`Tel: 571-272-7822
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`Paper 16
`Date: October 2, 2020
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`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)
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`
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`IPR2019-01539
`Patent RE46,828 E
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`Bentley Motors Limited and Bentley Motors, Inc. (“Petitioner”) filed
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`a petition (Paper 1, “Pet.”) to institute an inter partes review of claims 21,
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`24, 30, 32–34, 37, 39, 41–43, 45, and 46 (collectively the “challenged
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`claims”) of U.S. Patent No. RE46,828 E (Ex. 1001, “the ’828 patent”).
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`Jaguar Land Rover Limited (“Patent Owner”) timely filed a Preliminary
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`Response. Paper 7 (“Prelim. Resp.”). In its Preliminary Response, Patent
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`Owner requested that the Board apply its discretion under 35 U.S.C.
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`§ 314(a) to deny institution of the requested proceeding due to the advanced
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`state of a parallel district court litigation1 in which the same issues have been
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`presented. Prelim. Resp. 49‒52 (citing NHK Spring Co. v. Intri-Plex Techs.,
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`Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential,
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`designated May 7, 2019)).
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`The Board denied institution pursuant to 35 U.S.C. § 314(a). Paper 9
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`(Mar. 10, 2020) (Decision Denying Institution or “DDI”). When the
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`Decision Denying Institution was entered, a jury trial was scheduled for
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`October 13, 2020. DDI, 14. The trial date was five months before a PTAB
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`Final Decision would have issued if we had instituted trial. Id. In our
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`Decision Denying Institution, we found that the factors weighing most in
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`favor of discretionary denial were (1) substantial overlap in patent claims
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`challenged in the Virginia District Court litigation; (2) overlap in the
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`obviousness theories and references that Petitioner is pursuing here and in
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`the Virginia District Court litigation; (3) the advanced stage of the Virginia
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`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”).
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`2
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`IPR2019-01539
`Patent RE46,828 E
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`District Court litigation; and (4) the significant investment by the Court and
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`parties into the Virginia District Court litigation. Id. at 15.
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`Petitioner filed a Request for Rehearing of the Denial Decision.
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`Paper 10 (“Req. Reh’g” or “Request for Rehearing”). Concurrently
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`therewith, Petitioner requested that the Board’s Precedential Opinion Panel
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`(“POP”) reconsider the Denial Decision. Paper 11; Ex. 3002 (“POP
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`Request”). The issue submitted for POP review was “whether under
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`35 U.S.C. Section 314(a) and NHK Spring, the state of a parallel district
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`court action involving a common invalidity dispute can be the sole or
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`primary basis for denying institution.” Ex. 3002, 2.
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`On June 16, 2020, the POP declined to review Petitioner’s POP
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`Request. Paper 12. We now consider Petitioner’s Request for Rehearing.
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`By an e-mail dated June 19, 2020 (see Ex. 3003), Petitioner contacted
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`the Board to “call to the Board’s attention” a June 16, 2020 decision in Sand
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`Revolution II, LLC v. Continental Intermodal Group – Trucking LLC,
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`IPR2019-01393, Paper 24 (PTAB, June 16, 2020), wherein the parties were
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`provided an opportunity to address the factors relevant to a discretionary
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`denial discussed in Apple Inc. v. Fintiv Inc., IPR2020-00019, Paper 11
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`(PTAB Mar. 20, 2020 (designated Precedential May 5, 2020). Our Decision
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`Denying Institution in the proceeding before us was mailed on March 10,
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`2020, which was before the Apple v. Fintiv proceeding was decided or
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`designated precedential.
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`Petitioner’s e-mail (Ex. 3003) also informed us that the status of the
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`related Virginia District Court litigation] “has changed since the Board’s
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`original decision,” stating only that “the October 13, 2020 trial date has now
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`been rescheduled for February 23, 2021.” Ex. 3003. The trial date was
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`3
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`IPR2019-01539
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`changed based on a Joint Motion to Extend Deadlines filed by the parties
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`seeking “to extend the currently pending deadlines set in the September 25,
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`2019 Scheduling Order (ECF No. 55, ‘Scheduling Order’), and other
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`currently pending deadlines, by sixty (60) to ninety (90) days . . . in light of
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`complications related to the coronavirus disease (COVID-19) outbreak.”
