Case 5:19-cv-00036-RWS Document 485-9 Filed 08/05/20 Page 1 of 57 PageID #: 26685
`Case 5:19-cv-00036—RWS Document 485-9 Filed 08/05/20 Page 1 of 57 PageID #: 26685
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`EXHIBIT H
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`EXHIBIT H
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`Case 5:19-cv-00036-RWS Document 485-9 Filed 08/05/20 Page 2 of 57 PageID #: 26686
`Trials@uspto.gov
`
`
` Paper No. 11
`571.272.7822
`
`
`
` Entered: July 15, 2020
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`
`MAXELL, LTD.,
`Patent Owner.
`____________
`
`IPR2020-00202
`Patent 10,212,586 B2
`____________
`
`
`Before MICHAEL R. ZECHER, KEVIN C. TROCK, and
`JOHN A. HUDALLA, Administrative Patent Judges.
`
`TROCK, Administrative Patent Judge.
`
`
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`

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`IPR2020-00202
`Patent 10,212,586 B2
`
` INTRODUCTION
`
`A.
`
`Background
`Apple Inc. (“Petitioner”) filed a Petition, Paper 1 (“Pet.” or
`“Petition”), requesting an inter partes review (“IPR”) of claims 1, 2, 6, 7, 9,
`10, 13, 14, and 16–18 (the “challenged claims”) of U.S. Patent No.
`10,212,586 B2 (Ex. 1001, “the ’586 patent”). Maxell, Ltd. (“Patent Owner”)
`filed a Preliminary Response, Paper 6 (“Prelim. Resp.”). Pursuant to an
`Order, Paper 7, Petitioner filed a Reply, Paper 8 (“Reply”), and Patent
`Owner filed a Sur-reply, Paper 10 (“Sur-reply”).
`An inter partes review may not be instituted “unless . . . there is a
`reasonable likelihood that the petitioner would prevail with respect to at least
`1 of the claims challenged in the petition.” 35 U.S.C. § 314(a). Upon
`consideration of the Petition, the Preliminary Response, the Reply, the Sur-
`reply, and the evidence of record, we determine that Petitioner has shown a
`reasonable likelihood that it would prevail in showing the unpatentability of
`at least one of the challenged claims. Accordingly, we institute an inter
`partes review.
`
`B.
`
`Real Party in Interest
`Each party identifies itself as the only real party in interest. Pet. 69;
`Paper 4, 1.
`
`C.
`
`Related Proceedings
`According to the parties, the ’586 patent is the subject of the
`following action: Maxell, Ltd. v. Apple Inc., 5:19-cv-00036-RWS (E.D.
`Tex.) filed March 15, 2019. Pet. 69; Paper 4, 1.
`Petitioner also identifies U.S. Patent Application No. 16/170,222 filed
`October 25, 2018 (now U.S. Patent No. 10,264,456), and U.S. Patent
`
`2
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`IPR2020-00202
`Patent 10,212,586 B2
`Application No. 16/115,940 filed August 29, 2018, which claim priority to
`the ’586 patent. Pet. 69.
`
`The ’586 Patent (Ex. 1001)
`D.
`The ’586 patent describes a “mobile terminal and control method
`
`thereof capable of being protected against unauthorized use by a third party
`without using [a] dedicated key device.” Ex. 1001, 1:61–65. The
`’586 patent’s technique protects against unauthorized use by a third party by
`mutually registering a plurality of mobile terminals such that, “[w]hen
`unlocked among them, one mobile terminal communicates with another
`mobile terminal in a communication range of the short-range wireless
`communications, unlocks the above another mobile terminal, and when out
`of the communication range, locks it again.” Id. at 1:63–65, 2:1–9. Figures
`1 and 2 of the ’586 patent are reproduced below.
`
`Figure 1 is a block diagram illustrating a configuration of a mobile
`terminal. Id. at 2:16–17.
`
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`3
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`Patent 10,212,586 B2
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`Figure 2 is a flowchart illustrating operations for locking and releasing
`mobile terminal 1 (shown in Figure 1). Id. at 2:18–20.
