Trials@uspto.gov
`571-272-7822
`
`Paper 12
`Date: December 15, 2020
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`WALMARTINC.,
`Petitioner,
`
`V.
`
`CARAVAN CANOPY INTERNATIONAL,INC.,
`Patent Owner.
`
`IPR2020-01026
`Patent 5,944,040
`
`Before BART A. GERSTENBLITH, JAMES J. MAYBERRY,and
`ERIC C. JESCHKE,Administrative Patent Judges.
`
`JESCHKE, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 USC. § 314
`
`
`571-272-7822
`
`Paper 12
`Date: December 15, 2020
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`WALMARTINC.,
`Petitioner,
`
`V.
`
`CARAVAN CANOPY INTERNATIONAL,INC.,
`Patent Owner.
`
`IPR2020-01026
`Patent 5,944,040
`
`Before BART A. GERSTENBLITH, JAMES J. MAYBERRY,and
`ERIC C. JESCHKE,Administrative Patent Judges.
`
`JESCHKE, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Inter Partes Review
`35 USC. § 314
`
`
`
`IPR2020-01026
`Patent 5,944,040
`
`I. BACKGROUND
`
`Petitioner, Walmart Inc., filed a Petition to institute an inter partes
`
`review of claims 1-3 (the “challenged claims”) of U.S. Patent No. 5,944,040
`
`(Ex. 1001, “the ’040 patent’). Paper 1 (“Pet.”). Patent Owner, Caravan
`
`CanopyInternational, Inc.filed a Preliminary Response. Paper 8 (“Prelim.
`
`Resp.”). With Board authorization (Paper 9), Petitioner timely filed a
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`Preliminary Reply to Patent Owner’s Preliminary Response (Paper 10,
`
`“Prelim. Reply”), and Patent Ownertimely filed a Preliminary Sur-reply to
`
`Petitioner’s Preliminary Reply (Paper 11, “Prelim. Sur-reply”).
`
`Wehave authority to determine whetherto institute an inter partes
`
`review. See 35 U.S.C. § 314 (2018); 37 C.F.R. § 42.4(a) (2019) (“The
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`Boardinstitutes the trial on behalf of the Director.”). Section 314(a) of
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`Title 35 of the United States Code provides that an inter partes review may
`
`not be instituted “unless .. . the information presented in the petition...
`
`showsthat there is a reasonable likelihood that the petitioner would prevail
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`with respect to at least 1 of the claims challenged in the petition.” Upon
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`consideration of the arguments in the briefing and the evidence of record
`
`(including testimonial evidence), for the reasons below, we determinethat
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`the Petition shows a reasonable likelihood that Petitioner would prevail with
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`respect to at least one of the challenged claims. We thusinstitute inter
`
`partes review onall challenged claimsonall asserted grounds. See SAS
`
`Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1354, 1359-60 (2018); Consolidated
`
`Trial Practice Guide 64 (Nov. 2019), https://www.uspto.gov/TrialPractice
`
`GuideConsolidated (“Consolidated TPG”’) (“The Board will not institute on
`
`fewerthanall claimsor all challenges in a petition.”).
`
`
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`IPR2020-01026
`Patent 5,944,040
`
`A. Related Proceedings
`Theparties identify a proceeding in the U.S. District Court for the
`
`Central District of California (“the District Court”) in which Patent Owner
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`asserts the ’040 patent against Petitioner: Caravan Canopy Int'l, Inc. v.
`
`Walmart Inc., 2:19-cv-06978 (C.D. Cal.), filed Aug. 12, 2019 (the “Walmart
`
`Litigation”). Pet. 84; Paper 5 (Patent Owner’s Mandatory Notices), at 1.
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`The Walmart Litigation was stayed on August 19, 2020. See Paper 6
`
`(Petitioner’s Updated Mandatory Notices), at 2 (discussing Ex. 1019 (order
`
`staying the Walmart Litigation)).
`
`Theparties also identify other proceedings in which Patent Owner has
`
`asserted oris asserting the ’040 patent against parties not involvedin this
`
`inter partes review:
`
`1. Caravan Canopy Int'l, Inc. v. The Home Depot USA,Inc., 8:19-
`
`cv-01072 (C.D. Cal.), filed May 31, 2019;
`
`2. Caravan Canopy Int'l, Inc. v. ShelterLogic Corp., 5:19-cv-
`
`01224 (C.D. Cal.), filed July 1, 2019;
`
`3. Caravan Canopy Int’l, Inc. v. Z-Shade Co. Ltd., 2:19-cv-06224
`
`(C.D. Cal.), filed July 18, 2019;
`
`4. Caravan Canopy Int'l, Inc. v. Lowe’s Home Centers, LLC,
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`2:19-cv-06952 (C.D. Cal.), filed August 9, 2019;
`
`5. Caravan Canopy Int'l, Inc. v. Bravo Sports, 2:19-cv-06031
`
`(C.D. Cal.), filed July 12, 2019 (dismissed without prejudice);
`
`6. Int'l E-Z Up v. Caravan Canopy Int'l, Inc., 2:01-cv-06530
`
`(C.D. Cal.), filed July 30, 2001 (settled);
`
`7. Jang v. Caravan Canopy Int'l, Inc., 2:03-cv-01024 (C.D.Cal.),
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`filed February 11, 2003 (settled).