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`Ex. 1064. The Court granted the Joint Motion and issued an “Agreed Order”
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`revising the Scheduling Order due dates, with a new trial date “TBD.”
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`Ex. 3004. On May 5, 2020, the Court issued an Order stating the new trial
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`date is February 23, 2021. Ex. 3005.
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`We determined that supplemental briefing of the Request for
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`Rehearing was warranted on the application of Apple v. Fintiv to the facts of
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`this case. Paper 13. The parties filed supplemental rehearing briefs. Paper
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`14 (Petitioner's Supplemental Rehearing Brief) (“Pet. Suppl. Reh’g. Br.”);
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`Paper 15 (Patent Owner’s Supplemental Rehearing Response) (“PO Suppl.
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`Reh’g. Resp.”)).
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`We now consider Petitioner’s Request for Rehearing of our Decision
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`Denying Institution.
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`I. ANALYSIS
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`A. Request for Rehearing
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`When rehearing a decision on institution, the Board reviews the
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`decision for an abuse of discretion. 37 C.F.R. § 42.71(c). An abuse of
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`discretion may arise if the decision is based on an erroneous interpretation of
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`law, if a factual finding is not supported by substantial evidence, or if an
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`unreasonable judgment is made in weighing relevant factors. Star Fruits
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`S.N.C. v. U.S., 393 F.3d 1277, 1281 (Fed. Cir. 2005); Arnold P’ship v.
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`4
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`IPR2019-01539
`Patent RE46,828 E
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`Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004); In re Gartside, 203 F.3d
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`1305, 1315–16 (Fed. Cir. 2000).
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`The burdens and requirements of a request for rehearing are stated in
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`37 C.F.R. § 42.71(d):
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`(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.
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`Petitioner asserts that “under NHK Spring, the Board here abused its
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`§ 314(a) discretion because it lacked an independent reason for denying
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`review beyond the existence of a related district court action.” Req.
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`Reh’g 3. According to Petitioner, “NHK Spring does not give the Board
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`authority to deny institution solely or primarily because a related district
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`court action could potentially resolve the overlapping invalidity disputes
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`before a final decision by the Board.” Id. We disagree. Petitioner has
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`provided no persuasive authority supporting its interpretation of NHK
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`Spring. Binding precedent, discussed below, is contrary to Petitioner’s
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`argued interpretation.
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`The Board determines whether to institute a trial on behalf of the
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`Director. 37 C.F.R. § 42.4(a). The Director “possesses broad discretion in
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`deciding whether to institute review.” Saint Regis Mohawk Tribe v. Mylan
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`Pharm. Inc., 896 F.3d 1322, 1327 (Fed. Cir. 2018), cert. denied, 139 S. Ct.
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`1547 (2019) (citing Oil States Energy Services v. Greene’s Energy Group,
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`LLC, 138 S. Ct. 1365, 1371 (2018)); see also Cuozzo Speed Techs., LLC v.
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`Lee, 136 S. Ct. 2131, 2140 (2016) (“[T]he agency’s decision to deny a
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`petition is a matter committed to the Patent Office’s discretion.”). “If the
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`5
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`Director decides not to institute, for whatever reason, there is no review. In
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`making this decision, the Director has complete discretion to decide not to
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`institute review.” Saint Regis Mohawk Tribe, 896 F.3d at 1327 (emphases
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`added) (citing Oil States, 138 S. Ct. at 1371) (“The decision whether to
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`institute inter partes review is committed to the Director’s discretion.”).
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`“The Director bears the political responsibility of determining which cases
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`should proceed. While he has the authority not to institute review on the
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`merits of the petition, he could deny review for other reasons such as
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`administrative efficiency” (id.) or because a related district court action will
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`resolve overlapping patentability disputes before a final decision by the
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`Board. See Apple v. Fintiv, IPR2020-00019, Paper 11, 5–6 (identifying six
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`factors to be considered when a patent owner raises an argument for
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`discretionary denial due to the advanced state of a parallel district court
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`proceeding). In evaluating these 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. at 6. We address below the Apple v. Fintiv factors
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`based on the evidence and arguments of the parties.
