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`Exhibit 2
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`Exhibit 2
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`Case 1:20-cv-00393-LO-TCB Document 450-2 Filed 01/27/21 Page 2 of 27 PageID# 10082
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`Filed on behalf of: Philip Morris Products, S.A.
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`Entered: December 15, 2020
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________________
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`
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`PHILIP MORRIS PRODUCTS, S.A.,
`Petitioner,
`
`v.
`
`RAI STRATEGIC HOLDINGS, Inc.,
`Patent Owner.
`_______________________
`Case IPR2020-00921
`Patent 9,814,268
`______________________
`
`
`PETITIONER’S REQUEST FOR REHEARING
`OF DECISION DENYING INSTITUTION
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`Case 1:20-cv-00393-LO-TCB Document 450-2 Filed 01/27/21 Page 3 of 27 PageID# 10083
`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`I.
`
`II.
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`TABLE OF CONTENTS
`Introduction ...................................................................................................... 1
`A.
`Background ........................................................................................... 2
`B.
`Legal Standard ....................................................................................... 5
`The Board Should Vacate Its Previous Decision and Institute Review .......... 6
`A.
`This IPR Should Be Instituted In View of the Court’s Stay ................. 6
`1.
`The Court’s Stay and Suspension of Trials Moot Any
`NHK/Fintiv Issues ....................................................................... 8
`All of the Fintiv Factors Favor Institution .................................. 9
`2.
`This IPR Should Be Instituted Because An Early Trial Date Is
`Not Dispositive .................................................................................... 12
`III. Conclusion ..................................................................................................... 15
`
`B.
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`i
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`TABLE OF AUTHORITIES
`
`CASES
`
` Page(s)
`
`Apple Inc. v. Fintiv, Inc.,
`IPR2020-00019, Paper 11 (Mar. 20, 2020) .................................................passim
`Apple Inc. v. Maxell, Ltd.,
`IPR2020-00204, Paper 11 (June 19, 2020) ......................................................... 13
`Apple Inc. v. Seven Networks,
`IPR2020-00506, Paper 11 (Sept. 1, 2020) .......................................................... 13
`Bushnell Hawthorne, LLC v. Cisco Sys., Inc.,
`No. 1-18-cv-760 (E.D. Va. Apr. 22, 2019) ........................................................... 4
`Consol. Bearings Co. v. United States,
`348 F.3d 997 (Fed. Cir. 2003) .............................................................................. 6
`Cuozzo Speed Techs. v. Lee,
`136 S. Ct. 2131 (2016) ........................................................................................ 14
`Dolby Labs., Inc. v. Intertrust Techs. Corp.,
`IPR2020-00664, Paper 10 (Dec. 8, 2020)..................................................... 10, 12
`In re Gartside,
`203 F.3d 1305 (Fed. Cir. 2000) ............................................................................ 5
`Google v. Parus Holdings,
`IPR2020-00846, Paper 9 (Oct. 21, 2020) ........................................................... 11
`Google v. Personalized Media Commc’ns,
`IPR2020-00719, Paper 16 (Aug. 31, 2020) .......................................................... 3
`Henry v. INS,
`74 F.3d 1 (1st Cir. 1996) ..................................................................................... 13
`Ingenico Inc. v. Ioengine, LLC,
`IPR2019-00929, Paper 16 (Sept. 26, 2019) .......................................................... 8
`Precision Planting, LLC v. Deere & Co.,
`IPR2019-01052, Paper 19 (Jan. 7, 2020) .............................................................. 8
`
`ii
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`Sand Revolution II v. Cont’l Intermodal Group-Trucking,
`IPR2019-01393, Paper 24 (June 16, 2020) ..................................................passim
`SAS Inst. Inc. v. Iancu,
`138 S. Ct. 1348 (2018) ........................................................................................ 14
`STATUTES
`
`35 U.S.C.
