`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`
`APPLE INC.,
`Petitioner
`
`v.
`
`AIRE TECHNOLOGY LIMITED,
`Patent Owner
`____________
`
`IPR2022-01137
`Patent 8,581,706
`____________
`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`
`
`
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`
`
`
`Table of Contents
`
`B.
`
`C.
`
`INTRODUCTION ............................................................................................. 1
`I.
`II. ALL FINTIV FACTORS WEIGH AGAINST INSTITUTION ........................ 1
`Factor 1: The district court has not granted a stay, nor is there any
`A.
`evidence that a stay will be granted. .................................................... 3
`Factor 2: The district court trial will occur before the deadline for a
`final decision in this proceeding. ......................................................... 5
`Factor 3: By the time an institution decision is reached, the parties and
`the court will have completed claim construction briefing and
`discovery will be well underway. ........................................................ 6
`Factor 4: There is substantial overlap between this IPR and the district
`court proceedings. ................................................................................ 8
`Factor 5: Petitioner is a defendant in the district court litigation. ........ 9
`E.
`Factor 6: The petition is without merit and unlikely to succeed. ......... 9
`F.
`III. CONCLUSION ................................................................................................ 10
`
`
`D.
`
`
`
`
`
`
`
`i
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`
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`PATENT OWNER’S EXHIBIT LIST
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`Exhibit No. Description
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`2001
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`2002
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`2003
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`2004
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`2005
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`2006
`
`2007
`
`2008
`
`2009
`
`Notice of IPR Petitions, Aire Technology Ltd. v. Apple Inc., Case
`No. 6:21-cv-01101-ADA, Dkt. No. 37 (W.D. Tex. Jun. 24, 2022)
`
`Amended Scheduling Order, Aire Technology Ltd. v. Apple Inc.,
`Case No. 6:21-cv-01101-ADA, Dkt. No. 61 (W.D. Tex. Feb. 11,
`2022)
`
`Law360 Article: West Texas Judge Says He Can Move Faster
`Than PTAB
`
`Text Order Denying Motion to Stay Pending IPR, Solas OLED
`Ltd. v. Google, Inc., Case No. 6:19-cv-00515-ADA (W.D. Tex.
`June 23, 2020)
`
`Order Denying Motion to Stay Pending IPR, Multimedia Content
`Management LLC v. DISH Network L.L.C., Case No. 6:18-cv-
`00207-ADA, Dkt. No. 73 (W.D. Tex. May 30, 2019)
`
`Standing Order Governing Proceedings in Patent Cases, Judge
`Alan D. Albright
`
`Claim Construction Order, Solas OLED Ltd. v. Apple Inc., Case
`No. 6:19-cv-00537-ADA, Dkt. No. 61 (W.D. Tex. Aug. 30, 2020)
`
`Plaintiff Aire Technology Ltd.’s Preliminary Disclosure of
`Asserted Claims and Infringement Contentions to Apple Inc. in
`Aire Technology Ltd. v. Apple Inc., Case No. 6:21-cv-01101-
`ADA (W.D. Tex.)
`
`Defendant Apple Inc.’s Preliminary Invalidity Contentions in
`Aire Technology Ltd. v. Apple Inc., Case No. 6:21-cv-01101-
`ADA (W.D. Tex.)
`
`
`
`
`
`ii
`
`
`
`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
`I.
`
`INTRODUCTION
`Patent Owner Aire Technology Ltd. (“Patent Owner”) submits this
`
`preliminary response to Petitioner Apple Inc.’s (“Petitioner”) petition for inter
`
`partes review of U.S. Patent No. 8,581,706 (“the ’706 patent”).
`
`The Board should exercise its discretion to deny the petition in light of a
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`parallel district court case involving the same patent, the same claims, the same prior
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`art, and the same parties. By the time the Board reaches an institution decision in
`
`this proceeding, the parties and the district court will have already invested
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`significant time and resources in the case—claim construction briefing will be
`
`completed and discovery will be underway. The district court trial is also set to take
`
`place months before the deadline for a final written decision. Moreover, because the
`
`Fintiv factors so strongly favor a discretionary denial, the Board need not consider
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`the merits. Thus, all six Fintiv factors strongly favor a discretionary denial.
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`Accordingly, the Board should deny institution.
`
`II. ALL FINTIV FACTORS WEIGH AGAINST INSTITUTION
`
`35 U.S.C. § 314(a) gives the Board discretion to deny institution of the
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`requested inter partes review due to the advanced state of parallel district court
`
`litigation regarding the same issues. See NHK Spring Co. v. Intri-Plex Techs., Inc.,
`
`IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential, designated May 7,
`
`2019) (“NHK Spring”). The Board has set forth six factors for determining whether
`
`
`
`1
`
`
`
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`discretionary denial due to such parallel litigation is appropriate (the “Fintiv
`
`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`factors”):
`
`1.
