UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_________________
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`TV MANAGEMENT INC., D/B/A GPS NORTH AMERICA
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`Petitioner,
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`v.
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`PERDIEM CO., LLC.
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`Patent Owner
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`_________________
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`Case IPR2016-01063
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`U.S. Patent 8,717,166
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`_________________
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`PETITIONER’S REPLY TO PATENT OWNER RESPONSE
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`1
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_________________
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`TV MANAGEMENT INC., D/B/A GPS NORTH AMERICA
`
`Petitioner,
`
`v.
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`PERDIEM CO., LLC.
`
`Patent Owner
`
`_________________
`
`Case IPR2016-01063
`
`U.S. Patent 8,717,166
`
`_________________
`
`PETITIONER’S REPLY TO PATENT OWNER RESPONSE
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`1
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`EXHIBIT LIST1
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`Ex. 1001 U.S. Patent No. 8,717,166 (“’166 Patent”)
`Ex. 1002
`The file history of the ’166 Patent
`Ex. 1003 U.S. Patent No. 7,327,258 (“Fast”)
`Ex. 1004 U.S. Provisional Patent App. No. 60/542,208 (“Fast Provisional”)
`Ex. 1005 U.S. Patent Pub. No. US 2005/0156715 (“Zou”)
`Ex. 1006 Discrete Wireless’s Marcus GPS Fleet Management Application
`Product Brochure (“Marcus”)
`Ex. 1007 U.S. Patent App. No. 14/629,336, Response to Non-Final Office
`Action (Feb. 11, 2016)
`Success Stories in Fleet Tracking (Sept. 1, 2005)
`Ex. 1008
`Ex. 1009 U.S. Patent No. 7,949,608 (“Li”)
`Ex. 1010
`Software as a Service Article (“SaaS Article”)
`Ex. 1011
`Infringement Contentions in related litigation
`Ex. 1012 Declaration of Dr. Stephen Heppe
`Ex. 1013 Declaration of Vivek Ganti, Esq.
`Ex. 1014 Declaration of William Steckel
`Ex. 1015 Declaration of Steven G. Hill
`Ex. 1016 Declaration of Michael Femal
`Ex. 1017 Patent Assignment
`Ex. 1018 Perdiem’s Texas Business Formation (April 2015)
`Ex. 1019 Perdiem’s Litigation Press Release (May 2015)
`Ex. 1020 Article on the American Intellectual Property Association 2015
`Report of the Economic Survey
`Ex. 1021 Perdiem’s infringement complaint against Forward Thinking
`Systems LLC
`Ex. 1022 Perdiem’s infringement complaint against GPS Logic, LLC
`Ex. 1023 Perdiem’s infringement complaint against LiveViewGPS, Inc.
`Ex. 1024 Perdiem’s infringement complaint against thingtech LLC
`Ex. 1025 Pending claims of Application No. 14/629,347
`Ex. 1026 Pending claims of Application No. 15/200,592
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`1 Newly Filed Exhibits in Bold
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`2
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`Patent Owner filed its Patent Owner Response (POR) on March 2, 2017.
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`Petitioner submits this Reply pursuant to 37 C.F.R. §42.23 and the Scheduling
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`Order.
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`I.
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`Patent Owner’s Request for Adverse Judgment
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`On March 2, 2017, Patent Owner disclaimed all claims that are pending in
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`the instant trial. (Ex. 2011). Patent Owner filed its POR indicating that a request
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`to file a motion for adverse judgment is forthcoming. (POR, p.1). Thereafter,
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`Patent Owner requested authorization to file a motion for adverse judgment, which
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`the Board granted authorization to file such a motion via email. Patent Owner has
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`not yet filed a motion for adverse judgment.
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`Procedurally, “a party may request judgment against itself at any time during
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`a proceeding.” 37 CFR § 42.73(b). The rules refer to a “request” not “a motion.”
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`A request can be construed based on a party’s action. Id. By filing a disclaimer,
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`Patent Owner has already requested adverse judgement. (See Id. stating “actions
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`construed to be a request for adverse judgment include . . . disclaimer of a claim
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`such that the party has no remaining claim in the trial.”). For these reasons, Patent
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`Owner has sufficiently requested adverse judgement by disclaiming all pending
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`claims through its USPTO filing. (Ex. 2011). At this point, the Board needs
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`nothing more from the parties to grant Patent Owner’s request for adverse
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`judgment.