`
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`4
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`Figure 1, above, shows mobile terminals 1 and 2 each having (i) a
`radio communication function to transmit and receive information to and
`from mobile base station 3, and also having (ii) a function of performing
`short-range wireless communication (such as Bluetooth, infrared rays, and
`Wi-Fi Direct) between mobile terminals 1 and 2 for transmitting and
`receiving information between the mobile terminals. Id. at 2:52–63. Each
`mobile terminal (e.g., mobile terminal 1) includes controller 11, display unit
`12, operating unit 13 configured by a push-button switch or a touch panel,
`storage unit 14, and wireless communications unit 15 and short-range
`wireless communication unit 16 each configured by a communication circuit
`including an encoding circuit and a decoding circuit. Id. at 3:1–13.
`Mobile terminals 1 and 2 are previously registered (e.g., registered
`mutually by the same user) so that they can be mutually locked and unlocked
`through short-range wireless communications. Id. at 3:48–51, 4:19–20. For
`example, when the user views display unit 12 of mobile terminal 1 and
`operates operating unit 13 to release a locked state, mobile terminal 1
`searches whether another mobile terminal is in a short-distance
`communication range capable of performing short-range wireless
`communications. Id. at 3:32–37. Upon detecting mobile terminal 2, mobile
`terminal 1 confirms whether mobile terminal 2 is a previously registered
`mobile terminal. Id. at 3:37–39. After mobile terminal 1 confirms that
`mobile terminal 2 is a previously registered mobile terminal, mobile terminal
`2 is unlocked. Id. at 3:39–43.
`Figure 2 of the ’586 patent illustrates detailed operations for locking
`and unlocking mobile terminals 1 and 2. Id. at 3:58–60. First, mobile
`terminal 1 determines whether it is to be unlocked by the user’s password
`(step S201). Id. at 3:60–63. Mobile terminal 1 continues to wait for
`
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`Patent 10,212,586 B2
`unlocking until the locked state is released, and when it is unlocked, the
`process proceeds to step S202 in which mobile terminal 1 searches mobile
`terminals in its neighborhood through short-range wireless communications.
`Id. at 3:63–4:7. At step S203, mobile terminal 1 determines whether there is
`a mobile terminal in the neighborhood and whether it is a previously
`registered mobile terminal, and if both conditions are met, the process
`advances to step S204, at which mobile terminal 1 unlocks the previously
`registered mobile terminal 2 through short-range wireless communications.
`Id. at 4:8–20. For example, mobile terminal 1 transmits a signal for
`instructing mobile terminal 2 to be unlocked. Id. at 4:16–20. At step S205,
`mobile terminal 1 confirms whether it is to be locked by the user’s
`instruction, and if so, the process proceeds to step S207 at which mobile
`terminal 1 locks the previously registered mobile terminal 2 through short-
`range wireless communications. Id. at 4:21–30. For example, mobile
`terminal 1 transmits a signal for instructing mobile terminal 2 to be locked.
`Id. at 4:27–31. Then, at step S208, mobile terminal 1 is locked. Id. at 4:32.
`The locked state is a state in which functions or operations of a part, or the
`whole, of a mobile terminal are limited. Id. at 3:29–31.
`Figure 7 of the ’586 patent, reproduced below, illustrates a display of
`mobile terminal 1 at the time of detecting mobile terminal 2 through short-
`range wireless communications. Id. at 2:33–34.
`
`6
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`Patent 10,212,586 B2
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`As shown in Figure 7, above, mobile terminal 1 displays information
`regarding a detected mobile terminal 2 and an inquiry regarding unlocking
`the detected mobile terminal. Id. at 6:33–37. Unlocking selection button 74
`and unlocking non-selection button 76 are also displayed on the display of
`mobile terminal 1. Id. at 6:37–50. When detecting mobile terminal 2
`through short-range wireless communications, mobile terminal 1 transits to
`an unlocking selection mode. Id. When the user pushes push-button switch
`75 corresponding to unlocking selection button 74, mobile terminal 2 is
`unlocked. Id. When the user pushes push-button switch 77 corresponding
`
`7
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`IPR2020-00202
`Patent 10,212,586 B2
`to unlocking non-selection button 76, mobile terminal 1 releases the
`unlocking selection mode and returns to normal mode. Id.
`
`E.
`
`Challenged Claims
`Petitioner challenges claims 1, 2, 6, 7, 9, 10, 13, 14, and 16–18 of the
`’586 patent. Pet. 1, 9. Of the challenged claims, claims 1, 9, and 16 are
`independent. Claim 1 is set out below.
