`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`ABILITY OPTO-ELECTRONICS TECHNOLOGY CO., LTD.,
`Petitioner,
`
`v.
`
`LARGAN PRECISION CO., LTD.,
`Patent Owner.
`
`
`
`Case IPR2020-01339
`Patent No. 8,988,796
`
`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`
`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
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`B.
`C.
`
`I.
`
`II.
`
`D.
`E.
`
`TABLE OF CONTENTS
`THE BOARD SHOULD EXERCISE ITS DISCRETION TO DENY
`INSTITUTION UNDER SECTION 314(A) AS THE PARALLEL
`DISTRICT-COURT CASE WILL DETERMINE THE ISSUES RAISED IN
`THE PETITION BEFORE ANY FINAL WRITTEN DECISION HERE. ... 3
`Fintiv Factor 1: The District Court Would Likely Deny a Stay Due
`A.
`to the Case’s Advanced Stage and the Lack of Issue Overlap. ............ 4
`Fintiv Factor 2: The Timing of the Jury Trial Favors Denial. ............. 6
`Fintiv Factor 3: The Parties’ Investments in the Parallel Litigation
`Favor Denial. ........................................................................................ 8
`Fintiv Factors 4 and 5: The Parties and Issues Favor Denial. ............ 10
`Fintiv Factor 6: Other Circumstances Favor Denial. ......................... 11
`1.
`Petitioner’s Delay Favors Discretionary Denial. ..................... 11
`2.
`Petitioner’s Circumvention of the Rules Favors Denial. ......... 12
`3. Weakness on the Merits Favors Denial. .................................. 16
`THE BOARD SHOULD DENY INSTITUTION BECAUSE PETITIONER
`FAILS TO SHOW HOW THE CLAIMS ARE TO BE CONSTRUED. ..... 17
`A.
`Petitioner Inconsistently Construes “Aspheric.” ................................ 18
`B.
`Petitioner Inconsistently Construes “Lens Element.” ........................ 24
`C.
`The Board Should Deny the Petition Due to Petitioner’s
`Inconsistent Constructions. ................................................................ 28
`III. THE BOARD SHOULD DENY INSTITUTION BECAUSE PETITIONER
`HAS FAILED TO SHOW YU IS PRIOR ART TO THE ’796 PATENT. .. 29
`IV. EVEN IF YU IS PRIOR ART, INSTITUTION SHOULD BE DENIED
`BECAUSE PETITIONER HAS FAILED TO SHOW A REASONABLE
`LIKELIHOOD OF SUCCESS ON ANY CHALLENGED CLAIM. .......... 37
`A.
`’796 Patent Overview ......................................................................... 38
`
` i
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`B.
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`C.
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`D.
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
`For Ground 1, Petitioner Fails to Show Yu’s Figure 1 Provides the
`Necessary Information to Render Obvious the “F-Number” Recited
`in Claims 5 and 21-25. ....................................................................... 43
`For Ground 1, Petitioner’s Obviousness Argument Would Render
`Yu’s Stop Superfluous. ...................................................................... 48
`For Ground 2, Petitioner’s Obviousness Combination Improperly
`Relies on Hindsight to Calculate “Td” Values. .................................. 53
`For Ground 2, Petitioner’s Obviousness Combination Improperly
`Relies on Hindsight to Calculate “F-Number” Values. ..................... 58
`For Grounds 1 and 2, Petitioner Fails to Show Yu or Yamaguchi
`Discloses the Fourth Lens Element’s “Convex Shape in an Off-
`Axis Region” Limitation. ................................................................... 62
`CONCLUSION ............................................................................................ 66
`
`E.
`
`F.
`
`V.
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` ii
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
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`LIST OF EXHIBITS
`
`Exhibit
`2001
`
`2002
`
`2003
`
`Description
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM (Defendants’ Invalid-
`ity Contentions for U.S. Patent No. 8,988,796) (May 18, 2020)
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM, Docket Item 1 (Com-
`plaint for Patent Infringement) (Sept. 25, 2019)
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM, Docket Item 80
`(Amended Scheduling Order) (Mar. 27, 2020)
`2004 Draft Joint Case Management Statement, Largan Precision Co., Ltd. v.