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`
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`IPR2020-01026
`Patent 5,944,040
`
`Pet. 84-85; Paper 5, at 1. On December 13, 2019, the District Court
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`consolidated proceedings 1-4 listed above(collectively, “the Ongoing
`
`Litigations”) and the Walmart Litigation “for all purposes except fortrial.”
`
`Ex. 2001, at 1. After the District Court granted the stay of the Walmart
`
`Litigation, several of the defendants in the Ongoing Litigations requested
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`clarification that the stay appliesto all the consolidated cases. See Ex. 2004
`
`(Requestfor Clarification re Stay of Litigation). On August 28, 2020, the
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`District Court denied the “request for clarification.” Ex. 2005 (order
`
`denying Request for Clarification). The Ongoing Litigations are thus
`
`currently active.
`
`B. The ’040 Patent
`
`The ’040 patent relates to collapsible tent frames. See Ex. 1001, 1:1-
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`10. According to the ’040 patent, whenpitching(i.e., putting up) existing
`
`collapsible tent frames, “the center pole ribs 3 are positioned across the
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`upperportion of the interior space as shownin FIG.2 [below], thus limiting
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`the height of the interior space.””! Jd. at 1:57-60. Inconvenienceresults
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`because users must be mindful not to bumptheir heads against center pole
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`ribs 3 or connector 4 when entering or standing in the tent. See id. at 1:61—
`
`64.
`
`| Throughout this Decision, we omit any bold emphasis of reference
`numerals and figure numbers in quotations from the ’040 patent and from
`the relied-upon references.
`
`
`
`IPR2020-01026
`Patent 5,944,040
`
`Figures | and 2 are reproduced below:
`
`FAIORART
`
`FIG.)
`
`Figure 1 is a “perspective view showing the construction ofa typical
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`collapsible tent frame” and Figure 2 is a “sectional view of a tent with the
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`typical collapsible tent frame when the tent is completely pitched.”
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`Ex. 1001, 2:35-38. The °040 patent discloses that, because center pole 6
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`includes connector 4 andslide guider 5, the existing collapsible tent frames
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`have “a complex construction” and increased production costs. See id.at
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`1:65-67. The existing tent frames are also described as “too heavy for a user
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`to easily handle or move.” Jd. at 2:1-2.
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`Figures 3 and 4 are reproduced below:
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`
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`IPR2020-01026
`Patent 5,944,040
`
`Figure 3 is a “perspective view showingthe construction of a
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`collapsible tent frame in accordance with the preferred embodiment”ofthe
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`°040 patent, and Figure 4 is a “sectional view of a tent with the collapsible
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`tent frame of this invention when the tent is completely pitched.” Ex. 1001,
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`2:39-43. The collapsible tent frame in these figures includes “four side
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`poles 10 [that] are individually coupled to a center pole 50, having a simple
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`construction, through a center pole rib 30.” Jd. at 2:}64-66. Each center pole
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`rib 30 is coupled to one of four sliders 70 through a support link 40. See id.
`
`at 3:1-3. The depicted tent frame also includes“a plurality of side pole
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`connection beams 20, with each pair of ribs 20 being coupled to each other
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`at the center of them into a scissor assembly.” Jd. at 2:53-56. The
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`’040 patent describes the depicted tent frame as “‘convenientto users,” as
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`having a “simple construction capable of effectively reducing the production
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`cost, volume and weight,” and as having “heighten[ed] interior space ... in
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`comparison with a typical collapsible tent frame.” Jd. at 4:1-19.
`
`C. Challenged Claims
`
`Petitioner challenges claims 1-3, of which claim 1 is independent.
`
`Claims 2 and 3 depend from claim 1. Independent claim 1 is reproduced
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`below, with bracketed text addedto identify certain language:
`
`l.