`1. [Preamble] A mobile terminal configured to switch between an
`unlocked state and a locked state in which a predetermined
`operation is limited, comprising:
`[1(a)] a transceiver which performs short-range wireless
`communications;
`[1(b)] a memory which previously stores information about an
`another mobile terminal; and
`[1(c)] a controller which switches the mobile terminal between an
`unlocked state and a locked state based on an authentication
`input to the mobile terminal, wherein the locked state
`prevents unauthorized access to the mobile terminal;
`[1(d)] wherein, when conditions are met, the controller controls the
`mobile terminal to transmit information to the another
`mobile terminal for switching a state of the another mobile
`terminal from a locked state to an unlocked state, wherein
`the conditions include:
`[1(e)] first, the mobile terminal is in a locked state, the another
`mobile terminal is in a locked state, and the another mobile
`terminal is within communication range of the short-range
`wireless communications of the transceiver while in the
`locked state;
`[1(f)] second, after the mobile terminal is in the locked state, the
`another mobile terminal is in the locked state, and the another
`mobile terminal is within communication range of the short-
`range wireless communications of the transceiver while in the
`locked state, performing, via the transceiver, the short-range
`wireless communications with the another mobile terminal;
`and
`
`8
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`Patent 10,212,586 B2
`[1(g)] third, after the performing, receiving, by the controller, the
`authentication input for switching the mobile terminal from
`the locked state to the unlocked state.
`
`
`Ex. 1001, 9:42–10:6 (numbering designated by Petitioner; see Pet. 73–78
`(“APPENDIX OF CLAIMS”)).
`
`F.
`
`Evidence
`Petitioner relies upon the following evidence:
`(1) U.S. Patent Publication No. 2006/0041746 A1, published
`February 23, 2006 (“Kirkup”) (Ex. 1004);
` (2) U.S. Patent No. 7,941,534 B2, issued May 10, 2011 (“Huerga”)
`(Ex. 1005); and
`(3) Declaration of Dr. Victor Shoup. Ex. 1003.
`
`G.
`
`Asserted Grounds of Unpatentability
`
`Claims Challenged
`1, 6, 7, 9, 13, 14, 16, 18
`
`35 U.S.C. § References
`103(a)
`Kirkup
`
`2, 6, 10, 13, 17, 18
`
`103(a)
`
`Kirkup, Huerga
`
`
`
` ANALYSIS
`
`A.
`
`35 U.S.C. § 314(a)
`Patent Owner argues that the Petition should be denied under
`35 U.S.C. § 314(a) “because the invalidity arguments [Petitioner] raises here
`will be resolved in the co-pending District Court Action long before this
`proceeding will conclude.” Prelim. Resp. 2. Patent Owner argues, “the
`challenged claims are substantially the same in substance and scope as those
`asserted in the District Court Action.” Id. at 3. Patent Owner further argues,
`
`9
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`Patent 10,212,586 B2
`“the very same issues will be decided by a jury at the trial in the District
`Court Action a mere three months after the Board’s Institution Decision.”
`Id. at 13. According to Patent Owner, “[i]nstituting an IPR would needlessly
`duplicate the District Court Action, and unnecessarily waste the Board’s
`resources” because all the factors considered in Apple Inc. v. Fintiv, Inc.,
`IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) (“Fintiv”),
`“overwhelmingly favor denial of institution.” Sur-reply 2 (citing NHK
`Spring Co., Ltd. v. Intri-Plex Techs., Inc., IPR2018-00752, Paper 8 at 20
`(PTAB Sept. 12, 2018) (precedential) (“NHK”); see also Prelim. Resp. 4–5.
`35 U.S.C. § 314(a) states:
`[t]he Director may not authorize an inter partes review to be
`instituted unless the Director1 determines that the information
`presented in the petition filed under section 311 and any response
`filed under section 313 shows that there is a reasonable likelihood that
`the petitioner would prevail with respect to at least 1 of the claims
`challenged in the petition.
`
`Under § 314(a), the Director has discretion to deny institution of an inter
`partes review. 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.”).
`In NHK, the Board exercised its discretion under § 314(a) to deny a
`petition upon determining that institution would be an inefficient use of
`Board resources. NHK, Paper 8 at 19–20. In particular, the Board
`determined that it was proper to exercise discretion to deny institution in a
`case having a parallel district court proceeding involving (i) the same
`
`
`1 “The Board institutes the trial on behalf of the Director.” 37 C.F.R.
