throbber
Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 16
`Date: October 2, 2020
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`BENTLEY MOTORS LIMITED AND BENTLEY MOTORS, INC.,
`Petitioner,
`
`v.
`
`JAGUAR LAND ROVER LIMITED,
`Patent Owner.
`
`IPR2019-01539
`Patent RE46,828 E
`
`
`
`
`
`
`
`
`
`Before BARRY L. GROSSMAN, KEVIN W. CHERRY, and
`BRENT M. DOUGAL, Administrative Patent Judges.
`
`GROSSMAN, Administrative Patent Judge.
`
`DECISION
`Denying Petitioner’s Request for Rehearing of
`Decision Denying Institution of Inter Partes Review
`37 C.F.R. § 42.71(d)
`
`
`
`
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`Bentley Motors Limited and Bentley Motors, Inc. (“Petitioner”) filed
`
`a petition (Paper 1, “Pet.”) to institute an inter partes review of claims 21,
`
`24, 30, 32–34, 37, 39, 41–43, 45, and 46 (collectively the “challenged
`
`claims”) of U.S. Patent No. RE46,828 E (Ex. 1001, “the ’828 patent”).
`
`Jaguar Land Rover Limited (“Patent Owner”) timely filed a Preliminary
`
`Response. Paper 7 (“Prelim. Resp.”). In its Preliminary Response, Patent
`
`Owner requested that the Board apply its discretion under 35 U.S.C.
`
`§ 314(a) to deny institution of the requested proceeding due to the advanced
`
`state of a parallel district court litigation1 in which the same issues have been
`
`presented. Prelim. Resp. 49‒52 (citing NHK Spring Co. v. Intri-Plex Techs.,
`
`Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential,
`
`designated May 7, 2019)).
`
`The Board denied institution pursuant to 35 U.S.C. § 314(a). Paper 9
`
`(Mar. 10, 2020) (Decision Denying Institution or “DDI”). When the
`
`Decision Denying Institution was entered, a jury trial was scheduled for
`
`October 13, 2020. DDI, 14. The trial date was five months before a PTAB
`
`Final Decision would have issued if we had instituted trial. Id. In our
`
`Decision Denying Institution, we found that the factors weighing most in
`
`favor of discretionary denial were (1) substantial overlap in patent claims
`
`challenged in the Virginia District Court litigation; (2) overlap in the
`
`obviousness theories and references that Petitioner is pursuing here and in
`
`the Virginia District Court litigation; (3) the advanced stage of the Virginia
`
`
`1 Jaguar Land Rover Limited v. Bentley Motors Limited and Bentley Motors,
`Inc., Civ. No. 2:18-cv-320 (E.D. Va.) (“the Virginia District Court
`litigation”).
`
`2
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`District Court litigation; and (4) the significant investment by the Court and
`
`parties into the Virginia District Court litigation. Id. at 15.
`
`Petitioner filed a Request for Rehearing of the Denial Decision.
`
`Paper 10 (“Req. Reh’g” or “Request for Rehearing”). Concurrently
`
`therewith, Petitioner requested that the Board’s Precedential Opinion Panel
`
`(“POP”) reconsider the Denial Decision. Paper 11; Ex. 3002 (“POP
`
`Request”). The issue submitted for POP review was “whether under
`
`35 U.S.C. Section 314(a) and NHK Spring, the state of a parallel district
`
`court action involving a common invalidity dispute can be the sole or
`
`primary basis for denying institution.” Ex. 3002, 2.
`
`On June 16, 2020, the POP declined to review Petitioner’s POP
`
`Request. Paper 12. We now consider Petitioner’s Request for Rehearing.
`
`By an e-mail dated June 19, 2020 (see Ex. 3003), Petitioner contacted
`
`the Board to “call to the Board’s attention” a June 16, 2020 decision in Sand
`
`Revolution II, LLC v. Continental Intermodal Group – Trucking LLC,
`
`IPR2019-01393, Paper 24 (PTAB, June 16, 2020), wherein the parties were
`
`provided an opportunity to address the factors relevant to a discretionary
`
`denial discussed in Apple Inc. v. Fintiv Inc., IPR2020-00019, Paper 11
`
`(PTAB Mar. 20, 2020 (designated Precedential May 5, 2020). Our Decision
`
`Denying Institution in the proceeding before us was mailed on March 10,
`
`2020, which was before the Apple v. Fintiv proceeding was decided or
`
`designated precedential.
