022-01006, Paper 27 (PTAB Dec. 1, 2022) ......................................... 1, 3, 8
`
`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
`
`
`
`
`
`-i-
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`
`
`
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`
`
`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
`
`Worlds, Inc. v. Bungie, Inc.,
`903 F.3d 1237 (Fed. Cir. 2018) ............................................................................ 5
`
`
`
`
`
`-ii-
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`
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`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. The Board has already rejected this same RPI
`
`theory when instituting related IPR2022-01006, which involves the same Petitioners
`
`and Patent Owner. Just as the Board correctly determined in IPR2022-01006 (Paper
`
`27), the evidence confirms that Apple was not involved at all in this petition and is
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`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
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`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
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`standard business relationship between Apple and Petitioners makes Apple an RPI
`
`and privy. Not so. Petitioners and Apple have a standard business relationship like
`
`that of over 34 million application developers on Apple’s platform (EX-1024 at 6-7)
`
`and hundreds of MFi Program participants (collectively its business partners). EX-
`
`1025. The Board rejected CPC’s theory: the “common form of conducting business,
`
`without more, does not establish a relationship sufficient to make Apple a real party-
`
`in-interest or a privy of Petitioner...” IPR2022-01006, Paper 27 at 35.
`
`It would be a radical departure from the law—and from common sense—to
`
`
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`1
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`
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`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
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`troubling gamesmanship by patent owners. Moreover, barring this petition based on
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`CPC’s lawsuit against Apple would be inequitable, in violation of due process, and
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`inconsistent with the general rule against nonparty preclusions in litigation.
`
`I.
`
`APPLE IS NOT A REAL PARTY IN INTEREST.
`
`A. This Petition was not filed at Apple’s behest.
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`“[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
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`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
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`never provided any direction, control, or financing in this proceeding. EX-1022
`
`(Rog. Nos. 34). The only communication between Petitioners and Apple relating to
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`this proceeding was in reaction to CPC’s requests for discovery, which occurred
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`after the Petition was filed. Id. CPC does not even contend that Apple provided
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`control, direction, or funding in this proceeding. Instead, CPC dreams up a theory
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`based on a standard business relationship, which fails for the reasons below.
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`Further, the fact that Apple filed its own petition challenging the ’039 Patent
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`nearly four months before the instant Petition “suggests that Apple did not need
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`2
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`
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`Petitioner to file the Petition in this case on its behalf, because Apple had…control
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`over its own proceeding.” IPR2022-01006, Paper 27 at 16; see Unified Patents v.
`
`Uniloc USA, Inc. et al, IPR2018-00199, Paper 33 at 9 (PTAB May 31, 2019).
`
`B.
`
`The business relationship does not support an RPI theory
`
`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); see also
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`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).
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`The Board should likewise find Apple is not an RPI based on the common
`
`platform-developer relationship between Apple and Petitioners. CPC’s theory is
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`based on a relationship governed by standard agreements, including a click-through
`
`application developer agreement accepted by 34 million Apple business partners.
`
`See EX-1024. To find that Apple is an RPI based on this standard business
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`relationship would encourage gamesmanship and undermine the integrity of the
`
`PTAB—in essence allowing a patent owner to file suit against a defendant, and
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`then, a year later, sue the defendant’s relevant business partners with the threat of
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`unjustly time-barring their ability to file their own IPR petitions.
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`3
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`
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`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 CPC’s infringement allegations against Apple partially contributed to
`
`Petitioners’ reasonable apprehension of suit, this is insufficient to establish that
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`Apple is an RPI. First, the CPC v. Apple action is only one of many factors that
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`precipitated Petitioners’ reasonable apprehension of suit. The primary factor, which
`
`CPC ignores, is CPC’s demand letter and accompanying infringement charts sent to
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`Petitioners. DJ Action, Dkt. 1, ¶¶5373. Second, Petitioners do not sell the products
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`at issue in the DJ Action to Apple. Neither Apple nor Petitioners are involved or
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`liable in one another’s lawsuits. Third, the DJ complaint identifies products
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`compatible with Google’s Android (EX-1028), confirming that Petitioners have
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`reasons independent of Apple to protect their interests against CPC. Finally, neither
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`Petitioners nor Apple are participating in each other’s litigations. EX-1022 (Rog.
`
`Nos. 3-4). Thus, the statements in the DJ complaint (reflecting that Petitioners are
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`Apple’s business partners) do not support Apple being deemed an RPI.