`§ 315(b) ............................................................................................................... 15
`§ 315(e)(2) ...................................................................................................... 7, 11
`§ 317(b) ............................................................................................................... 14
`REGULATIONS
`
`37 C.F.R.
`§ 42.71(c) .............................................................................................................. 5
`§ 42.71(d) .............................................................................................................. 5
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`iii
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`Exhibit List
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`Ex.
`Description
`1001 U.S. Patent No. 9,814,268 (“the ’268 patent”)
`1002
`File History for U.S. Patent No. 9,814,268 (“’268 FH”)
`1003 Declaration of Dr. Seetharama C. Deevi in Support of Petition for
`Inter Partes Review of ’268 Patent (“Deevi Decl.”)
`1004 Curriculum Vitae of Dr. Seetharama C. Deevi
`1005 U.S. Patent No. 5,249,586 (“Morgan”)
`1006 U.S. Patent No. 5,865,185 (“Collins”)
`1007 U.S. Patent Application Publication No. 2007/0102013 (“Adams”)
`1008 U.S. Patent No. 5,144,962 (“Counts-962”)
`1009 U.S. Patent No. 4,947,874 (“Brooks”)
`1010 U.S. Patent No. 5,692,525 (“Counts-525”)
`1011 U.S. Patent No. 5,095,921 (“Losee”)
`1012
`IEEE 100, The Authoritative Dictionary of IEEE Standards Terms (7th
`ed. 2000) (“IEEE Dictionary”)
`1013 U.S. Patent No. 5,060,671 (“Counts-671”)
`1014 U.S. Patent Application Publication No. 2007/0215167 (“Crooks”)
`1015 U.S. Patent No. 4,510,950 (“Keritsis”)
`1016
`Philip Morris Incorporated Invention Record (submitted May 19,
`1994; witnessed May 23, 1994) (“May 1994 Invention Record”)
`1017 U.S. Patent No. 2,104,266 (“McCormick”)
`1018 Chemical and Biological Studies on New Cigarette Prototypes that
`Heat Instead of Burn Tobacco, R. J. Reynolds Tobacco Company
`Monograph (1988) (“RJR’s 1988 Monograph”) (markings on exhibit
`appeared in the used copy purchased by counsel)
`
`iv
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`
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`1025
`
`Ex.
`1019
`
`Description
`Steven M. Kaplan, Wiley Electrical and Electronics Engineering
`Dictionary (2004)
`1020 RESERVED
`1021
`Summary of Group #3 Brainstorming on May 13, 1994
`1022 U.S. Provisional Application Serial No. 60/722,036
`1023 R.R. Baker, Temperature Distribution Inside a Burning Cigarette, 24
`Nature 405 (1974)
`1024 Richard R. Baker, Smoke Generation Inside a Burning Cigarette:
`Modifying Combustion to Develop Cigarettes That May be Less
`Hazardous to Health, 32 Progress in Energy and Combustion Science
`373 (2006)
`Patent Owner’s Infringement Chart for ’123 patent, In the Matter of
`Certain Tobacco Heating Articles and Components Thereof, Inv. No.
`___, EDIS Doc. ID 707369 (filed April 9, 2020)
`1026 U.S. Patent No. 5,498,855 (“Deevi”)
`1027 Modern Dictionary of Electronics (7th ed., 1999) (excerpt)
`1028 Merriam-Webster’s Collegiate Dictionary (10th ed., 2001) (excerpt)
`1029 Concise Oxford English Dictionary (11th ed., 2008) (excerpt)
`1030
`TheLadySmokes.com webpages archived at
`https://web.archive.org/web/20061107040128/http://theladysmokes.co
`m (November 7, 2006),
`https://web.archive.org/web/20061107040116/http://www.theladysmo
`kes.com/CigaretteHolders.html (November 7, 2006),
`https://web.archive.org/web/20061107040116/http://www.theladysmo
`kes.com/Bitchsticks.html (November 7, 2006), and
`https://web.archive.org/web/20061107040116/http://www.theladysmo
`kes.com/FAQs.html (March 13, 2007)
`1031 Chambers Dictionary of Science and Technology (Peter M.B. Walker,
`ed., 1999) (excerpt)
`
`v
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`1035
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`Ex.