`
`Petitioner’s e-mail (Ex. 3003) also informed us that the status of the
`
`related Virginia District Court litigation] “has changed since the Board’s
`
`original decision,” stating only that “the October 13, 2020 trial date has now
`
`been rescheduled for February 23, 2021.” Ex. 3003. The trial date was
`
`3
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`changed based on a Joint Motion to Extend Deadlines filed by the parties
`
`seeking “to extend the currently pending deadlines set in the September 25,
`
`2019 Scheduling Order (ECF No. 55, ‘Scheduling Order’), and other
`
`currently pending deadlines, by sixty (60) to ninety (90) days . . . in light of
`
`complications related to the coronavirus disease (COVID-19) outbreak.”
`
`Ex. 1064. The Court granted the Joint Motion and issued an “Agreed Order”
`
`revising the Scheduling Order due dates, with a new trial date “TBD.”
`
`Ex. 3004. On May 5, 2020, the Court issued an Order stating the new trial
`
`date is February 23, 2021. Ex. 3005.
`
`We determined that supplemental briefing of the Request for
`
`Rehearing was warranted on the application of Apple v. Fintiv to the facts of
`
`this case. Paper 13. The parties filed supplemental rehearing briefs. Paper
`
`14 (Petitioner's Supplemental Rehearing Brief) (“Pet. Suppl. Reh’g. Br.”);
`
`Paper 15 (Patent Owner’s Supplemental Rehearing Response) (“PO Suppl.
`
`Reh’g. Resp.”)).
`
`We now consider Petitioner’s Request for Rehearing of our Decision
`
`Denying Institution.
`
`I. ANALYSIS
`
`A. Request for Rehearing
`
`When rehearing a decision on institution, the Board reviews the
`
`decision for an abuse of discretion. 37 C.F.R. § 42.71(c). An abuse of
`
`discretion may arise if the decision is based on an erroneous interpretation of
`
`law, if a factual finding is not supported by substantial evidence, or if an
`
`unreasonable judgment is made in weighing relevant factors. Star Fruits
`
`S.N.C. v. U.S., 393 F.3d 1277, 1281 (Fed. Cir. 2005); Arnold P’ship v.
`
`4
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004); In re Gartside, 203 F.3d
`
`1305, 1315–16 (Fed. Cir. 2000).
`
`The burdens and requirements of a request for rehearing are stated in
`
`37 C.F.R. § 42.71(d):
`
`(d) Rehearing. . . . The burden of showing a decision should be
`modified lies with the party challenging the decision. The
`request must specifically identify all matters the party believes
`the Board misapprehended or overlooked, and the place where
`each matter was previously addressed in a motion, an opposition,
`or a reply.
`
`Petitioner asserts that “under NHK Spring, the Board here abused its
`
`§ 314(a) discretion because it lacked an independent reason for denying
`
`review beyond the existence of a related district court action.” Req.
`
`Reh’g 3. According to Petitioner, “NHK Spring does not give the Board
`
`authority to deny institution solely or primarily because a related district
`
`court action could potentially resolve the overlapping invalidity disputes
`
`before a final decision by the Board.” Id. We disagree. Petitioner has
`
`provided no persuasive authority supporting its interpretation of NHK
`
`Spring. Binding precedent, discussed below, is contrary to Petitioner’s
`
`argued interpretation.
`
`The Board determines whether to institute a trial on behalf of the
`
`Director. 37 C.F.R. § 42.4(a). The Director “possesses broad discretion in
`
`deciding whether to institute review.” Saint Regis Mohawk Tribe v. Mylan
`
`Pharm. Inc., 896 F.3d 1322, 1327 (Fed. Cir. 2018), cert. denied, 139 S. Ct.
`
`1547 (2019) (citing Oil States Energy Services v. Greene’s Energy Group,
`
`LLC, 138 S. Ct. 1365, 1371 (2018)); see also Cuozzo Speed Techs., LLC v.
`
`Lee, 136 S. Ct. 2131, 2140 (2016) (“[T]he agency’s decision to deny a
`
`petition is a matter committed to the Patent Office’s discretion.”). “If the
`
`5
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`Director decides not to institute, for whatever reason, there is no review. In
`
`making this decision, the Director has complete discretion to decide not to
`
`institute review.” Saint Regis Mohawk Tribe, 896 F.3d at 1327 (emphases
`
`added) (citing Oil States, 138 S. Ct. at 1371) (“The decision whether to
`
`institute inter partes review is committed to the Director’s discretion.”).