`§ 42.4(a).
`
`10
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`Patent 10,212,586 B2
`patent/parties, (ii) the same claim construction, (iii) the same prior art
`references, (iv) the same arguments as in the district court proceeding, which
`was scheduled to be completed before a final decision would have been due
`in the Board proceeding. See id. at 19–20. The Board determined that these
`circumstances supported denial of the petition under § 314(a), considering
`the America Invents Act’s (“AIA’s”) objective “to provide an effective and
`efficient alternative to district court litigation.” Id. at 20 (quoting General
`Plastic Industrial Co. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19
`(PTAB Sept. 6, 2017) (precedential)).
`In Fintiv, the Board indicated it will assess the following factors
`pertaining to a related parallel district court proceeding, in determining
`whether to exercise its discretion to institute review:
`whether the court granted a stay or evidence exists that one
`1.
`may be granted if a proceeding is instituted;
`proximity of the court’s trial date to the Board’s projected
`2.
`statutory deadline for a final written decision;
`investment in the parallel proceeding by the court and the
`3.
`parties;
`overlap between issues raised in the petition and in the
`4.
`parallel proceeding;
`whether the petitioner and the defendant in the parallel
`5.
`proceeding are the same party; and
`other circumstances that impact the Board’s exercise of
`6.
`discretion, including the merits.
`See Fintiv, Paper 11 at 5–6.
`For the reasons discussed in detail below, we do not agree with Patent
`Owner that the circumstances of this case warrant denial of institution under
`§ 314(a).
`
`11
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`Patent 10,212,586 B2
`1. Whether the court granted a stay or evidence exists that one
`may be granted if a proceeding is instituted
`
`
`Although Petitioner moved for a stay in the underlying litigation (see
`Reply 6; Ex. 1045), the court recently denied Petitioner’s motion. See Sur-
`reply; Ex. 1052. Notably, the court denied the motion without prejudice and
`stated that it could not say, in the event that we instituted this IPR, whether
`“the late stage [of proceedings] would necessarily outweigh the potential
`simplification of issues following institution decisions” in this and other IPR
`cases. Ex. 1052, 6 (citing a prior case by the court in which a stay was
`granted three weeks before trial upon the institution of IPRs). In other
`words, the court signaled its willingness to entertain a renewed motion for
`stay from Petitioner if we were to grant institution. Notwithstanding, the
`court stated that, were a renewed motion for stay requested, the late stage of
`proceedings “will certainly weigh against granting a stay.” Id. Given the
`court’s inclination to reconsider a motion for stay for the potential
`simplification of issues, but also considering the court’s comment about how
`the late stage of proceedings would affect its consideration of any such
`renewed motion, we view this factor as neutral.
`2. Proximity of the court’s trial date to the Board’s projected
`statutory deadline for a final written decision
`
`
`
`Trial in the underlying litigation is currently set for October 26, 2020.
`Reply 7; Sur-reply 1. Petitioner notes that it filed a petition for writ of
`mandamus related to the court’s denial of Petitioner’s motion to transfer the
`underlying litigation. Reply 7 (citing Ex. 1046). Petitioner also notes the
`COVID-19 pandemic may affect the trial schedule. Id.
`Patent Owner argues, however, that trial “will be complete nine
`months before a Final Written Decision issues” here and that a delay in the
`
`12
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`Patent 10,212,586 B2
`trial date is unlikely. Sur-reply 3. Patent Owner cites a standing order in the
`court of the underlying litigation “to keep cases moving” despite the
`COVID-19 pandemic. Id. at 4 (quoting Ex. 2018). And, according to Patent
`Owner, even if the trial date were delayed by three months, the trial would
`still precede the Final Written Decision by six months. Id. at 3. The U.S.
`Court of Appeals for the Federal Circuit recently denied a petition for writ of
`mandamus related to the motion to transfer. In re Apple Inc., No. 2020-115,
`2020 WL 2125340 (Fed. Cir. Apr. 22, 2020).
`The trial in the underlying litigation is currently set to occur months
`before any Final Written Decision in this case will issue. Although we
`consider delays due to the COVID-19 pandemic to be a real possibility
`despite the court’s standing order, we agree with Patent Owner that even a
`delayed trial might precede a Final Written Decision. This factor favors the
`exercise of discretionary denial.
