DYNAMICS INC.

Patent Trials and Appeals Board

Oct 13, 2020

IPR2020-00504 (P.T.A.B. Oct. 13, 2020)

Trials@uspto.gov Paper 16
571-272-7822 Entered: October 13, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

SAMSUNG ELECTRONICS CO., LTD., SAMSUNG ELECTRONICS
AMERICA, INC., SAMSUNG RESEARCH AMERICA, INC.,
Petitioner,

v.

DYNAMICS, INC.,
Patent Owner.
_______________

IPR2020-00504
Patent 10,223,631 B2
_______________

Before TREVOR M. JEFFERSON, GEORGIANNA W. BRADEN, and
JON M. JURGOVAN, Administrative Patent Judges.

JEFFERSON, Administrative Patent Judge.

DECISION
Denying Patent Owner’s Request on Rehearing of Decision Granting
Institution of Inter Partes Review
37 C.F.R. § 42.71(d)
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I. INTRODUCTION
Petitioner, Samsung Electronics Co., Ltd., Samsung Electronics
America, Inc., and Samsung Research America, Inc., filed a Petition
requesting inter partes review of claims 1–7, 9–13, 19, 21, and 22 of
U.S. Patent No. 10,223,631 B2 (Ex. 1001, the “’631 Patent”). Paper 1
(“Petition” or “Pet.”). Patent Owner, Dynamics Inc., filed a Preliminary
Response to the Petition. Paper 8 (“Prelim. Resp.”). Per our email
authorization (Ex. 3001), Petitioner filed a Reply to Patent Owner’s
Preliminary Response. Paper 9 (“Pet. Reply”). Patent Owner filed a Sur-
Reply to Petitioner’s Reply. Paper 10 (“PO Sur-Reply”).
We granted Petitioner’s request to institute trial. Paper 11 (“Dec.” or
“Institution Decision”). In our Institution Decision, we evaluated the factors
in Apple v. Fintiv, IPR2020-00016, Paper 11 (PTAB March 20, 2020)
(precedential), which were briefed in the Reply and Sur-Reply, and we
determined the factors weighed against exercising our discretion to deny
institution of inter partes review under 35 U.S.C. § 314(a).
Patent Owner filed a Request for Rehearing of our Institution
Decision, asserting that some of the Apple v. Fintiv factors were evaluated
incorrectly. Paper 13 (“Reh’g Req.” or “Request for Rehearing”). For the
reasons below, we deny the Request for Rehearing.
II. LEGAL STANDARDS
“The burden of showing a decision should be modified lies with the
party challenging the decision,” and the challenging party “must specifically
identify all matters the party believes the Board misapprehended or
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overlooked, and the place where each matter was previously addressed” in a
paper of record. 37 C.F.R. § 42.71(d) (2019) (emphasis added). When
rehearing a decision on petition, the Board will review the decision for an
abuse of discretion. See 37 C.F.R. § 42.71(c). An abuse of discretion may
be determined if a decision: (1) is clearly unreasonable, arbitrary, or
fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly
erroneous fact findings; or (4) involves a record that contains no evidence on
which the Board could rationally base its decision. Redline Detection, LLC
v. Star Envirotech, Inc., 811 F.3d 435, 442 (Fed. Cir. 2015) (internal
citations omitted).
Patent Owner contends we misapprehended or overlooked certain
facts in analyzing Apple v. Fintiv factors 1, 3 and 4, which Patent Owner
contends favor exercising our discretion to deny institution of inter partes
review. Req. Reh’g 1–4. We address Patent Owner’s arguments below in
correspondence with each argued Apple v. Fintiv factor.
A. Apple v. Fintiv Factor 1 – Whether a Stay Exists or is Likely to be
Granted if a Proceeding is Instituted
Patent Owner argues “[t]he Board’s factor 1 analysis relied solely on
the fact that there is a stay in the district court proceeding, and ignored the
duplications of efforts at the pending ITC proceeding for factor 1.” Req.
Reh’g 6. We disagree with Patent Owner’s characterization of our analysis
under Apple v. Fintiv factor 1. For factor 1, we merely stated that the district
court’s stay weighed against exercising discretion to deny institution, and
that the duplicative efforts with the ITC proceeding must be considered
further in Apple v. Fintiv factors 2 and 4. Dec. 9–10.