`
`“The Director bears the political responsibility of determining which cases
`
`should proceed. While he has the authority not to institute review on the
`
`merits of the petition, he could deny review for other reasons such as
`
`administrative efficiency” (id.) or because a related district court action will
`
`resolve overlapping patentability disputes before a final decision by the
`
`Board. See Apple v. Fintiv, IPR2020-00019, Paper 11, 5–6 (identifying six
`
`factors to be considered when a patent owner raises an argument for
`
`discretionary denial due to the advanced state of a parallel district court
`
`proceeding). In evaluating these factors, “the Board takes a holistic view of
`
`whether efficiency and integrity of the system are best served by denying or
`
`instituting review.” Id. at 6. We address below the Apple v. Fintiv factors
`
`based on the evidence and arguments of the parties.
`
`1. Whether the court granted a stay or evidence
` exists that one may be granted if a proceeding is instituted
`
`The District Court has not granted a stay. We have not been directed
`
`to any evidence that either party requested a stay.
`
`Petitioner states “Petitioner will move immediately for a stay of the
`
`district court action if the Board institutes this IPR.” Pet. Suppl. Reh’g.
`
`Br. 4. Whether the Court would grant a stay is unknown.
`
`On the record before us, the parties fail to show persuasively that the
`
`District Court would, or would not, grant a stay. Accordingly, Fintiv
`
`6
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`factor 1 weighs evenly for each party. See Apple Inc. v. Seven Networks,
`
`LLC, IPR2020-00506, Paper 11 at 7 (PTAB Sept. 1, 2020).
`
`2.
`Proximity of the Court’s trial date to the Board’s
`projected statutory deadline for a final written decision
`
`The Court amended the original trial date and reset the trial date for
`
`February 23, 2021. Ex. 3005. This revised trial date was in light of a Joint
`
`Motion of the parties to extend due dates because of complications related to
`
`the COVID-19 pandemic. Ex. 1064.
`
`Assuming we were to institute an inter partes review in this
`
`proceeding in October, 2020, our Final Decision would be due in October,
`
`2021. This would be about eight months after the February 23, 2021, trial
`
`date.
`
`When a district court’s trial date occurs before the projected statutory
`
`deadline, the Board generally weighs this factor in favor of exercising
`
`authority to deny institution under § 314(a). Fintiv, Paper 11 at 9. However,
`
`other variables here contribute to the uncertainty that the jury trial will occur
`
`on February 23, 2021, as currently scheduled. See Ex. 3005. The
`
`coronavirus pandemic already disrupted the trial date once, and the situation
`
`continually evolves. The parties’ previous Joint Motion to extend District
`
`Court scheduling order dates (see Ex. 1064 (District Court Order granting
`
`the Joint Motion to Extend Deadlines because of the COVID-19 pandemic))
`
`and uncertainty as to whether the trial will actually go forward on February
`
`23, 2021, the presently scheduled date, diminishes the extent to which this
`
`factor weighs in favor of exercising discretion to deny institution. See Sand
`
`Revolution II, LLC v. Continental Intermodal Group – Trucking LLC,
`
`IPR2019-01393, Paper 24 at 9–10 (June 16, 2020) (informative) (“because
`
`of the number of times the parties have jointly moved for and the district
`
`7
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`court agreed to extend the scheduling order dates . . . and the uncertainty that
`
`continues to surround the scheduled trial date, we find that this factor weighs
`
`marginally in favor of not exercising discretion to deny institution under
`
`35 U.S.C. § 314(a)”).
`
`Given the substantial gap of almost eight months between the trial
`
`date and the final written decision deadline in this proceeding, assuming we
`
`granted rehearing and instituted a trial in October, 2020, it is unlikely, based
`
`on the present record, that the trial date would be delayed to a date after a
`
`final written decision in this proceeding as a result of COVID-19.
`
`Therefore, given that the District Court’s currently scheduled trial date
`
`falls about eight months before the projected statutory deadline for a final
`
`written decision, but accounting for the uncertainty as to whether the trial
`
`actually will start on the currently scheduled date, Fintiv factor 2 weighs
`
`moderately in favor of exercising our discretion to not institute a trial. See
`
`Apple v. Seven Networks, IPR2020-00506, Paper 11 at 7–9.
`
`3.
`
`Investment in the parallel proceeding
`by the Court and the parties
`
`We discussed this factor in our Decision Denying Institution under the
`
`heading “Stage of the Litigation.” DDI, 12–15. Since our Decision, the
`
`District Court and the parties have continued to invest significant time and
`
`resources in getting this case ready for trial. See, e.g., Ex. 3009, which is an
`
`excerpt of the District Court docket for the last 90 days as of October 1,
`
`2020. The Court held a remote Markman hearing on May 21, 2020 via
`
`ZoomGov and has remained very active since that time. Ex. 1065
`
`(transcript), Ex. 3006, Ex. 3009.