`
`2.
`
`3.
`
`4.
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`5.
`
`6.
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`whether the court granted a stay or evidence exists that one may be
`granted if a proceeding is instituted;
`
`proximity of the court’s trial date to the Board’s projected statutory
`deadline for a final written decision;
`
`investment in the parallel proceeding by the court and the parties;
`
`overlap between issues raised in the petition and in the parallel
`proceeding;
`
`whether the petitioner and the defendant in the parallel proceeding are
`the same party; and
`
`other circumstances that impact the Board’s exercise of discretion,
`including the merits.
`
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 at 5–6 (PTAB Mar. 20, 2020)
`
`(precedential, designated May 5, 2020) (“Fintiv I”); Apple Inc. v. Fintiv, Inc.,
`
`IPR2020-00019, Paper 15 at 7–8 (PTAB May 13, 2020) (decision denying
`
`institution of inter partes review) (“Fintiv II”). “These factors relate to whether
`
`efficiency, fairness, and the merits support the exercise of authority to deny
`
`institution in view of an earlier trial date in the parallel proceeding.” Fintiv I at 6. In
`
`evaluating the factors, “the Board takes a holistic view of whether efficiency and
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`integrity of the system are best served by denying or instituting review.” Id.
`
`
`
`2
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`
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
`
`As set forth below, all six Fintiv factors weigh against institution. The district
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`court trial will precede any final written decision from the Board. To avoid
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`duplication of efforts, wasting resources, and potentially inconsistent decisions, the
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`Board should deny institution.
`
`A.
`
`Factor 1: The district court has not granted a stay, nor is there any
`evidence that a stay will be granted.
`
`There is presently one active district court case involving the ’706 patent
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`pending in the Western District of Texas before Judge Albright: Aire Technology
`
`Ltd. v. Apple Inc., No. 6:21-cv-01101. The district court is aware of Petitioner’s
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`pending IPR petition,1 but has not stayed the case pending IPR. Nor is there any
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`evidence that the case will be stayed.
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`To the contrary, the district court has entered a scheduling order and the case
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`is set for trial on November 6, 2023. See Ex. 2002 (Scheduling Order) at 3. Petitioner
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`has not filed a motion to stay, likely because Judge Albright does not favor stays
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`pending IPR proceedings. See Ex. 2003 (Law360 Article: West Texas Judge Says
`
`He Can Move Faster Than PTAB) (Judge Albright: “It’s my job to give people the
`
`
`1 Patent Owner filed a Notice of IPR Petition in the district court, which states that
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`defendant/Petitioner filed an IPR petition regarding claims of the ’706 patent. Ex.
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`2001 at 1-2.
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`
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`3
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`
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
`opportunity to have their cases tried in a federal court . . . and I probably can get a
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`patent trial resolved more quickly than the PTAB can.”). Indeed, Petitioner does not
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`indicate in its Petition that it intends to seek a stay, and only admits that “[n]o motion
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`to stay has been filed.” Petition at 15. See Samsung Elecs. Co. Ltd. v. Evolved
`
`Wireless LLC, IPR2021-00950, Paper 10 at 10–11 (PTAB Nov. 29, 2021)
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`(“Evolved”) (finding this factor weighed in favor of denial and denying institution
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`where patent owner showed a stay was unlikely based on the advanced stage of the
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`case and the court’s past decisions denying stays).
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`Regardless, by the deadline for an institution decision (January 6, 2023),
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`discovery will be well underway. Claim construction briefing has been completed,
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`although the Markman hearing has been postponed to May 16, 2023. See Ex. 2002
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`at 2. Thus, even if Petitioner ultimately files a motion to stay, it is highly unlikely
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`that Judge Albright would grant a stay at that late juncture in the case. See, e.g., Ex.
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`2004 (Order denying motion to stay pending IPR where plaintiff had served its
`
`preliminary infringement contentions and where claim construction was scheduled
`
`to begin before the IPR institution deadline); Ex. 2005 at 5 (Order denying stay
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`pending IPR even though discovery had not yet begun, as the district court had
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`already “invested significant resources and time in construing all the contested claim
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`terms”).
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`
`
`4
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`
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
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`As explained by the Board, a stay of the district court litigation pending
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`resolution of the PTAB proceedings “allays concerns about inefficiency and
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`duplication of efforts.” Fintiv I at 6; Fintiv II at 12. But here, the district court has
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`not stayed the pending litigation, nor is there any evidence that a stay will be granted.
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`Allowing this IPR to proceed simultaneously with the district court litigation would
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`be wasteful and inefficient. This factor weighs against institution.
`
`B.
