Trials@uspto.gov
`571-272-7822
`
`Paper 12
`Entered: June 2, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TESO LT, UAB; CODE200, UAB; METACLUSTERLT, UAB;
`AND OXYSALES, UAB,
`Petitioner,
`
`Vv.
`
`LUMINATI NETWORKSLTD.,
`Patent Owner.
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`Before THOMASL. GIANNETTI, SHEILA F. McSHANE,and
`RUSSELLE. CASS, Administrative Patent Judges.
`
`McSHANE,Administrative Patent Judge.
`
`DECISION
`DenyingInstitution of Jnter Partes Review
`35 US.C. § 314
`
`
`571-272-7822
`
`Paper 12
`Entered: June 2, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TESO LT, UAB; CODE200, UAB; METACLUSTERLT, UAB;
`AND OXYSALES, UAB,
`Petitioner,
`
`Vv.
`
`LUMINATI NETWORKSLTD.,
`Patent Owner.
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`Before THOMASL. GIANNETTI, SHEILA F. McSHANE,and
`RUSSELLE. CASS, Administrative Patent Judges.
`
`McSHANE,Administrative Patent Judge.
`
`DECISION
`DenyingInstitution of Jnter Partes Review
`35 US.C. § 314
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`I,
`
`INTRODUCTION
`
`A.
`Background and Summary
`Teso LT, UAB, Code200, UAB, Metacluster LT, UAB, and Oxysales,
`UAB (“Teso”or“Petitioner”)! filed a Petition requesting inter partes review
`of claims 1, 2, 8, 9, 11-18, 24, and 26-28 of U.S. Patent No. 10,637,968 B2
`(Ex. 1001, “the ’968 patent”), along with the supporting Declaration of
`Michael Freedman, Ph.D. Paper 5 (“Pet.”); Ex. 1011. Luminati Networks
`Ltd. (“Luminati” or “Patent Owner”) filed a Preliminary Response to the
`
`Petition. Paper 10 (“‘Prelim. Resp.”).
`We haveauthority under 35 U.S.C. § 314(a), which provides that an
`inter partes review may notbe instituted “unless .
`.
`. the information
`presented in the petition .
`.
`. showsthat there is a reasonable likelihoodthat
`the petitioner would prevail with respect to at least 1 of the claims
`
`challengedin the petition.”
`For the reasons that follow, we exercise our discretion under
`
`35 U.S.C. § 314(a) to denyinstitution of inter partes review.
`
`B.
`
`Related Matters
`
`The parties identify the related litigations, Luminati Networks Ltd. v.
`Code200, UAB, 2:19-cv-00396-JRG (E.D.Tex.) (“the 396 district court
`case”), Luminati Networks, Ltd. v. NetNut, Ltd., 2:20-cv-00188-JRG (E.D.
`Tex.), and Luminati Networks Ltd. v. Tefincom S.A. D/B/A NordVPN,2:19-
`cv-00414-JRG (E.D. Tex.). Pet. 2; Paper 7, 2-3.
`Theparties note that another petition wasfiled in IPR2020-01266
`(now denied), directed to U.S. Patent No. 10,257,319, which claimsthe
`
`' Petitioner additionally identifies coretech It, UAB as a real party-in-
`interest. Pet. 1.
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`benefit of the same provisional application and is a continuation of the same
`
`application as the 968 patent. Pet. 1; Paper 7, 2. The parties note that
`anotherpetition was filed in IPR2020-01358 (now denied) that asserted
`challenges to U.S. Patent No. 10,484,510, which claims the benefit of the
`
`sameprovisional application and is a continuation of the same application as
`the °968 patent. Pet. 1-2; Paper 7, 3. The parties additionally note that
`
`anotherpetition wasfiled in IPR2021-00122 (now denied) that asserted
`
`challenges to U.S. Patent No. 10,484,511, which claims the benefit of the
`
`sameprovisional, and is a continuation of the same application as the
`
`068 patent. Pet. 2; Paper 7, 3.
`
`C.