`3. Investment in the parallel proceeding by the court and the
`parties
`
`
`Petitioner contends that, aside from claim construction proceedings,
`“the district court has not invested other substantive efforts and the litigation
`is not ‘advanced.’” Reply 8. Petitioner notes that summary judgment is still
`months away and fact discovery and depositions are ongoing. Id.
`According to Petitioner, the court is not likely to analyze invalidity until
`trial. Id.
`As evidence of the court’s investment in the underlying litigation
`toward issues of invalidity, Patent Owner highlights the court’s claim
`construction hearing and order and its rulings on Petitioner’s motion to
`dismiss and motion to transfer. Sur-reply 5 (citing Exs. 2004–2007). Patent
`Owner also notes that fact discovery has closed and that expert discovery is
`
`13
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`Patent 10,212,586 B2
`underway and was expected to close June 25, 2020. Id. at 5–6 (citing
`Exs. 2019–2020).
`At least some of the work underway or already completed in the
`underlying litigation may have relevance to issues in the Petition, including
`claim construction and expert discovery. Patent Owner’s arguments directed
`to the court’s rulings on the motion to dismiss or the motion to transfer
`provide little probative value concerning the court’s investment in the
`invalidity issues raised there. However, considering that some of the
`investment by the court and the parties in the underlying litigation may be
`relevant to the patentability issues in this case, we find this factor slightly
`favors the exercise of discretionary denial.
`4. Overlap between issues raised in the petition and in the parallel
`proceeding
`
`
`Patent Owner argues “the invalidity arguments [Petitioner] raises here
`will be resolved in the co-pending District Court Action long before this
`proceeding will conclude,” because “[t]he scope of [Petitioner’s] challenge
`to the ’586 Patent’s validity in this proceeding is substantially the same as in
`the District Court Action.” Prelim. Resp. 2, 12. Patent Owner argues that
`the claims challenged in this proceeding “cover all the asserted claims
`against [Petitioner] in the District Court Action” (id. at 12–13), and that
`“[t]he prior art and grounds that [Petitioner] relies on in supporting its
`Petition are the same as the prior art at issue in the District Court Action”
`(Sur-reply 7). Indeed, Patent Owner argues, “the very same issues will be
`decided by a jury at the trial in the District Court Action a mere three months
`after the Board’s Institution Decision.” Prelim. Resp. 13.
`Petitioner disagrees. Petitioner argues, “this IPR challenges different
`claims based on different art than from the underlying litigation.” Reply 9.
`
`14
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`Patent 10,212,586 B2
`In particular, Petitioner argues, “Maxell only asserts one independent claim
`(16) and two dependent claims (7 and 17) in the litigation. The Petition
`challenges claims 1–2, 6–7, 9–10, 13–14, and 16–18.” Id.
`Petitioner also asserts, “this IPR presents different grounds than in the
`litigation.” Id. Petitioner points out that in the District Court Action, it
`relies on Schiffer (Ex. 1015) alone or the combination of Schiffer and
`Kirkup (Ex. 1004) as prior art to challenge the validity of claims 7, 16, and
`17, whereas here, Petitioner relies on Kirkup alone or the combination of
`Kirkup and Huerga (Ex. 1005) as prior art to the challenged claims. Id.
`As part of the analysis of overlapping issues, it is helpful to consider
`the parties’ recent efforts in the District Court Action to narrow the issues at
`trial. Patent Owner made a Final Election of Asserted Claims (Ex. 2009) in
`which it elected to assert only claims 7,2 16, and 17 of the ’586 patent
`against Petitioner. Id. at 1. Petitioner made a Final Election of Prior Art
`(Ex. 2010) to assert only Schiffer in combination with Kirkup “for the
`elected claims [7, 16, 17]” of the ’586 patent. Id. at 1, 4. If no other claims
`of the ’586 patent are being contested at trial, then only the infringement and
`validity of claims 7, 16, and 17 will be decided in the District Court Action
`with respect to the ’586 patent.
`
`
`2 We recognize that claim 7 depends directly from independent claim 1, and
`in order to decide the validity of dependent claim 7, the trier of fact in the
`District Court Action would necessarily consider the application of the prior
`art to the limitations of independent claim 1. However, we also recognize
`that based on the parties’ final elections, the validity of independent claim 1
`will not be decided in the District Court Action because the infringement
`and validity of independent claim 1 is not being contested by the parties in
`that proceeding.
