From:
`To:
`Cc:
`Subject:
`Date:
`
`Appleby, Robert A.
`Precedential_Opinion_Panel_Request
`mrosato@wsgr.com; Argenti, Matthew; Medley, Patrick; #Samsung_Caltech_IPR
`IPR2023-00130, IPR2023-00131, IPR2023-00133
`Monday, June 5, 2023 11:02:57 PM
`
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`
`Honorable Board:
`
`On behalf of Petitioner Samsung Electronics Co., Ltd. (“Samsung”), we
`respectfully request rehearing by the Precedential Opinion Panel (“POP”) of the
`Patent Trial and Appeal Board’s May 4, 2023 decisions in the above-referenced
`proceedings. The Board’s decisions denied institution of inter partes review
`under NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8
`(P.T.A.B. Sept. 12, 2018), and Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper
`11 (P.T.A.B. Mar. 20, 2020), because of a parallel district court proceeding.
`
`Based on our professional judgment, we believe these cases require an answer
`to the following precedent-setting questions of exceptional importance:
`
`Whether Fintiv’s multi-factor balancing analysis and Director Vidal’s Interim
`Procedure for Discretionary Denials in AIA Post Grant Proceedings with
`Parallel District Court Litigation (U.S.P.T.O. June 21, 2022) require a
`compelling merits showing under Fintiv’s sixth factor where an unpatentability
`challenge may be strong even if found not to reach the compelling standard.
`
`Background:
`
`The sixth Fintiv factor requires the Board to consider, as part of its multi-factor
`analysis, other “relevant circumstances in the case, including the merits.”
`Fintiv, Paper No. 11 at 14. In considering the merits of Samsung’s petition
`under Fintiv’s sixth factor, the Board asked whether Samsung’s petitions
`“present[] a challenge with compelling merits.” Dec. at 20 (emphasis added).
`The Board
`then concluded
`that, because Samsung’s “showing of
`unpatentability is not compelling,” the merits consideration “is neutral” as to
`whether review should be instituted. Dec. at 21, 30 (emphasis added). In the
`course of its analysis, the Board repeatedly stated that, even if it were to find
`that Samsung has “show[n] a reasonably likelihood of success” on the merits,
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`

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`the Board must “apply a higher compelling merits standard for purposes of
`determining whether to exercise [its] discretion to deny institution.” Dec. at 27;
`see also Dec. at 29.
`
`In the interests of conciseness, all citations in this email refer to the Board’s
`decision denying institution in IPR2023-00130. The Board’s denying
`institution in IPR2023-00131 IPR2023-00133 employ the same reasoning.
`
`Reasons for POP Review:
`
`The POP review is needed to clarify the proper standard of assessing the merits
`of an IPR petition under Fintiv’s sixth factor. The Board’s insistence on a
`heightened “compelling merits” showing misunderstands both Fintiv and
`Director Vidal’s Interim Guidance on discretionary denials. The Interim
`Guidance instructs the Board to institute review (and to decline to exercise the
`Board’s discretionary denial authority) when the Board finds that the petition
`“presents a compelling unpatentability challenge,” even if the other Fintiv
`factors point toward denial. Interim Guidance at 4-5. But that means that a
`finding of compelling merits under the sixth factor automatically outweighs all
`the other Fintiv factors, and “alone demonstrates that the PTAB should not
`discretionarily deny institution under Fintiv.” Id. at 5 (footnote omitted)
`(emphasis added). It does not mean—as the Board here mistakenly believed—
`that the strength of a petition’s merits is relevant to Fintiv’s multi-factor
`analysis only when such merits rise to the level of “compelling.”
`
`The Board’s mistaken approach is contrary to Fintiv. Fintiv instructs that the
`Board must engage in a “‘balanced assessment of all relevant circumstances of
`the case, including the merits.’” Fintiv, Paper No. 11 at 5 (citation omitted). In
`particular, the Board must “balance[]” the six factors enumerated in Fintiv,
`“tak[ing] a holistic view of whether efficiency and integrity of the system are
`best served by denying or instituting review.” Fintiv, Paper No. 11 at 6
`(citation omitted). If, however, the merits assessment under the sixth factor
`were to come into play only when these merits rise to the level of “compelling”
`(which is an exceedingly demanding showing, see Dec. at 20-21), it would
`never effectively be part of the balancing exercise because it would either
`outweigh all the other Fintiv factors (if the merits were compelling) or be
`irrelevant (if the merits were less than compelling).
`
`That is demonstrably not what Fintiv envisioned. Fintiv emphasized that the
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`