`Description
`1032 Complaint for Patent Infringement, RAI Strategic Holdings, Inc. v.
`Altria Client Services, et al., No. 1:20-cv-393 (E.D. Va. April 9,
`2020).
`File History for U.S. Patent No. 7,726,320 (“’320 FH”)
`1033
`1034 Civil docket report for RAI Strategic Holdings, Inc. v. Altria Client
`Services LLC, No. 1:20-cv-00393-LO-TCB (E.D. Va. filed April 9,
`2020)
`Joint Proposed Discovery Plan Pursuant to Rule 26(f), RAI Strategic
`Holdings, Inc. v. Altria Client Services LLC, No. 1:20-cv-00393-LO-
`TCB (E.D. Va. September 2, 2020), ECF No. 97
`1036 Rule 16(b) Scheduling Order, RAI Strategic Holdings, Inc. v. Altria
`Client Services LLC, No. 1:20-cv-00393-LO-TCB (E.D. Va.
`September 8, 2020), ECF No. 99
`Letter from Maximillian Grant, counsel for Defendants, to David
`Maiorana, counsel for Plaintiffs, regarding RAI Strategic Holdings,
`Inc. v. Altria Client Services LLC, No. 1:20-cv-00393-LO-TCB
`(September 18, 2020)
`1038 Memorandum in Support of Defendants’ Partial Motion to Stay
`Plaintiffs’ Claims Regarding U.S. Patent Nos. 9,814,268 and
`10,492,542, RAI Strategic Holdings, Inc. v. Altria Client Services LLC,
`No. 1:20-cv-00393-LO-TCB (E.D. Va. November 27, 2020), ECF No.
`371
`Plaintiffs’ Opposition to Defendants’ Partial Motion to Stay Plaintiffs’
`Claims Regarding U.S. Patent Nos. 9,814,268 and 10,492,542, RAI
`Strategic Holdings, Inc. v. Altria Client Services LLC, No. 1:20-cv-
`00393-LO-TCB (E.D. Va. December 2, 2020), ECF No. 405
`1040 Reply Support of Defendants’ Partial Motion to Stay Plaintiffs’ Claims
`Regarding U.S. Patent Nos. 9,814,268 and 10,492,542, RAI Strategic
`Holdings, Inc. v. Altria Client Services LLC, No. 1:20-cv-00393-LO-
`TCB (E.D. Va. December 3, 2020), ECF No. 422
`1041 Order, RAI Strategic Holdings, Inc. v. Altria Client Services LLC, No.
`1:20-cv-00393-LO-TCB (E.D. Va. December 4, 2020), ECF No. 426
`
`1037
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`1039
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`vi
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`Ex.
`1042
`
`Description
`Transcript of Motion Hearing Proceedings (Via Zoom Conference)
`Before the Honorable Theresa C. Buchanan, United States District
`Court Magistrate Judge, RAI Strategic Holdings, Inc. v. Altria Client
`Services LLC, No. 1:20-cv-00393-LO-TCB (E.D. Va. December 4,
`2020)
`1043 Order, RAI Strategic Holdings, Inc. v. Altria Client Services LLC, No.
`1:20-cv-00393-LO-TCB (E.D. Va. December 7, 2020), ECF No. 432
`1044 Claim Construction Order, RAI Strategic Holdings, Inc. v. Altria
`Client Services LLC, No. 1:20-cv-00393-LO-TCB (E.D. Va.