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Patent Owner argues “[g]iven that trial has already begun, Fintiv
factor 1 should have been determined in favor of denial.” Req. Reh’g 7.
But the proximity of the trial date to the Board’s projected statutory deadline
is exactly what is considered under Apple v. Fintiv factor 2. See Dec. 10.
Likewise, Patent Owner argues “[r]elitigating the exact same issues
petitioner asserted in its final invalidity contentions at the ITC cannot be
considered to be efficient, nor a sign of ‘integrity of the system.’” Req.
Reh’g. 6. This, however, is considered under Apple v. Fintiv factor 4. See
Dec. 11–12.
In sum, Patent Owner argues we should have considered Apple v.
Fintiv factors 2 and 4 under factor 1. See Req. Reh’g 6–7. We do not agree
with this contention. Patent Owner does not show we misapprehended or
overlooked any fact, evidence, or legal issue in rendering our Institution
Decision, regardless of the Apple v. Fintiv factor under which it was
considered. In any case, we considered all factors, including factors 1, 3,
and 4, in concluding that the balance of the Apple v. Fintiv factors weighed
against exercising discretion to deny institution. Thus, Patent Owner has not
demonstrated we misapprehended or overlooked any fact in our Apple v.
Fintiv factor 1 analysis.
B. Factor 3 – Investment in the Parallel Proceeding by the Court and
Parties
Patent Owner argues that our analysis of Apple v. Fintiv factor 3 was
clearly erroneous because “it was based, at least in part, on the number of
papers filed in the present proceeding as compared to ‘the Fintiv or the Sand
Revolution case.’” Req. Reh’g 8 (citing Dec. 11). We did not, however,
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base our Apple v. Fintiv factor 3 analysis of the number of papers filed
relative to these cases, but on the investments made by the ITC and parties
as demonstrated by the evidence of record. Dec. 11–12. The parties’ filings
reflect these investments.
Patent Owner further argues “nothing in the precedential opinion on
factor 3 concerns the investment by the parties in the present IPR.” Req.
Reh’g 8 (citing Apple v. Fintiv, Paper 11 at 9). Apple v. Fintiv states,
however, that “[t]he investment factor is related to the trial date factor, in
that more work completed by the parties and court in the parallel proceeding
tends to support the arguments that the parallel proceeding is more
advanced, a stay may be less likely, and instituting would lead to duplicative
costs.” Apple v. Fintiv, Paper 11 at 10. In other words, a comparison of the
investments made in each proceeding indicates which proceeding is more
advanced.
Patent Owner also argues “the Panel completely ignored the portion of
the factor 3 analysis related to the ‘matter of petition timing,’ . . . which
further favors denial.” Req. Reh’g 8 (citing Apple v. Fintiv, Paper 11 at 11).
Apple v. Fintiv factor 3 states, however, that “the parties should explain facts
relevant to timing.” See Apple v. Fintiv, IPR2020-00019, Paper 11 at 11.
Patent Owner contends Petitioner became aware of the asserted claims on
July 15, 2019. Req. Reh’g 11. Yet Patent Owner fails to identify any
evidence in the record to support this date, nor has Patent Owner provided
sufficient information to explain why Petitioner would have known of the
asserted claims on this date. In this regard, we note that attorney argument
is not evidence. Elbit Systems of America, LLC v. Thales Visionix, Inc., 881
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F.3d 1354, 1359 (Fed. Cir. 2018) (citing Icon Health & Fitness, Inc. v.
Strava, Inc., 849 F.3d 1034, 1043 (Fed. Cir. 2017)).
Patent Owner then argues the Reply and Sur-Reply should not be
considered as investments in the preliminary proceeding for this case
because they “did not include any substantive patent law analysis pertinent
to resolution of the IPR, if instituted.” Req. Reh’g 9. Patent Owner points