`
`CPC refers to discovery concerning additional agreements between
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`Petitioners and Apple. POPR at 25. Such agreements do not change the analysis
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`herein and further reflect the standard business relationship discussed above. Apple
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`has not and does not direct, control, fund or otherwise contribute to Petitioners
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`petitions, and there are no indemnification requests between Apple and Petitioners
`4
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`
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`relating to CPC’s patent assertions. EX-1022 (Rog. Nos. 4-5).
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`C. The Developer Agreement does not support Apple being an RPI.
`
`The Federal Circuit has found that the existence of an agreement provides
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`“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
`
`in Broadcom’s IPR petition because “Broadcom clearly has an interest of its own in
`
`challenging the [] patent” 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
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`Apple Developer Program License Agreement (“Developer Agreement”), Apple and
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`Petitioners have a platform-developer relationship, which presents an even weaker
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`common interest than the manufacturer-customer relationship in Wi-Fi One.
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`Petitioners also sell many of the same products for use with Google’s Android. It is
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`clear that Petitioners did not file their IPR petitions at Apple’s behest.
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`Moreover, contrary to CPC’s argument, Worlds, Inc. v. Bungie, Inc. and the
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`Board’s subsequent decision in Bungie v. Worlds Inc. are inapplicable here. POPR
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`at 26. The Developer Agreement between Apple and Petitioners is easily
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`distinguishable from the “DevPub Agreement between Bungie and Activision.”
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`Worlds, Inc. v. Bungie, Inc., 903 F.3d 1237, 1244 (Fed. Cir. 2018).
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`Although the Developer Agreement includes representations of non-
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`infringement, such provisions are nothing like those in Worlds. The Board found
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`5
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`that “unlike an opinion letter that opines merely as to whether rights are clear for
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`use, the [DevPub] Agreement requires the ‘legal reviews’ to be conducted so as to
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`ensure the rights are ‘fully cleared for use.’” Bungie v. Worlds Inc., IPR2015-01264,
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`Paper 64 at 30 (PTAB Jan. 14, 2020). Moreover, “Activision would be funding, at
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`least in part, the legal reviews,” and the Board agreed that “IPR petitions would
`
`have constituted ‘legal reviews’ under…the Agreement.” Id. at 30-31. In contrast,
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`the Developer Agreement requires subscribers to represent and warrant, “[t]o the
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`best of [the subscriber’s] knowledge and belief,” whether rights are clear for use and
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`does not require subscribers to take any action. EX-2009 at 16 (3.2(d)). Subscribers
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`are not required to make any “legal review,” let alone to fund any such effort. Id.
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`Next, Ventex does not support CPC’s assertions regarding the indemnification
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`clauses in the Developer Agreement. Ventex Co., Ltd., v. Columbia Sportswear
`
`North America, Inc., IPR2017-00651 (PTAB Jan. 24, 2019). The Board has
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`repeatedly distinguished the Ventex exclusivity-plus-indemnity arrangement versus
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`standalone indemnification provisions. Unified Pats. Inc. v. Am. Pats. LLC,
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`IPR2019-00482, Paper 132 at 52 (PTAB Aug. 3, 2022) (exclusivity fee and
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`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
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`between Apple and Petitioners, nor has CPC alleged any.
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`There have also been no indemnification communications between Petitioners
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`and Apple related to CPC’s patent claims. EX-1022 (Rog. No. 5). The Board has
`6
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`also repeatedly refused to find indemnification provisions sufficient to establish an
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`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., IPR2016-01041, Paper 29 at 8
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`(PTAB Nov. 9, 2017) (“[W]e are unaware of any inter partes review decision in
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`which a[n] RPI finding was based solely on evidence of an indemnification clause,
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`and we decline to do so here.”); RR Donnelley & Sons Co. v. ScriptChek Visual
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`Verification Sys., Inc., IPR2021-00564, Paper 17 at 3536 (finding no RPI where
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`“the [] Petition was not filed at [indemnitee]’s ‘behest’”).
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`Contrary to CPC’s argument, Apple’s purported right to approve of any
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`settlement that affects Apple’s rights is not applicable here. POPR at 33. Any
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`potential settlement in this proceeding does not “affect Apple’s rights or bind[]
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`Apple,” and CPC has failed to provide any evidence to the contrary. Id. at 3239.