`November 24, 2020), ECF No. 360
`In re Court Operations Under the Exigent Circumstances Created by
`the Outbreak of Coronavirus Disease 2019 (COVID-19): Temporary
`Suspension of Criminal Jury Trials (E.D. Va. November 16, 2020)
`1046 Civil Minutes, Ancora Technologies, Inc. v. TCT Mobile (US), Inc., et
`al., No. SACV 19-2192-GW-ADSx (C.D. Cal. November 12, 2020)
`1047 Order, Bushnell Hawthorne, LLC v. Cisco Systems, Inc., No. 1:18-cv-
`760 (E.D. Va. April 22, 2019)
`Plaintiffs’ Notice of Motion and Motion for Summary Judgment,
`Apple Inc. v. Iancu, No. 5:20-cv-06128-EJD (N.D. Cal. November 23,
`2020), ECF No. 65
`
`1045
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`1048
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`vii
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`I.
`
`Introduction
`Petitioner Philip Morris Products, S.A., respectfully requests rehearing of the
`Board’s Decision Denying Institution of Inter Partes Review (Paper 9, Nov. 16,
`2020) (“Decision”), and also seeks Precedential Opinion Panel review. The Board
`should grant rehearing and institute review for two independent reasons.
`First, the Board should reconsider its Decision and institute review based on
`“the evolving facts of this case” and “new evidence.” Sand Revolution II v. Cont’l
`Intermodal Group-Trucking, IPR2019-01393, Paper 24 at 2-3 (June 16, 2020)
`(Informative). The case for institution is much stronger here than in Sand because,
`unlike that case, all of the factors here favor institution, including the trial date.
`The Court has stayed the parallel case pending IPR and further revealed that, even
`without a stay, trial would not have been held until 2022, and perhaps late 2022,
`due to COVID-related delays and an ever-growing backlog. Exs. 1041-1043.1
`Second, the Decision failed to follow Fintiv’s binding instruction that an
`early trial date is not dispositive, impermissibly denying review based solely on an
`early trial date. Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 at 5 (Mar. 20,
`2020) (precedential) (“Fintiv”). The Decision recognized the factors that favored
`institution, including Petitioner’s diligence, the Petition’s strength on the merits,
`the small investment in district court, and the lack of overlap due to Petitioner’s
`stipulation. The Decision, however, impermissibly concluded that one factor—the
`anticipated trial date—outweighed all the others. Decision 28-29. Notably, the
`
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`1 New exhibits are public documents filed solely for the Board’s convenience.
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`1
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`projected trial date later proved wrong, illustrating one reason why Fintiv correctly
`ruled that an early trial date should not be dispositive.
`Accordingly, the Board should reconsider and institute review. Otherwise,
`the Board will perpetuate the injustice a denying a Petition for being filed too
`early. Had Petitioner waited several months to seek IPR, the inevitable court delay
`would have mooted any NHK/Fintiv issue before the institution decision.
`A. Background
`Patent Owner filed its complaint in the EDVA on April 9, 2020. Petitioner
`responded by filing this IPR less than one month later, on May 8, and before it
`responded in Court to the complaint. Reply 3. The EDVA case was still in its
`infancy when Patent Owner filed its POPR three months later. The parties had not
`exchanged preliminary contentions or proposed claim terms for construction, and
`could only speculate as to the amounts of overlap and investment. Reply 4-5. The
`Court had recently issued a schedule, but such scheduling orders are not reliable.
`Reply 5. The trial date was not set, but trial was projected to be eight to nine
`months before the Board’s final written decision. Reply 7.
`The projected early trial date should not have prevented institution. Fintiv at
`5 (all factors, including an “early trial date” are “non-dispositive”); Reply 7 (citing
`cases instituting with longer gaps). The Board had never denied institution when
`presented with Petitioner’s combination of diligence and strong merits.
`Nonetheless, Petitioner further ensured that it would pass the NHK / Fintiv
`test with plenty of room to spare (according to the Board’s previous decisions) by
`stipulating that it would not raise the IPR grounds at the EDVA should the Board
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`2
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`institute. Reply 4. At that time, the Board had never denied institution on
`NHK/Fintiv grounds despite the existence of a similar stipulation, with the
`exception of the Google v. Personalized Media cases, e.g., IPR2020-00719, Paper
`16 (Aug. 31, 2020). There, Google filed at “the last moment” before its one-year
`bar expired, the parties had completed all discovery and dispositive motions, pre-
`trial motions were pending, and it would have taken “significant resources” to
`evaluate 329 related file histories to construe ten disputed claim terms—which the
`court had already done and explained in its 94-page Markman order. Personalized
`at 12-16 & n.10. None of those facts were present here.