`Ability Opto-Electronics Technology Co. Ltd., N.D. Cal. Case No.
`3:20-CV-006607-JD (Oct. 30, 2020)
`2005 Open Text S.A. v. Alfresco Software, Ltd, N.D. Cal. Case No. 3:13-
`CV-04910-JD, Docket Item 213 (Transcript of Proceedings) (June 20,
`2014)
`2006 Open Text S.A. v. Alfresco Software, Ltd, N.D. Cal. Case No. 3:13-
`CV-04910-JD, Docket Item 240 (Scheduling Order) (Aug. 25, 2014)
`2007 Open Text S.A. v. Alfresco Software, Ltd, N.D. Cal. Case No. 3:13-
`CV-04910-JD, Docket Listing
`2008 United States District Court Northern District of California, General
`Order No. 72-6 (Sept. 16, 2020)
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM (Expert Declaration of
`Dr. Rongguang Liang Regarding Claim Construction) (July 13, 2020)
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM (Declaration of Jose
`Sasian, Ph.D., Regarding Claim Construction of United States Patent
`Nos. 7,274,518, 8,395,691, 8,988,796, and 9,146,378) (July 13, 2020)
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., N.D. Cal. Case No. 3:20-CV-006607-JD, Docket Listing
`
`2009
`
`2010
`
`2011
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` iii
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`
`
`2013
`
`2014
`
`2017
`
`2018
`
`Exhibit
`2012
`
`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
`
`Description
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM (Defendants’ Invalid-
`ity Contentions for U.S. Patent No. 8,988,796, Exhibit C4 Invalidity
`Claim Chart for U.S. Patent No. 8,988,796 (“’796 patent”) Based on
`U.S. Patent No. 9,097,860 to Hung-Kuo Yu and Chao-Hsiang Yang
`(“Yu ’860”)) (May 18, 2020)
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM (Defendants’ Invalid-
`ity Contentions for U.S. Patent No. 8,988,796, Exhibit C3 Invalidity
`Claim Chart for U.S. Patent No. 8,988,796 (“’796 patent”) Based on
`U.S. Patent Application No. 2004/0012861 (“Yamaguchi ’861”))
`(May 18, 2020)
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM (Plaintiff Largan Pre-
`cision Co., Ltd.’s Patent Rule 3-1 and 3-2 Disclosures) (Apr. 2, 2020)
`2015 L. Phillips Email to B. Story Regarding Asserted Claims (May 18,
`2020)
`2016 C. Lee Email to Ability Opto-Electronics Technology Co. Ltd. Re-
`garding Infringement of the ’796 Patent (Aug. 8, 2019)
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM, Docket Item 138 (De-
`fendants’ Responsive Claim Construction Brief) (Sept. 1, 2020)
`Largan Precision Co., Ltd. v. Ability Opto-Electronics Technology Co.
`Ltd., E.D. Tex. Case No. 4:19-CV-00696-ALM, Docket Item 131
`(Largan’s Opening Claim Construction Brief) (July 30, 2020)
`[RESERVED]
`2019
`2020 Certified Translation of Taiwanese Application No. 102139029
`2021 Redline showing a comparison of ’796 Patent to Taiwanese Applica-
`tion No. 102139029
`’796 Patent’s Claims 1, 15, and 21 to Taiwanese Application No.
`102139029 Comparison
`2023 U.S. Patent No. 10,502,929 (Lai)
`
`2022
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` iv
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
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`USE OF EMPHASIS IN QUOTATIONS
`
`All emphases in quotations and exhibit citations have been added, unless
`otherwise indicated.
`
`
`
`APPLICABLE STATUTES
`
`References to 35 U.S.C. §§ 102 and 103 are to the AIA versions applicable
`to the ’796 Patent.
