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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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`FITBIT, INC.,
`Petitioner
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`v.
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`PHILIPS NORTH AMERICA LLC
`
`Patent Owner
`
`_______________
`Case No. IPR2020-00783
`U.S. Patent No. 7,088,233
`_______________
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`PATENT OWNER SUR-REPLY TO PETITIONER’S REPLY
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`IPR2020-00783
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`Patent Owner Sur-Reply
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`Patent Owner submits this Sur-Reply to Petitioner’s Reply (Paper 7).
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`I. NHK and FINTIV I Apply to This Proceeding
`Petitioner mischaracterizes the sequence of events in Fintiv I. Petitioner
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`asserts that “the district court’s scheduling of a trial date was the fact that led to the
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`Board ordering supplemental briefing on the issue of discretionary denial.” Rep.,
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`1. This is not accurate.
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`At the time the petition was filed in Fintiv¸ no trial date had been set in the
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`related district court litigation. Rather, the trial date was set by the district court in
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`between the filing of the petition and the patent owner preliminary response. Then,
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`in the patent owner preliminary response, the patent owner raised the setting of the
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`trial date in the related district court litigation as one of the reasons for a
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`discretionary denial. However, because the petitioner did not have the opportunity
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`to consider this fact in its petition, the Board authorized supplemental briefing on
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`the issue of the appropriateness of a discretionary denial. Indeed, if the setting of a
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`trial date in a related litigation was necessary for a denial under 35 U.S.C. § 314(a),
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`the Board could have said so.
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`II.
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`Petitioner Fails to Show How the Fintiv Factors Favor Institution
`1.
`The District Court is Unlikely to Grant a Stay
`The issue of whether of the district court would grant a stay is at-best
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`muddled. The orders cited by Petition fail to establish that Judge Talwani would
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`grant a stay in the current litigation. In Reddy v. Lowe’s Cos., Inc., the Board had
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`issued a final written decision finding all of the asserted claims to be unpatentable.
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`Ex. 1043. In Smith & Nephew, Inc. v. Conformis, Inc. (Ex. 1044) and Realtime
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`Data LLC d/b/a IXO v. Acronis, Inc. (Ex. 1045), no analysis was provided as to
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`why the stays were being granted. Thus, it would be speculative to say what Judge
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`Talwani would do in the present case, especially since the Court has invested such
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`significant resources already into the matter.
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`2.
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`Both the Fitbit and Garmin Trials Are Likely to Occur Before the
`Projected Deadline for the Final Written Decision
`Petitioner’s argument regarding the Garmin Litigation presupposes that the
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`Central District of California’s postponement of jury trials will go on indefinitely.
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`In all likelihood, the Central District of California will restart having jury trials
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`soon. The court’s Covid-19 Notice was only issued last month, and other
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`California federal courts are holding jury trials. Ex. 2022. Patent Owner
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`understands that some California judges are already having internal meetings to
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`discuss procedures for jury trials to occur under current COVID conditions.
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`Indeed, the Garmin Litigation continues to move forward with the court recently
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`issuing the claim construction order. Ex. 2023.
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`Petitioner’s argument regarding the “historical scheduling practice” of the
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`District of Massachusetts is misleading. Petitioner argues that “[m]etrics show that
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`the court’s average time to trial in civil cases is approximately 36 months.” Rep.,
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`4. However, this ignores the fact that, in 2018, the District of Massachusetts
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`adopted local patent rules that move cases along at a faster timeline. For example,
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`the local patent rules require that trial and construction hearing be held within 24
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`and nine months, respectively, of the scheduling conference. Ex. 2024, 32. Thus,
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`it is likely that the District of Massachusetts litigation will go to trial before the
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`projected deadline for the final written decision, October 28, 2021.
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`3.
`The Parties Have Already Invested Substantial Resources
`The parties and both courts have invested considerable time and resources in
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`the district court proceeding. The parties are nearing the end of fact discovery, all
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`of the inventors have been deposed, document production is substantially
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`complete, both courts have held Markman hearings, the Garmin court has issued a
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`claim construction order (Ex. 2023), and numerous motions have been filed. See
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`Fintiv I, 10 (“district court claim construction orders may indicate that the court
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`and parties have invested sufficient time in the parallel proceeding to favor
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`denial.”).
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`Further, Petitioner mischaracterizes the Fitbit court’s order denying its
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`request to construe additional terms (Ex. 1064). Rep. 5. The Fitbit court’s
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`scheduling order limited the parties to, collectively, having 10 terms for
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`construction. Ex. 2003, 2. Petitioner sought leave to have additional terms
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`construed. In denying this motion, the court stated
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`[t]o the extent that Fitbit believes that additional construction is
`necessary, Fitbit may, at a later date, request a second round of briefing
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`on terms not already before the court if Fitbit first establishes that the
`construction of the additional terms is in dispute and is material to
`invalidity or infringement of a claim.
`Ex. 1064. This order can hardly be characterized as “the district court
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`establish[ing] a procedure for a second round to construe additional terms.” Rep.,
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`5. Indeed, the failed motion demonstrates that Petitioner already had an
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`opportunity to convince the court that additional claim construction was necessary
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`and it failed to meet that burden.
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`Petitioner ignores the fact that the most burdensome aspects of the litigations
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`will be complete before the projected deadline for the Board’s final written
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`decision. By this deadline, the parties will have almost certainly completed fact
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`and expert discovery, dispositive motions, and pre-trial filings. While the Covid-
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`19 pandemic may inject some uncertainty into the trial dates, the pandemic will not
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`affect the bulk of the work to be done in the litigations and there is no reason to
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`believe that trial before any final written decision is unlikely (and Petitioner has
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`not demonstrated otherwise).
