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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________________________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________________________________
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`INTEL CORPORATION
`Petitioner
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`v.
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`PACT XPP SCHWEIZ AG
`Patent Owner
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`U.S. Patent No. 7,928,763
`U.S. Patent No. 9,552,047
`U.S. Patent No. 9,037,807
`U.S. Patent No. 9,075,605
`U.S. Patent No. 9,170,812
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`Case IPR2020-00537
`Case IPR2020-00539
`Case IPR2020-00540
`Case IPR2020-00541
`Case IPR2020-00542
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`PETITIONER’S REPLY PURSUANT TO BOARD ORDER
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`Petitioner’s Reply Pursuant to Board Order
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`Table of Contents
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`I.
`II.
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`Page
`PACT Was Properly Served Under 37 C.F.R. § 42.105(a) ............................. 1
`Petitioner Is Not Statutorily Barred Because Its Declaratory-Judgment
`Complaint Did Not Challenge the Validity of Any Patents ............................ 3
`III. The Delaware Action Does Not Justify Discretionary Denial ........................ 4
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`i
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`Petitioner’s Reply Pursuant to Board Order
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`TABLE OF AUTHORITIES
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` Page(s)
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`Cases
`Apple Inc., v. Finitiv, Inc.,
`IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) ....................................... 4, 5, 6
`Cisco Sys., Inc. v. Chrimar Sys., Inc.,
`IPR2018-01511, Paper 11 (PTAB Jan. 31, 2019) ................................................ 4
`HTC Corp. & HTC Am., Inc., v. Motiva Patents, LLC,
`IPR2019-01666, Paper 9 (PTAB Apr. 3, 2020) ................................................... 5
`Intel Corp. v. Tela Innovations, Inc.,
`IPR2019-01228, Paper 19 (PTAB Jan. 30, 2020) ........................................ 3, 4, 5
`Intel Corp. v. VLSI Tech. LLC,
`IPR2019-01195, Paper 11 (PTAB Jan. 13, 2020) ............................................ 5, 6
`LG Elecs., Inc., v. Straight Path IP Grp., Inc.,
`IPR2015-00196, Paper 20 (PTAB May 15, 2015) ............................................... 4
`Micron Tech., Inc. v. e.Digital Corp.,
`IPR2015-00519, Paper 14 (PTAB March 24, 2015) ............................................ 3
`Samsung Elecs. Co., Ltd. v. Bitmicro, LLC,
`IPR2018-01410, Paper 14 (PTAB Jan. 23, 2019) ................................................ 4
`Sand Revolution II, LLC, v.
`Continental Intermodal Group - Trucking LLC,
`IPR2019-01393, Paper 24 (PTAB June 16, 2020) ............................................... 5
`Sling TV, L.L.C. v. Realtime Adaptive Streaming, LLC,
`IPR2018-01342, Paper 45 (PTAB Jan. 17, 2020) ................................................ 5
`Synopsys, Inc. v. Mentor Graphics Corp.,
`IPR2012-00042, Paper 23 (PTAB Apr. 11, 2013) ............................................... 2
`Vizio, Inc. v. Polaris PowerLED Techs., LLC,
`IPR2020-00043, Paper 30 (PTAB May 4, 2020) ................................................. 6
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`ii
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`Petitioner’s Reply Pursuant to Board Order
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`Statutes
`35 U.S.C. § 312(a)(5) ................................................................................................. 3
`35 U.S.C. § 315(a)(1) ................................................................................................. 4
`Other Authorities
`37 C.F.R. § 42.105 ..................................................................................................... 2
`37 C.F.R. § 42.105(a) ............................................................................................. 1, 2
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`iii
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`Petitioner’s Reply Pursuant to Board Order
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`Exhibit
`No.