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`merits consideration may ask “if the merits of a ground raised in the petition
`seem particularly strong” (but not necessarily compelling)—a fact that would
`“favor[] institution” (but not necessarily require it). Fintiv, Paper No. 11 at 14-
`15 (citing cases). Conversely, where “the merits of the ground raised in the
`petition are a closer call,” that fact would “favor[] denying institution when
`other factors favoring denial are present.” Id. at 15 (citation omitted). As
`Fintiv concluded, “there may be strengths or weaknesses regarding the merits
`that the Board considers as part of its balanced assessment.” Id. (citation
`omitted) (emphasis added). Fintiv’s insistence on a balanced multi-factor
`analysis—one that considers both strengths and weaknesses of the merits, and
`then balances them against the other five factors—is contrary to the Board’s
`mechanical approach, where only a finding of “compelling merits” could
`counterbalance the other factors.
`
`Director Vidal’s Interim Guidance does not require a different result. The
`Interim Guidance expressly reaffirmed Fintiv’s multi-factor balancing
`approach, and sought only to “clarify[y]” its application. Interim Guidance at
`1-2. As part of that clarification, Director Vidal instructed the Board not to
`exercise its discretionary denial authority “where a petition presents compelling
`evidence of unpatentability.” Id. at 2. Given the heightened evidentiary
`showing required to find such compelling evidence, that determination “alone”
`outweighs all other Fintiv factors. Id. at 5. But that does not mean that, as part
`of the overall balancing required under Fintiv, an unpatentability challenge that
`is strong but not necessarily compelling cannot (in combination with other
`factors) outweigh the factors that favor denial, depending on the factors’
`relative strength.
`
`Here, even though the Board did not find the merits to be compelling, they are
`nevertheless strong. The Board’s erroneous analysis under Fintiv’s sixth factor,
`which discounted the merits of Samsung’s petition, in turn infected the overall
`holistic multi-factor balancing assessment. The POP should clarify the proper
`standard for merits assessment under Fintiv’s sixth factor, and then remand the
`case to the panel to reconsider its decision to deny institution under the proper
`application of Fintiv’s multi-factor analysis.
`
`The Board May Wish to Hold the Rehearing Request:
`
`The Fintiv rule is currently subject of an ongoing Administrative Procedure Act
`(“APA”) challenge to its validity. That challenge has been brought in the U.S.
`
`

`

`District Court for the Northern District of California. See Apple Inc. v. Vidal,
`No. 5:20-cv-06128-EJD (N.D. Cal.). The district court initially dismissed that
`lawsuit as barred by 35 U.S.C. § 314(d)—the non-reviewability provision of
`the IPR statute. The U.S. Court of Appeals for the Federal Circuit, however,
`reversed that dismissal with respect to the claim that, in promulgating the Fintiv
`rule, the Director failed to comply with the notice-and-comment rulemaking
`requirements. Apple Inc. v. Vidal, 63 F.4th 1, 14-15 (Fed. Cir. 2023). The
`lawsuit is currently pending on remand, with the procedural challenge to Fintiv
`poised to be decided on summary judgment.
`
`In the interests of efficiency, the Board may wish to hold Samsung’s rehearing
`request until this procedural challenge to Fintiv is resolved. If Fintiv is
`procedurally invalid, it cannot be relied upon to deny institution of Samsung’s
`petition on the basis of a parallel district court litigation. The delay in
`resolution of Samsung’s rehearing request should not be overly long. The
`parties in the Apple litigation have jointly proposed by the renewed summary
`judgment briefing be conducted by November 2, 2023, with oral argument to
`be held shortly thereafter. See Joint Status Report, Apple Inc. v. Vidal, No.
`5:20-cv-06128-EJD, ECF No. 145 at 1 (N.D. Cal. June 2, 2023). Nor would
`the delay prejudice the Patent Owner, since the district court in the parallel
`litigation refused to stay the case before it pending the resolution of Samsung’s
`IPR petition.
`
`Conclusion:
`
`the attached
`in
`these reasons, which are more fully explained
`For
`contemporaneously filed Requests for Rehearing, Samsung requests that the
`POP grant review and reconsider the decisions to deny institution of inter
`partes review.
`
`Respectfully submitted,
`
`Robert A. Appleby, P.C.
`Counsel for Petitioner
`
`Robert A. Appleby, P.C.
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