`
`
` v
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
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`INTRODUCTION
`
`Congress intended IPRs to be an “effective and efficient alternative” to liti-
`
`gation.1 But here, institution would contravene that purpose. Petitioner asserts in
`
`the petition the same prior art and obviousness grounds that Petitioner has asserted
`
`in a parallel district court litigation. And the petition does not explain why Peti-
`
`tioner waited to seek this duplicative review for 11 months after Patent Owner pro-
`
`vided notice of infringement and three months after Patent Owner served its in-
`
`fringement contentions. What is more, the petition exceeds the word limit by 3,600
`
`words due to its improper inclusion of 46 screenshots and other transgressions of
`
`the Board’s Rules. For at least these reasons, the Board should exercise its discre-
`
`tion under 35 U.S.C. § 314(a) to deny this petition.
`
`The petition should also be denied due to its failure to follow Section
`
`42.104(b)’s requirement that it propose how each challenged claim is to be con-
`
`strued and explain how each claim is unpatentable under that proposed construc-
`
`tion.2 This Rule prevents a petitioner from applying varying claim interpretations
`
`
`1 Gen. Plastic Indus. Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper
`19 at 16-17 (P.T.A.B. Sept. 6, 2017).
`2 See 37 C.F.R. § 42.104(b)(3), (4); Jiawei Tech. (HK) Ltd. v. Richmond, IPR2014-
`00937, Paper 24 at 2 (P.T.A.B. Feb. 6, 2014).
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`depending on the disclosures of different prior art references. But that is what Peti-
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`tioner has done here. This Rule also precludes petitioners from offering one ap-
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`proach to claim scope before the Board and another approach before the district
`
`court. But again, that is what Petitioner has done here. Indeed, Petitioner did not
`
`disclose that it has sought constructions in the parallel litigation for the terms “as-
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`pheric” and “lens element” that would narrow the scope of those terms, nor how
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`the prior art would meet those proposed constructions.
`
`Beyond that, the petition relies on the Yu reference in each proposed obvi-
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`ousness ground, but fails to establish that Yu is prior art to the ’796 Patent. Yu was
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`filed on December 27, 2013, months after the ’796 Patent’s claimed priority date of
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`October 29, 2013.3 Yet the petition does not sufficiently establish that Yu is enti-
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`tled to an earlier priority date.
`
`And even if Yu were prior art, the petition otherwise fails to show the re-
`
`quired likelihood of success on the merits. Wei-Yu Chen, the ’796 inventor, was
`
`the first to develop a four-lens system that has a total distance for the lens elements
`
`(“Td”) between 0.8 and 2.5 mm, along with precise focal-length ratios, to provide a
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`compact system that corrects astigmatism and aberrations with an enlarged field of
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`
`3 ’796 Patent at cover, 1:6-8.
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`U.S. Patent No. 8,988,796
`view (i.e., the observable area that can be seen through the optical device).4 The
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`petition ignores this advancement over the prior art, arguing that it would have
`
`been obvious to modify prior-art systems and shrink or enlarge their dimensions to
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`fall within the narrow 0.8-2.5 mm range. Petitioner thus relies on hindsight and
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`fails to explain why a person of ordinary skill in the art would have been motivated
`
`to resize any prior systems or combination to satisfy the claims’ precise measure-
`
`ments.
`
`So, Patent Owner respectfully asks the Board to decline to institute inter
`
`partes review on all Grounds (1-2) of the petition.
`
`I.
`
`The Board Should Exercise Its Discretion to Deny Institution Under
`Section 314(a) as the Parallel District-Court Case Will Determine the Is-
`sues Raised in the Petition Before Any Final Written Decision Here.
`
`All the issues raised in the petition are already being litigated in the parallel
`
`district-court litigation. Petitioner served its invalidity contentions in that litigation
`
`on May 18, 2020, and raised obviousness arguments in view of Yu and Yamagu-
`
`chi.5 Petitioner asserts the same obviousness grounds here.6 There is no reason for
`
`
`4 See e.g., ’796 Patent at 4:21-5:2. Claims 5 and 21-25 also require the lens system
`to include a narrow “f-number” range along with the precise Td range and focal
`length ratios.
`5 E.g., Ex. 2001 (Invalidity Contentions) at 6, 22, 27.
`6 Petition at 8.
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`the Board to hold proceedings duplicating the parallel litigation.