`
`As explained in the Apple v. Fintiv Order, “[t]his investment factor is
`
`related to the trial date factor, in that more work completed by the parties
`
`8
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`and the court in the parallel proceeding tends to support the arguments that
`
`the parallel proceeding is more advanced, a stay may be less likely, and
`
`instituting would lead to duplicative costs.” Apple v. Fintiv, Paper 11 at 10.
`
`Based on the existing District Court PACER docket and the current
`
`schedule and trial date (see Ex. 1064, 3005), before we would institute an
`
`inter partes review in this case, which likely would be by the end of
`
`October, 2020 (assuming we determine to institute), the District Court and
`
`the parties will have invested significant time and resources in getting this
`
`case ready for trial:
`
` The Court issued an Opinion and Order denying a motion to
`
`dismiss under 35 U.S. § 101 (31 pages – analyzing the patented
`
`technology, the claims, and other evidence and concluding
`
`claims were patent-eligible);
`
` Fact discovery closed on January 17, 2020;
`
` Claim construction has been fully briefed and a Markman
`
`hearing was held on May 21, 2020 (Ex. 1065, 3006);
`
` Opening, Responsive, and Rebuttal Expert Reports were due by
`
`September 24, 2020 (Ex. 1064);
`
` Expert discovery closes on October 14, 2020 (Ex. 1064);
`
` Dispositive motions are due October 21, 2020 (Ex. 1064).
`
`In this case, the substantial work already completed by the parties and
`
`the Court in the parallel proceeding are facts that collectively weigh strongly
`
`in favor of denying institution and avoiding duplication of efforts at PTAB.
`
`Moreover, if we were to institute a proceeding, the following
`
`additional investment of time and resources by the District Court and the
`
`9
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`parties will occur after institution but before our final decision in October,
`
`2021 (again, assuming we institute a proceeding in October ,2020):
`
` Pretrial disclosures are due November 24, 2020 (Ex. 1064);
`
` Attorney’s pre-trial conference will be held January 29, 2021
`
`(Ex. 3005);
`
` Final Pretrial Conf. will be held February 5, 2021(Ex. 3005);
`
` Voir Dire and Jury Instructions will be filed on February 16,
`
`2021 (Ex. 3005); and
`
` The trial will begin February 23, 2021.
`
`These additional facts also collectively weigh strongly in favor of
`
`denying institution.
`
`4.
`
`Overlap between issues raised in the petition
` and in the parallel proceeding
`
`In our Decision Denying Institution, we discussed the overlap of
`
`issues between this IPR proceeding and the District Court case. DDI 9–12
`
`(discussing overlap of claims and overlap of references on the issue of
`
`patentability/validity). We found there is substantial duplication between
`
`the claims at issue in this IPR proceeding and the claims at issue in the
`
`District Court. Id. at 11. We also found we find there is duplication
`
`between the evidence and grounds of unpatentability in this IPR proceeding
`
`and the evidence and grounds of invalidity asserted in the District Court.
`
`DDI, 12. We determined these findings weigh in favor of discretionary
`
`denial. Id. at 11, 12. These facts have not changed. This factor continues to
`
`weigh in favor of discretionary denial of an inter partes review.
`
`10
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`5. Whether the petitioner and the defendant in the
`parallel proceeding are the same party
`
`The parties in the IPR proceeding before us (Bentley Motors Limited
`
`and Bentley Motors Inc. as Petitioners, and Jaguar Land Rover Limited, as
`
`Patent Owner) are identical to the parties in the District Court.
`
`Accordingly, this factor weighs in favor of discretionary denial.
`
`6.
`
`Other circumstances that impact the Board’s
`exercise of discretion, including the merits.
`
`The factors considered in the exercise of discretion are part of a
`
`balanced assessment of all the relevant circumstances in the case, including
`
`the merits. Apple v. Fintiv, IPR2020-00019, Paper 11, 14. For example, if
`
`the merits of a ground raised in the petition seem particularly strong on the
`
`preliminary record, this fact has favored institution. Id. at 14–15. By
`
`contrast, if the merits of the grounds raised in the petition are a closer call,
`
`then that fact has favored denying institution when other factors favoring
`
`denial are present. Id. at 15. Here, we determine that Petitioner does not
`
`have a particularly strong merits argument.