`
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`We agree with Petitioner that there is not complete overlap in the
`claims being asserted in the underlying litigation and in this proceeding.
`Patent Owner only asserts claims 7, 16, and 17 in the underlying litigation.
`Ex. 2009, 1. Here, Petitioner challenges the patentability of claims 1, 2, 6, 7,
`9, 10, 13, 14, and 16–18. Pet. 1. This difference is material because in this
`proceeding, the patentability of eleven claims would be decided at trial,
`whereas in the District Court Action, the validity of only three claims would
`ostensibly be decided at trial. At most, even when considering that the
`validity of dependent claim 7 would necessarily require the trier of fact in
`the District Court Action to consider the application of the prior art to the
`limitations of independent claim 1, there is an overlap of four claims
`between the two proceedings.
`In addition, claims 1, 2, 6, 9, 10, 13, 14, and 18 have arguably
`different scope from claims 7, 16, and 17. For instance, independent
`claim 9, which is a “method” claim, is broader in scope than independent
`claim 16, which is a “system” claim, because independent claim 16 recites
`that “the first mobile terminal comprises a transceiver for performing short-
`range wireless communications,” whereas independent claim 9 includes no
`such transceiver for carrying out its method steps. Compare Ex. 1001,
`10:35–59, with id. at 11:18–12:21.
`We do not find compelling Patent Owner’s assertion that “the very
`same issues will be decided by a jury” in the District Court Action. See
`Prelim. Resp. 13; see also Sur-reply 9. To support its position, Patent
`Owner provides a table of “a sample comparison of the evidence cited [from
`Kirkup] in the Petition allegedly supporting [the] unpatentability of Claims 1
`and 7” to the evidence cited by Petitioner in its preliminary invalidity
`contentions in the District Court Action. See Prelim. Resp. 13–14 (citing
`
`16
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`Patent 10,212,586 B2
`Pet. 19–48; Ex. 2012, 1–18). However, Patent Owner does not explain how
`a comparison of paragraph citations from Kirkup only against the limitations
`of claims 1 and 7 results in Patent Owner’s conclusion that “the very same
`issues” will be decided by a jury in the District Court Action. See Prelim.
`Resp. 13–14.
`We disagree with Patent Owner’s assertion that a jury would use “the
`same prior art” to consider the validity issues of the three claims (7, 16, and
`17) being asserted by Patent Owner in the District Court Action. See
`Sur-reply 9. Here, Petitioner relies on the prior art reference Kirkup alone or
`the combination of Kirkup and Huerga as prior art references for its
`patentability challenges, whereas in the District Court Action, Petitioner
`relies on Schiffer alone or the combination of Schiffer and Kirkup.
`Compare Pet. 9, with Ex. 2010, 4.
`Nonetheless, Patent Owner argues that, “[i]n the District Court
`Action, [Petitioner] prominently uses Kirkup as a primary reference.”
`Prelim. Resp. 13 (citing Ex. 2011 at 119). Petitioner, however, points out
`that in the District Court Action it “relies upon Kirkup only as an alternative
`secondary reference in combination with Schiffer.” Reply 9 (citing
`Ex. 1047, 3; Ex. 2009, 1). Patent Owner’s argument appears to rely on
`Petitioner’s preliminary Invalidity Contentions (Ex. 2011), and does not
`appear to take into account Petitioner’s Final Election of Prior Art
`(Ex. 2010), in which Petitioner limits its assertion of prior art against the
`’586 patent to Schiffer in combination with Kirkup. Id. at 4. Based on our
`review of the evidence, we agree with Petitioner that it appears to rely upon
`Kirkup only as a secondary reference in combination with Schiffer in its
`invalidity contentions in the District Court Action.
`
`17
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`Case 5:19-cv-00036-RWS Document 485-9 Filed 08/05/20 Page 19 of 57 PageID #: 26703
`IPR2020-00202
`Patent 10,212,586 B2
`Patent Owner also asserts that “[Petitioner] also relies on Schiffer
`here” (Sur-reply 7 (citing Ex. 1015; Ex. 1003 ¶¶ 34, 45)), but Petitioner
`correctly point out that Schiffer “is not used for any ground in the IPR”
`(Reply 9). Rather, Petitioner’s expert, Dr. Shoup, merely refers to and
`describes Schiffer as an example of a system “for allowing a mobile device
`to unlock another device via proximity” that were well-known prior to 2012.