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`Apple’s Developer Agreement states that “Apple may require You to carry
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`certain levels of insurance for certain types of Applications and name Apple as an
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`additional insured.” POPR at 36 (citing EX-2009 at 36, Section 6.1) (emphasis
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`added). But this is inapplicable, and Petitioners do not have any insurance policy
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`that names Apple as an insured party. EX-1022 (Rog. No. 2).
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`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
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`download of the Licensed Applications by end-users located in… United States,”
`7
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`
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`CPC fails to explain how this provision is relevant to an RPI analysis (it is not). Nor
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`does CPC cite to any authority on this point.
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`In summary, the standard Apple Developer Agreement, entered into by 34
`
`million app developers, is woefully insufficient to establish Apple as an RPI.
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`D. Routine product certification does not make Apple an RPI.
`
`CPC cites no authority supporting its argument based on Petitioners’ routine
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`submission of products to Apple. Because Petitioners sell some products compatible
`
`with Apple Wallet, Petitioners provided the products to Apple for certification.
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`Similar submissions are required by Apple across at least 56 business partners. EX-
`
`1026, EX-1027. CPC contends that this smaller number of hardware developers
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`compared to software developers infers a “close business relationship.” POPR at 3,
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`14, 36. Putting aside this flawed inference, a “common form of conducting business,
`
`without more, does not…make Apple a real party-in-interest.” IPR2022-01006,
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`Paper 27 at 35. At least one of the August Smart Lock products and Yale Assure
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`Lock products were submitted for certification, as required of hundreds of MFi
`
`Program participants. EX-1022 (Rog. No. 1); see EX-1025. Petitioners submitted
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`products for certification and compliance with Apple Pay Technology’s security
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`requirements (ASM Agreement) or compatibility with other Apple products (MFi
`
`Agreements). Product certification submissions have no bearing on an RPI analysis.
`
`E. CPC’s “clear beneficiary” argument is meritless.
`
`CPC makes a meritless argument that “Apple would be a clear beneficiary if
`
`8
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`
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`[Petitioners’] IPRs were to succeed.” POPR at 41. However, “a common desire
`
`among multiple parties to see a patent invalidated, without more, does not establish
`
`privity,” nor does it establish RPI. WesternGeco LLC v. ION Geophysical Corp.,
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`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
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`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.
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`F.
`
`Petitioners challenged the ’039 Patent for their own benefit.
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`CPC’s allegation that Petitioners challenged the ’039 Patent “for Apple’s
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`benefit” is baseless and speculative. POPR at 42. Although CPC did not send an
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`’039 Patent infringement chart, as explained in the DJ Action, “[b]ased on [CPC’s]
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`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. That fear was justified—CPC recently sued HID
`
`for infringement of the ‘039 patent. EXs-1029, 1030 (complaint). Petitioners filed
`
`this Petition for their own interests. Apple had no notice of, participation in, or
`
`control of this Petition and filed its own 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
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`nonparty preclusion. See Taylor v. Sturgell, 553 U.S. 880, 893895 (2008).
`
`9
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`
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`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.
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`Factor 2: No privity in business relationship between Apple and Petitioners.
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`This exception does not apply to platform-developer relationships, even with
`
`an indemnification clause. WesternGeco, 889 F.3d at 13211322; Section I(B)-(D).
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`Factors 3-4: Petitioners have no control or representation in the Apple action.
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`Petitioners had no notice of, participation in, or control over the Apple action.
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`EX-1022 (Rog. Nos. 34). Petitioners are not represented by Apple and do not
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`“ha[ve] a full and fair opportunity to litigate the validity of the patent” in the Apple
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`action. See WesternGeco LLC, 889 F.3d 1319.
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`Factor 5: Petitioners are not acting as Apple’s proxy.
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`Petitioners have not received advice, direction or funding from Apple related
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`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.
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`Factor 6: No special statutory scheme foreclosing successive litigation.
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`CPC does not even contend that this factor applies.
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`For the reasons above, Apple is not an RPI or in privity with Petitioners.
`
`Dated: December 21, 2022
`
`
`
`
`
`
`Respectfully Submitted,
`
` / Dion M. Bregman /
`Dion M. Bregman, Reg. No. 45,645
`
`
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`10
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`IPR2022-01093
`U.S. Patent No. 8,620,039
`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
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`PRELIMINARY RESPONSE was served on December 21, 2022, via email on
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`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)
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`
`
`
`
`
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`Dated: December 21, 2022
`
`
`Respectfully Submitted,
`
` / Dion M. Bregman /
`Dion Bregman (Reg. No. 45,645)
`
`
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`11
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