`
`Factor 2: The district court trial will occur before the deadline for
`a final decision in this proceeding.
`
`The statutory deadline for a final written decision in this proceeding is January
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`6, 2024, which can be extended to July 6, 2024 for good cause or in the case of
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`joinder. 37 C.F.R. § 42.100. Meanwhile, the pending case is set for trial on
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`November 6, 2023. Thus, trial in the district court litigation will occur months before
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`the deadline for a final written decision, which weighs against institution See Fintiv
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`I at 9 (“If the court’s trial date is earlier than the projected statutory deadline, the
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`Board generally has weighed this fact in favor of exercising authority to deny
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`institution under NHK.”); Fintiv II at 13 (finding this factor weighed in favor of
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`discretionary denial and denying institution where the district court trial was
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`scheduled to occur two months before the deadline for the Board to reach a final
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`written decision).
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`
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`5
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`
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
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`Petitioner argues that this factor weighs against a discretionary denial because
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`the district court’s originally set trial date (at the time the Petition was filed) of July
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`20, 2023 was “uncertain.” Petition at 15. Judge Albright’s standing order governing
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`proceedings in patent cases expressly states that “[a]fter the trial date is set, the Court
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`will not move the trial date except in extreme situations.” Ex. 2006 at 9 (emphasis
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`added).
`
`Because the district court trial will occur two months before the deadline for
`
`a final written decision in this matter, this factor weighs in favor of a discretionary
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`denial. Fintiv II at 13.
`
`C.
`
`Factor 3: By the time an institution decision is reached, the parties
`and the court will have completed claim construction briefing and
`discovery will be well underway.
`
`This factor relates to the “amount and type of work already completed in the
`
`parallel litigation by the court and the parties at the time of the institution decision.”
`
`Fintiv I at 9 (emphasis added). For example, “if, at the time of the institution
`
`decision, the district court has issued substantive orders related to the patent at issue
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`in the petition,” this factor favors denial. Id. at 9–10. Claim construction orders
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`entered by the district court likewise “indicate that the court and parties have
`
`invested sufficient time in the parallel proceeding to favor denial.” Id. at 10.
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`Here, the district court has entered a scheduling order that includes all the
`
`deadlines leading up to trial. The parties have already exchanged preliminary
`
`
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`6
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`
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
`infringement and invalidity contentions—including Apple’s 11 invalidity contention
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`claim charts totaling nearly 844 pages for the ’706 patent alone. Further, by the
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`January 6, 2023 institution decision deadline, discovery will be underway. More
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`importantly, claim construction briefing has been completed. Ex. 1020 at 4. The
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`Markman hearing, originally set for July 18, 2022, id., was moved to May 16, 2023.
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`Ex. 2002 at 2. Judge Albright typically provides preliminary claim constructions at
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`the hearing, then enters a final claim construction order within just a couple weeks
`
`after the hearing. See, e.g., Ex. 2007 at 2 (August 30, 2020 Claim Construction Order
`
`entering constructions provided at Markman hearing held on August 14, 2020).
`
`Thus, the parties and the court will have invested significant time and resources in
`
`the litigation by the time the Board reaches an institution decision in this matter. This
`
`favors discretionary denial. Fintiv I at 10; Fintiv II at 13–14 (finding that “the level
`
`of investment and effort already expended on claim construction and invalidity
`
`contentions” favored denial where, as here, the parties had exchanged final
`
`contentions, a Markman hearing was held, the court had entered a claim construction
`
`order).
`
`Petitioner’s assertion that the investment in the district court case “has been
`
`minimal” (Petition at 16) is without merit. Those arguments are based on the filing
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`date of its petition, rather than the date of institution, and should thus be rejected.
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`See Fintiv I at 9.
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`
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`7
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`
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
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`D.
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`Factor 4: There is substantial overlap between this IPR and the
`district court proceedings.
`
`This factor looks at “whether all or some of the claims challenged in the
`
`petition are also at issue in district court,” and whether the “petition includes the
`
`same or substantially the same claims, grounds, arguments, and evidence” as the
`
`parallel district court case. Fintiv I at 12–13.
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`Here, Petitioner has challenged many of the claims of the ’706 patent. Patent
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`Owner’s infringement contentions in the district court identify claims 1, 2, 3, 11, 12,
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`16, 18, and 20 as the asserted claim for the district court case, and the petition
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`challenges those same claims. Ex. 2008 at 1.
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`Further, Petitioner’s invalidity contentions in the district court case identify
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`many of the same references asserted in the Petition as prior art that anticipates
`
`and/or renders obvious the asserted claims. For example, the invalidity contentions
`
`identify the Guthery, Nozawa and RFID Handbook references. Ex. 2009 at 49. The
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`only reference asserted in the Petition but not identified in the invalidity contentions
`
`is the secondary reference SmartCard Handbook. Thus, there is substantial overlap
`
`with respect to Petitioner’s invalidity arguments and evidence. That the district court
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`case involves additional prior art references not asserted in this IPR is “not relevant
`
`to the question of the degree of overlap for this factor.” Fintiv II at 15.