`
`The precedential Apple Inc. v. Fintiv Inc. decision sets forth six factors to
`
`guide the Board’s exercise of discretionary denial under Section 314(a).7 In Fintiv,
`
`the Board explained that these factors help determine “whether efficiency, fairness,
`
`and the merits support the exercise of authority to deny institution in view of an
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`earlier trial date in the parallel proceeding.”8 As detailed below, all these factors fa-
`
`vor discretionary denial here.
`
`A. Fintiv Factor 1: The District Court Would Likely Deny a Stay
`Due to the Case’s Advanced Stage and the Lack of Issue Overlap.9
`
`Petitioner does not state it will request a stay in the parallel litigation. If Peti-
`
`tioner were to do so, Patent Owner will not agree, and the district court would
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`likely deny such a request because discovery is at an advanced stage, and any insti-
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`tuted IPR proceedings will not address all claims and patents asserted in the litiga-
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`tion.
`
`Indeed, Petitioner has requested inter partes review of only three of the four
`
`
`7 IPR2020-00019, Paper 11 at 5-6 (P.T.A.B. Mar. 20, 2020).
`8 Id. at 6.
`9 Factor 1 is “whether the court granted a stay or evidence exists that one may be
`granted if a proceeding is instituted.”
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`U.S. Patent No. 8,988,796
`patents asserted in the parallel litigation.10 And in one of those requests, Petitioner
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`has not sought review of all of the asserted claims.11 So even if Petitioner’s peti-
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`tions are granted, claims from half of the asserted patents will be free from inter
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`partes review. Under such circumstances, prior Northern District decisions indicate
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`it is unlikely to grant a motion to stay.12 And as detailed for Fintiv Factor 3, the
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`parallel litigation is at an advanced stage and will be even more so when the Board
`
`issues its institution decision.
`
`Thus, the facts underlying Fintiv Factor 1 are neutral or slightly favor discre-
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`tionary denial.
`
`
`10 Patent Owner asserts U.S. Patent No. 7,274,518 against Petitioner in the parallel
`litigation. Ex. 2002 (Complaint) at 9-12. The one-year time bar for Petitioner to re-
`quest inter partes review has passed for the ’518 Patent.
`11 Patent Owner alleges that Petitioner infringes, inter alia, claim 9 of U.S. Patent
`No. 9,146,378. Ex. 2014 (Patent Rule 3-1 and 3-2 Disclosures) at 1. But Petitioner
`does not challenge claim 9 in its petition for the ’378 Patent (IPR2020-01545).
`12 See e.g., NetFuel, Inc. v. Cisco Sys. Inc., 2020 WL 836714, at *2 (N.D. Cal. Feb.
`20, 2020) (denying motion to stay, in part, because one patent would remain in
`case regardless of outcome of IPR proceedings).
`
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`Fintiv Factor 2: The Timing of the Jury Trial Favors Denial.13
`
`B.
`
`In the parallel litigation, the final pretrial conference originally was sched-
`
`uled for April 30, 2021.14 But on September 15, 2020, the Federal Circuit directed
`
`the Eastern District of Texas to transfer the parallel litigation to the Northern Dis-
`
`trict of California. And the initial case management conference with Judge Donato
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`in the new venue is scheduled for December 24, 2020.
`
`Even accounting for the transfer, the likely trial date favors discretionary de-
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`nial here.15 Patent Owner has proposed that the jury trial begin in November
`
`2021.16 Patent Owner has also proposed the close of fact discovery by April 2021
`
`and the close of expert discovery by July 2021.17 The projected deadline for the
`
`
`13 Factor 2 is “proximity of the court’s trial date to the Board’s projected statutory
`deadline for a final written decision.”
`14 Ex. 2003 (Scheduling Order) at 4.
`15 Fintiv, IPR2020-00019, Paper 11 at 9 (explaining “[i]f the court’s trial date is
`earlier than the projected statutory deadline, the Board generally has weighed this
`fact in favor of exercising authority to deny institution”). But for the motion to
`change venue to the Northern District, which Petitioner joined, trial would have
`likely been scheduled for ten months before the projected deadline.
`16 Ex. 2004 (Draft Joint Case Management Conference Statement) at 17.
`17 Id.