`
`A collapsible tent frame, comprising:
`
`[A] a center pole constructed for stretching and sustaining
`a tent’s roof whena tent is pitched with the tent frame;
`
`[B] a plurality of side poles coupled to each other through
`a plurality of scissor-type ribs, with upper endsofsaid ribs being
`hinged to connectors provided at top ends of said side poles and
`lower ends of said ribs being hinged to sliders movably fitted
`over said side poles; and
`
`
`
`IPR2020-01026
`Patent 5,944,040
`
`[C/] plurality of center pole ribs coupling said center pole
`to said connectors of the side poles, [C2] said center pole ribs
`individually comprising two rib members coupled to each other
`through a hinge joint and being hinged to the slider of an
`associated side pole through a support link,
`[C3] thus being
`collapsible at the hinge joint in accordance with a sliding motion
`of said slider along the side pole.
`Ex. 1001, 4:27-42.?
`
`D. Asserted Grounds of Unpatentability
`
`Petitioner challenges claims 1—3 on the following grounds:
`
`
`
`
`
`
` 103(a)
`
`
`
`
`
`
`
`
`
`
`Tsai,’ Lynch
`
`2 WeadoptPetitioner’s designations for the elements of the challenged
`claims. We use these designations in the discussion below.
`3
`Japanese Publication No. H1-61370 (with translation andaffidavit),
`published April 19, 1989 (Ex. 1005 (Japanese version) and Ex. 1004
`(translation with affidavit), collectively “Yang”).
`4
`US4,779,635, issued October 25, 1988 (Ex. 1007, “Lynch”).
`>” Statements in the ’040 patent at column1, lines 11-15; column 1,
`lines 18—25; and Figures 1 and 2 (“AAPA”). For clarity and consistency
`with the Petition, we use the term “AAPA” (for Applicant Admitted Prior
`Art (see Pet. 2)). Patent Owner appears to disagree with this term. See
`generally Prelim. Resp. (frequently referring to “alleged AAPA”).
`®
`US1,502,898, issued July 29, 1924 (Ex. 1008, “Berg”’).
`7
`US5,638,853, issued June 17, 1997 (Ex. 1006,“Tsai’”).
`
`
`
`IPR2020-01026
`Patent 5,944,040
`
`
`
`
`
`Claim(s) Challenged
`
`35 U.S.C.§
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`Reference(s)/Basis
`
`
`
`
`
`
`
`‘Petitioner supports its challenges with a declaration from-Dr. Richard
`W.Klopp, P.E. (Ex. 1003, “the Klopp Declaration”or “Klopp Decl.”), who
`
`Petitioner has retained as an independent expert (id. J] 1-6). Patent Owner
`
`relies on the Declaration of Mr. Lance Rake (Ex. 2014, “Rake Decl.”’), who
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`Patent Ownerhas retained as an independentexpert (id. {{ 1, 5).
`
`II. DISCUSSION
`
`A. Discretion Under 35 U.S.C. § 314(a)
`
`Patent Ownerargues that we should exercise our discretion to deny
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`institution under 35 U.S.C. § 314(a) based on the Ongoing Litigations and
`other factors. Prelim. Resp. 3-15. The parties addressed this issue in the
`authorized additional briefing. See Prelim. Reply; Prelim. Sur-reply.
`
`1. Legal Framework
`In deciding whetherto exercise discretion under § 314(a), the Board
`
`may consider “events in other proceedingsrelated to the samepatent, either
`at the Office, in district courts, or the ITC.” Consolidated TPG 58. The
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`precedential order in Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11
`
`(PTAB Mar.20, 2020), identifies factors to consider when a patent owner
`
`8 Although Petitioner states that the ground of Tsai, Berg, and Carter
`renders unpatentable claims “1-3”(Pet. 9), for claims 1 and 2,Petitioner
`relies on only Tsai and Berg(id. at 79). See Prelim. Resp. 55 n.1 (“Grounds
`6 and 7 are identical as to claim 1.”(citing Pet. 79)). Petitioner thusrelies
`on the ground of Tsai, Berg, and Carter to address only claim 3.
`9 US 5,511,572, issued April 30, 1996 (Ex. 1009, “Carter”).
`
`8
`
`
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`IPR2020-01026
`Patent 5,944,040
`
`raises an argumentfor discretionary denial due to the advancedstate of a
`
`parallel proceeding:
`
`whetherthe court granted a stay or evidenceexists that one
`1.
`may be granted if a proceedingis instituted;
`
`proximity of the court’s trial date to the Board’s projected
`2.
`statutory deadline for a final written decision;
`3.
`investmentin the parallel proceeding by the court and the
`parties;
`
`overlap between issues raised in the petition and in the
`4.
`parallel proceeding;
`
`whether the petitioner and the defendant in the parallel
`5.
