`571-272-7822
`
`Paper 8
`Date: January 6, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`PEAG LLC (d/b/a JLab Audio), AUDIO PARTNERSHIP LLC and AUDIO
`PARTNERSHIP PLC (d/b/a Cambridge Audio)
`Petitioner,
`
`v.
`
`VARTA MICROBATTERY GMBH,
`Patent Owner.
`____________
`
`IPR2020-01212
`Patent 9,153,835 B2
`____________
`
`Before CHRISTOPHER L. CRUMBLEY, JON B. TORNQUIST, and
`MONTÉ T. SQUIRE, Administrative Patent Judges.
`
`SQUIRE, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`VARTA Ex. 2030 Page 1 of 50
`EVE Energy v. VARTA
`IPR2022-01484
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`IPR2020-01212
`Patent 9,153,835 B2
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`I. INTRODUCTION
`PEAG LLC (d/b/a JLab Audio), Audio Partnership LLC and Audio
`Partnership PLC (d/b/a Cambridge Audio) (collectively, “Petitioner”) filed a
`Petition (Paper 1, “Pet.”) requesting the Board institute an inter partes
`review of claims 1–12 of U.S. Patent No. 9,153,835 B2 (Ex. 1001, “the ’835
`patent”). Varta Microbattery GmbH (“Patent Owner”) filed a Preliminary
`Response (Paper 7, “Prelim. Resp.”). Petitioner identifies PEAG LLC (d/b/a
`JLab Audio), Audio Partnership LLC, Audio Partnership PLC (d/b/a
`Cambridge Audio), and Guangdong Mic-Power New Energy Co. Ltd., as the
`real parties-in-interest. Pet. 1. Patent Owner identifies VARTA Microbattery
`GmbH, as the real party-in-interest. Paper 5, 2.
`We have authority to determine whether to institute an inter partes
`review. See 35 U.S.C. § 314 (2018); 37 C.F.R. § 42.4(a) (2019). The
`standard for instituting an inter partes review is set forth in 35 U.S.C.
`§ 314(a), which provides that an inter partes review may not be instituted
`“unless the Director determines . . . there is a reasonable likelihood that the
`petitioner would prevail with respect to at least 1 of the claims challenged in
`the petition.”
`Having considered the Petition, Preliminary Response, and evidence
`of record, for the reasons below, we determine that the Petition shows a
`reasonable likelihood that Petitioner would prevail with respect to at least
`one of the challenged claims. Patent Owner has not persuaded us that we
`should exercise our discretion to deny institution. We thus institute inter
`partes review on all challenged claims on all asserted grounds. See SAS Inst.,
`Inc. v. Iancu, 138 S. Ct. 1348, 1354, 1359–60 (2018); see also Patent Trial
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`and Appeal Board Consolidated Trial Practice Guide 64 (Nov. 2019) (“The
`Board will not institute on fewer than all claims or all challenges in a
`petition.”), available at https://www.uspto.gov/TrialPracticeGuideConsolidated
`(“TPG”).
`
`II. BACKGROUND
`A. Related Matters
`The parties indicate that the ’835 patent is the subject of the following
`pending consolidated district court actions: VARTA Microbattery GmbH v.
`Costco Wholesale Corporation, No. 2:20-cv-0051-JRG (E.D. Tex.); VARTA
`Microbattery GmbH v. Amazon.com, Inc., No. 2:20-cv-0052-JRG (E.D.
`Tex.); VARTA Microbattery GmbH v. Best Buy Co., Inc., No. 2:20-cv-0054-
`JRG (E.D. Tex.); VARTA Microbattery GmbH v. PEAG, LLC, No. 2:20-cv-
`0071-JRG (E.D. Tex.); VARTA Microbattery GmbH v. Audio Partnership
`LLC, et al., No. 2:20-cv-00138-JRG (E.D. Tex.); and VARTA Microbattery
`GmbH v. Samsung Electronics America, Inc., No. 2:20-cv-00029-JRG (E.D.
`Tex.) (collectively, “the District Court Action”). Pet. 1; Paper 5, 2–3; Ex.
`2002. Petitioner also filed petitions challenging claims of other patents
`asserted in the District Court Action in IPR2020-01211, IPR2020-01213,
`and IPR2020-01214. Pet. 2; Paper 5, 3.