`
`The ’968 Patent
`
`The ’968 patentis titled “System Providing Faster and More Efficient
`
`Data Communication” and issued on April 28, 2010, from an application
`
`filed on April 28, 2019. Ex. 1001, codes (22), (45), (54). The application
`
`for the 968 patent is a continuation of several applications, and other related
`
`applications include a divisional application and a provisional application.
`
`See id. at code (60).
`
`The ’968 patent is directed to a system and methodfor increasing
`
`network communication speed for users, while lowering network congestion
`
`for content owners and internet 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.
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`The communication request is sent to the agents. Ex. 1001, code (57).
`
`One or moreof the agents respond with a list of peers that have previously
`seen someorall of the content whichis the response to this request (after
`
`checking whetherthis data is still valid). Jd. The client then downloadsthe
`data from these peers in parts andin parallel, thereby speeding up the Web
`transfer, releasing congestion from the Webby fetching the information
`from multiple sources, and relieving traffic from Web servers by offloading
`
`the data transfers from them to nearby peers. Id.
`
`Challenged claim 1 is the only independent claim ofthe 968 patent,
`
`Claim 1 is reproduced below.
`
`1. A method for use with a requesting client device that comprises an
`Hypertext Transfer Protocol (HTTP) or Hypertext Transfer Protocol
`Secure (HTTPS)client, for use with a first web server that is a HTTP
`or HTTPS serverthat respectively responds to HTTP or HTTPS
`requests andstoresafirst content identified by a first content
`identifier, for use with a second serverdistinct from the first web
`server and identified in the Internet by a second IP address, and for
`use with a list of IP addresses, the method comprising:
`identifying, by the requesting client device, an HTTP or HTTPS
`request for the first content;
`selecting, by the requesting client device, an IP address from
`the list;
`sending, by the requesting client device, to the second server
`using the second IP address over the Internet in response to the
`identifying andthe selecting, the first content identifier and the
`selected IP address; and
`receiving, by the requesting client device, over the Internetin
`responseto the sending, from the secondserver using the
`selected IP address, the first content.
`
`Ex. 1001, 19:16-35.
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`D.—Asserted Grounds of Unpatentability
`
`Petitioner challenges the patentability of claims of the °968 patent on
`
`the following grounds:
`
`
`Reference(s)/Basis
`35 U.S.C.§
`Claim(s) Challenged
`
`
`
`1, 2, 13-17, 26-28|102(b)’
`
`
`
`a 8,9, TITS, 26|193(a) MorphMix, RFC 26164
`
`
`1,2, 8,9, ll, 12,
`
`15-18, 24, 26-28
`103(a)
`Cottrell5, RFC 2616
`
`
`
`
`
`
`
`
`Pet. 5.
`
`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. 1-14.
`
`In assessing whether to exercise such discretion, the Board weighsthe
`
`following factors:
`
`* The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
`Stat. 284, 287-88 (2011), amended 35 U.S.C. §§ 102 and 103, effective
`March 16, 2013. Because the ’968 patent claimspriority to a provisional
`application that wasfiled before this date, with Petitioner not contesting that
`priority, the pre-AIA versions of §§ 102 and 103 apply. See Ex. 1001,
`code (60); Pet. 10.
`3 Marc Rennhard, MorphMix — A Peer-to-Peer-based System for
`AnonymousInternet Access (2004) (Ph.D. dissertation, published by ETH
`Zurich Research Collection) (Ex. 1013).
`4 Hypertext Transfer Protocol—HTTP/1.1, Network Working Group, RFC
`2616, The Internet Society, 1999 (Ex. 1012).
`> U.S. Patent Application No. 2008/0196098 Al, published August 14, 2008
`(Ex. 1017).
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`1. whether the court granted a stay or evidence exists that one
`may be granted if a proceedingis 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. overlap betweenissuesraised in the petition and in the
`parallel proceeding;
`5. whetherthe petitioner and the defendantin the parallel
`proceeding are the sameparty; and .