`
`
`
`8
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`
`
`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
`
`In sum, this IPR and the district court case involve the same claims—which
`
`will be construed under the same Phillips standard—and much of the same prior art
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`(and, as discussed below, the same parties), which raises substantial “concerns of
`
`inefficiency and the possibility of conflicting decisions.” Fintiv I at 12. This factor
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`thus weighs in favor of a discretionary denial. See Fintiv II at 15; NHK Spring at 19–
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`20; see also, Next Caller, IPR2019-00961, Paper 10 at 14 (denying institution where
`
`the district court case involved only a subset of the challenged claims).
`
`E.
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`Factor 5: Petitioner is a defendant in the district court litigation.
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`There is no dispute that Petitioner is the defendant in the district court
`
`litigation. “Because the petitioner and the defendant in the parallel proceeding are
`
`the same party, this factor weighs in favor of discretionary denial.” Fintiv II at 15.
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`Petitioner asserts that the Board should simply ignore this factor because
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`“most Petitioners in IPR proceedings” are also defendants in district court litigation.
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`Petition at 17. This argument is without support and contrary to precedent, and
`
`should thus be rejected. Fintiv requires due consideration of this factor, regardless
`
`of how common it is for the Petitioner to also be a defendant in the litigation.
`
`F.
`
`Factor 6: The petition is without merit and unlikely to succeed.
`
`The Board may consider other circumstances in the exercise of its discretion,
`
`including the merits of the case. Fintiv I at 14. However, “a full analysis of the merits
`
`is not necessary to evaluate this factor.” Fintiv II at 17. Although Patent Owner chose
`
`
`
`9
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`
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
`to reserve its arguments on the merits at this stage, when considered together with
`
`the five other Fintiv factors discussed above, this factor still favors discretionary
`
`denial.
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`III. CONCLUSION
`
`The Petition should be denied because Petitioner has not established a
`
`reasonable likelihood of invalidity under any ground or challenged claim. As set
`
`forth above, all six Fintiv factors strongly favor discretionary denial, and the petition
`
`should be denied for this reason alone.
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`
`
`Date: October 6, 2022
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`
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`Respectfully submitted,
`
`By: /s/ Brett Cooper
`Brett Cooper, Reg. No. 55,085
`BC Law Group, P.C.
`200 Madison Avenue, 24th Floor
`New York, NY 10016
`Telephone: 516-359-9668
`bcooper@bc-lawgroup.com
`
`Counsel for Patent Owner,
`Ai Technology, Ltd.
`
`
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`10
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
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`CERTIFICATION REGARDING WORD COUNT
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`Pursuant to 37 C.F.R. §42.24(d), Patent Owner hereby certifies, in accordance
`
`with and reliance on the word count provided by the word-processing system used
`
`to prepare this PATENT OWNER’S PRELIMINARY RESPONSE, that the
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`words in this paper is 2,203. Pursuant to 37 C.F.R. § 42.24, this word count is in
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`compliance with the word limit set forth in 37 C.F.R. § 42.24(b)(1) excluding the
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`portions exempted under 37 C.F.R. § 42.24(a)(1).
`
`Respectfully submitted,
`
`By: /s/ Brett Cooper
`
`Brett Cooper, Reg. No. 55,085
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`Date: October 6, 2022
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response
`
`
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`CERTIFICATE OF SERVICE (37 C.F.R. § 42.6(e)(1))
`
`The undersigned hereby certifies that the above document was served on
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`October 6, 2022 by filing this document through the Patent Trial and Appeal Board
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`End to End system, as well as delivering a copy via electronic mail upon the
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`following attorneys of record for the Petitioner:
`
`Scott T. Jarratt (Reg No. 70,297)
`scott.jarratt.ipr@haynesboone.com
`Andrew S. Ehmke (Reg No. 50,271)
`andy.ehmke.ipr@haynesboone.com
`Calmann J. Clements (Reg No. 66,910)
`calmann.clements.ipr@haynesboone.com
`HAYNES AND BOONE, LLP
`2323 Victory Ave. Suite 700
`Dallas, TX 75219
`Phone: (972) 739-8663
`Fax: (214) 200-0853
`
`/s/ Brett Cooper
`Brett Cooper, Reg. No. 55,085
`BC Law Group, P.C.
`200 Madison Avenue, 24th Floor
`New York, NY 10016
`Telephone: 516-359-9668
`bcooper@bc-lawgroup.com
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