Trials@uspto.gov
`571-272-7822
`
`Paper 11
`Entered: February 2, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`CODE200, UAB; TESO LT, UAB; METACLUSTERLT, UAB;
`AND OXYSALES, UAB,
`Petitioner,
`
`V.
`
`LUMINATI NETWORKSLTD.,
`Patent Owner.
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`Before THOMASL. GIANNETTI, SHEILA F. McSHANE,and
`RUSSELLE. CASS,Administrative Patent Judges.
`
`McSHANE,Administrative Patent Judge.
`
`DECISION
`Denying Institution of Inter Partes Review
`35 US.C. § 314
`
`
`571-272-7822
`
`Paper 11
`Entered: February 2, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`CODE200, UAB; TESO LT, UAB; METACLUSTERLT, UAB;
`AND OXYSALES, UAB,
`Petitioner,
`
`V.
`
`LUMINATI NETWORKSLTD.,
`Patent Owner.
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`Before THOMASL. GIANNETTI, SHEILA F. McSHANE,and
`RUSSELLE. CASS,Administrative Patent Judges.
`
`McSHANE,Administrative Patent Judge.
`
`DECISION
`Denying Institution of Inter Partes Review
`35 US.C. § 314
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`I.
`
`INTRODUCTION
`
`A.
`
`Background and Summary
`
`Code200, UAB, Teso LT, UAB, Metacluster LT, UAB, and Oxysales,
`
`UAB (“Code200”or “Petitioner”)! filed a Petition requesting inter partes
`
`review of claims 1, 2, 6-11, 13, and 15-24 of U.S. Palent No. 10,484,510
`
`B2 (Ex. 1001, “the ’510 patent’) pursuant to 35 U.S.C. §§ 311-319, along
`
`with the supporting Declaration of Michael Freedman, Ph. D. Paper 5
`
`(“Pet.”); Ex. 1009. Luminati Networks Ltd. (“Luminati” or “Patent Owner’)
`
`filed a Preliminary Responseto the Petition. Paper 9 (Prelim. Resp.”).
`
`Wehave authority under 35 U.S.C. § 314(a), which provides that an
`
`inter partes review maynotbeinstituted “unless .
`
`.
`
`. the information
`
`presented in the petition .
`
`.
`
`. showsthat there is a reasonable likelihood that
`
`the petitioner would prevail with respect to at least 1 of the claims
`
`challenged in the petition.”
`
`Forthe reasons that follow, we exercise our discretion under 35
`
`U.S.C. § 314(a) to deny institution of inter partes review.
`
`B.
`
`Related Matters
`
`The parties identify the related litigations, Luminati Networks Ltd. v.
`
`Teso LT, UABetal., 2:19-cv-00395-JRG (E.D. Tex.) (“the 395 district court
`
`case”) and Luminati Networks Ltd. v. Tefincom S.A. D/B/A NordVPN, 2:19-
`
`cv-00414-JRG (E.D. Tex.). Pet. 2; Paper 6, 2.
`
`The parties also note another petition has been filed in IPR2020-
`
`01266, whichis directed to U.S. Patent No. 10,257,319, which claims the
`
`' Petitioner additionally identifies coretech It, UAB asa real party-in-
`interest. Pet. 2.
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`benefit of the same provisional application, and is a continuation of the same
`
`application, as the °510 patent. Pet. 2; Paper6, 2.
`
`C.
`
`The ’510 Patent
`
`The 510 patentis titled “System Providing Faster and More Efficient
`
`Data Communication”and issued on November 19, 2019, from an
`
`application filed on February 17, 2019. Ex. 1001, codes (22), (45), (54).
`
`The application for the °510 patent is a continuation of several applications,
`
`and other related applications include a divisional application and a
`
`provisional application. See id., code (60). The ’510 patent is subject to a
`
`terminal disclaimer. Jd., code (*).
`
`The ’510 patent is directed to a system and method for increasing
`
`network communication speed for users, while lowering network congestion
`
`for content owners andinternet service providers (ISPs). Ex. 1001, code
`
`(57). The system employs network elements including an acceleration
`
`server, clients, agents, and peers, where communication requests generated
`
`by applications are intercepted by the client on the same machine. Jd. The
`
`IP address of the server in the communication request is transmitted to the
`
`acceleration server, which providesa list of agents to use for this IP address.
`
`Id.
`
`The communication request is sent to the agents. Ex. 1001, code (57).