`6. other circumstances that impact the Board’s exercise of
`discretion, including the merits.
`
`Fintiv at 6. Recognizing that “there is some overlap amongthese factors”
`
`and that “[s]ome facts may be relevant to more than one factor,” the Board
`
`“takes a holistic view of whetherefficiency and integrity of the system are
`
`best served by denyingorinstituting review.” Id.
`
`Asidentified above, the 396 district court case, which involvesthe
`
`’968 patent, is pending in the Eastern District of Texas. See Pet. 2; Paper 7,
`
`2; Prelim. Resp. 1-2. A Docket Control Order entered in that case sets
`
`February 22, 2021, as the deadline for completing fact discovery, March 29,
`
`2021, as the deadline for completing expert discovery, and July 12, 2021, for
`
`jury selection for a trial. Ex. 1005, 1,3. The District Court conducted a
`
`claim construction hearing on January 29, 2021, and, on February 8, 2021,
`
`issued a Claim Construction Opinion and Order. See Prelim. Resp. 2; Ex.
`
`2002.
`
`Weaddress each Fintiv factor below.
`
`B. Factor 1 — Stay ofRelated Litigation Proceeding
`
`No party has requested a stay of the pending 396 case by the District
`
`Court. Pet. 6; Prelim Resp. 7. Petitioner argues that because the Board has
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`previously “decline[d] to infer” how a district court would decide a stay
`
`motion, this factor is neutral. Pet. 6 (alteration in original).
`
`Patent Ownerrefers to Petitioner’s filing of a motionto stay in
`
`Luminati Networks Ltd. v. Teso LT, UAB, No. 2:19-cv-395 (E.D. Texas),
`
`which concernsrelated patents, as instructive. Prelim. Resp. 7. Patent
`
`Ownerarguesthat in that case, Petitioner concededthat, as a generalrule,
`
`“such stays are not granted.” Jd. (emphasis omitted). Patent Owneralso
`
`asserts that in that case: (1) the stay motion was denied before an institution
`
`decision by the Board; (2) Petitioner could not again seek a stay “until after
`
`an institution decision issuesastoall of the district court patents involved
`
`under Board review;” and (3) the District Court did not indicate one way or
`
`the other as to whether a stay would likely be granted at that time. Jd.
`
`Patent Ownerrefers to the Board’s conclusion in other prior petitions that
`
`whether a court would grant a stay was speculation. Jd. Patent Owner
`
`argues that factor 1 “strongly favors denial ofinstitution.” Jd. at 8.
`
`Weare not persuaded by Patent Owner’s arguments becausethey rely
`
`on guesswork concerning future District Court actions. We, therefore,
`
`decline to speculate on the likelihood of how the District Court may rule on
`
`a future motion to stay. Accordingly, we find that this factor is neutral.
`
`C. Factor 2 — Proximity of Court’s Trial Date
`
`Patent Ownerarguesthat the Petition should be denied because jury
`
`selection in the 396 district court case is scheduled approximately eleven
`
`months before a final determination would issue in this case, if it were
`
`instituted. Prelim. Resp. 8.
`
`Petitioner alleges that Patent Owner has previously sought to delay
`
`trials as the set trial date approaches. Pet. 6—7 (referring to Luminati
`
`
`
`TPR2021-00249
`Patent 10,637,968 B2
`
`Networks Lid. v. UAB Tesonet, No. 2:18-cv-00299-JRG (E.D. Tex.)).
`
`Petitioner refers to Judge Gilstrap’s Order to continuejury trials from
`
`December2020 through February 2021, and states that “commonsense
`
`counsels that a continuance of three monthsofjurytrials in one of this
`
`country’s busiest patent dockets may impacttrial dates in 2021.” Id. at 7
`(citing Ex. 1008, 1). Petitioner argues that in light of Patent Owner’s
`history, the busy District Court docket, and the potential for COVID-related
`
`delays, Factor 2 is neutral. Jd.
