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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`APPLE INC.,
`Petitioner
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`v.
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`AIRE TECHNOLOGY LIMITED,
`Patent Owner
`____________
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`IPR2022-01137
`Patent 8,581,706
`____________
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`
`PATENT OWNER’S PRELIMINARY RESPONSE SUR-REPLY
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`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`A.
`B.
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`C.
`D.
`E.
`F.
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`Table of Contents
`Factor 1: It is undisputed that a stay is unlikely to be granted. ...................... 1
`Factor 2: The district court trial will occur before the deadline for a final
`decision in this proceeding. ............................................................................ 1
`Factor 3: There has been significant investment in the litigation. ................. 3
`Factor 4: Duplicative issues and inefficiencies remain. ................................. 4
`Factor 5: Petitioner is a defendant in the district court litigation. .................. 5
`Factor 6: The petition is without merit and unlikely to succeed. ................... 5
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`i
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`The district court case concerns the same parties, patent, claims, and invalidity
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`references. On balance, the Fintiv factors weigh against institution.
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`A.
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`Factor 1: It is undisputed that a stay is unlikely to be granted.
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`Petitioner does not dispute that the district court is unlikely to grant a stay in
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`the event the Petition is instituted. Petitioner does not present any argument or
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`evidence that the district court is likely to grant a stay, and instead argues that this
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`factor is neutral without evidence specific to the case. To the contrary, Patent Owner
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`provides such evidence, including of the stage of the litigation, to reasonably
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`conclude that a stay is unlikely. See Samsung Elecs. Co. Ltd. v. Evolved Wireless
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`LLC, IPR2021-00950, Paper 10 at 10–11 (PTAB Nov. 29, 2021) (“Evolved”).
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`Moreover, Petitioner has not moved for a stay and has not indicated that it intends
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`to so move. Factor 1 weighs against institution.
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`B.
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`Factor 2: The district court trial will occur before the deadline for
`a final decision in this proceeding.
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`Petitioner does not dispute that the district court case is scheduled for trial on
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`November 6, 2023, well before the January 6, 2024 final written decision deadline.
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`Instead, Petitioner relies upon the PTO Director’s June 21, 2022 Memo and the June
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`30, 2022 time-to-trial statistics to assert that the trial date “for purposes of the
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`Board’s Fintiv analysis” is late February 2024. In doing so, Petitioner misconstrues
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`the Memo, which does not dictate that the trial date “for purposes of the Board’s
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`1
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response Sur-Reply
`
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`Fintiv analysis” should be based on recent time-to-trial statistics, but rather cautions
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`that the “court’s scheduled trial date … is not by itself a good indicator of whether
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`the district court trial will occur before the statutory deadline.” Memo at 8 (emphasis
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`added). Judge Albright has set a trial date and “will not move the trial date except in
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`extreme situations.” Ex. 2006 at 9 (emphasis added). Patent Owner relied on more
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`than just the scheduled trial date to indicate that the trial will precede the final written
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`decision deadline. Moreover, even though the June 30, 2022 statistics show a 28-
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`month time-to-trial, the relevant preceding statistics, starting with the September 30,
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`2021 statistics (operative when the district court case was filed), are indicative of a
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`trial date well before or simultaneous with the final written decision deadline. See
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`Ex. 2010, at 5 (September 30, 2021 statistics showing 23.9 months); Ex. 2011, at 5
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`(December 31, 2021 statistics showing 25.5 months); Ex. 2012, at 5 (March 31, 2021
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`statistics showing 27.2 months). Petitioner’s approach is additionally incongruous
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`with the Memo, which dictates the PTAB should also consider additional factors
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`“such as the number of cases before the judge in the parallel litigation and the speed
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`and availability of other case dispositions.” Memo at 9.Petitioner, in addition to
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`ignoring presented evidence, does not cite to anything other than the one statistic.
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`Finally, Petitioner argues that the gap between trial date and final written
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`decision deadline is so short that discretionary denial is not warranted. Yet the Board
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`has exercised its discretion to deny institution under nearly identical circumstances.
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`2
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`See, e.g., Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 7–8, at 13 (PTAB
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`May 13, 2020) (“Fintiv II”); Evolved at 13; Immersion Systems LLC v. Midas Green
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`Techs., LLC, IPR2021-01176, Paper 16 at 12–13 (PTAB Jan. 6, 2022) (“Midas”).
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`Petitioner’s cited cases are inapposite. They were issued during the first half of 2021
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`while the COVID pandemic was still creating significant uncertainty that has now
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`passed. See Ex. 2002 at 3. Factor 2 weighs against institution.
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`C.
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`Factor 3: There has been significant investment in the litigation.