`proceedingare the same party; and
`
`other circumstances that impact the Board’s exercise of
`6.
`discretion, including the merits.
`
`‘intiv, Paper 11 at 5-6. “These factors relate to whetherefficiency, fairness,
`
`and the merits support the exercise of authority to deny institution in view of
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`an earliertrial date in the parallel proceeding.” Jd. at 6. There is some
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`overlap among these factors and some facts may be relevant to more than
`
`one factor. Jd.
`
`In evaluating the factors, the Board takes a holistic view of
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`whether efficiency and integrity of the system are best served by denying or
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`instituting review. Id.
`
`2. Analysis
`
`a. Factor 1: whether the court granted a stay or
`evidence exists that one may be granted ifa
`proceedingis instituted
`
`Patent Owner focuses on the Ongoing Litigations, stating that they
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`“are not stayed, and the [D]istrict [C]ourt rejected the other defendants’
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`Request to extend the Caravan/Walmart stay to ‘all consolidated cases.’”
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`Prelim. Sur-reply 4 (citing Ex. 2004, at 2; Ex. 2005). Petitioner responds
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`IPR2020-01026
`Patent 5,944,040
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`that the Walmart Litigation is stayed, “which weighsstrongly against
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`denyinginstitution.” Prelim. Reply 1 (citing Ex. 1019). According to
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`Petitioner, Patent Owner’s position that “the Board should denyinstitution
`
`based on other cases pending between Patent Ownerand other parties .
`
`.
`
`. is
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`unsupported by any authority.” Jd. at 2.
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`“A district court stay of the litigation pending resolution of the PTAB
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`trial allays concerns aboutinefficiency and duplication of efforts. This fact
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`has strongly weighed against exercising the authority to deny institution
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`under NHK [Spring Co.v. Intri-Plex Techs. Inc., IPR2018-00752, Paper 8
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`(PTAB Sept. 12, 2018) (precedential)].” Fintiv, Paper 11 at 6. Here, the
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`District Court granted Petitioner’s motion to stay the Walmart Litigation
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`“pending the Patent Office’s decision on [this] IPR petition.” Ex. 1019, at 6;
`see Prelim. Reply 2 (arguing that the District Court “has stayed the Walmart
`
`[Litigation] to allow the IPR to proceed”). Although the stay will not
`
`address potential inefficiencies and duplication of efforts in the Ongoing
`
`Litigations, the stay will allay such concerns as to the Walmart Litigation.
`Weturn now to the District Court’s denial of the “request for
`
`clarification”that the stay in the Walmart Litigation applied to the Ongoing
`
`Litigations. See Ex. 2004; Ex. 2005. In general, “[i]f a court has denied a
`
`defendant’s motion for a stay pending resolution of a PTAB proceeding, and
`
`has not indicated to the parties that it will consider a renewed motion or
`
`reconsider a motion to stay if a PTABtrial is instituted, this fact has
`
`sometimes weighedin favor of exercising authority to deny institution under
`
`NHK.” Fintiv, Paper 11 at 7-8. We do not, however, view the request for
`
`clarification, filed by three of the four defendants in the Ongoing Litigations
`(see Ex. 2004,at 3), as a motion fora stay that the District Court denied. Cf
`
`10
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`
`
`IPR2020-01026
`Patent 5,944,040
`
`Prelim. Resp. 7 (stating that “the [D]istrict [C]ourt has expressly declined to
`
`stay three of the five” Ongoing Litigations). Instead, as argued by
`
`Petitioner, those three defendants in the Ongoing Litigations “asked only for
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`clarification whetherthe court’s stay as to Walmart also applied to their
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`cases.” Prelim. Reply 2-3 (citing Ex. 2004). Indeed,in its responseto the
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`request for clarification, Patent Owner acknowledgesthis distinction and
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`emphasizes that none of the defendants in the Ongoing Litigations actually
`
`moved for a stay. See Ex. 2022, at 2-3 (arguing (1) that a “request” does not
`
`exist under the Local Rules, and (2) that “the original motion to stay [was]
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`(a) filed by Defendant Walmart only as movant, (b) not joined by any other
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`Defendant, and (c) granted by this Court specifically only as to Walmart’).
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`Because the WalmartLitigation is the only parallel litigation
`
`involving Petitioner, we weigh each factor in the overall analysis in this
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`proceeding with that fact in mind. See Fintiv, Paper 11 at 6 (stating that
`
`“Ts]ome facts may be relevant to more than one factor’ and that, “in
`
`evaluating the factors, the Board takes a holistic view of whetherefficiency
`
`and integrity of the system are best served by denyingorinstituting
`
`review”). On the particular facts here, we view this factor overall as
`
`weighing strongly against discretionary denial.