`
`One or more of the agents respond withalist of peers that have previously
`
`seen someorall of the content whichis the responseto this request (after
`
`checking whetherthis data is still valid). Jd. The client then downloads the
`
`data from these peers in parts and in parallel, thereby speeding up the Web
`
`transfer, releasing congestion from the Web by fetching the information
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`from multiple sources, and relieving traffic from Webservers by offloading
`the data transfers from them to nearby peers. Jd.
`
`Challenged claim 1 is the only independent claim. Claim 1 of the
`
`510 patent is reproduced below.
`
`1. A methodfor use with a web server that responds to
`Ilypertext Transfer Protocol (HTTP) requests and stores a first content
`identified by a first content identifier, the method bya first client
`device comprising:
`
`establishing a Transmission Control Protocol (TCP) connection
`with a secondserver;
`
`sending, to the web serverover an Internet, the first content
`identifier;
`
`receiving, the first content from the web server overthe Internet
`in responseto the sending ofthe first content identifier; and
`
`sending the received first content, to the second server over the
`established TCP connection, in response to the receiving of thefirst
`content identifier.
`
`Ex. 1001, 19:18-31.
`
`D.—Asserted Grounds of Unpatentability
`
`Petitioner challenges the patentability of claims of the °510 patent on
`
`the following grounds:
`
`Claims Challenged
`
`Reference(s)
`
`35 U.S.C. §
`
`* The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
`Stat. 284, 287-88 (2011), amended 35 U.S.C.§ 103, effective March 16,
`2013. Because the 510 patent claimspriority to a provisional application
`that was filed before this date, with Petitioner not contesting that priority, the
`pre-AIA versions of §§ 102, 103 apply. See Ex. 1001, code (60); Pet. 12.
`3 Michael K. Reiter, Crowds: Anonymityfor Web Transactions, ACM
`Transactions on Information and System Security, Vol. 1, No. 1, November
`1998, at 66—92 (Ex. 1011).
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`| 35 U.S.C. §
`Claims Challenged
`1, 2, 6-11, 13,
`103(a)
`15, 16, 18-23
`2 120
`
`Reference(s)
`;
`Crowds, RFC 2616
`
`
`
`
`
`1, 6, 8-11, 13, 15-20,
`22-24
`
`
`l, 2, 6-8, 13, 15, 16,
`183
`1020
`
`Voy8113; 1,18|
`rosea)
`MorphMix, REC 2616
`
`103(a)
`
`Border, RFC 2616
`«6
`
`Pet. 15-16.
`
`\
`
`II. DISCRETIONARY DENIAL UNDER§ 314(a)
`
`A. Overview
`
`Patent Ownerrequests that we exercise our discretion under 35 U.S.C.
`§ 314(a) to deny the Petition under Apple Inc. v. Fintiv, Inc., IPR2020-
`00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) (“Fintiv”). Prelim.
`
`Resp. 4-16.
`
`In assessing whether to exercise such discretion, the Board weighs the
`
`following factors:
`
`1. whether the court granted a stay or evidence exists that one
`maybe granted if a proceeding1s instituted;
`2. proximity of the court’s trial date to the Board's projected
`statutory deadline for a final written decision;
`
`3. investmentin the parallel proceeding by the court and the
`parties;
`
`\
`
`4 Hypertext Transfer Protocol—HTTP/1.1, Network Working Group, RFC
`2616, The Internet Society, 1999 (Ex. 1018).
`>U.S. Patent No. 6,795,848, issued September 21, 2004 (Ex. 1017).
`6 Marc Rennhard, MorphMix—APeer-to-Peer-based System for
`AnonymousInternet Access (2004) (Ph.D.dissertation, Swiss Federal
`Institute of Technology) (Ex. 1013).
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`4. overlap betweenissuesraised in the petition and in the
`parallel proceeding;
`5. whether the petitioner and the defendantin the parallel
`proceeding are the same party; and
`6. other circumstances that impact the Board’s exercise of
`discretion, including the merits.
`
`Fintiv at 6. Recognizing that “there is same overlap among these factors”
`
`and that “[s]ome facts may be relevant to more than onefactor,” the Board
`
`“takes a holistic view of whetherefficiency and integrity of the system are
`best served by denying or instituting review.” Jd.