`In its Decision, the Board correctly found that Petitioner had been diligent,
`investment in the parallel case was low, that it was “impossible to determine the
`extent of any overlap” at this early stage in the case, and that Petitioner’s
`stipulation “lessen[ed]” any concerns regarding duplication of effort and
`conflicting decisions. Decision 18-19. The Board also found that Petitioner’s
`proposed “grounds are particularly strong” on the merits. Decision 26 (emphasis
`added). Nonetheless, the Board denied institution based solely on the scheduled
`trial date:
`[W]e determine that, in this instance, the anticipated EDVA trial
`between the same parties eight to nine months before the projected
`statutory deadline outweighs slightly the factors that favor institution,
`including Petitioner’s diligence in filing the Petition, the strength of
`the Petition on the merits, the relatively modest investment in the
`district court action to date, and the lack of exact overlap based on
`Petitioner’s narrow stipulation.
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`3
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`Decision at 28-29 (emphasis added). Never before (or since, at least to date) had
`the Board found that a future trial date outweighed all of these other positive
`factors. And here, the projected trial date was later proven to be incorrect.
`Faced with the Board’s unprecedented weighing of the factors, Petitioner
`immediately sought relief from the Court in the form of a stay pending IPR or a
`ruling that the Court will grant a stay upon institution. Ex. 1038 at 23. Many
`courts, including some in the EDVA, regularly deny pre-institution motions out of
`hand. E.g., Bushnell Hawthorne, LLC v. Cisco Sys., Inc., No. 1-18-cv-760, slip op.
`at 1-2 (E.D. Va. Apr. 22, 2019) (Ellis, J.) (Ex. 1047, denying a pre-institution stay
`because “it is uncertain whether the PTAB” will institute review, with no further
`analysis). But as Petitioner explained to the Court, without such an order, the
`Board would surely deny the ’542 patent’s still-pending petitions (PGR2020-00071
`and IPR2020-01188) and would have no hope of reconsideration in this IPR. For
`that reason, Petitioner explained, the Court should “revist[] the reasoning behind
`denying pre-institution stays.” Ex. 1038 at 1-2; Ex. 1040 at 1-2. In the alternative,
`Petitioner asked the Court to rule that it “will” stay the case as to the ’268 and ’542
`patents upon institution of review, as did another court just two weeks before. Ex.
`1038 at 13; Ancora Techs. v. TCT Mobile (US), Inc., No. SACV 19-2192, slip op.
`at 6 (C.D. Cal. Nov. 12, 2020) (Ex. 1046). Patent Owner opposed. Ex. 1039.
`The Court granted Petitioner’s motion to stay pending IPR of the ’268 and
`’542 patents, and the stay will remain in place if the Board institutes review. See
`Ex. 1038 at 23 (relief requested); Ex. 1040 at 2-4, 6-8 (same); Exs. 1041, 1043
`(granting motion); Ex. 1042 at 6-9 (“[I]t makes sense for [the Board] to decide
`
`4
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`whether or not to institute first, and if granted, then they, of course, will rule on the
`merits.”). The Court will revisit the stay after the Board’s decision in the ’542 case
`because, as Petitioner explained to the Court, the proposed stay would be short if,
`despite the stay, the Board denied review the ’542 patent under the same
`NHK/Fintiv rationale as the ’268. Ex. 1038 at 23; Ex. 1040 at 2-4, 6-8. The Court
`granted Petitioner’s motion, and further ruled that it would stay the entire case,
`including Petitioner’s counterclaims, because “we’re not going to get to trial any
`time soon,” not “until maybe 2022, maybe the end of 2022” due to COVID and the
`backlog of criminal cases. Ex. 1042 at 6-7. Notably, the EDVA had resumed
`criminal trials in September, but issued an order on November 16 (the same day as
`the Board’s Decision) suspending criminal trials through January 19, 2021, in view
`of COVID’s recent resurgence. Ex. 1045 at 1-5. Civil trials are suspended
`indefinitely because criminal trials take precedence to protect a criminal
`defendant’s 6th Amendment right to a speedy trial. Id. at 2 n.1.