`
`b. Factor 2: proximity of the court’s trial date to the
`Board’s projected statutory deadlinefor a final
`written decision
`
`Patent Ownerstates that “[t]rial in the [Ongoing Litigations]is
`
`scheduled to begin on June 8, 2021.” Prelim. Resp. 7 (citing Ex. 2002
`
`(Scheduling Order, dated January 27, 2020)). Patent Owner contendsthat a
`
`final written decision in this proceeding,if instituted, would not issue until
`
`approximately December 2021—-six monthsafter the scheduledtrial date.
`
`11
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`
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`IPR2020-01026
`Patent 5,944,040
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`Id. According to Patent Owner, the Board has viewedsimilar relative dates
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`as favoring discretionary denial. Jd. (citing Cisco Sys., Inc. v. Ramotat Tel
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`Aviv Univ. Ltd., IPR2020-00122, Paper 15 at 8 (PTAB May 15, 2020)).
`
`Petitioner argues that this factor weighs against discretionary denial
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`because the Walmart Litigation “is stayed, so any trial on Walmart’s
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`invalidity defenses will not occur until after this proceedingis final.”
`
`Prelim. Reply 3 (citing Fintiv, Paper 11 at 9). According to Petitioner, “[t]he
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`timing ofthe trials of the [Ongoing Litigations] is irrelevant underthis
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`factor, and will have no effect” on this proceeding.
`
`/d.
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`In the alternative,
`
`Petitioner contendsthat, “even if [the timing] were relevant(it is not), the
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`timing oftrial in [the Ongoing Litigations] is unknown”for two reasons:
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`(1) if this proceedingis instituted “each of th[e] defendants [in the Ongoing
`
`Litigations] would have the opportunity to file motions for joinder with this
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`[proceeding] and to obtain stays of their own district court cases” and
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`(2) even if the Ongoing Litigations were to occur, they could not all occur on
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`the scheduled date of June 8, 2021. Id. at 3-4.
`
`As to the Walmart Litigation, we agree with Petitioner that, based on
`
`the stay, any trial would take place after resolution of this proceeding. See
`Prelim. Reply 3. Thus,as to the parallel litigation involving Petitioner, this
`factor weighs strongly against discretionary denial.
`
`Although wedo not agree with Petitioner that the timing ofthetrials
`
`in the Ongoing Litigations are entirely “irrelevant” (Prelim. Reply 3), as
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`discussed above, we are mindful of the fact that the Walmart Litigation is
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`the only parallel litigation involving Petitioner. As noted by Patent Owner,
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`in the most recent scheduling order, the District Court maintained June8,
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`2021, as the start date for the “Jury Trials” in the Ongoing Litigations. See
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`12
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`IPR2020-01026
`Patent 5,944,040
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`Prelim. Sur-reply 5 (citing Ex. 2023 (Amended Scheduling Order, dated
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`August 11, 2020), at 2 (listing “Jury Trials” on “June 8, 2021” and “No
`Change” from the prior scheduling order (Ex. 2002))). Although Petitioner
`maybecorrect that the Ongoing Litigations do not simultaneously begin on
`
`June 8, 2021, the Board “generally take[s] courts’ trial schedules at face
`
`value absent some strong evidenceto the contrary.” Apple Inc. v. Fintiv,
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`Inc., 1PR2020-00019, Paper 15 at 13 (PTAB May 13, 2020) (informative).
`
`Moreover, given (1) the six-month period from the scheduled trial
`
`start date (June 8, 2021) to the due date for the final written decision in this
`proceeding (December 2021) and (2) the overlap in issues betweenthis
`
`proceeding and each of the Ongoing Litigations (as discussed below), we are
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`persuaded by Patent Owner’s argument that—evenif only one ofthe
`
`OngoingLitigations actually started on June 8, 202 1—at least someof the
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`overlapping invalidity issues will likely be decided before a final written
`
`decision here. See Prelim. Sur-reply 6. But Petitioner will have no control
`
`over which invalidity issues are presented in anytrial or how they are
`
`presented. Asto Petitioner’s assertion that, uponinstitution ofthis inter
`
`partes review, the defendants in the Ongoing Litigations “would have the
`
`opportunity to file motions for joinder” and then seek stays in the District
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`Court (Prelim. Reply 3), we decline to speculate how the analysis may differ
`
`underthat hypothetical situation. For the reasons above,as to the Ongoing
`
`Litigations, this factor weighs slightly in favor of discretionary denial.