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`Board’s final written decision is in February 2022—three months after the ex-
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`pected jury trial. And the Board has repeatedly denied petitions in part based on
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`similar gaps in time.18
`
`Further, Judge Donato’s previous management of similar matters indicates
`
`that the likely trial date favors discretionary denial here. For instance, in Open Text
`
`S.A. v. Box, Inc., the plaintiff accused multiple defendants of infringing multiple
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`patents, and the Eastern District of Virginia transferred the matter to the Northern
`
`District of California.19 After Judge Donato held an initial case management con-
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`ference, he scheduled, and ultimately presided over, the jury trial seven and a half
`
`months later.20 Given the similarities between Open Text and the transferred paral-
`
`lel litigation here, the parties should expect the court to schedule the jury trial to
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`begin by at least the proposed November 2021 date.
`
`
`18 E.g., Apple Inc. v. Maxell, Ltd., IPR2020-00409, Paper 12 at 7-8 (P.T.A.B. Aug.
`11, 2020) (finding gap between five and eight months, depending on COVID-19
`delay, to favor denial).
`19 Ex. 2005 (Open Text Case Mgmt. Conference Transcript) at 6-7.
`20 Ex. 2006 (Open Text Scheduling Order); Ex. 2007 (Open Text Docket) at 24-30.
`The Open Text schedule also provided for filing of claim construction briefing over
`a three-week period. Ex. 2006. In the parallel litigation here, the parties have al-
`ready filed all claim construction briefing. As such, the parties should expect the
`time to trial to be faster than in Open Text.
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`Petitioner nonetheless asserts the timeline of the parallel litigation is unclear
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`due to travel restrictions related to COVID-19.21 But the parties are conducting dis-
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`covery and depositions virtually (and will continue to do so), such that travel re-
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`strictions should not impact the district-court schedule. And other cases have re-
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`cently progressed to trial in the pertinent district court.22 Thus, even with COVID-
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`19 concerns, Fintiv Factor 2 favors discretionary denial.
`
`C. Fintiv Factor 3: The Parties’ Investments in the Parallel Litiga-
`tion Favor Denial. 23
`
`Petitioner ignores the parties’ significant investments of time and resources
`
`in the parallel litigation, which has been pending for 14 months.24 The parties have
`
`completed claim-construction briefing, which included a 55-page declaration from
`
`
`
`21 Petition at 85-86.
`22 See e.g., Zuegel v. Mountain View Police Dept., N.D. Cal. No. 5:17-cv-3249,
`Docket Items 162-164 (trial held Nov. 13-17, 2020); Fairbairn v. Fidelity Invest-
`ments Charitable Gift Fund, N.D. Cal. 3:18-cv-4881, Docket Items 233-239 (trial
`held Oct. 19-23, 2020); Ex. 2006 (N.D. Cal. General Order No. 72-6).
`23 Factor 3 is “investment in the parallel proceeding by the court and the parties.”
`24 Ex. 2002 (Complaint) at 26. Although Petitioner makes passing reference to dis-
`covery (Petition at 85), Petitioner fails to address that the parties have conducted
`substantial discovery beyond depositions, in addition to other investments.
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`Petitioner’s expert and a 59-page declaration from Patent Owner’s expert.25 As de-
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`tailed below in Section II, the claim constructions disputed between the parties are
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`particularly relevant to validity as Petitioner inconsistently construes several claim
`
`terms. Thus, on claim-construction, there is significant risk that the parties and the
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`Board will duplicate work performed in the parallel litigation if this proceeding is
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`instituted. And these claim-construction disputes risk the district court and the
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`Board issuing inconsistent determinations on issues relevant to validity.
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`Further, during fact discovery, the parties collectively produced in excess of
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`37,000 documents totaling more than 216,000 pages and responded to over four
`
`dozen interrogatories.26 The parties have also fully briefed (including replies and
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`sur-replies) two motions to dismiss, a motion to disqualify, a motion to transfer
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`(and appeal therefrom), and two motions to compel.27
`
`Given the significant time and resource investments, which will continue at
`
`least until the Board’s institution decisions, institution here would result in duplica-
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`tive proceedings that unnecessarily tax the Board’s resources. Thus, Fintiv Factor 3
`
`
`25 Ex. 2009 (Liang Decl.); Ex. 2010 (Sasian Decl.); Ex. 2011 (District Court
`Docket) at 8-10.