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`PETITIONER’S EXHIBIT LIST
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`Description
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`1033
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`1034
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`1035
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`1036
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`1037
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`1038
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`1039
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`1040
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`1041
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`1042
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`1043
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`1044
`1045
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`1046
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`1047
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`Power of Attorney, U.S. Patent No. 8,471,593, filed in
`2014
`Power of Attorney, U.S. Patent No. 7,928,763, filed in
`2014
`Power of Attorney, U.S. Patent No. 9,552,047, filed in
`2014
`Power of Attorney, U.S. Patent No. 9,037,807, filed in
`2014
`Patent Assignment Agreement between PACT XPP
`Technologies AG & Scientia Sol Mentis AG, executed
`March 15, 2018
`Email chain between K. Bendix and A. Grunberger re
`acceptance of service, dated February 5-6, 2020
`Email chain between L. Tarpley and A. Grunberger re
`acknowledging receipt of electronic service, dated
`February 7 and 10, 2020
`Email chain between A. Grunberger and K. Bendix re
`service, dated February 10, 2020
`Power of Attorney, U.S. Patent No. 7,928,763 filed in
`2020
`Affidavit of Raymundo Avila with Nationwide Legal re
`hand-service of Petitioner Intel Corporation’s Petitions
`and Supporting Documents on PACT counsel on
`February 10, 2020 and Delivery Receipt
`Intel Corporation's Complaint for Declaratory Judgment,
`Dkt. No. 1, filed April 25, 2019
`Letter from S. Li to S. Lotfollahi re PACT's claim
`swapping and narrowing, dated December 13, 2019
`Intentionally Left Blank
`Screenshot from Public PAIR Correspondence Record,
`U.S. Patent No. 9,552,047, taken February 10, 2020
`Request for Certificate of Correction, U.S. Patent No.
`9,075,605, filed December 5, 2018
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`iv
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`Petitioner’s Reply Pursuant to Board Order
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`Patent Owner (“PACT”) makes three procedural arguments against institution
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`in these proceedings. The Board should reject these arguments as baseless. First,
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`Petitioner (“Intel”) properly served PACT’s counsel of record based on assignment
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`agreements in the PTO database. Second, Intel’s non-infringement declaratory-
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`judgment action (“Non-Infringement Action”) cannot bar these proceedings because
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`Intel did not challenge validity. Third, the parties’ pending district court case
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`(“Delaware Action”) is in an early stage and does not warrant discretionary denial.
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`I.
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`PACT Was Properly Served Under 37 C.F.R. § 42.105(a)
`On February 7, 2020, Intel properly served its Petitions on the most recent
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`counsel of record before the PTO, Aaron Grunberger of Norton Rose Fulbright. Intel
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`also served counsel in the Delaware Action, Quinn Emanuel, on February 10.1 Both
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`acts independently constitute proper service. 37 C.F.R. § 42.105(a) (“[P]etitioner
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`may . . . serve the petition . . . on the patent owner at any other address known to the
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`petitioner as likely to effect service.”). Although PACT argues that Intel should
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`have instead served Alliacense Limited (“Alliacense”) based on a power of attorney
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`filed by PACT’s predecessor company, PACT omits key facts.2
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`First, at the time Intel filed its Petitions, the most recent power of attorney in
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`1The one-year bar date is February 10, 2020. See IPR2020-00532 POPR at 31, n.1.
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`2PACT did not allege improper service for IPR2020-00541 or IPR2020-00542.
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`1
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`Petitioner’s Reply Pursuant to Board Order
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`the PTO database was filed by PACT’s predecessor, PACT XPP Technologies AG.
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`This outdated power of attorney was filed by Alliacense attorney Edward Heller III
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`(Exs. 1033-1036), who was also the only attorney identified in PAIR for each patent.
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`E.g., Ex. 1046 (screenshot taken Feb. 10, 2020). Mr. Heller passed away in 2018.
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`Intel therefore served Mr. Grunberger, the designated correspondent in the
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`agreements assigning the patents to the current PACT entity in March 2018
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`(Scientia Sol Mentis AG subsequently changed its name to PACT). Ex. 1037. The
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`Board has found service on the “address . . . found in the most recent assignment
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`document in the Office’s assignment database” proper under 37 C.F.R. § 42.105(a).
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`Synopsys, Inc. v. Mentor Graphics Corp., IPR2012-00042, Paper 23 at 4 (PTAB
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`Apr. 11, 2013); 37 C.F.R. § 42.105(a).
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`Second, PACT omits that Mr. Grunberger expressly agreed to accept service
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`on PACT’s behalf. On February 5, Intel asked Mr. Grunberger if he “agree[d] to
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`accept electronic service . . . pursuant [to] 37 C.F.R. § 42.105.” Ex. 1038. Mr.
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`Grunberger confirmed on February 6, and acknowledged receipt on February 10.
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`Exs. 1038-1039. Three days after he was served, Mr. Grunberger attempted to
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`revoke his acceptance of service on orders from “litigation counsel.” Ex. 1040. Such
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`blatant gamesmanship should not be accepted. Mr. Grunberger was identified in
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`assignment agreements as PACT’s attorney, expressly agreed to accept service for
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`PACT, and has subsequently acted on PACT’s behalf in the PTO. Exs. 1037-1038,
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`2
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`Petitioner’s Reply Pursuant to Board Order
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`1041, 1047. There can be no question that Intel’s service upon Mr. Grunberger was
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`proper.