`B. The ’835 Patent (Ex. 1001)
`The ’835 patent is titled “Button Cells and Method for Producing
`Same” and issued October 6, 2015, with claims 1–13. Ex. 1001, codes (54),
`(45), 12:1–66. The ’835 patent relates to a button cell comprising two
`housing half-parts (housing cup and housing top) separated from one another
`by an electrically insulating seal and which form a housing with a flat
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`bottom area and a flat top area parallel to it, and an electrode-separator
`assembly within the housing. Id. at code (57), 1:16–24, 3:7–12.
`According to the ’835 patent, it was known in the art to have button
`cells with electrode-separator assemblies contained within the housing, but
`the prior art button cells always contained these assemblies inserted flat such
`that the electrode layers are aligned essentially parallel to the flat bottom and
`top areas of the housing. Ex. 1001, 1:43–44, 3:34–37. The ’835 patent states
`that various problems occur in button cells that contain such
`electrode-separator assemblies, including increased scrap rates due to faults
`that can occur when the assemblies make contact with one another, as well
`as the potential that the assemblies can start to leak. Id. at 1:57–59, 1:65–2:3.
`The ’835 patent states it was also known in the art to close button cells
`in a liquid-tight manner by beading the edge of the cell cup over the cell top
`and that button cells without beading cannot be loaded as heavily in the axial
`direction as compared to button cells with a beaded-over cup edge,
`especially with respect to axial mechanical loads caused in the interior of the
`button cell. Id. at 2:4–6, 2:18–23. The ’835 patent explains that the axial
`forces, which may occur, for example, as a result of volume changes during
`charging and discharging processes, can lead to leaks more readily in button
`cells without beading than in button cells with beading. Id. at 2:24–28. Thus,
`the ’835 patent indicates there was a need in the art for a button cell that is
`resistant to mechanical loads in the axial direction and manufactured without
`a beaded-over cup edge. Id. at 2:31–36.
`The ’835 patent describes a button cell, which includes a housing cup
`and a housing top separated from one another by an electrically insulating
`seal and which form a housing with a flat bottom area and a flat top area
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`parallel to it, and an electrode-separator assembly within the housing,
`including at least one positive and at least one negative electrode in the form
`of flat layers and connected to one another by at least one flat separator,
`wherein the electrode layers are aligned essentially at right angles to the flat
`bottom and top areas of the housing and the button cell is manufactured
`without being beaded over. Ex. 1001, code (57), 2:40–49, 11:1–22.
`Figure 4 of the ’835 patent, reproduced below, illustrates a button cell
`according to an embodiment of the claimed invention.
`
`
`Figure 4 of the ’835 patent, above, shows button cell 400 including a
`housing comprising cup part 401 and top part 402, with seal 403 arranged
`therebetween, and an assembly of electrodes 407 and 408 and separators 405
`and 406, contained as spiral winding 404 within the housing. Id. at 11:1–9,
`Fig. 3. Figure 4 of the ’835 patent also shows button cell 400 as having top
`part 402 inserted into cup part 401 such that the casing areas of top part 402
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`and cup part 401 overlap and the edge of cup part 401 is not beaded over the
`edge of top part 402.
`The ’835 patent discloses that electrode 407 is connected via output
`conductor 410 to top part 402 and electrode 408 is connected via output
`conductor 409 to cup part 402. Id. at 11:9–12. The ’835 patent further
`discloses that insulating means 411 and 412 are arranged between the end
`faces of the winding and cup part 401 and top part 402. Id. at 11:17–19.
`
`Figure 5 of the ’835 patent, reproduced below, illustrates another
`embodiment of a button cell according to the claimed invention.
`
`
`Figure 5 of the ’835 patent, above, shows button cell 500 comprising cup
`part (cell cup) 501 and top part (cell top) 502 connected to one another,
`sealed by means of seal 510, which together form a housing with flat bottom
`area 503 and flat top area 504 parallel to it. Id. at 11:23–29. The ’835 patent
`discloses that cell top 502 is inserted into cell cup 501 such that the casing
`areas of the cell top and the cell cup overlap and the edge of cell cup 501 is
`not beaded over edge 511 of cell top 502. Id. at 3:1–3, 11:32–39.