`26 Ex. 2004 (Draft Joint Case Management Statement) at 7.
`27 Id.; see also Largan Precision Co., Ltd. v. Ability Opto-Elecs. Tech. Co. Ltd.,
`E.D. Tex. No. 4:19-cv-696, Docket Items 20, 30, 39, 60 112, 114, 144.
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`favors discretionary denial.
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`D. Fintiv Factors 4 and 5: The Parties and Issues Favor Denial.28
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`Patent Owner is the plaintiff and Petitioner is a defendant in the parallel liti-
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`gation, where Petitioner is asserting the same obviousness grounds, arguments, and
`
`evidence as here.29 For example, Petitioner asserts the following prior art and argu-
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`ments both here and in the parallel litigation: (a) Yu alone renders obvious claims
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`1-9, 11, and 15-25; and (b) the combination of Yamaguchi and Yu renders obvious
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`claims 1-9, 11, and 15-25.30
`
`The parallel litigation also involves substantially the same claims.31 Depend-
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`ent claims 5 and 10 are the only ’796 claims challenged here that Patent Owner did
`
`not assert in the parallel litigation. But those two claims overlap significantly with
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`challenged claims 1 and 21, which are asserted in the parallel litigation, as they all
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`recite the same “Fno” range, and claim 10’s “ΣC” substantially relates to claim 1’s
`
`
`28 Factor 4 is “overlap between issues raised in the petition and in the parallel pro-
`ceeding.” And Factor 5 is “whether the petitioner and the defendant in the parallel
`proceeding are the same party.”
`29 E.g., Ex. 2001 (Invalidity Contentions) at 6-9; see also Exs. 2012-2013 (Invalid-
`ity Contention Charts).
`30 Ex 2001 (Invalidity Contentions) at 6, 27; Ex. 2012 at 1-23, 25-33; Ex. 2013 at
`12-15, 17-20, 24-25.
`31 Ex. 2014 (Patent Rule 3-1 and 3-2 Disclosures) at 1, 9; Ex. 2015.
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`U.S. Patent No. 8,988,796
`“Td.” Thus, the district court will likely resolve key issues of obviousness raised in
`
`the petition.32 And this significant overlap of issues and claims raises concerns of
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`inefficiency and the possibility of conflicting decisions.33
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`Accordingly, Fintiv Factors 4 and 5 favor discretionary denial.
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`E.
`
`Fintiv Factor 6: Other Circumstances Favor Denial.
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`Additional considerations favor discretionary denial here, including Peti-
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`tioner’s delay in filing its petition, Petitioner’s attempt to circumvent the Board’s
`
`Rules, and the weakness of the petition’s obviousness grounds.34
`
`1.
`
`Petitioner’s Delay Favors Discretionary Denial.
`
`Petitioner dallied in filing its petition, despite knowing about the ’796 Patent
`
`
`32 See Supercell Oy v. Gree, Inc., IPR2020-00513, Paper 11 at 13-14 (P.T.A.B.
`June 24, 2020). Although Petitioner states that “to the extent that trial is instituted
`in these matters, [it] agrees not to pursue the [petition’s] combinations of refer-
`ences” in the parallel litigation (Petition at 86), this ignores the concerns underly-
`ing Factor 4, since the district court still may address the validity of substantially
`all of the claims challenged in the petition. And the other defendant still may at-
`tempt to pursue those reference combinations in the parallel litigation.
`33 Edwards Lifesciences Corp. v. Evalve, IPR2019-01546, Paper 7 at 12-13
`(P.T.A.B. Feb. 26, 2020) (exercising discretionary denial when substantially same
`claims and arguments at issue in petition and parallel district-court case).
`34 Factor 6 is “other circumstances that impact the Board’s exercise of discretion,
`including the merits.”
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` 11
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
`for nearly a year, and about the relevant claims and asserted prior art for months.