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`4.
`There Is Still Likely to Be Substantial Overlap in Issues
`Petitioner’s assertion that there is no overlap between the proceedings is
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`incorrect. While Petitioner has narrowly stipulated that if the Board institutes IPR,
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`“it will not pursue, in district court, invalidity of the ’233 patent based on any
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`instituted IPR ground,” this stipulation does not eliminate the overlap between the
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`proceedings and does not address substantially similar art that it could raise that
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`would still render the current IPR issues duplicative. Nor does such a stipulation in
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`any way affect the invalidity issues in the Garmin litigation. Indeed, Fitbit ignores
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`the fact that Garmin has petitioned for inter partes review on the same grounds
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`(IPR2020-00910) and has moved for joinder of that proceeding with the present
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`one.
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`Under Petitioner’s reasoning, Factor 4 requires complete overlap between
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`parallel proceedings to weigh in favor of denial. This is incorrect. Under Factor 4,
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`if a petition “includes the same or substantially the same claims, grounds,
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`arguments, and evidence as presented in the parallel proceeding, this fact has
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`favored denial.” Apple v. Fintiv, Inc., IPR2020-000910, Paper 11, 12 (emphasis
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`added). As such, Factor 4 only favors institution where the petition includes
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`“materially different grounds, arguments, and/or evidence.” Id., 12-13.
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`While Petitioner has stipulated to not pursue identical invalidity grounds in
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`the parallel proceeding (if IPR is instituted), it has failed to establish that the other
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`invalidity grounds it will pursue are materially different from the positions
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`presented in the Petition. In its invalidity contentions, Petitioner identified
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`numerous prior art references that it alleges anticipate the challenged claims or
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`render them obvious. Ex. 2005, 14-38. Notably, these contentions seek to combine
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`the references cited in the Petition with numerous other prior art references.
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`5.
`Fitbit and Garmin are also Parties in the Related Litigations
`This factor plainly weighs in favor of denial. Petitioner and Garmin
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`(petitioner in the -910 proceeding) are the same parties in the related litigations.
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`6. Other Factors Support Denial
`As explained in the Preliminary Response, the Petition fails to show how
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`Jacobsen and Say, either alone or in combination, disclose all of the limitations of
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`claim 1 – the only independent claim challenged in the Petitions. However, when
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`the claims are properly interpreted, Jacobsen fails to disclose the claimed “wireless
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`communications module” and “security mechanism,” and Say fails to disclose the
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`claimed “security mechanism.” POPR, Sec. V. While the Central District of
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`California declined to construe these terms, Patent Owner maintains that its
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`constructions are correct. Further, the Fitbit Court is expected to issue its claim
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`construction order soon as the parties have already submitted the claim
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`construction briefs and conducted a Markman hearing.
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`Moreover, Petitioner omits the fact that on re-direct Dr. Martin clarified his
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`testimony. During redirect by Philips’s counsel (and without ever having
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`consulted with Dr. Martin during the deposition as confirmed at the deposition
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`itself), Dr. Martin clarified—consistent with his original declaration—that use of
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`encryption alone—in the context of the entire claim—would not satisfy “governing
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`6
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`information transmitted between the first personal device and the second device,”
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`as demonstrated in the below excerpt of his testimony:
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`Q. And I guess my question is: Could you explain that?
`A. And sorry if I wasn’t clear, but I thought I said this in response to
`Mr. Peterman’s question. The encryption would keep people from
`being able to sniff that data that was being transmitted, but encryption
`by itself wouldn’t be able to authenticate that somebody – as the
`example in Figure 5 of the bystander, encryption by itself wouldn’t be
`able to control the action that they were – the dispensing of the
`medication that was given in the example.
`Q. Got it.
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`A. So encryption by itself wouldn’t provide the authentication
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`to do that.
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`Ex. 2025, Martin Dep. at 165:1-15.
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`Last, Petitioner’s citation to Google LLC v. Uniloc 2017 LLC, IPR2020-
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`00115, Paper 10 (May 12, 2020) is not relevant to the current facts. In Google, the
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`Board was addressing the situation where the petition challenged claims that were
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`not at issue in the related litigation. In denying the petition, the Board
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`characterized the following as a “crucial fact” to its decision: that “the challenged
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`patent is currently the subject of two instituted IPRs that cover all claims missing
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`from the litigation.” Id. at 6-7. Because the claims challenged in the Petition are
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`also being asserted in the related litigation, Google is inapposite.
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`7
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`Date: September 11, 2020
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`Respectfully submitted,
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`/George C. Beck/
`George C. Beck
`Registration No. 38,072
`Counsel for Patent Owner
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`IPR2020-00783
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`Patent Owner Sur-Reply
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`CERTIFICATE OF SERVICE
`The undersigned certifies that a copy of the foregoing Sur-Reply to
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`Petitioner’s Reply is being served on September 11, 2020, by filing these
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`documents through the Patent Trial and Appeal Board End-to-End (E2E) system as
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`well as delivering copies via email to the following counsel for the Petitioner:
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`ITCPhilips-Fitbit_IPRs@paulhastings.com
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`/George C. Beck/
`George C. Beck
`Registration No. 38,072
`Counsel for Patent Owner
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`9
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