`
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`The ’835 patent further discloses that button cell 500 contains an
`
`assembly within the housing comprising electrodes 508 and 509 and
`separators 507 in the form of a winding, whose end faces in the direction of
`flat bottom area 503 and flat top area 504 which is parallel to it. Id. at
`11:40–46. The ’835 patent also discloses that the assembly is wound up on
`winding core 512 in the center of the button cell and winding core 512 and
`the electrodes and separators wound around it are aligned at right angles to
`flat bottom and flat top areas 503 and 504. Id. at 11:46–50.
`The ’835 patent explains that if the volume of the electrodes increases
`or decreases during a charging or discharging process, the mechanical forces
`that result act predominantly radially, and can be absorbed by the casing area
`of the button cell. Ex. 1001, 11:50–54. According to the ’835 patent, because
`of the right-angled alignment of the electrodes, radial forces can be absorbed
`much better than axial forces by the housing of the button cell, which results
`in the button cell having improved sealing characteristics. Id. at 3:51–55.
`
`C. Challenged Claims
`Petitioner challenges claims 1–12 of the ’835 patent.1 Pet. 7, 8. Of the
`challenged claims, claim 1 is the only independent claim. Claim 1,
`reproduced below, is illustrative of the subject matter of the challenged
`claims:
`1. A button cell comprising:
`a housing cup and a housing top separated from one
`another by an electrically insulating seal and which form
`
`
`
` 1
`
` Claim 13 is the only claim of the ’835 patent Petitioner has not challenged
`in this Petition. Prelim. Resp. 6.
`
`
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`a housing with a flat bottom area and a flat top area parallel
`to it,
`
`an electrode-separator assembly within the housing
`comprising at least one positive and at least one negative
`electrode in the form of flat layers and connected to one
`another by at least one flat separator, and
`an insulating means,
`wherein the electrode layers are aligned essentially
`at right angles to the flat bottom area and the flat top area
`and the button cell is closed without being beaded over,
`and the electrode-separator assembly is in the form of a
`spiral winding having end faces defining side surfaces of
`the spiral winding face facing in an axial direction relative
`to the flat bottom area and the flat top area, and wherein
`the insulating means is arranged between the end faces of
`the spiral winding and the housing cup and the housing
`top.
`Ex. 1001, 12:2–22.
`
`D. Evidence
`Petitioner relies on the following references in the asserted grounds of
`unpatentability:
`Name
`
`Reference
`
`Date
`
`Kaun
`
`Kobayashi
`
`JP 2007–294111
`
`Ryou
`
`EP 1886364 B1
`
`
`
`
`8
`
`US 2005/0233212 A1 Oct. 20, 2005
`(published)
`Nov. 8, 2007
`(published)
`May 24, 2006
`(filed)
`Pet. 8, 23–27. Petitioner also relies on the declaration testimony of
`William Gardner (Ex. 1003, “the Gardner Declaration”) in support of
`its contentions. Id. at 8.
`
`Exhibit
`No.
`1005
`
`1006
`
`1007
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`E. Asserted Grounds of Unpatentability
`Petitioner contends that the challenged claims are unpatentable based
`on the following grounds:
`Claims Challenged
`
`References/Basis
`
`35 U.S.C. §2
`
`103
`103
`103
`
`1–12
`1–12
`1–12
`
`Pet. 8.
`
`Kaun, Kobayashi
`Kobayashi, Kaun
`Kobayashi, Ryou
`
`III. ANALYSIS
`A. Discretion Under 35 U.S.C. § 325(d)
`Patent Owner argues that we should exercise our discretion under
`35 U.S.C. § 325(d) to deny institution because the Petition involves the same
`or substantially the same prior art previously presented to the Office. Prelim.
`Resp. 1, 21–22. Patent Owner contends that Petitioner relies on Kobayashi
`for each of the asserted grounds, but that Kobayashi was cited and already
`considered by the Examiner during prosecution, and Petitioner identifies no
`error by the Patent Office. Id. at 1, 21 (citing Ex. 1002, at 341, 455).3
`Patent Owner also contends that Petitioner relies on Kaun and Ryou in
`combination with Kobayashi for each of the asserted grounds, but Kaun and
`
`
`
` 2
`
` The Leahy-Smith America Invents Act (“AIA”) includes revisions to
`35 U.S.C. §§ 102, 103 that became effective on Mar. 16, 2013. Pub. L. No.