`
`Asidentified above, the 395 district court case, which involves the
`
`°510 patent, is pending in the Eastern District of Texas. See Pet. 2; Paper6,
`
`2; Prelim. Resp. 4-5. The 395 district court case has a Docket Control Order
`
`entered that set December 14, 2020,as the deadline for completing fact
`discovery, January 21, 2021, as the deadline for completing expert
`
`discovery, and May 3, 2021, for jury selection andtrial. Ex. 1004, 1,3. The
`
`parties have advised usthat the date for jury selection has been movedto
`
`May 10, 2021. The Court has conducted a claim construction hearing, and
`
`on December7, 2020, issued a Claim Construction Opinion and Order.
`
`Paper 10; Ex. 2017.
`
`Petitioner advised us that the presiding judge in the 395 district court
`
`case, Judge Gilstrap, has continued jury trial dates in other cases scheduled
`
`for trial from December 2020 through February 2021, due to the COVID-19
`
`pandemic. See Ex. 3001. We have not, however, been informed of any
`
`change in the May 10, 2021 jury selection date in the 395 district court case.
`
`Weaddress each Fintiv factor below.
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`B. Factor 1 — Stay ofRelated Litigation Proceeding
`
`Petitioner filed a motion to stay the 395 district court case, which was
`
`denied without prejudice as premature because it was filed in advance of the
`
`Board’s decision to institute inter partes reviews on anyofthe asserted
`
`patents in the litigation.’ Ex. 2015, 3. Althoughthe district court denied the
`
`~ motion without prejudice, with refiling permitted within 24 days of the
`
`Board’s institution decisions for the asserted patents, Patent Owner argues
`
`that the District Court has not indicated one way or the other whether a stay
`
`is likely to be granted at that time. Prelim. Resp. 6—7.
`
`Because the Board has previously “decline[d] to infer” how a District
`
`Court would decide a stay motion, Petitioner asserts that this factoris
`
`neutral. Pet. 7 (quoting Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15
`
`at 12 (PTAB May13, 2020) (informative)). Patent Owner argues that
`
`becausethe District Court has not granted a stay and “would notlikely grant
`
`a stay given the lateness of the Petition, this factor favors denial of
`
`institution.” Prelim Resp. 7.
`
`Wedecline to speculate on the likelihood of how the District Court
`
`may rule on a future motion to stay. Accordingly, we find that this factoris
`
`neutral.
`
`C. Factor 2 — Proximity of Court’s Trial Date
`
`Patent Ownerarguesthat the Petition should be denied becausejury
`
`selection in the 395 district court case is scheduled approximately nine
`
`monthsbefore a final determination would issue in this case. Prelim. Resp.
`
`4, 7-10.
`
`’ Three patents, the °510 patent as well as U.S. Patent Nos. 10,469,614 and
`10,257,319, are asserted in the 395 district court case. Ex. 2015, 1.
`
`7
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`Petitioner alleges that Patent Ownerhas previously soughtto delay
`
`trials as the set trial date approaches. Pet. 7 (referring to Luminati Networks
`
`Ltd. v. UAB Tesonet, No. 2:18-cv-00299-JRG (E.D. Tex.)). Petitioner
`
`arguesthatin light of Patent Owner’s history and the potential for COVID-
`
`related delays, Factor 2 is neutral. /d. at 8. Patent Owner respondsthat the
`
`previouslitigation has been misrepresented by Petitioner, and instead Patent
`
`Ownerfiled a motion to consolidate the referenced case with another case to
`
`accelerate the date by which the ’510 patent infringement claims could be
`
`tried. Prelim. Resp.7.
`
`As mentioned above, Petitioner additionally brings to our attention
`
`Judge Gilstrap’s Order to continue jury trials from December 2020 through
`
`February of 2021, but the communication notes that Petitioner does not
`
`know what impact the continuances may have onthetrial date in this case.
`
`See Ex. 3001. Patent Ownerasserts that the Judge Gilstrap’s Order does not
`
`impact the schedulefortrial in the case, and “no other facts can be inferred
`
`from the Order.” Jd.
`
`As Patent Ownerasserts, the related jury trial in the 395 district court
`
`case is currently scheduled to occur approximately nine months before a
`
`final determination would issue in this case. Although there may be a delay
`
`in the trial date, presuming that there would be delay would be conjecture at
`
`this time. Accordingly, this factor favors discretionary denial of inter partes
`
`review.
`
`D. Factor 3 — Investmentin the Parallel Proceeding
`
`Petitioner notes that this Petition was filed less than three monthsafter
`
`the asserted claims were disclosed in the 395 district court case. Pet. 8.
`
`However, it is undisputed that at this time that claim construction briefing
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`has been completed, a Markman hearing was conducted, and a claim
`
`construction order issued in the 395 district court case, which includes
`
`interpretation of claim terms associated with the ’510 patent. See Ex. 2016.