`In view of the above, Petitioner now requests rehearing of the Board’s
`decision denying institution of the ’268 patent’s IPR.
`B.
`Legal Standard
`A party seeking rehearing must identify the matters that the Board
`“misapprehended or overlooked.” 37 C.F.R. § 42.71(d). The Board reviews its
`decision for an abuse of discretion, 37 C.F.R. § 42.71(c), which occurs when “a
`decision is based on an erroneous interpretation of law,” “represents an
`unreasonable judgment in weighing relevant factors” or the “the agency offers
`insufficient reasons for treating similar situations differently.” In re Gartside, 203
`
`5
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`F.3d 1305, 1315-16 (Fed. Cir. 2000); Consol. Bearings Co. v. United States, 348
`F.3d 997, 1007 (Fed. Cir. 2003); Sand at 4.
`
`II. The Board Should Vacate Its Previous Decision and Institute Review
`Two independent bases compel reconsideration and institution. First, “the
`evolving facts of this case” and “new evidence” present an even stronger case for
`reconsideration and institution than in Sand. Sand at 2-3. Second, the Decision
`impermissibly treated the projected trial date as a dispositive factor.
`A. This IPR Should Be Instituted In View of the Court’s Stay
`The case here for granting reconsideration and instituting review is far
`stronger than in Sand. In that case, the Board recognized that “evolving facts” of
`the case and “new evidence” regarding the court’s schedule warranted
`reconsideration and institution. Sand at 2-3.
`In particular, petitioner Sand argued that “the Denial Decision was premised
`on the mistake that the district court’s schedule for the jury trial was certain,” but
`“a district court trial schedule is inherently unpredictable and the court will often
`extend or accelerate deadlines and modify case schedules for myriad reasons.”
`Sand at 5 (internal quotation marks omitted). Sand further explained that “after the
`[Denial] Decision, the jury trial in the parallel proceeding was delayed by another
`two months … with further delays possible.” Sand at 5-6.2 And after the Board
`authorized further briefing, Sand stipulated that it would not pursue the IPR
`
`
`2 Sand did not raise any of these issues, or even dispute the NHK Spring arguments
`raised in the POPR, until after the decision denying institution.
`
`6
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`IPR2020-00921 (USP 9,814,268)
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`Petitioner’s Request for Rehearing
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`grounds in court if the IPR is instituted. Sand at 11-12. The Board agreed that
`reconsideration and institution was warranted in light of this new evidence. Sand at
`7-14.
`Two facts changed in Sand that warranted reconsideration and institution,
`and both more strongly favor the same result here. First, the Sand court’s new trial
`date was still four months before the Board’s final decision, but in view of “the
`uncertainty that continue[d] to surround the scheduled trial date,” the Board found
`that this factor weighed marginally in favor of institution. Sand at 8-10.
`Here, just as in Sand, the Board overlooked or misapprehended the
`uncertainty of the trial date, which did in fact change. The new trial date will
`certainly be far after the Board’s final written decision. Indeed, even without the
`stay, trial will occur far after the Board’s final decision, “maybe the end of 2022”
`because of COVID and the ensuing backlog of criminal trials that take precedence
`over civil trials. Ex. 1042 at 6. However, had Petitioner not moved for a stay, it
`would not have known of this inevitable delay until after the time to request
`rehearing had expired, as has happened to other petitioners. Ex. 1048 at 18-20.