`
`Overall, we accord more weightto the lack ofatrial date in the parallel
`
`litigation involving Petitioner than to the trial dates in the Ongoing
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`Litigations involving different parties, and thus overall this factor weighs
`
`against discretionary denial.
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`13
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`IPR2020-01026
`Patent 5,944,040
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`c. Factor 3: investmentin the parallel proceeding by the
`court and the parties
`
`Patent Ownerarguesthat this factor weighs in favor of discretionary
`
`denial based on the investment by the parties and the District Court in the
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`Ongoing Litigations and the Walmart Litigation (prior to the stay) as well as
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`the timing ofthe filing of the Petition here. See Prelim. Resp. 7-10. As to
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`the investmentin the parallel proceedings, Patent Ownerhighlights the
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`District Court’s “significant investment of time and resourcesin its detailed
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`21-page claim construction order construing six claim terms.” See id. at 7—
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`8. Noting that the parties have exchangedinitial infringement and invalidity
`
`contentions, Patent Ownerargues that the investment thusfar in the parallel
`
`proceedingsis similarto that in the informative Fintiv decision, in which this
`
`factor weighed “somewhatin favor of discretionary denial.” Jd. at 8
`
`(quoting Fintiv, Paper 15 at 14). Asto the timing of the Petition, Patent
`
`Ownerstates that Petitioner “waited six months after receiving [the] initial
`
`infringement contentions [in the Walmart Litigation] (Ex. 2006) and two and
`
`a half monthsafter servingits initial invalidity contentions (Ex. 2007)to file
`
`its Petition.” Jd. at 9. Patent Owneralso arguesthat Petitioner’s “initial
`
`invalidity contentions involve the sameart and at least substantially the same
`
`arguments as its Petition.” Jd. at 9-10 (chart showing the overlap in the
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`asserted groundshere andtheinitial invalidity contentions).
`
`Petitioner respondsthat the District Court has not invested significant
`
`resources andthat Petitioner did not delay in filing the Petition. See Prelim.
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`Reply 4—7. Petitioner argues that “the [D]istrict [C]ourt had not invested
`
`significant resources in resolving the merits of the parties’ invalidity
`
`positions” andthat, in the order staying the Walmart Litigation, the District
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`Court stated that the case was“still in its early stages.” Jd. at 4 (quoting
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`14
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`IPR2020-01026
`Patent 5,944,040
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`Ex. 1019, at 3). Petitioner contends that Patent Owner“overstates the
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`[District [C]ourt’s investment in claim construction, particularly in view of
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`the work that remainsin the stayedlitigation,” because the claim
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`construction order “only addressed six terms, four of which the Court simply
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`accordedtheir plain and ordinary meaning.” /d. (citing Ex. 1018, at 20-21).
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`Asto the timing ofthe filing of the Petition, Petitioner argues that any delay
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`was due to “Patent Owner’s initial disclosure of deficient infringement
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`allegations,” which, according to Petitioner, “made it impossible. .
`
`. to
`
`understand [the] allegations.” Jd. at 6.
`
`Wefirst address the investment in the consolidated proceedings. As
`
`stated in the precedential Fintiv decision,“district court claim construction
`
`orders mayindicate that the court and parties have invested sufficient time in
`
`the parallel proceeding to favor denial.” Fintiv, Paper 11 at 10. Here, the
`
`District Court issued the claim construction orderin all five parallel
`
`proceedings on June 23, 2020, almost two months before staying the
`
`Walmart Litigation. See Ex. 1018; Ex. 1019. We view the District Court’s
`
`21-page claim construction order (Ex. 1018) morein line with the “detailed”
`
`orderin the parallel proceeding in Apple v. Fintiv (see Fintiv, Paper 15 at 14)
`
`than the “two-page” claim construction order in Sand Revolution (see Sand
`
`Revolution II, LLC v. Cont’l Intermodal Grp. — Trucking LLC, IPR2019-
`
`01393, Paper 24 at 10—-11 (PTAB June 16, 2020) (informative)). See Prelim.
`
`Resp. 8. Although, as noted by Petitioner (Prelim. Reply 5—6), the District
`
`Court applied the plain and ordinary meaning for some terms (Ex. 1018,at
`
`20-21), the Court considered the arguments and provided a thorough
`
`discussion of the issues. See id. at 1-21.
`
`15
`
`
`
`IPR2020-01026
`Patent 5,944,040
`
`Asto the Walmart Litigation, we agree with Petitioner that, aside
`
`from the claim construction order, the District Court and the parties have not
`
`invested a significant amount of resources in the invalidity positions. See
`
`Prelim. Reply 4. And, as argued by Petitioner, “in view of the stay, no
`
`further investment will occur until this [proceeding] is resolved.” Jd. at 5.