to no authority that the investments in the Reply and Sur-Reply should not
be considered in the factor 3 analysis.
Patent Owner makes numerous assertions that the investment in the
parallel ITC proceeding was greater than that in the present inter partes
review. Req. Reh’g 9–11. Patent Owner identifies some investments
supported by evidence in the record and others that are not. For example,
Patent Owner does not indicate where in the record the listing of depositions
and locations was presented before the request for rehearing. Id. at 10. A
request for rehearing is not an opportunity to supplement the record by
presenting new information and arguments without a showing of good cause,
which has not been made here. See Huawei Device Co., Ltd. v. Optis
Cellular Tech., LLC, IPR2018-00816, Paper 19 at 4 (PTAB Jan. 8, 2019)
(precedential). Furthermore, as noted, attorney argument and assertions do
not constitute evidence. See Elbit, supra.
Accordingly, Patent Owner has not demonstrated that we
misapprehended or overlooked any fact in our Apple v. Fintiv factor 3
analysis.
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C. Factor 4 – Overlap Between Issues Raised in the Petition and
in the Parallel Proceeding
Patent Owner contends “[our] determination that [Apple v. Fintiv]
factor 4 weighs against denial of institution was clearly erroneous based on a
misapprehension of the analysis required by the [Apple v. Fintiv] Board and
overlooking facts that weigh in favor of denial.” Req. Reh’g 12.
Specifically, Patent Owner contends Apple v. Fintiv states that “if a petition
involves the same prior art challenges but challenges claims in addition to
those that are challenged in the district court, it may still be inefficient to
proceed because the district court may resolve the validity of enough
overlapping claims to resolve key issues in the petition.” Req. Reh’g 12
(citing Apple v. Fintiv, IPR2020-00016, Paper 11 at 13 (emphasis omitted)).
Patent Owner contends we did not consider whether “‘enough overlapping
claims [would] resolve key issues in the petition’” but instead “made a
simple black and white comparison of the claims at issue at the ITC versus
the claims at issue in the present IPR, and finding that there was not a 100%
match, found factor 4 in favor of institution.” Id. (quoting Apple v. Fintiv,
IPR2020-00016, Paper 11 at 13).
Patent Owner incorrectly characterizes our Apple v. Fintiv factor 4
analysis. Req. Reh’g 12–14. The “key issue” that Patent Owner identified
in its briefing is the assertion that challenging claims 1, 4, 6, and 22 in the
’631 Patent instead of the dependent and independent claims 1–7, 9–13, 19,
21, and 22 of the ’631 Patent in this inter partes review “‘indirectly
addresses the patentability of ‘enough’ overlapping claims’” in relation to
Apple v. Fintiv factor 1. See Patent Owner’s Sur-Reply, Paper 10 at 4, 8–10.
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Patent Owner gave no reasoning to explain this conclusion. Id. As we
explained in our Institution Decision, the ITC proceeding will not resolve
the parties’ dispute concerning patentability of claims 2, 3, 5, 7, 9–13, 19,
and 21, which recite different and additional elements than the claims in the
ITC proceeding. Dec. 11–12. We further explained that the ITC proceeding
will not resolve the parties’ dispute concerning dependent claims that
address processor limitations (claims 8 and 9) and RFID receiver limitations
(claims 10 and 11). Id. (citing Ex. 1001, 15:3–14). Thus, in our Institution
Decision, we assessed the significance of the non-overlapping claims in
relation to the overlapping claims, and found in the facts of this case that the
non-overlapping claims were sufficient to weigh in favor of institution when
the parties’ dispute over those claims would not be resolved in either the ITC
proceeding or the stayed district court case. Dec. 11–12.
Patent Owner next argues “the claims asserted in the ITC proceeding
were 100% identical to the claims challenged in the present proceeding