`Ex. 1003 ¶ 34. Contrary to Patent Owner’s assertion, Schiffer is not being
`applied as a prior art reference in this proceeding against any challenged
`claims. See Pet. 9, 11–67.
`Thus, not only would the patentability of eight additional claims be
`decided in this proceeding whose validity would not be decided in the
`District Court Action, but the prior art combinations being considered and
`applied in the two proceedings are different as well.
`For these reasons, we determine that this factor weighs against
`exercising discretionary denial.
`5. Whether the petitioner and the defendant in the parallel
`proceeding are the same party
`“If a petitioner is unrelated to a defendant in an earlier court
`proceeding, the Board has weighed this fact against exercising discretion.”
`Fintiv at 13–14. Petitioner and Patent Owner acknowledge the parties are
`the same in this IPR proceeding and in the District Court Action. Reply 10;
`Sur-reply 9–10.
`This factor does not weigh against exercising discretionary denial.
`6. Other circumstances that impact the Board’s exercise of
`discretion, including the merits
`
`
`The final Fintiv factor takes into account any other relevant
`circumstances. The decision whether to exercise discretion to deny
`
`18
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`

`

`Case 5:19-cv-00036-RWS Document 485-9 Filed 08/05/20 Page 20 of 57 PageID #: 26704
`IPR2020-00202
`Patent 10,212,586 B2
`institution under § 314(a) is based on “a balanced assessment of all relevant
`circumstances in the case, including the merits.” Patent Trial and Appeal
`Board Consolidated Trial Practice Guide at 58 (Nov. 2019) (“Consolidated
`Trial Practice Guide”), available at https://www.uspto.gov/sites/default/
`files/documents/tpgnov.pdf. Considering the merits of the unpatentability
`arguments in the Petition and Patent Owner’s arguments in the Preliminary
`Response, as discussed below, we determine Petitioner has established a
`reasonable likelihood that it would prevail with respect to the challenged
`claims. As discussed below, Petitioner relies on Kirkup alone or a
`combination for Kirkup and Huerga for teaching “[a] mobile terminal
`configured to switch between an unlocked state and a locked state in which a
`predetermined operation is limited” (independent claim 1) and “[a] method
`for controlling a mobile terminal to transit between an unlocked state and a
`locked state in which a predetermined operation is limited” (independent
`claim 9). Based on the present record, Petitioner presents persuasive
`evidence and argument that the teachings of Kirkup alone meets all the
`limitations of independent claims 1 and 9. Accordingly, the particularly
`strong merits of the challenge presented in the Petition strongly favors
`institution.
`Patent Owner argues that Petitioner unreasonably delayed in filing the
`Petition. Prelim. Resp. 16–19; Sur-reply 10. The court in the underlying
`litigation also stated that Petitioner “has not sufficiently explained its delay
`in filing the petitions . . . nine months after [Patent Owner] filed suit and six
`months after [Patent Owner] served its initial infringement contentions.”
`Ex. 1052, 4–5.
`Petitioner, however, notes that the underlying litigation initially
`involved 10 different patents and “132 possibly-asserted claims”; Petitioner
`
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`Case 5:19-cv-00036-RWS Document 485-9 Filed 08/05/20 Page 21 of 57 PageID #: 26705
`IPR2020-00202
`Patent 10,212,586 B2
`argues that it needed time to locate relevant prior art and prepare petitions
`requesting IPRs. Reply 7–8. Petitioner’s explanation is consistent with the
`AIA’s legislative history as to the one-year statutory bar under § 315(b). See
`157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (statement of Senator Kyl)
`(“High-technology companies, in particular, have noted that they are often
`sued by defendants asserting multiple patents with large numbers of vague
`claims, making it difficult to determine in the first few months of the
`litigation which claims will be relevant and how those claims are alleged to
`read on the defendant’s products. . . . [I]t is important that the section 315(b)
`deadline afford defendants a reasonable opportunity to identify and
`understand the patent claims that are relevant to the litigation.”). We also
`note that Patent Owner made its Preliminary Election of A