`112–29, §§ 3(b), 3(c), 3(n)(1), 125 Stat. 284, 287, 293 (2011). Because the
`application from which the ’835 patent issued was filed before Mar. 16,
`2013, we apply the pre-AIA versions of §§ 102, 103 to this Decision.
`3 For citations to Exhibit 1002, we refer and cite to the page numbers added
`to the document in the lower right side.
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`Ryou are duplicative of other references considered during prosecution. Id.
`at 1–2, 21 (“Petitioners rely on Kaun and Ryou for their discussion of a
`housing that is not beaded over, but the Examiner took the position that that
`very feature was taught by Nakayama.”).
`Petitioner argues that we should not exercise our discretion to deny
`institution under § 325(d) because “Kobayashi was cited in an IDS filed on
`May 8, 2014, but was not substantively examined during prosecution.” Pet.
`31. Petitioner also argues that during prosecution the Office erred in a
`manner material to the patentability of the challenged claims. Id. at 32.
`Petitioner contends that
`[w]hile Kobayashi was cited in an IDS, . . . the Office erred
`in failing to consider Kobayashi in a manner “material to
`the patentability of the challenged claims” of the ’835
`Patent by overlooking “specific teaching[s] in the relevant
`prior art” that “impact patentability of the challenged
`claims.”
`
`Id.
`
`Section 325(d) of Title 35 of the United States Code provides, in
`relevant part: “In determining whether to institute or order a proceeding
`under this chapter, chapter 30, or chapter 31, the Director may take into
`account whether, and reject the petition or request because, the same or
`substantially the same prior art or arguments previously were presented to
`the Office.” The Board uses a two-part framework for evaluating arguments
`under § 325(d):
`1.
`whether the same or substantially the same art previously
`was presented to the Office or whether the same or
`substantially the same arguments previously were
`presented to the Office; and
`
`
`
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`2.
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`if either condition of first part of the framework is
`satisfied, whether the petitioner has demonstrated
`that the Office erred in a manner material to the
`patentability of challenged claims.
`
`
`
`Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH,
`IPR2019-01469, Paper 6 at 8 (PTAB Feb. 13, 2020) (precedential)
`(“Advanced Bionics”). “Previously presented art includes art made of record
`by the Examiner, and art provided to the Office by an applicant, such as on
`an Information Disclosure Statement (IDS), in the prosecution history of the
`challenged patent.” Id. at 7‒8. The Becton, Dickinson4 factors, which address
`discretion to deny when a petition presents the same or substantially the
`same prior art or arguments previously presented to the Office, are
`instructive. Id. at 9 (“[T]he Becton, Dickinson factors provide useful insight
`into how to apply the framework under 35 U.S.C. § 325(d).” (footnote
`omitted)).
`
`Applying the Advanced Bionics two-part framework to Patent
`Owner’s arguments, we are not persuaded the art presented in the Petition is
`the same or substantially the same as the art previously presented to the
`Office during prosecution of the ’835 patent. In particular, we are not
`persuaded the specific combinations of Kobayashi with Kaun and Ryou that
`Petitioner asserts in the Petition are the same or substantially the same art as
`the art previously presented to the Office during prosecution. See Ex. 1002,
`
`
`
` 4
`
` Becton, Dickinson & Co. v. B. Braun Melsungen AG, IPR2017-01586,
`Paper 8 (PTAB Dec. 15, 2017) (precedential as to § III.C.5, first paragraph)
`(“Becton, Dickinson”).
`
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`318–324. Although Kobayashi was cited in an IDS during prosecution (Ex.
`1002, 341), the Kaun and Ryou references were never cited in any IDS or
`presented to the Office during prosecution, and are not the same or
`substantially the same as any art that was presented. See generally Ex. 1002.
`Kaun and Ryou are also not duplicative of the Nakayama reference,
`which is a different prior art reference presented to the Office during
`prosecution. Compare Ex. 1005 (Kaun) and Ex. 1007 (Ryou) with, Ex. 1015
`(Nakayama). Although Patent Owner asserts that Kaun and Ryou are
`duplicative of other references considered during prosecution (Prelim. Resp.