`Second, Sand stipulated (after institution was denied) that it would drop its
`IPR grounds from its court case if the PTAB instituted IPR. Sand at 11-12.
`Petitioner already made a similar stipulation, and the stronger statutory estoppel is
`even more favorable to institution because it will preclude Petitioner from raising
`any grounds in court that it “raised or reasonably could have raised during [this
`IPR].” 35 U.S.C. § 315(e)(2) (emphasis added); Sand at 12 n.5.
`Accordingly, the Board should reconsider its Decision and institute this IPR
`
`7
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`Petitioner’s Request for Rehearing
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`as it did in Sand, and for the additional reasons that follow.
`
`1.
`
`The Court’s Stay and Suspension of Trials Moot Any
`NHK/Fintiv Issues
`As an initial matter, the NHK / Fintiv analysis applied to Sand, but it is no
`longer applicable here because of the stay. As the Board explained in its
`precedential Fintiv decision, NHK/Fintiv applies only “[w]hen the patent owner
`raises an argument for discretionary denial under NHK due to an earlier trial date.”
`Fintiv at 5 (emphasis added). The Court’s stay, however, eliminates any earlier (or
`later) trial date, and thus “render[s] moot the patent owner’s argument for
`discretionary denial.” Id. at 6 n.9 (citing Precision Planting, LLC v. Deere & Co.,
`IPR2019-01052, Paper 19 at 10 (Jan. 7, 2020)) (emphasis added); Ingenico Inc. v.
`Ioengine, LLC, IPR2019-00929, Paper 16 at 57 (Sept. 26, 2019) (“In view of the
`district court’s Stay Order, Patent Owner’s arguments regarding inefficiency and a
`‘race to judgment’ are no longer pertinent.”).
`In addition, unbeknownst to Petitioner (and presumably the Board), the
`EDVA case was not going to trial as scheduled, stay or no stay. In the months
`leading up to the Board’s decision, conditions related to COVID had been
`improving, and the EDVA was holding criminal trials again with appropriate
`precautions. Ex. 1045 at 1-2. But on the same day the Board issued its Decision,
`the EDVA suspended criminal trials until January 19, 2021, because “conditions in
`the community have deteriorated over the last several weeks.” Id. at 2 (General
`Order 2020-22).
`In view of the newly issued suspension and the ever-increasing backlog of
`
`8
`
`
`
`Case 1:20-cv-00393-LO-TCB Document 450-2 Filed 01/27/21 Page 18 of 27 PageID# 10098
`IPR2020-00921 (USP 9,814,268)
`
`Petitioner’s Request for Rehearing
`
`criminal cases, the Court granted Petitioner’s motion and further stayed the entire
`case, including Petitioner’s counterclaims. The Court explained that “we’re not
`going to get to trial any time soon,” not “until maybe 2022, maybe the end of
`2022” because the Court must hear the criminal trials first. Ex. 1042 at 6-7. The
`Court was clear that it stayed Petitioner’s counterclaims because of the COVID-
`related delay, and not because Patent Owner “might file” IPRs of its own. Id. at 7.
`Accordingly, there is no longer any basis for a discretionary denial here.
`Because of the stay, and also because of COVID, the parallel district court trial
`will not be held until well after the Board’s final written decision—mooting any
`grounds for a discretionary denial.
`Further analysis is unnecessary, but as shown in the next section, all of the
`Fintiv factors now favor institution.
`
`2.
`All of the Fintiv Factors Favor Institution
`The Court’s stay pending IPR (and the COVID-related delay that will occur
`regardless) delays the Court’s trial until far after the Board’s final decision date—
`removing the Board’s only reason for denying institution. Re-weighing these
`factors in light of the evolving facts, as the Board did in Sand, demonstrates that all
`six factors now favor institution.