`
`In a related Petition in IPR2019-01502, Petitioner herein challenged
`
`the same claims of the same patent as are challenged in the proceeding
`
`before us. See IPR2019-01502, Paper 10 (the “1502 IPR”). The prior art
`
`asserted, and the arguments made, in the 1502 IPR are substantially similar
`
`to those in the proceeding before us. We determined that the prior art in the
`
`1502 IPR failed “to describe a vehicle control system ‘arranged to control a
`
`plurality of vehicle subsystems,’ as recited in” all the challenged claims.
`
`Id. at Paper 10, 11. Our preliminary analysis of the merits here indicates the
`
`same problem with Petitioner’s case.
`
`11
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`The fact that the merits of this proceeding are not strong favors
`
`discretionary denial.
`
`Petitioner argues that other identified real parties in interest in this
`
`IPR proceeding, Volkswagen AG, Volkswagen Group of America, Inc.
`
`(“Volkswagen”), Dr. Ing. h.c.F. Porsche AG (“Porsche”), and Audi AG
`
`(“Audi”), are not defendants in the District Court. Pet. Suppl. Reh’g. Br. 6–
`
`72. While this stated fact is true, it is irrelevant to our determination of
`
`whether we exercise discretion to deny a petition.
`
`Our rules require that parties to a proceeding provide certain
`
`mandatory notices, including identification of the “real parties-in-interest.”
`
`37 C.F.R. § 42.8(b)(1). One of the core functions of the “real party-in-
`
`interest” requirement is to assure proper application of the statutory estoppel
`
`provisions. Consol. Trial Practice Guide 12–13 (Nov. 2019); see also
`
`35 U.S.C. § 315(e) (stating that estoppel applies only when the IPR
`
`proceeding “results in a final written decision under section 318(a).”). If we
`
`do not institute an IPR proceeding, there is no final written decision.
`
`Petitioner also argues “the real parties in interest are now time-barred
`
`from filing another IPR petition.” Pet. Suppl. Reh’g. Br. 7. This Petition
`
`was filed on August 24, 2019, and these parties were time-barred days later
`
`on August 30, 2019 based on the one-year time bar established in 35 U.S.C.
`
`§ 315(b) (“An inter partes review may not be instituted if the petition
`
`requesting the proceeding is filed more than 1 year after the date on which
`
`the petitioner, real party in interest, or privy of the petitioner is served with a
`
`complaint alleging infringement of the patent.”). See Ex. 1070 (Affidavit of
`
`
`2 See Ex. 2035, identifying Bentley, Porsche, and Audi as part of the
`Volkswagen corporate family.
`
`12
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`Service on Petitioner, Bentley Motors, Inc., on August 30, 2018). This
`
`proceeding does not concern the other identified real parties, and therefore,
`
`this argument is not persuasive towards the duplication of effort at PTAB
`
`based on the parallel district court proceeding.
`
`7.
`
`Conclusion
`
`Under Fintiv, the Board takes “a holistic view of whether efficiency
`
`and integrity of the system are best served by denying or instituting review.”
`
`Fintiv, Paper 11 at 6. Fintiv factor 1 weighs evenly for each party. Fintiv
`
`factor 2 weighs moderately in favor of exercising our discretion to not
`
`institute a trial. Fintiv factor 3 weighs strongly in favor of denying
`
`institution and avoiding duplication at PTAB of discovery and other work by
`
`the parties and the Court. Fintiv factor 4 weighs in favor of discretionary
`
`denial of an inter partes review. Fintiv factor 5 weighs in favor of
`
`discretionary denial. Fintiv factor 6 favors discretionary denial. Thus, based
`
`on this analysis, we determine under the particular circumstances of this
`
`case, the interests of efficiency and integrity of the patent system tilt toward
`
`invoking our discretionary authority under § 314(a) to deny institution of the
`
`Petition.
`
`Based on our analysis, Petitioner has not shown that we abused our
`
`discretion in denying the Petition. Accordingly, the request for rehearing is
`
`denied.
`
`II. ORDER
`
`For the reasons given, it is:
`
`ORDERED that the request for rehearing is denied.
`
`13
`
`

`

`IPR2019-01539
`Patent RE46,828 E
`
`PETITIONER:
`
`Edgar Haug
`Brian Murphy
`Robert Colletti
`HAUG PARTNERS LLP
`ehaug@haugpartners.com
`bmurphy@haugpartners.com
`rcolletti@haugpartners.com
`
`PATENT OWNER:
`
`Jon Strang
`Clement Naples
`LATHAM & WATKINS LLP
`clement.naples@lw.com
`jonathan.strang@lw.com
`
`
`14
`
`

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