`
`Indeed, Patent Owner notified Petitioner of its infringement of the ’796 Patent
`
`more than 11 months before the petition’s filing.35 Three months before the peti-
`
`tion, Patent Owner served its infringement contentions in the parallel litigation, set-
`
`ting forth the asserted claims.36 And two months before, Petitioner served its inva-
`
`lidity contentions, including claim charts analyzing the same prior art asserted in
`
`the petition.37
`
`But Petitioner fails to explain why it delayed filing its petition after learning
`
`of its infringement of the ’796 Patent and the prior art asserted in its petition. So,
`
`instituting an IPR here would not be an effective or efficient alternative to litiga-
`
`tion, particularly given Petitioner’s delay in filing its petition that contributed to the
`
`advanced stage of the parallel litigation.
`
`2.
`
`Petitioner’s Circumvention of the Rules Favors Denial.
`
`The Board should exercise its discretion to deny institution due to Peti-
`
`tioner’s disregard for the Board’s Rules, which warn against using excessive im-
`
`ages of text and deleting spacing between words to circumvent the 14,000-word
`
`
`35 Ex. 2016 (Aug. 8, 2019 Notification Email).
`36 Ex. 2014 (Patent Rule 3-1 and 3-2 Disclosures) at 9.
`37 E.g., Ex. 2001 (Invalidity Contentions) at 22; Exs. 2012-2013 (Invalidity Con-
`tention Charts).
`
` 12
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
`limit.38 Here, Petitioner exceeded the word limit by over 3,600 words, when ac-
`
`counting for words in screenshots and for spaces deleted between words.39
`
`More particularly, the petition includes 46 screenshots of text from the ’796
`
`Patent and asserted prior art. For example, the petition includes the below image of
`
`text describing an embodiment of the ’796 Patent, when arguing that the patent in-
`
`cludes an equation defining the claimed “aspheric” lens surface.40
`
`
`
`This image includes over 85 words that describe the equation or define variables,
`
`
`38 Patent Trial and Appeal Board Consolidated Trial Practice Guide (Nov. 2019) at
`40; 37 C.F.R. § 42.24(a).
`39 Petitioner states the petition contains 13,547 words according to the word-pro-
`cessing system used to prepare the petition. Petition at 90.
`40 Id. at 7, 13, 14.
`
` 13
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
`which Petitioner has previously included in the text of briefing in the parallel liti-
`
`gation.41
`
`Similarly, the petition includes multiple images of text from Yamaguchi,
`
`such as the example below, when asserting that Yamaguchi uses three formulas for
`
`aspheric lens surfaces.42
`
`
`And the petition again relies on multiple images, one of which is below,
`
`when asserting that Yamaguchi discloses a particular coordinate system and certain
`
`lens dimensions.43
`
`
`41 E.g., Ex. 2017 (Defendants’ Claim Construction Br.) at 9.
`42 Petition at 12-13.
`43 Id. at 14.
`
` 14
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
`
`
`
`This pattern of relying on images of text continues throughout the petition.44
`
`In addition, the petition deletes the space after every exhibit citation (e.g.,
`
`“Ex.1001”), doing so 205 times in total.45
`
`Thus, rather than include the text needed to analyze the ’796 Patent and as-
`
`serted prior art in the petition itself, Petitioner evades Section 42.24(a)’s limit with
`
`screenshots of text and other improper methods. The Board has warned that such
`
`tactics may lead to denial of institution. For instance, as the Board explained in Fa-
`
`cebook, Inc. v. Sound View Innovations, LLC:
`
`
`44 See also id. at 5, 18-20, 22, 23, 25-26, 30-33, 35, 37, 39, 47-48, 56, 59, 61, 64,
`66, 68-69, 74, 76, 78, 80-82.
`45 E.g., id. at 1 (citing “Ex.1003”), 2 (citing “Ex.1001”); see also id. at 3-10, 12,
`15-18, 20, 23-24, 26-36, 38-39, 41-48, 50, 52-73, 75-77, 79-80, 82, 84-85.