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`Third, Intel additionally hand-served PACT’s litigation counsel, Quinn
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`Emanuel, on February 10. Ex. 1042. The Board has previously found that this
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`constitutes proper service. See Micron Tech., Inc. v. e.Digital Corp., IPR2015-
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`00519, Paper 14 at 4-5 (PTAB March 24, 2015) (service on patent owner’s litigation
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`counsel met the service requirements of 35 U.S.C. § 312(a)(5) where there was no
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`prejudice to patent owner). Because Intel acted in good faith to serve PACT through
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`multiple channels, and PACT cannot show any prejudice, Intel’s service was proper.
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`II.
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`Petitioner Is Not Statutorily Barred Because Its Declaratory-Judgment
`Complaint Did Not Challenge the Validity of Any Patents
`Contrary to PACT’s allegations, the Non-Infringement Action did not
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`challenge the validity of any patent in these proceedings. Intel’s only cause of action
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`for these patents was a “Declaration of Noninfringement.” Ex. 1043 at 11-20.
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`PACT’s argument that Intel’s claims nevertheless challenge validity because they
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`recite that Intel’s products “do not infringe, either directly or indirectly, any valid
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`and enforceable claim” is incorrect. E.g., IPR2020-00537, Paper 6 at 42 (emphasis
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`in original). The Board recently rejected the same argument regarding the same
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`language in another action. In Intel Corp. v. Tela Innovations, Inc., the patent owner
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`asserted that a declaratory-judgment action triggered the 35 U.S.C. § 315(a)(1)
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`statutory bar by alleging that “Intel's products ‘do not infringe . . . any valid and
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`3
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`Petitioner’s Reply Pursuant to Board Order
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`enforceable claim’” of the patent. IPR2019-01228, Paper 19 at 15 (PTAB Jan. 30,
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`2020). The Board, however, held that the petition was not barred. Id. at 19 (“[W]e
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`are not persuaded on this record that the DJ Complaint expressly alleges invalidity .
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`. . .”); see also LG Elecs., Inc., v. Straight Path IP Grp., Inc., IPR2015-00196, Paper
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`20 at 7 (PTAB May 15, 2015) (no § 315(a)(1) bar where complaint alleged
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`“[petitioner] does not infringe . . . a valid claim, if any” of the patent); Samsung
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`Elecs. Co., Ltd. v. Bitmicro, LLC, IPR2018-01410, Paper 14 at 20 (PTAB Jan. 23,
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`2019) (no § 315(a)(1) bar where complaints “do not allege a cause of action for
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`invalidity”). PACT’s only case—Cisco Sys., Inc. v. Chrimar Sys., Inc.—is irrelevant
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`because it analyzes a declaratory-judgment action that indisputably challenged the
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`validity of the patent. IPR2018-01511, Paper 11 (PTAB Jan. 31, 2019)
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`(precedential). Here, like Tela, Intel did not challenge the validity of any patents at
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`issue, and PACT’s arguments to the contrary should be rejected.
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`III. The Delaware Action Does Not Justify Discretionary Denial
`The Board balances six factors “relat[ing] to whether efficiency, fairness, and
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`the merits” justify discretionary denial under § 314(a). Apple Inc., v. Finitiv, Inc.,
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`IPR2020-00019, Paper 11 at 6 (PTAB Mar. 20, 2020) (precedential). PACT only
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`addresses three of these factors, none of which favor denial.
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`First, the early stage of the Delaware Action does not justify discretionary
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`denial. Indeed, trial is set for September 20, 2021, which is after the September 15
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`4
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`Petitioner’s Reply Pursuant to Board Order
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`deadline for Final Written Decisions. The Board has consistently declined to invoke
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`§ 314(a) when trial is scheduled after Final Written Decisions are due. See, e.g.,
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`Sling TV, L.L.C. v. Realtime Adaptive Streaming, LLC, IPR2018-01342, Paper 45
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`(PTAB Jan. 17, 2020); HTC Corp., et. al., v. Motiva Patents, LLC, IPR2019-01666,
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`Paper 9 (PTAB Apr. 3, 2020); Intel Corp. v. VLSI Tech. LLC, IPR2019-01195, Paper
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`11 (PTAB Jan. 13, 2020). The “crucial fact” that Final Written Decisions would
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`issue before the scheduled trial would therefore “resolve complex issues that
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`otherwise would need to be litigated.” Tela, IPR2019-01228, Paper 19 at 24-25.