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`Petitioner asserts that the Board should simply ignore both the parties’ and the
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`district court’s significant investment in the district court litigation because some of
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`the work done in that case does not directly relate to invalidity issues. This is
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`contrary to the Board’s decisions finding that “substantive orders related to the
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`patent at issue,” including claim construction orders entered by the district court,
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`favor discretionary denial. Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 at 9–
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`10 (PTAB Mar. 20, 2020) (precedential, designated May 5, 2020) (“Fintiv I”). In
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`Midas, for example, the Board found that, although much was left to occur in the
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`case, the expended effort in early discovery and claim construction was “not
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`insubstantial” and denied institution. Midas at 13–14. The same reasoning applies
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`here. Claim construction briefing was completed three months ago, discovery is
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`open and ongoing, and the parties have exchanged infringement and invalidity
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`contentions. “[T]he level of investment and effort already expended on claim
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`3
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`construction and invalidity contentions” favors denial. Fintiv II at 13–14. Factor 3
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`weighs against institution.
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`D.
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`Factor 4: Duplicative issues and inefficiencies remain.
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`Petitioner does not dispute that the district court case involves the same patent,
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`claims, and invalidity references. To erase any doubt as to the complete overlap
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`regarding invalidity arguments and evidence, Petitioner’s invalidity contentions
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`incorporate this IPR by reference. This proceeding is entirely duplicative.
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`Petitioner “stipulates that it will not pursue … the prior art obviousness
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`combinations on which trial is instituted for the claims on which trial is instituted.”
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`Reply at 4. This narrow stipulation is insufficient, only concerning the obviousness
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`combinations directed to particular claims for which trial is instituted. Petitioner
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`would still be free to raise anticipation arguments or other combinations based on
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`the same references, or even the same combinations directed to different claims.
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`This limited stipulation is not “nearly identical” to the stipulation in Sand. As
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`explained in Sand, Petitioner could have stipulated that it “would not pursue any
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`ground raised or that could have been reasonably raised in an IPR, i.e., any ground
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`that could be raised under §§ 102 or 103 on the basis of prior art patents or printed
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`publications.” Sand Revolution II, LLC, Continental Intermodal Grp. – Trucking
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`LLC, IPR2019-013393, Paper 24 at 12 n.5 (PTAB June 16, 2020). Such a stipulation
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`“might better address concerns regarding duplicative efforts and potentially
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`4
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`conflicting decisions in a much more substantial way … [and] might help ensure that
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`an IPR functions as a true alternative.” Id. Factor 4 favors denial. Even had Petitioner
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`made the type of stipulation described in Sand, it would have only weighed
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`“marginally in favor of not exercising discretion.” Sand at 12; Evolved at 15.
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`E.
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`Factor 5: Petitioner is a defendant in the district court litigation.
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`There is no dispute that Petitioner is the defendant in the district court
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`litigation. Thus, this factor is not neutral—it weighs in favor of discretionary denial.
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`See Fintiv II at 15; Midas at 18; Evolved at 16. And even if the trial date were relevant
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`here, as discussed above, trial and the precursor dispositive motions that could
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`implicate validity issues will occur before the final written decision deadline.
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`F.
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`Factor 6: The petition is without merit and unlikely to succeed.
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`Petitioner argues that, pursuant to the Memo, institution should not be denied
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`because the Petition makes a compelling case that the testimony of Dr. Phinney
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`“plainly shows that the ’706 patent claims are no more than well-known and obvious
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`methods for conducting communication between a reading device and applications
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`on a data carrier.” Reply at 5. Petitioner provides no further explanation as to how
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`that testimony, or the Petition, is compelling, only alluding to the fact that Patent
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`Owner did not challenge the Petition on the merits. Factor 6 is neutral at best, and
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`when viewed in light of the other five Fintiv factors, weighs against institution.
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`5
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`Date: October 26, 2022
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`Respectfully submitted,
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`By: /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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`Counsel for Patent Owner,
`Aire Technology Limited.
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`6
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`IPR2022-01137 (’706 Patent)
`Patent Owner Preliminary Response Sur-Reply
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`CERTIFICATE OF SERVICE (37 C.F.R. § 42.6(e)(1))
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`The undersigned hereby certifies that the above document was served on
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`October 26, 2022 by filing this document through the Patent Trial and Appeal Case
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`Tracking System, as well as delivering a copy via electronic mail upon the following
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`attorneys of record for the Petitioner:
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`Scott T. Jarratt (Reg No. 70,297)
`scott.jarratt.ipr@haynesboone.com
`Andrew S. Ehmke (Reg No. 50,271)
`andy.ehmke.ipr@haynesboone.com
`Calmann J. Clements (Reg No. 66,910)
`calmann.clements.ipr@haynesboone.com
`HAYNES AND BOONE, LLP
`2323 Victory Ave. Suite 700
`Dallas, TX 75219
`Phone: (972) 739-8663
`Fax: (214) 200-0853
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`Date: October 26, 2022
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`
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`By: /s/ Brett Cooper
`Brett Cooper, Reg. No. 55,085
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