`
`Underthe Docket Control Order, fact discovery in that case was completed
`
`on December 14, 2020, and expert discovery was completed on January 21,
`
`2021. See Ex. 1004, 1,3. The parties have not advised us of any changes to
`
`those dates as scheduled.
`
`Accordingly, in view ofthe status of the progress of the 395 district
`
`court case, we agree with Patent Ownerthat this factor favors denial of
`
`institution of inter partes review. See Prelim. Resp. 12.
`
`E. Factor 4 — Overlap With Issues Raised in Parallel Proceeding
`
`Petitioner asserts that because claims 1, 2, 8-11, 13, 15, 16, 18-20,
`
`22, and 23 are asserted in the 395 district court case, but the Petition also
`
`challenges claims 6, 7, 17, 21, and 24 of the ?510 patent, this factor weighs
`
`in favorof institution. Pet. 8.
`
`Patent Ownerarguesthat the overlap ofthe issues raised in Petition
`
`and the 395 district court case are substantial. Prelim Resp. 12. More
`
`specifically, Patent Owner contends that the Crowds, MorphMix, Border,
`
`and RFC 2616 priorart asserted in the challenges in this proceedingareall
`
`identified in the invalidity contentions in the 395 district court case. Id.
`
`(citing Ex. 2006, ff 3-4). Patent Owneralso asserts that only claim 1 of the
`
`°510 patent is independent, and the additional claims challenged in the
`
`Petition are all dependent. Jd. at 12-13. As such, Patent Ownerarguesthat
`
`there is no other independent claim at issue here that is not asserted in the
`
`district court case, and the resolution of the patentability of independent
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`claim 1 in the district court is also likely to have an impact on the additional
`
`dependentclaims challenged here. Jd. at 13.
`
`In light of the commonpriorart asserted here and in the 395 district
`
`court case, as well as the commonchallenge to the sole independent claim of
`
`the °510 patent, we agree with the Patent Ownerthat the overlap in issues
`
`between the two proceedings is substantial. Accordingly, we determine that
`
`this factor favors denial of institution of inter partes review.
`
`F. Factor 5 — Commonality ofParties in Parallel Proceedings
`
`Petitioner asserts that Code200 is a named petitioner here, but is not a
`
`defendant in the 395 district court case. Pet. 9. Patent Owner arguesthat
`
`three of the four named petitioners are also defendants in the 395 district
`
`court case. PO Resp. 13. Patent Owneralso asserts that there is a close
`
`corporate relationship between Code200 andthe other petitioners because
`
`they share a commonparent company. Jd. at 14 (citing Ex. 2013, Ex. 2014).
`
`Petitioner does not challenge this contention.
`
`Given the commonality of most of the parties in this proceeding and
`
`395 district court case, we find that this factor favors denial ofinstitution.
`
`G. Factor 6 — Other Circumstances
`
`Petitioner contends that the challenged patent is “extraordinarily
`
`weak,” and policy favors instituting review underthese circumstances. Pet.
`
`9. Patent Ownerdisagrees, arguing that Petitioner’s reading of the claimsis
`
`unreasonable andtheasserted prior art is weak. Prelim. Rep. 15—16.
`
`We have reviewed Petitioner’s unpatentability arguments and Patent
`
`Owner’s preliminary responses, and based on the limited record before us,
`
`we do notfind that the merits outweigh the other Fintiv factors favoring
`
`denial of institution.
`
`10
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`H. Conclusion
`
`The majority of the Fintiv factors, and particularly factor 2, the
`
`proximity ofthetrial date in the 395 district court case, favor the denial of
`
`institution. Thus, based on our assessmentof the Fintiv factors, we exercise
`
`our discretion under 35 U.S.C. § 314(a) to deny inter partes review.
`
`III. ORDER
`
`Accordingly,it is:
`
`ORDEREDthatthe Petition is denied as to all grounds andall
`
`challenged claims of the 510 patent.
`
`“Ul
`
`
`
`IPR2020-01358
`Patent 10,484,510 B2
`
`For PETITIONER:
`
`Craig Tolliver
`George Scott
`CHARHON, CALLAHAN, ROBSON & GARZA, PLLC
`ctolliver@tolliverlawfirm.com
`jscott@ccrglaw.com
`
`For PATENT OWNER:
`
`Thomas Dunham
`Don Livornese
`RUYAKCHERIAN LLP
`tomd@dunham.cc
`donl@ruyakcherian.com
`
`12
`
`
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