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`3
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`II. Recommendation Pursuant to 37 C.F.R. §42.73(c)
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`In the likely event that the Board grants Patent Owner’s request for adverse
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`judgment, Petitioner urges the Board to make a recommendation pursuant to 37
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`C.F.R. §42.73(c) relating to the ongoing prosecution of two applications that share
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`the same specification as the patent-at-issue. Specifically, the Board should
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`recommend to the Examiner to evaluate the two pending patent applications and
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`consider whether any of the recently allowed claims should be re-evaluated, based
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`on 1) the Board’s institution decision in IPR2016-01061, -01062, -01063, -01064,
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`and -01278 and 2) any forthcoming adverse judgements, which preclude Patent
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`Owner from pursuing claims that are not patentably distinct from the disclaimed
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`claims. See 37 CFR §42.73(d)(3).
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`In addition, the Board should recommend to the Examiner to require Patent
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`Owner to explain how any of the recently-allowed (but pending) claims are
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`patentably distinct from the claims that are subject to 1) the related institution
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`decisions, 2) any future final written decision, and 3) any adverse judgement.
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`Petitioner is not aware of an instance where the Board previously made a Rule
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`73(c) Recommendation, but the facts in this case warrant consideration of such a
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`recommendation.
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`The recently-filed disclaimer and the forthcoming adverse judgment in these
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`proceedings are part of a pattern of “sue-and-settle” litigation activity which
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`4
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`derives strength from the Patent Owner’s ability to continue to request examination
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`of what are, at best, repetitive claims.
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`The patent-at-issue is part of a portfolio of patents that share a common
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`specification. The portfolio began when Mr. Diem filed Provisional Patent App.
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`No. 60/752,879 and a non-provisional App. No. 11/335,699. Two years later he
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`assigned his patent rights to his patent attorney, Mr. Babayi. (Ex. 1017). Under
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`Mr. Babayi’s control, the non-provisional issued as U.S. Pat. No. 7,525,425 on
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`April 28, 2009. Mr. Babayi subsequently began filing numerous patent
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`applications based on Mr. Diem’s provisional, resulting in a considerable portfolio
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`of patents and applications comprising numerous claims that are overlapping and,
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`in some cases, repetitive. (See table below).
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` Patent Owner was formed in April 2015 in Texas. (Ex. 1018). Upon
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`formation, it commenced litigation in the Eastern District of Texas in May 2015
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`(Ex. 1019). Patent Owner extracted numerous settlements by leveraging the high
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`costs of patent litigation.2 (See IPR2016-01061, Declaration of Alan Whitehurst).
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`For example, when the’931 Patent issued on June, 30, 2015, Patent Owner filed
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`2 The American Intellectual Property Association 2015 Report of the Economic
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`Survey concluded that the median patent litigation costs for a mid-size case is $1-
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`2.5M. (Ex. 1020, p.1).
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`5
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`
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`four new lawsuits two days later. PerdiemCo, LLC. v. Forward Thinking Systems
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`LLC, 2:15-cv-01220; Perdiem Co LLC v. GPS Logic, LLC, 2:15-cv-01216,
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`PerdiemCo, LLC. v. LiveViewGPS, Inc., 2:15-cv-01219, PerdiemCo, LLC. v.
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`thingtech LLC., 2:15-cv-01218. (Exs. 1021-1024).
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`The following table summarizes the portfolio, as well as the related IPR
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`status, if any, of each issued patent:
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`
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`App/ Pat No.