`Factor 1 strongly favors institution because the Court stayed the case
`pending resolution of the PTAB proceedings. As the Board explained in Fintiv:
`A district court stay of the litigation pending resolution of the PTAB
`trial allays concerns about inefficiency and duplication of efforts. This
`fact has strongly weighed against exercising the authority to deny
`institution under NHK.
`
`9
`
`
`
`Case 1:20-cv-00393-LO-TCB Document 450-2 Filed 01/27/21 Page 19 of 27 PageID# 10099
`IPR2020-00921 (USP 9,814,268)
`
`Petitioner’s Request for Rehearing
`
`Fintiv at 6 (emphasis added). Even if Petitioner had not moved for a stay, trial
`would have eventually been delayed until “maybe the end of 2022” due to COVID
`and the backlog (Ex. 1042 at 6), preventing any additional inefficiency or
`duplication of efforts. Accordingly, this factor now strongly favors institution.
`Factor 2 strongly favors institution because the Court will not lift the stay
`until after the Board’s final decision, pushing trial until well after the Board’s final
`written decision. Further, trial might not even be possible until “the end of 2022”
`because of the backlog of criminal trials. Ex. 1042 at 6. Indeed, the Board would
`have reached validity first had it instituted review because the Court’s trial would
`have been delayed due to COVID and the backlog, even without the stay.
`Factor 3 favors institution because the Court ordered the stay just over two
`weeks after the Board’s decision issued. Ex. 1041 (issued December 4, 2020);
`Fintiv at 10 (high investment indicates “a stay may be less likely”). Not enough
`changed in the meantime to shift this factor to a negative, especially given the stay
`and taking into account Petitioner’s exceptional diligence in filing this IPR in less
`than one month. Dolby Labs., Inc. v. Intertrust Techs. Corp., IPR2020-00664,
`Paper 10 at 17 (Dec. 8, 2020) (finding petitioner “acted diligently and without
`much delay” when it filed three months after infringement contentions). Due to
`Petitioner’s prompt IPR filing, contentions still had not been exchanged by the
`time of the POPR, and the parties could only speculate regarding investment and
`overlap. Reply 4-5; Decision 19.
`As a result, fact discovery, which would have remained open for almost
`another two months after the date of the stay, will remain incomplete until after the
`
`10
`
`
`
`Case 1:20-cv-00393-LO-TCB Document 450-2 Filed 01/27/21 Page 20 of 27 PageID# 10100
`IPR2020-00921 (USP 9,814,268)
`
`Petitioner’s Request for Rehearing
`
`Court lifts the stay. Ex. 1038 at 8 (discovery would have closed on January 27).
`The parties have not served their expert reports and will not do so until after the
`Court lifts its stay. Ex. 1042 at 10-11. The Court issued a one-page Markman
`Order on November 24, but the Court merely agreed with Patent Owner that the
`sole term in dispute (“cartridge with two open ends”) has its plain and ordinary
`meaning. Ex. 1044. This “does not demonstrate the high level of investment … as
`the detailed Markman Order in Fintiv.” Sand at 7-9.
`Factor 4 strongly favors institution because the statutory estoppel will
`preclude Petitioner from raising any invalidity grounds that it “raised or reasonably
`could have raised during [this IPR]” in Court. 35 U.S.C. § 315(e)(2). This
`eliminates Fintiv’s concerns regarding efficiency and conflicting results, as
`Congress deemed this amount of overlap acceptable. See also Sand at 12 n.5 (The
`equivalent stipulation ensures the “IPR functions as a true alternative to litigation
`in relation to grounds that could be at issue in an IPR.”).
`Factor 5 favors institution. Because the Board will reach invalidity before
`the Court, the fact that the same parties are in the IPR and court now favors
`institution. Google v. Parus Holdings, IPR2020-00846, Paper 9 at 20-21 (Oct. 21,
`2020). Instituting review allows the Board to efficiently adjudicate invalidity
`between these parties, and the statutory estoppel will limit the overlap between the
`proceedings if any claims survive IPR, precisely as Congress intended.
`Factor 6 strongly favors institution because the Board correctly found
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