`
`For the reasons discussed above, we view the investment in the
`
`Ongoing Litigations as relevant to this factor. Although the District Court
`
`has likely not expended significant resources on invalidity issues (aside from
`
`claim construction) (see Prelim. Reply 4), the parties in the Ongoing
`
`Litigations recently served their final invalidity contentions. See Exs. 2024—
`
`2027 (final invalidity contentions, each dated August 18, 2020); see also
`
`Fintiv, Paper 11 at 9 (“The Boardalso has considered the amount and type
`
`of work already completedin the parallel litigation by the court and the
`parties at the time of the institution decision.” (emphasis added)); Prelim.
`Sur-reply 6 (“The [D]istrict [C]ourt, [Patent Owner], and the other
`
`defendants continue and will continue to invest valuable time and resources
`
`into litigations involving the ’040 Patent.”). Thus, at this point, the Ongoing
`
`Litigations are at approximately the same stage as the parallel proceeding in
`
`Apple v. Fintiv, in which this factor weighed “somewhatin favor of
`
`discretionary denial.” Fintiv, Paper 15 at 14.
`
`Weturn now to the timing of the filing of the Petition. “Ifthe
`
`evidence showsthat the petitionerfiled the petition expeditiously, such as
`
`promptly after becoming aware ofthe claims being asserted, this fact has
`
`weighed against exercising the authority to deny institution under NHK.”
`
`Fintiv, Paper 11 at 11. In contrast, if “the evidence showsthat the petitioner
`
`did notfile the petition expeditiously, such as at or around the sametimethat
`
`16
`
`
`
`IPR2020-01026
`Patent 5,944,040
`
`the patent ownerrespondsto the petitioner’s invalidity contentions, or even
`
`if the petitioner cannot explain the delayin filing its petition, these facts
`
`have favored denial.” Jd. at 11-12.
`
`In light of the overlap between the groundsasserted in the Petition and
`
`the initial invalidity contentions in the Walmart Litigation (as discussed
`
`below)(see Prelim. Resp. 9-10), we determine that Petitioner has not
`
`adequately explained the 2.5-month delay from the date of service of the
`
`initial invalidity contentions—March 16, 2020 (Ex. 2007, at 17)—and the
`
`date offiling of the Petition—June 1, 2020. We are not persuaded by
`
`Petitioner’s argumentthat “Patent Owner’s initial disclosure of deficient
`
`infringement allegations” impeded Petitioner’s ability to file. Prelim.
`
`Reply 6. Althoughthe allegedly deficient initial contentionsdo not appear
`
`to identify all allegedly infringing products (compare Ex. 2006(initial
`
`infringement claim chart), with Ex. 1020, at 20-28 (revised infringement
`
`claim chart)), the relevant issue is not the identity of the infringing products,
`
`but rather the identity of the claims asserted. See Fintiv, Paper 11 at 11
`
`(stating that the Board recognizes “that it is often reasonable for a petitioner
`
`to wait to file its petition until it learns which claims are being asserted
`
`againstit in the parallel proceeding” (emphasis added)), quoted at Prelim.
`
`Sur-reply 7. Here, as argued by Patent Owner, as early as December9,
`
`2019, Petitioner knew Patent Ownerwasasserting all three claims of the
`
`°040 patent. See Prelim. Sur-reply 7 (citing Ex. 2006; Ex. 1021 (Plaintiff's
`
`Initial Disclosures), at 2).
`
`Moreover,although Petitionerfiled the Petition within the one-year
`
`statutory bar under § 315(b) (see Prelim. Reply 6), that does not,byitself,
`
`demonstrate filing “expeditiously.” Fintiv, Paper 11 at 11 (‘As a matter of
`
`17
`
`
`
`IPR2020-01026
`Patent 5,944,040
`
`petition timing, notwithstanding that a defendanthas one yearto file a
`
`petition, it may impose unfair costs to a patent ownerif the petitioner, faced
`
`with the prospect of a loomingtrial date, waits until the district court trial
`
`has progressedsignificantly before filing a petition at the Office.” (emphasis
`
`added and footnote omitted)). For the reasons above, we determinethatthis
`
`factor overall weighsslightly in favor of discretionary denial.