`
` 15
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
`Excessive words in figures, drawings or images, deleting spacing be-
`tween words, or using excessive acronyms or abbreviations for word
`phrases, in order to circumvent the rules on word count, may lead to
`dismissal of a party’s brief …. Petitioner failed to use normal spacing
`for numerous citations and, thus, reduced the word count. Additionally,
`the Petition reproduces numerous and lengthy passages of text from
`other documents as images … [that] may not have been counted by the
`word-processing system.46
`
`Here, the magnitude of Petitioner’s improper tactics undermines the integrity
`
`of the proceedings and justifies discretionary denial.47 Otherwise, other petitioners
`
`will only be encouraged to similarly disregard the Board’s Rules.
`
`3. Weakness on the Merits Favors Denial.
`
`As detailed below in Section II, Petitioner fails to explain how the chal-
`
`lenged claims are to be construed. And in the petition, Petitioner inconsistently
`
`construes multiple claim terms that Petitioner contends require construction in the
`
`parallel litigation.
`
`
`46 IPR2017-01003, Paper 14 at 6-7 (P.T.A.B. Sept. 1, 2017) (citing Pi-Net Int’l,
`Inc. v. JPMorgan Chase & Co., 600 F. App’x 774 (Fed. Cir. 2015)); see also EMC
`Corp. v. Intellectual Ventures I LLC, IPR2017-00429, Paper No. 11 at 27-29
`(P.T.A.B. July 5, 2017).
`47 Fintiv, IPR2020-00019, Paper 11 at 16.
`
` 16
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
`Further, Petitioner concedes that each relied-upon reference must be modi-
`
`fied to purportedly render obvious the challenged claims.48 As detailed below in
`
`Sections III and IV, Petitioner also fails to show that Yu is prior art and fails to an-
`
`swer the fundamental question of why a person of ordinary skill in the art
`
`(“POSITA”) would have modified the references in the manner Petitioner alleges.
`
`Thus, the petition’s lack of merit, in addition to Petitioner’s delay and circumven-
`
`tion of the Rules, confirms that Factor 6 favors discretionary denial.49
`
`In sum, at least five Fintiv factors weigh against institution. Accordingly, the
`
`Board should exercise its § 314(a) discretion to deny institution.
`
`II. The Board Should Deny Institution Because Petitioner Fails to Show
`How the Claims Are to Be Construed.
`
`Despite proposing that multiple claim terms require construction in the par-
`
`allel litigation, here Petitioner “proposes no terms for construction.”50 But by fail-
`
`ing to set forth these constructions, the petition never explains how the challenged
`
`claims are to be construed in accordance with 37 C.F.R. § 42.104(b)(3). Worse, the
`
`
`
`48 E.g., Petition at 8.
`49 See Fintiv, IPR2020-00019, Paper 11 at 14-15 (explaining that if grounds “seem
`particularly strong on the preliminary record,” this may favor institution, but if the
`merits “are a closer call, then that fact has favored denying institution when other
`factors favoring denial are present”).
`50 Petition at 9.
`
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`Case No. IPR2020-01339
`U.S. Patent No. 8,988,796
`petition does not show how, as so construed, the challenged claims are unpatenta-
`
`ble under the petition’s identified statutory grounds.
`
`Despite Section 42.104’s requirements, the petition fails to provide Patent
`
`Owner sufficient notice of how Petitioner construes the challenged claims and how
`
`Petitioner applies the asserted prior art in light of Petitioner’s constructions.51 The
`
`Board has cautioned that it may deny a petition where it “fail[s] to offer a construc-
`
`tion and analysis of a term critical to understanding the scope of [the challenged]
`
`claims.”52 Yet here, Petitioner fails to satisfy the claim-construction requirement,
`
`leaving Patent Owner and the Board to do Petitioner’s job and allowing Petitioner
`
`to propose inconsistent constructions here and in district court.
`
`A.
`
`Petitioner Inconsistently Construes “Aspheric.”
`
`According to Petitioner, the scope of “aspheric” is critical to understanding
`
`Petitioner’s arguments. This term appears in every claim, and the burden lies with
`
`Petitioner to construe it and provide evidence of that construction. But Petitioner
`
`applies two constructions for the term “aspheric” depending on which prior-art ref-
`
`erence the petition analyzes for the patentability of the challenged claims. The peti-
`
`tion’s two
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