`1–2) and seems to imply that Petitioner applies Kaun and Ryou in the
`Petition the same way the Examiner applied Nakayama during prosecution
`(id. at 21), Patent Owner does not provide any detailed analysis or
`meaningful discussion of any overlap between the art relied upon in the
`Petition and prior art combinations presented to the Office.
`Because Patent Owner has not established that the art combinations
`Petitioner asserts in the Petition are the same or substantially the same as the
`art previously presented to the Office during prosecution, we need not
`address the second part of the Advanced Bionics framework. See Advanced
`Bionics, Paper 6 at 10.
`Even assuming that the same or substantially the same art was
`previously presented to the Office during prosecution, we determine
`Petitioner demonstrates sufficiently that the Office erred in a manner
`material to the patentability of challenged claims. In particular, Petitioner
`demonstrates that the Examiner materially erred by overlooking Kobayashi’s
`teachings, which disclose nearly all of the claim limitations, and not
`applying it in a rejection as a reference. See Advanced Bionics at 8 n.9 (“An
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`example of a material error may include misapprehending or overlooking
`specific teachings of the relevant prior art where those teachings impact
`patentability of the challenged claims.”). For example, as we discuss below,
`in both the second and third asserted grounds, Petitioner relies on Kobayashi
`as a reference teaching nearly all of the claim limitations with the exception
`of “the button cell is closed without being beaded over.” Pet. 59–65, 70, 72–
`74. In contrast, during prosecution, the Examiner did not rely on Kobayashi
`as a reference in any rejection (see generally Ex. 1002), which suggests that
`the Examiner overlooked Kobayashi’s teaching of nearly all of the claim
`limitations and the impact those teachings would have on the patentability of
`the claims.
`Accordingly, we decline to exercise our discretion under 35 U.S.C.
`§ 325(d) to deny institution.
`B. Discretion Under 35 U.S.C. § 314(a)
`Patent Owner argues that we should exercise our discretion to deny
`institution based on the parallel proceeding in the District Court Action.
`Prelim. Resp. 10. Patent Owner contends
`review would be inefficient given the complete overlap in
`Petitioners’ invalidity arguments in their Petition and the
`pending lawsuits, and in view of the advanced stage and
`schedule of those lawsuits, where trial will occur seven
`months prior to any final decision that would be made by
`this Board.
`Id. at 10–11.
`Petitioner argues that we should not exercise our discretion to deny
`institution under § 314(a). Pet. 27. Petitioner contends that “the Board has
`repeatedly ruled that . . . the mere existence of parallel district court actions
`
`
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`with scheduled trial dates earlier than an anticipated Final Written Decision
`is not a dispositive factor against institution” and that there is no per se rule
`against instituting an IPR in those circumstances. Id. at 27–28 (citing cases).
`Under § 314(a), the Director has discretion to deny institution of an
`inter partes review, and that discretion has been delegated to the Board. See
`37 C.F.R. § 42.4(a) (“The Board institutes the trial on behalf of the
`Director.”); Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016)
`(“[T]he agency’s decision to deny a petition is a matter committed to the
`Patent Office’s discretion.”); SAS, 138 S. Ct. at 1356 (“[Section] 314(a)
`invests the Director with discretion on the question whether to institute
`review . . . .” (emphasis omitted)); Harmonic Inc. v. Avid Tech., Inc., 815
`F.3d 1356, 1367 (Fed. Cir. 2016) (“[T]he PTO is permitted, but never
`compelled, to institute an IPR proceeding.”).
`The Board has held that the advanced state of a parallel district court
`action is a factor that may weigh in favor of denying a petition under
`§ 314(a). See NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752,
`Paper 8 at 20 (PTAB Sept. 12, 2018) (precedential); Patent Trial and Appeal
`Board Consolidated Trial Practice Guide (Nov. 2019), 58 & n.2, available at
`https://www.uspto.gov/TrialPracticeGuideConsolidated (“Trial Practice
`Guide”). We consider the following factors to assess “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”:
`1.
`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;
`
`2.
`
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`4.
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`5.
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`6.
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`3.