`
`Petitioner also filed a Notice Of Issuance Of Order Relevant To
`
`Parallel District Court Litigation. Paper 11 (“Notice”). The Notice states
`that in Case No. 2:19-cv-00395-JRG (“395 case”), a parallel litigation, the
`
`District Court ordered that the beginningoftrial (jury selection) date be reset
`to July 12, 2021 pursuantto the parties’ Joint Motion to Reschedule Pretrial
`Conference. /d. at 1-2 (citing Ex. 1037). Petitioner argues that the 396
`
`district court caseis also set for jury selection on July 12, 2021, and because
`
`Patent Ownercontendsthat the °395 case should commencefirst, the
`
`396 district court case “should not commence”at that time. Jd. at 2.
`
`Petitionerasserts that“it is not clear when the 396case will reachtrial.” Jd.
`
`Patent Ownerarguesthat Petitioner’s reference to a potential COVID-
`19 trial delay is speculative. Prelim. Resp. 8. Patent Owneralso asserts that
`whether Patent Ownersettled a prior lawsuit at the pretrial conference is
`
`irrelevant here, because that settled case does not meanthat this case will
`
`settle, given the different facts and parties at issue. Jd. Patent Owner
`contends that Judge Gilstrap’s December 2020 continuances have no impact
`on the trial date here. Jd. at 8-9. Patent Ownerfurther respondsto
`
`Petitioner’s argumentsin the Notice related to the °395 case date change by
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`asserting that there has been no changeto the 396 district court schedule,
`
`and “[p]er the practice of the Court, multiple cases often share the same jury
`
`selection date with the trials to follow.” Notice 3.
`
`As Patent Ownercontends, the related jury trial in the 396 district
`
`court case is currently scheduled to occur approximately eleven months
`
`before a final determination would issue in this case. Althoughrealistically
`
`there may be somedelayin the trial date due to crowded docket conditions
`
`or other factors, presuming that there would be extensive delay would be
`
`conjecture at this time. Accordingly, given the eleven month differencein
`
`dates, this factor favors exercising our discretion to deny institution ofinter
`
`partes review.
`
`D. Factor 3 — Investmentin the Parallel Proceeding
`
`Petitioner notes that this Petition wasfiled less than five monthsafter
`
`the asserted claims were disclosed in the 396 district court case and nearly
`
`six months before co-petitioner’s statutory deadline for filing an inter partes
`
`review.® Pet. 7-8. However, there has been substantial investment by the
`
`parties and the District Court in the litigation. It is undisputedthat at this
`
`time claim construction briefing is completed in the 396 district court case, a
`
`Markman hearing has been conducted,and a claim construction order
`
`issued, which includesinterpretation of claim terms associated with the ’968
`
`patent. See Ex. 2002. Under the Docket Control Order, fact discovery in the
`
`case was completed on February 22, 2021, and expert discovery was
`
`completed on March 29, 2021. See Ex. 1005, 1,3. The parties have not
`
`advised us of any changesto those dates as scheduled.
`
`® As noted below, Teso LT,the first-namedpetitioner, is not a defendant in
`the 396 district court case.
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`Although we acknowledgethatPetitionerfiled this Petition
`substantially in advance of the one-year statutory bar, we are not persuaded
`
`that filing the Petition less than five monthsafter the asserted claims were
`
`disclosed in the 396 district court case outweighs the substantial progress
`
`and investmentin the 396 district court case. Accordingly, we agree with
`
`Patent Ownerthat this factor favors exercising our discretion to deny
`
`institution of inter partes review. See Prelim. Resp. 11.
`
`E. Factor 4 — Overlap With Issues Raised in Parallel Proceeding
`
`Petitioner asserts that while claims 1, 2, 8, 9, 11, 12, 15, 17, 18, and
`
`26-28 of the ?968 patent are asserted in the 396 district court case, the
`
`Petition also challenges claims 13, 14, 16, and 24, and therefore this factor
`
`weighsin favorofinstitution. Pet. 8.
`
`Patent Owner arguesthat the overlap of the issues raised in Petition
`
`with those in the 396 district court case is substantial. Prelim. Resp. 12.