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`1. Whether the court granted a stay or evidence
` exists that one may be granted if a proceeding is instituted
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`The District Court has not granted a stay. We have not been directed
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`to any evidence that either party requested a stay.
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`Petitioner states “Petitioner will move immediately for a stay of the
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`district court action if the Board institutes this IPR.” Pet. Suppl. Reh’g.
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`Br. 4. Whether the Court would grant a stay is unknown.
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`On the record before us, the parties fail to show persuasively that the
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`District Court would, or would not, grant a stay. Accordingly, Fintiv
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`6
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`IPR2019-01539
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`factor 1 weighs evenly for each party. See Apple Inc. v. Seven Networks,
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`LLC, IPR2020-00506, Paper 11 at 7 (PTAB Sept. 1, 2020).
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`2.
`Proximity of the Court’s trial date to the Board’s
`projected statutory deadline for a final written decision
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`The Court amended the original trial date and reset the trial date for
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`February 23, 2021. Ex. 3005. This revised trial date was in light of a Joint
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`Motion of the parties to extend due dates because of complications related to
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`the COVID-19 pandemic. Ex. 1064.
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`Assuming we were to institute an inter partes review in this
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`proceeding in October, 2020, our Final Decision would be due in October,
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`2021. This would be about eight months after the February 23, 2021, trial
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`date.
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`When a district court’s trial date occurs before the projected statutory
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`deadline, the Board generally weighs this factor in favor of exercising
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`authority to deny institution under § 314(a). Fintiv, Paper 11 at 9. However,
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`other variables here contribute to the uncertainty that the jury trial will occur
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`on February 23, 2021, as currently scheduled. See Ex. 3005. The
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`coronavirus pandemic already disrupted the trial date once, and the situation
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`continually evolves. The parties’ previous Joint Motion to extend District
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`Court scheduling order dates (see Ex. 1064 (District Court Order granting
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`the Joint Motion to Extend Deadlines because of the COVID-19 pandemic))
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`and uncertainty as to whether the trial will actually go forward on February
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`23, 2021, the presently scheduled date, diminishes the extent to which this
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`factor weighs in favor of exercising discretion to deny institution. See Sand
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`Revolution II, LLC v. Continental Intermodal Group – Trucking LLC,
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`IPR2019-01393, Paper 24 at 9–10 (June 16, 2020) (informative) (“because
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`of the number of times the parties have jointly moved for and the district
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`7
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`court agreed to extend the scheduling order dates . . . and the uncertainty that
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`continues to surround the scheduled trial date, we find that this factor weighs
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`marginally in favor of not exercising discretion to deny institution under
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`35 U.S.C. § 314(a)”).
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`Given the substantial gap of almost eight months between the trial
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`date and the final written decision deadline in this proceeding, assuming we
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`granted rehearing and instituted a trial in October, 2020, it is unlikely, based
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`on the present record, that the trial date would be delayed to a date after a
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`final written decision in this proceeding as a result of COVID-19.
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`Therefore, given that the District Court’s currently scheduled trial date
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`falls about eight months before the projected statutory deadline for a final
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`written decision, but accounting for the uncertainty as to whether the trial
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`actually will start on the currently scheduled date, Fintiv factor 2 weighs
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`moderately in favor of exercising our discretion to not institute a trial. See
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`Apple v. Seven Networks, IPR2020-00506, Paper 11 at 7–9.
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`3.
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`Investment in the parallel proceeding
`by the Court and the parties
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`We discussed this factor in our Decision Denying Institution under the
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`heading “Stage of the Litigation.” DDI, 12–15. Since our Decision, the
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`District Court and the parties have continued to invest significant time and
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`resources in getting this case ready for trial. See, e.g., Ex. 3009, which is an
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`excerpt of the District Court docket for the last 90 days as of October 1,
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`2020. The Court held a remote Markman hearing on May 21, 2020 via
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`ZoomGov and has remained very active since that time. Ex. 1065
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`(transcript), Ex. 3006, Ex. 3009.