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`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) (“Fintiv”). Overlap among these factors often exists and
`some facts may be relevant to more than one factor. Id. at 6. Therefore, in
`evaluating these factors, we “take[] a holistic view of whether efficiency and
`integrity of the system are best served by denying or instituting review.” Id.
`at 6. We address each of these factors in turn below.
`1. Whether the Court Granted a Stay or Evidence Exists That a Stay
`may be Granted if a Proceeding is Instituted
`In considering the first Fintiv factor, the Fintiv panel noted that the
`existence of a district court stay pending Board resolution of an inter partes
`review has weighed strongly against discretionary denial, while a denial of
`such a stay request sometimes weighs in favor of discretionary denial.
`Fintiv, Paper 11 at 6–8.
`Patent Owner notes that Petitioner filed a motion to stay the District
`Court Action on August 20, 2020 and the court denied that motion on
`October 7, 2020. Prelim. Resp. 12 (citing Ex. 2005 (motion to stay); Ex.
`2007 (order on motion to stay)). Patent Owner argues that, even if the Board
`were to proceed with institution of this IPR and Petitioner were to renew its
`
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`motion to stay the District Court Action, that motion would also likely be
`denied. Id.
`We disagree that this factor weighs against institution here. Although
`the district court previously denied Petitioner’s motion to stay, in reviewing
`the stay order, the district court indicated that the motion was “premature . . .
`in advance of the PTAB’s decision on whether or not to grant the petition for
`inter partes review” and denied without prejudice to renew. Ex. 2007, 3. The
`order on Petitioner’s motion to stay expressly provides that Petitioner is
`permitted to refile its motion to stay “within 14 days following the PTAB’s
`institution decision,” which evidences the district court’s willingness to
`revisit the issue and reconsider whether to grant a stay. Id. The fact that the
`court has expressed willingness to reconsider whether to grant a stay
`following our decision to institute generally weighs against exercising
`discretion to deny institution. Fintiv, Paper 11 at 7 (explaining that where
`“the court has denied a motion to stay without prejudice and indicated to the
`parties that it will consider a renewed motion or reconsider a motion to stay
`if a PTAB trial is instituted . . . [t]his fact has usually weighed against
`exercising authority to deny institution under NHK”).
`Patent Owner argues that the specific facts of the copending District
`Court Action make a stay less likely, noting that there is a “heightened
`prejudice” that would be caused by a stay due to Petitioner’s continued
`importation of the allegedly infringing products. Prelim. Resp. 12–13.
`According to Patent Owner, the Eastern District of Texas has denied a stay
`in an unrelated case, even after institution of an inter partes review, when
`there was a risk of heightened prejudice. Id. at 13 (citing Peloton Interactive,
`Inc. v. Flywheel Sports, Inc., 2:18-cv-030390, 2019 WL 3826051, at *3
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`(E.D. Tex. Aug. 14, 2019)). But there are also other facts present in the
`District Court Action that increase the likelihood of a stay being granted,
`based on the court’s past practices. For example, we note the early stage of
`the litigation and the fact that the court has not issued a claim construction
`ruling, facts which have been found to weigh in favor of a stay. See Uniloc
`USA, Inc. v. Google, LLC, No. 2-17-cv-00231, Dkt. 47, 2 (E.D. Tex. Oct. 3,
`2017) (granting stay where “[n]o patent claims have been construed by the
`Court in these cases and discovery has barely begun.”). Taken together, the
`facts of the District Court Action generally counterbalance one another, and
`do not make the grant of a stay significantly more or less likely.
`
`Accordingly, the balance of the evidence on the first Fintiv factor
`neither weighs in favor of nor against exercising discretion to deny
`institution.
`
`2. Proximity of Trial Date
`The parties agree that the trial date of the District Court Action is
`currently scheduled for June 7, 2021 (Pet. 29; Prelim. Resp. 13), which is
`seven months before the statutory date for the final written decision.
`When a district court’s trial date will occur before the projected
`statutory deadline, the Board generally weighs this second Fintiv factor in
`favor of exercising authority to deny institution under § 314(a). Fintiv, Paper
`11 at 9.
`Accordingly, the second Fintiv factor weighs in favor of exercising
`discretion to deny institution.