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`Filing Date Issue Date USPTO/IPR status
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`12-23-05
`60/752,879
`11/335,699/ 7,525,425 1-20-06
`12/428,008/ 8,149,113 4-22-09
`13/437,725/ 8,223,012 4-2-12
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`13/550,788/ 8,493,207 7-17-12
`13/948,785/ 8,717,166 7-23-13
`14/270,890/ 9,003,499 5-6-14
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`N/A
`4-8-09
`3-14-12
`7-17-12
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`7-23-13
`5-6-14
`4-7-15
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`14/620,913/ 9,071,931 2-12-15
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`6-30-15
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`14/629,336/ 9,319,471 2-23-15
`14/629,343/ 9,485,314 2-23-15
`14/629,347
`2-23-15
`14/629,355/ 9,119,033 2-23-15
`15/200,592
`7-1-16
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`4-19-16
`11-1-16
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`8-25-15
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`N/A
`None filed
`IPR2017-00969
`IPR2016-01061 &
`IPR2017-00574
`IPR2016-01062
`IPR2016-01063
`IPR2016-01064 &
`IPR2017-00575
`IPR2016-01278 &
`IPR2017-00636
`IPR2017-00973
`IPR2017-00968
`Notice of Allowance/RCE
`IPR2017-01007
`Notice of Allowance/RCE
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`The table emphasizes two pending applications, 14/629,347 and 15/200,592. The
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`examiner has allowed the claims in spite of the fact that the claims repeat
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`limitations of those found in the instituted IPRs and disclaimed claims. For
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`6
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`example, the pending claims in App. No. 14/629,378 (Ex. 1025) and App. No.
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`15/200,592 (Ex. 1026) include concepts such as “first level of administrative
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`privileges,” “second level of administrative privileges,” “user identification code,”
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`and “ISEs,” which are found in the disclaimed claims. In addition, the pending
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`claims include “one or more servers configured to” limitations like those found in
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`the ’931 Patent, which is subject to the instituted IPR trial, IPR2016-01278. The
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`applications are still pending because Patent Owner recently filed a request for
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`continued examination to submit an Information Disclosure Statement.
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`
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`37 CFR §42.73(d)(3) precludes Patent Owner from pursuing claims that are
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`not patentably distinct from the disclaimed claims at issue in the instant
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`proceedings. If the claims-at-issue in these pending applications issue, Petitioner
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`expects that they too will be the subject of future litigation consistent with the
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`foregoing pattern of litigation. Moreover, Patent Owner will continue to prosecute
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`patent applications claiming the subject matter of Mr. Diem’s original conception
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`in ways that overlap and repeat the limitations of the patent which it has now been
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`forced to disclaim when faced with these proceedings.
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`Patent Owner can afford to disclaim claims when an invalidity judgment is
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`imminent so long as it can re-prosecute similar claims in a new patent application
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`without oversight. For these reasons, Petitioner urges the Board to make the
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`7
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`suggested recommendation relating to the examination of these two patent
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`applications.
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`III. Conclusion
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`For these reasons, Petitioner requests the Board to grant Patent Owner’s
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`request for adverse judgement. In addition, Petitioner requests the Board to issue a
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`Rule 73(c) recommendation as indicated above.
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`IV. Certification of Compliance
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`Pursuant to 37 C.F.R. § 42.24(d), the undersigned certifies that Microsoft
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`Word counts 1,082 words in this Petition, not including the table of contents, the
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`table of authorities, the mandatory notices under § 42.8, the certificate of service,
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`an appendix of exhibits, or the claim listing.
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`HILL, KERTSCHER & WHARTON, LLP
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`Date: March 16, 2017
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`/Vivek Ganti/
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`
` Vivek Ganti (Registration No. 71,368)
`Lead Counsel for Petitioners
`3350 Riverwood Pkwy, Suite 800
`Atlanta, GA 30339
`(770) 953-0995
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`8
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`CERTIFICATION OF SERVICE
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`The undersigned hereby certifies that the foregoing paper was served via
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`electronic mail on March 16, 2017, as agreed to by the parties pursuant to 37
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`C.F.R. § 42.105, in its entirety on the following:
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`Alan Whitehurst
`AlanWhitehurst@quinnemanuel.com
`Quinn-PerDiem@quinnemanuel.com
`Quinn Emanuel Urquhart & Sullivan, LLP
`777 6th Street NW 11th floor
`Washington, D.C. 20001-3706
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`Date: March 16, 2017
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`Respectfully submitted,
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`HILL, KERTSCHER & WHARTON,
`LLP
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`/Vivek Ganti/
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`
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`Vivek Ganti (Reg. No. 71,368)
`Lead Counsel for Petitioners
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`3350 Riverwood Pkwy, Suite 800
`Atlanta, GA 30339
`(770) 953-0995
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`9
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