`
`d. Factor 4: overlap betweenissues raised in the petition
`andin the parallel proceeding
`
`Patent Ownerarguesthat the ’040 patent “has three claims, all of
`
`which are asserted against each of the defendants [in the Ongoing
`
`Litigations,] all of which Walmart challengesin its Petition, and all of which
`
`will be litigated in” the Ongoing Litigations. Prelim. Resp. 11. Patent
`
`Ownerprovides a chart showing the degree of overlap between Petitioner’s
`
`asserted groundshere and each defendant’s final invalidity contentions in
`
`the Ongoing Litigations. See Prelim. Sur-reply 8-9 (discussing Ex. 2024
`
`(final invalidity contentions of Costco Wholesale Corporation); Ex. 2025
`
`(final invalidity contentions of Z-Shade Co. Ltd.); Ex. 2026 (final invalidity
`
`contentions of ShelterLogic Corp.); Ex. 2027 (final invalidity contentions of
`
`Loew’s HomeCenters, LLC)); Prelim. Resp. 11 (“The defendants in the four
`
`[Ongoing L]itigations have raised the same art in many of the same
`
`combinations as Walmart advancesin its Petition.”’).
`
`Petitioner responds that the Walmart Litigation “is stayed, thereby
`
`eliminating any concerns of overlap or duplicative efforts between the
`
`[D]istrict [C]ourt and the Board.” Prelim. Reply 7 (discussing Sand
`
`Revolution, Paper 24 at 11 (“This factor evaluates ‘concernsof inefficiency
`
`and the possibility of conflicting decisions’ when substantially identical
`
`prior art is submitted in both the district court and the inter partes review
`
`18
`
`
`
`IPR2020-01026
`Patent 5,944,040
`
`proceedings.” (quoting Fintiv, Paper 11 at 12))). In addition, “to eliminate
`
`any potential inefficiencies or overlap, Petitioner stipulates that, if this IPR is
`
`instituted, Petitioner will not pursue the same grounds in” the Walmart
`
`Litigation. Jd. According to Petitioner, “[t]he stay [in the Walmart
`
`Litigation] and this stipulation weigh[] this factor against discretionary
`
`denial.” Jd. (citing Sand Revolution, Paper 24 at 11-12).
`
`Asto the Walmart Litigation, we generally agree with Petitioner that
`
`the stay will allay some concern as to potential inefficiencies. See Prelim.
`Reply 7. As discussed below, however, the overlap in issues between the
`
`Petition and the invalidity allegations in the Ongoing Litigationsraises
`
`related concerns. See Fintiv, Paper 11 at 12 (‘{I]f the petition includes the
`
`sameor substantially the same claims, grounds, arguments, and evidence as
`
`presented in the parallel proceeding, this fact has favored denial.”).
`Wefirst address the degree of overlap in issues based on the claimsat
`
`issue here and in the Ongoing Litigations. See Fintiv, Paper 11 at 13 (“The
`
`existence of non-overlapping claim challenges will weigh for or against
`
`exercising discretion to deny institution under NHK depending on the
`
`similarity of the claims challenged in the petition to thoseat issue in the
`
`district court.”). As noted by Patent Owner, the ’040 patent has only three
`
`claims, all of which are challenged in both the Petition and in the final
`
`invalidity contentions by each of the defendants in the Ongoing Litigations.
`
`See Prelim. Resp. 11; Prelim. Sur-reply 8-10 (discussing Exs. 2024-2027).
`
`Weturn now to the degree of overlap in issues based onthe artat
`
`issue here and in the Ongoing Litigations. See Fintiv, Paper 11 at 12-13
`
`(discussing how,“if the petition includes materially different grounds,
`
`arguments, and/or evidence than those presentedin the district court, this
`
`19
`
`
`
`IPR2020-01026
`Patent 5,944,040
`
`fact has tended to weigh against exercising discretion to deny institution
`
`under NHK’). We agree with Patent Ownerthat the degree of overlap based
`
`on the prior art at issue raises certain “‘concernsof inefficiency and the
`
`possibility of conflicting decisions.” Prelim. Sur-reply 10 (quoting Fintiv,
`
`Paper 11 at 12). For example, as discussed by Patent Owner(id. at 8-10),
`
`four of the seven groundsasserted by Petitioner are relied on by at least two
`
`(and, for one ground,all) defendants in the Ongoing Litigations. See
`
`Ex. 2024, at 19-38 (Tsai and Lynchfor claims 1—3; Tsai and Berg for claims
`
`1 and 2), 40-59 (Yang and Lynchfor claims 1-3; Yang and Berg for claims
`
`1-3); Ex. 2025, at 19-38 (Tsai and Lynchfor claims 1-3; Tsai and Berg for
`
`claims 1 and 2), 40-59 (Yang and Lynchfor claims 1-3; Yang and Berg for
`
`claims 1-3); Ex. 2026, at 11-14 (Tsai and Lynchfor clai
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