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`As explained in the Apple v. Fintiv Order, “[t]his investment factor is
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`related to the trial date factor, in that more work completed by the parties
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`8
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`and the court in the parallel proceeding tends to support the arguments that
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`the parallel proceeding is more advanced, a stay may be less likely, and
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`instituting would lead to duplicative costs.” Apple v. Fintiv, Paper 11 at 10.
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`Based on the existing District Court PACER docket and the current
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`schedule and trial date (see Ex. 1064, 3005), before we would institute an
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`inter partes review in this case, which likely would be by the end of
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`October, 2020 (assuming we determine to institute), the District Court and
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`the parties will have invested significant time and resources in getting this
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`case ready for trial:
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` The Court issued an Opinion and Order denying a motion to
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`dismiss under 35 U.S. § 101 (31 pages – analyzing the patented
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`technology, the claims, and other evidence and concluding
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`claims were patent-eligible);
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` Fact discovery closed on January 17, 2020;
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` Claim construction has been fully briefed and a Markman
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`hearing was held on May 21, 2020 (Ex. 1065, 3006);
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` Opening, Responsive, and Rebuttal Expert Reports were due by
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`September 24, 2020 (Ex. 1064);
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` Expert discovery closes on October 14, 2020 (Ex. 1064);
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` Dispositive motions are due October 21, 2020 (Ex. 1064).
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`In this case, the substantial work already completed by the parties and
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`the Court in the parallel proceeding are facts that collectively weigh strongly
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`in favor of denying institution and avoiding duplication of efforts at PTAB.
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`Moreover, if we were to institute a proceeding, the following
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`additional investment of time and resources by the District Court and the
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`9
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`IPR2019-01539
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`parties will occur after institution but before our final decision in October,
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`2021 (again, assuming we institute a proceeding in October ,2020):
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` Pretrial disclosures are due November 24, 2020 (Ex. 1064);
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` Attorney’s pre-trial conference will be held January 29, 2021
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`(Ex. 3005);
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` Final Pretrial Conf. will be held February 5, 2021(Ex. 3005);
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` Voir Dire and Jury Instructions will be filed on February 16,
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`2021 (Ex. 3005); and
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` The trial will begin February 23, 2021.
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`These additional facts also collectively weigh strongly in favor of
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`denying institution.
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`4.
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`Overlap between issues raised in the petition
` and in the parallel proceeding
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`In our Decision Denying Institution, we discussed the overlap of
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`issues between this IPR proceeding and the District Court case. DDI 9–12
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`(discussing overlap of claims and overlap of references on the issue of
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`patentability/validity). We found there is substantial duplication between
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`the claims at issue in this IPR proceeding and the claims at issue in the
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`District Court. Id. at 11. We also found we find there is duplication
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`between the evidence and grounds of unpatentability in this IPR proceeding
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`and the evidence and grounds of invalidity asserted in the District Court.
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`DDI, 12. We determined these findings weigh in favor of discretionary
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`denial. Id. at 11, 12. These facts have not changed. This factor continues to
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`weigh in favor of discretionary denial of an inter partes review.
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`10
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`5. Whether the petitioner and the defendant in the
`parallel proceeding are the same party
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`The parties in the IPR proceeding before us (Bentley Motors Limited
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`and Bentley Motors Inc. as Petitioners, and Jaguar Land Rover Limited, as
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`Patent Owner) are identical to the parties in the District Court.
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`Accordingly, this factor weighs in favor of discretionary denial.
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`6.
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`Other circumstances that impact the Board’s
`exercise of discretion, including the merits.
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`The factors considered in the exercise of discretion are part of a
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`balanced assessment of all the relevant circumstances in the case, including
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`the merits. Apple v. Fintiv, IPR2020-00019, Paper 11, 14. For example, if
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`the merits of a ground raised in the petition seem particularly strong on the
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`preliminary record, this fact has favored institution. Id. at 14–15. By
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`contrast, if the merits of the grounds raised in the petition are a closer call,
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`then that fact has favored denying institution when other factors favoring
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`denial are present. Id. at 15. Here, we determine that Petitioner does not
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`have a particularly strong merits argument.