`
`Morespecifically, Patent Owner contendsthat the MorphMix, Cottrell, and
`
`RFC 2616 prior art references asserted in the challengesin this proceeding
`
`are all identified in the invalidity contentions in the 396 district court case.
`
`Id. (citing Ex. 2009 Jf 3-4). Patent Ownerfurther asserts that only claim 1
`
`of the °968 patent is independent, and the additional claims challenged in the
`
`Petition are all dependent claims. /d. at 12-13. Thus, Patent Ownerargues
`
`that there is no independent claim challenged here that is not also asserted in
`
`the District Court case, and that the additional dependent claims challenged
`
`here do not representa significant difference. Jd.
`
`Wenote that it is stipulated that the parties to the Petition, excluding
`
`Teso LT, which is not a defendantin the 396 district court case, are asserting
`
`10
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`the same references—MorphMix,Cottrell, and RFC 2616—fortheir
`
`challenges here andin the district court case. Ex. 2009 fq 3-4.
`
`In light of the commonpriorart asserted here andin the 396 district
`
`court case, as well as the commonchallenge to the sole independentclaim of
`
`the °968 patent, we agree with Patent Ownerthat the overlap in issues
`
`between the two proceedingsis substantial. Accordingly, we determine that
`
`this factor favors exercising our discretion to deny institution of inter partes
`
`review.
`
`F. Factor 5 — Commonality ofParties in Parallel Proceedings
`
`Petitioner asserts that Teso LT is a namedpetitioner here, but is not a
`
`defendantin the 396 district court case, although it has been sued for
`
`infringementin cases asserting other related patents. Pet. 8. Patent Owner
`
`argues that three of the four namedpetitioners are also defendants in the 396
`
`district court case. Prelim. Resp. 13. Patent Owneralsoasserts that there is
`
`a close corporate relationship between Teso LT and the other named
`
`petitioners because they admittedly are sister companies. Jd. (citing Pet. 5).
`
`Given the commonality of most of the petitioners in this proceeding
`
`and the defendants in the 396 district court case, and the close relationship of
`
`all the petitioners, we find that this factor favors exercising our discretion to
`
`deny institution.
`
`G. Factor 6 — Other Circumstances
`
`Petitioner contends that the challenged patent is “extraordinarily
`
`weak,” and policy favors instituting review under these circumstances. Pet.
`
`8. Patent Ownerdisagrees, arguing that Petitioner’s reading of the claimsis
`
`unreasonable and the asserted prior art is weak. Prelim. Resp. 14. Patent
`
`Owneralso asserts that NetNut Ltd. filed an ex parte reexamination request
`
`11
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`against the °968 patent, which was granted. Jd. As such, Patent Owner
`
`argues that the Patent Office is already considering validity issues of the
`
`°968 patent. Id.
`
`Wehave reviewed Petitioner’s unpatentability arguments and Patent
`
`Owner’s preliminary responses, and based onthe limited record before us,
`
`wedo notfind that the merits outweigh the other Fintiv factors favoring
`
`exercising our discretion to denyinstitution.
`
`H. Conclusion
`
`The majority of the Fintiv factors favor the denial ofinstitution. Thus,
`
`based on ourholistic assessment of the Fintiv factors, we exercise our
`
`discretion under 35 U.S.C. § 314(a) to deny inter partes review.
`
`III. ORDER
`
`Accordingly,it is:
`
`ORDEREDthat the Petition is denied as to all grounds andall
`
`challenged claimsof the ’968 patent.
`
`12
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`For PETITIONER:
`
`Craig Tolliver
`George Scott
`CHARHON, CALLAHAN, ROBSON & GARZA, PLLC
`ctolliver@ccrglaw.com
`jscott@ccrglaw.com
`
`For PATENT OWNER:
`
`Thomas Dunham
`Don Livornese
`RUYAKCHERIAN LLP
`tomd@dunham.cc
`donl@ruyakcherian.com
`
`13
`
`
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