`3. Investment in the Parallel Proceeding
`Patent Owner argues that this factor favors denial because of the
`advanced stage and schedule of the District Court Action relative to this
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`proceeding. Prelim. Resp. 10–11. Patent Owner contends it has served
`infringement contentions, Petitioner has served invalidity contentions, and
`both parties have produced documents and propounded and responded to
`interrogatories. Id. at 15. Patent Owner further contends the parties have
`exchanged proposed terms and identified evidence upon which they intend
`to rely for claim construction, and that the claim construction hearing is
`scheduled for January 15, 2021. Id. at 15–16 (citing Ex. 2004, 4–5). Patent
`Owner also contends fact discovery is scheduled to close on January 29,
`2021 and trial is scheduled to begin on June 7, 2021. Id. at 16 (citing
`Ex. 2004, 1, 3, 4). Patent Owner asserts that the “court’s claim construction
`decision is expected to follow shortly after the institution decision and . . .
`trial will likely be completed seven months before any final written decision
`even if institution were to occur.” Id.
`Petitioner contends that this Fintiv factor weighs against discretionary
`denial because the “district court proceeding is still at its infancy” and
`“Petitioner has worked diligently to file the subject petition approximately
`eight months before the statutory bar date.” Pet. 30.
`In considering this third Fintiv factor, the Board’s precedential Fintiv
`order provides the following guidance:
`[I]f, at the time of the institution decision, the district court
`has issued substantive orders related to the patent at issue
`in the petition, this fact favors denial.[] Likewise, district
`court claim construction orders may indicate that the court
`and parties have invested sufficient time in the parallel
`proceeding to favor denial. If, at the time of the institution
`decision, the district court has not issued orders related to
`the patent at issue in the petition, this fact weighs against
`exercising discretion to deny institution under NHK.
`
`
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`Fintiv, Paper 11 at 9–10 (footnote omitted).
`There is no evidence that the district court has issued any substantive
`orders related to the ’835 patent. Although the parties in the District Court
`Action have completed some work, for example, served preliminary
`infringement and invalidity contentions, responded to each other’s requests
`for documents and interrogatories, and exchanged proposed terms for claim
`construction, discovery is not over and much remains to be completed in
`advance of trial. See Ex. 2004, 1–4. The claim construction hearing has not
`yet occurred and it is scheduled for January 15, 2021, and the district court
`has not issued any claim construction orders. Id. at 4. The close of fact
`discovery is not currently scheduled to be completed until January 29, 2021
`and expert discovery is not currently scheduled to be completed until March
`12, 2021. Id. at 3. There is also no evidence that the parties have submitted
`briefing on any dispositive issue, or that the district court has made any
`determination on the merits. Thus, the evidence shows that the investment in
`the parallel proceeding related to the validity issue is minimal. This fact
`weighs in favor of not exercising discretion to deny institution.
`In considering the court’s and the parties’ investment in the parallel
`proceeding to date, the panel in Fintiv further provides that a petitioner’s
`diligence or delay in filing a petition may be relevant. Fintiv, Paper 11 at
`11–12. If the evidence shows that a petitioner filed its petition expeditiously,
`such as promptly after becoming aware of the claims being asserted, this fact
`has weighed against denying institution. Id. at 11 (citing Intel Corp. v. VLSI
`Tech. LLC, IPR2019-01192, Paper 15 at 12–13 (PTAB Jan. 9, 2020);
`Illumina Inc. v. Natera, Inc., IPR2019-01201, Paper 19 at 8 (PTAB Dec. 18,
`2019)). If, however, the evidence shows the petitioner did not file its petition
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`expeditiously, such facts have favored denial. Id. at 11–12 (citing Next
`Caller, Inc. v TRUSTID, Inc., IPR2019-00961, Paper 10 at 16 (PTAB Oct.
`16, 2019)). In considering this factor, Petitioner’s diligence in filing the
`Petition also weighs in favor of not exercising discretion to deny institution.
`In particular, the evidence shows Petitioner acted expeditiously by filing this
`Petition approximately eight months before the allotted twelve-month
`statutory bar date. Pet. 30.
`Accordingly, based on the minimal investment in the parallel
`proceeding and the Petitioner’s diligence in filing the Petition, the third
`Fintiv factor weighs strongly in favor of not exercising discretion to deny
`institution.
`
`4. Overlap of Issues
`The fourth Fintiv factor evaluates “concerns of