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`In a related Petition in IPR2019-01502, Petitioner herein challenged
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`the same claims of the same patent as are challenged in the proceeding
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`before us. See IPR2019-01502, Paper 10 (the “1502 IPR”). The prior art
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`asserted, and the arguments made, in the 1502 IPR are substantially similar
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`to those in the proceeding before us. We determined that the prior art in the
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`1502 IPR failed “to describe a vehicle control system ‘arranged to control a
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`plurality of vehicle subsystems,’ as recited in” all the challenged claims.
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`Id. at Paper 10, 11. Our preliminary analysis of the merits here indicates the
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`same problem with Petitioner’s case.
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`11
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`The fact that the merits of this proceeding are not strong favors
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`discretionary denial.
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`Petitioner argues that other identified real parties in interest in this
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`IPR proceeding, Volkswagen AG, Volkswagen Group of America, Inc.
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`(“Volkswagen”), Dr. Ing. h.c.F. Porsche AG (“Porsche”), and Audi AG
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`(“Audi”), are not defendants in the District Court. Pet. Suppl. Reh’g. Br. 6–
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`72. While this stated fact is true, it is irrelevant to our determination of
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`whether we exercise discretion to deny a petition.
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`Our rules require that parties to a proceeding provide certain
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`mandatory notices, including identification of the “real parties-in-interest.”
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`37 C.F.R. § 42.8(b)(1). One of the core functions of the “real party-in-
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`interest” requirement is to assure proper application of the statutory estoppel
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`provisions. Consol. Trial Practice Guide 12–13 (Nov. 2019); see also
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`35 U.S.C. § 315(e) (stating that estoppel applies only when the IPR
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`proceeding “results in a final written decision under section 318(a).”). If we
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`do not institute an IPR proceeding, there is no final written decision.
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`Petitioner also argues “the real parties in interest are now time-barred
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`from filing another IPR petition.” Pet. Suppl. Reh’g. Br. 7. This Petition
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`was filed on August 24, 2019, and these parties were time-barred days later
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`on August 30, 2019 based on the one-year time bar established in 35 U.S.C.
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`§ 315(b) (“An inter partes review may not be instituted if the petition
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`requesting the proceeding is filed more than 1 year after the date on which
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`the petitioner, real party in interest, or privy of the petitioner is served with a
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`complaint alleging infringement of the patent.”). See Ex. 1070 (Affidavit of
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`2 See Ex. 2035, identifying Bentley, Porsche, and Audi as part of the
`Volkswagen corporate family.
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`12
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`Service on Petitioner, Bentley Motors, Inc., on August 30, 2018). This
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`proceeding does not concern the other identified real parties, and therefore,
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`this argument is not persuasive towards the duplication of effort at PTAB
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`based on the parallel district court proceeding.
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`7.
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`Conclusion
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`Under Fintiv, the Board takes “a holistic view of whether efficiency
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`and integrity of the system are best served by denying or instituting review.”
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`Fintiv, Paper 11 at 6. Fintiv factor 1 weighs evenly for each party. Fintiv
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`factor 2 weighs moderately in favor of exercising our discretion to not
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`institute a trial. Fintiv factor 3 weighs strongly in favor of denying
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`institution and avoiding duplication at PTAB of discovery and other work by
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`the parties and the Court. Fintiv factor 4 weighs in favor of discretionary
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`denial of an inter partes review. Fintiv factor 5 weighs in favor of
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`discretionary denial. Fintiv factor 6 favors discretionary denial. Thus, based
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`on this analysis, we determine under the particular circumstances of this
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`case, the interests of efficiency and integrity of the patent system tilt toward
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`invoking our discretionary authority under § 314(a) to deny institution of the
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`Petition.
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`Based on our analysis, Petitioner has not shown that we abused our
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`discretion in denying the Petition. Accordingly, the request for rehearing is
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`denied.
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`II. ORDER
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`For the reasons given, it is:
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`ORDERED that the request for rehearing is denied.
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`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
`
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`14
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