throughout fact and expert discovery, so all of those issues have already
been fully litigated between the parties.” Req. Reh’g 12. Patent Owner
further argues “the claims asserted in these related IPRs matched 100% with
the claims asserted in the ITC proceeding when the petitions were filed with
the Board.” Id. at 12–13. Patent Owner states Petitioner complained that
there were too many claims in the case for a one-week trial before the ITC,
and under direction from the ITC judge, Patent Owner withdrew a number of
dependent claims from the ITC investigation. Id. at 13. Patent Owner
argues Petitioner should not “be rewarded by being permitted to use that
difference in scope as the basis for the institution.” Id. Patent Owner
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contends we misapprehended or overlooked “that the ITC proceeding will
resolve patentability issues of “enough overlapping claims to resolve key
issues in the petition” because the ITC proceeding involves the same
independent claim, the same prior art challenges, and the same parties.” Id.
For reasons already explained, we do not agree we misapprehended or
overlooked the patentability issues to be resolved in the ITC proceeding.
The ITC proceeding involves the claims 1, 4, 6, and 22 of the ’631 Patent so
the patentability of the claims 2, 3, 5, 7, 9–13, 19, and 21 will not be
resolved in that proceeding. Whatever the history between the parties as to
why the non-overlapping claims were litigated and then withdrawn from the
ITC proceeding, seemingly with Patent Owner’s acquiescence, the fact is the
non-overlapping claims remain in the ’631 Patent and Petitioner has
challenged their patentability in this proceeding. Although Patent Owner
asserts “resolution of the validity and infringement issues by Judge Elliot at
the ITC are substantially likely to resolve the dispute between the parties”
(Req. Reh’g 14), this is mere speculation, and Patent Owner points to no
evidence to support its assertion. In any case, Patent Owner’s assertion does
not show we misapprehended or overlooked any fact in rendering our
Institution Decision.
Patent Owner further argues “the Panel overlooked the fact that ITC
trial has already commenced, that the ITC initial determination is scheduled
to issue March 16, 2021, and that the target date for completion of the
investigation is July 16, 2021, which facts were provided via e-mail prior to
the issuance of the Decision.” Req. Reh’g 14 (citing Ex. 2027; Ex. 2028).
The evidence Patent Owner presented for the Request for Rehearing,
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however, shows the ITC trial is scheduled for November 16–20, 2020, so
Patent Owner is incorrect in asserting the ITC trial has begun. See Ex. 2028.
That the initial determination is scheduled for March 16, 2021, and the target
date for completion of the investigation is July 16, 2021, means a final
written decision in this proceeding will be entered before any exclusion
order in the ITC proceeding becomes effective.
Accordingly, Patent Owner has not demonstrated we misapprehended
or overlooked any fact in our Apple v. Fintiv factor 4 analysis.
III. CONCLUSION
For the reasons expressed above, we determine Patent Owner has
failed to demonstrate error or an abuse of discretion in our Institution
Decision. Accordingly, we decline to change our Institution Decision and,
thus, deny Patent Owner’s Request for Rehearing.
IV. ORDER
For the reasons given, it is:
ORDERED Patent Owner’s Request for Rehearing of the Institution
Decision is denied.

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For PETITIONER:

F. Christopher Mizzo
Gregory S. Arovas
James E. Marina
Alan Rabinowitz
KIRKLAND & ELLIS LLP
Chris.mizzo@kirkland.com
Greg.arovas@kirkland.com
James.marina@kirkland.com
Alan.rabinowitz@kirkland.com

For PATENT OWNER:

Robert W. Morris
ECKERT SEAMANS CHERIN & MELLOTT, LLC
rwmorris@eckertseamans.com

Michael V. Messinger
SHAMI MESSINGER PLLC
mike@shamimessinger.com