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`Even where the “currently scheduled trial date is in relatively close proximity to the
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`expected final decision,” this factor favors not exercising discretion to deny. Sand
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`Revolution II, LLC, v. Continental Intermodal Group - Trucking LLC, IPR2019-
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`01393, Paper 24 at 9-10 (PTAB June 16, 2020) (informative).
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`Second, the Delaware Action does not reflect substantial investment by the
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`parties sufficient to warrant discretionary denial. The parties have only taken two
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`depositions (both third parties), and fact discovery does not close until October 2,
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`2020. The court has yet to issue any substantive orders, including Markman, which
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`also weighs against denying institution. Finitiv, IPR2020-00019, Paper 11 at 9-12.
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`The Board has even declined to exercise discretion to deny institution after Markman
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`has completed. See, e.g., Sand Revolution II, Paper 24 at 10-11. PACT’s cited case,
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`on the other hand, denies institution based on significantly more advanced district
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`5
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`Petitioner’s Reply Pursuant to Board Order
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`court proceedings. See Vizio, Inc. v. Polaris PowerLED Techs., LLC, IPR2020-
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`00043, Paper 30 (PTAB May 4, 2020) (Markman and expert discovery completed).
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`PACT also argues that Intel’s filings are “late,” however, Intel worked expeditiously
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`to file its Petitions less than two months after receiving PACT’s selection of 180
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`claims. Ex. 1044; VLSI, IPR2019-01195, Paper 11 at 9-11 (filing petition two
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`months after claim narrowing was reasonable); Finitiv, IPR2020-00019, Paper 11 at
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`11 (“[I]t is often reasonable for a petitioner to wait to file its petition until it learns
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`which claims are being asserted . . . .”).
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`Last, the Delaware Action presents substantially different arguments, and thus
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`does not raise overlapping issues with these proceedings. These proceedings each
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`assert references not raised in the Delaware Action against these patents: Hennessy
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`(IPR2020-00532); Nicol, Miyamori, and Hennessy (IPR2020-00537); DeHon
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`(IPR2020-00539); Barroso, Alpha Manual, Godfrey, and Nickolls (IPR2020-
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`00540); Nicol and DeHon (IPR2020-00541); and Wilson, Houston, and Gove
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`(IPR2020-00542). Moreover, in the Delaware Action, Intel asserts over 40
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`references—including 8 prior-art products that cannot be raised in IPR—and
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`obviousness combinations not at issue here. Because these proceedings include
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`materially different arguments, the Board’s decisions will not duplicate rulings in
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`the district court, and therefore the Board should not deny Intel’s petitions. Finitiv,
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`IPR2020-00019, Paper 11 at 12-13; VLSI, IPR2019-01195, Paper 11 at 9-11.
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`6
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`Petitioner’s Reply Pursuant to Board Order
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`Date: July 23, 2020
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`Respectfully submitted,
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`/s/ Kevin Bendix
`Kevin Bendix (Reg. No. 67,164)
`kevin.bendix@kirkland.com
`KIRKLAND & ELLIS LLP
`555 South Flower Street, Suite 3700
`Los Angeles, CA 90071
`Telephone: (213) 680-8400
`Facsimile: (213) 680-8500
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`Robert A. Appleby, P.C. (Reg. No. 40,897)
`robert.appleby@kirkland.com
`Gregory S. Arovas, P.C. (Reg. No. 38,818)
`greg.arovas@kirkland.com
`KIRKLAND & ELLIS LLP
`601 Lexington Avenue
`New York, New York 10022
`Telephone: (212) 446-4800
`Facsimile: (212) 446-4900
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`Attorneys for Petitioner Intel Corporation
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`7
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`Petitioner’s Reply Pursuant to Board Order
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a copy of the foregoing documents were
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`served on July 23, 2020 through the Patent Review Processing System, as well as by
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`e-mailing copies to:
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`Ziyong Li, Esquire
`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`50 California Street, 22nd Floor
`San Francisco, CA 94111
`(415) 875-6373
`seanli@quinnemanuel.com
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`Nima Hefazi, Esquire
`Joseph M. Paunovich, Esquire
`QUINN, EMANUEL, URQUHART & SULLIVAN, LLP
`865 S. Figueroa Street, 10th Floor
`Los Angeles, CA 90017
`(213) 443-3000
`nimahefazi@quinnemanuel.com
`joepaunovich@quinnemanuel.com
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`Attorneys for Patent Owner
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`/s/ Kevin Bendix
`Kevin Bendix
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