Personalized Media Communications, LLC

Patent Trials and Appeals Board

Nov 5, 2020

IPR2020-00723 (P.T.A.B. Nov. 5, 2020)

Trials@uspto.gov Paper 25
571.272.7822 Entered: November 5, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

GOOGLE LLC,
Petitioner,

v.

PERSONALIZED MEDIA COMMUNICATIONS, LLC,
Patent Owner.
____________

IPR2020-00723
Patent 7,747,217 B1
____________

Before GEORGIANNA W. BRADEN, JON M. JURGOVAN, and
JOHN F. HORVATH, Administrative Patent Judges.

HORVATH, Administrative Patent Judge.

DECISION
Denying Petitioner’s Request on Rehearing of
Decision Denying Institution of Inter Partes Review
37 C.F.R. § 42.71(d)

IPR2020-00723
Patent 7,747,217 B1
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I. INTRODUCTION
A. Background
On August 31, 2020, we denied Google LLC’s (“Petitioner”) Petition
for inter partes review of U.S. Patent No. 7,747,217 B1 (“the ’217 patent”).
Paper 22 (“Dec.” or “Decision”). In doing so, we evaluated and weighed the
factors set forth in Apple v. Fintiv, IPR2020-00019, Paper 11 (PTAB
March 20, 2020) (precedential), which were briefed by the parties, and
determined the factors weighed in favor of denying institution as an exercise
of our discretion under 35 U.S.C. § 314(a).
On September 30, 2020, Petitioner filed a Request for Rehearing of
our Decision, contending the Decision misapprehended Fintiv and
improperly weighed the Fintiv factors. Paper 24 (“Reh’g. Req.”). For the
reasons expressed below, we deny Petitioner’s Request for Rehearing.
B. Standard for Reconsideration
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 occurs if the 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). A request for rehearing “must specifically identify all
matters the party believes the Board misapprehended or overlooked, and the
place where each matter was previously addressed in a motion, an
opposition, or a reply.” 37 C.F.R. § 42.71(d). The burden of showing a
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decision should be modified on a request for rehearing lies with the party
challenging the decision. Id.
II. ANALYSIS
Petitioner contends we “misapplied Fintiv factors 6, 3, and 5 in this
case and made several errors of law,” and that a “proper analysis of these
factors weighs against the Board exercising its discretion to deny
institution.” Reh’g. Req. 2.
As an initial matter, Petitioner’s contention that we improperly
weighed the Fintiv factors is, ultimately, a contention that Petitioner would
have weighed the factors differently. Id. But the weight assigned to the
Fintiv factors, like the ultimate decision on whether to institute trial, is left to
the sound discretion of the Board. See Deloach v. Shinseki, 704 F.3d 1370,
1380 (Fed. Cir. 2013) (finding “the evaluation and weighing of evidence are
factual determinations committed to the discretion of the factfinder,” and the
factfinder’s weighing of the evidence is reversible error only when the
entirety of the evidence leads to a “definite and firm conviction that a
mistake has been committed”). Thus, the fact that Petitioner would have us
weigh the Fintiv factors differently is insufficient to show we erred in our
weighing of the factors.
A. Fintiv Factor 6
This factor asks us to consider “other circumstances that impact the
Board’s exercise of discretion, including the merits.” Fintiv, Paper 11 at 6.
Petitioner argues that our analysis of this factor, which did not address the
full merits of the Petition, was erroneous because it “is contrary to Fintiv
factor 6’s requirements and the statutory framework of the America Invents
Act (“AIA”).” Reh’g. Req. 2. Specifically, Petitioner argues that “[n]othing
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in Fintiv allows the Board to disregard the merits when deciding whether to
exercise its discretion under § 314(a).” Id. Moreover, Petitioner argues,
§ 314(a) requires decisions on institution to be “determined by the threshold
question of whether a petition has shown that ‘there is a reasonable
likelihood that the petitioner would prevail with respect to at least 1 of the
claims challenged in the petition,’—i.e., the merits.” Id. at 3 (quoting 35
U.S.C. § 314(a)).
We are not persuaded by Petitioner’s arguments. First, as noted in our
Decision, the Supreme Court and the Federal Circuit have recognized that
§ 314(a) invests the Director with discretion to institute inter partes review
despite the merits of the petition. See Dec. 4; see also SAS Inst. Inc. v.
Iancu, 138 S. Ct. 1348, 1356 (2018) (“[Section] 314(a) invests the Director
with discretion on the question whether to institute review . . . .”); Harmonic
Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1367 (Fed. Cir. 2016) (“[T]he PTO is
permitted, but never compelled, to institute an IPR proceeding.”) (emphasis
added). That is, § 314(a) constrains the Director’s ability to institute inter
partes review by preventing him from “authoriz[ing] inter partes review . . .
unless . . . there is a reasonable likelihood that the petitioner would prevail,”
but does not mandate the Director to institute inter partes review for any
reason, including the merits of a petition.
Second, as also noted in our Decision, Fintiv does not require us to
consider the merits of the petition in isolation, but instead requires us to
consider the merits as “part of a balanced assessment of all the relevant
[Fintiv factors] in the case,” which “is not to suggest that a full merits
analysis is necessary.” Dec. 10 (quoting Fintiv, Paper 11 at 14, 15). Our
Decision does that by (a) recognizing the tremendous resources needed “to
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reach even preliminary conclusions on the merits,” (b) balancing the needed
resources against “the significant resources already expended by the parties
and the District Court,” and (c) recognizing the inefficiency of “perform[ing]
a full merits analysis to determine whether the merits outweigh the [other]
Fintiv factors . . . when the District Court will likely have performed a full
merits analysis . . . more than 10 months before we can do so.” Id. at 12.
Patent Owner has not shown any error in that analysis. See Reh’g
Req. 2–4. Patent Owner’s argument that Fintiv requires a full merits
analysis is contrary to the language of § 314(a), as interpreted by the
Supreme Court and Federal Circuit, and is contrary to Fintiv itself. As
discussed above, the need to conduct a full merits analysis is a constraint on
the Director’s ability to institute inter partes review rather than a mandate to
institute review of a petition based on its merits. See 35 U.S.C. § 314(a);
SAS 138 S. Ct. at 1356; Harmonic, 815 F.3d at 1367. Recognizing this,
Fintiv finds the merits should be considered as part of a balanced assessment
of all relevant factors, which “is not to suggest that a full merits analysis is
necessary to evaluate this factor.” Fintiv, Paper 11 at 15.
Third, as noted in our Decision, we did not consider the full merits of
the Petition because we determined after a brief consideration of the
prosecution history that “tremendous resources . . . will be required to
resolve issues of claim construction, let alone issues of conception and
reduction to practice that will be required to reach even preliminary
conclusions on the merits of the Petition.” Dec. 12. Thus, even assuming
that factor 6 weighs in favor of institution, we would still deny institution
because the other Apple v. Fintiv factors in this case weigh against
institution. That is, we determined based on our review of the prosecution
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Patent 7,747,217 B1
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history and the issues raised by the parties, including claim construction,
conception, and diligent reduction to practice, that the resources that would
be required to reach even a preliminary conclusion on the merits when added
to the resources already spent in the district court case would outweigh
whatever the merits might be.
For the reasons discussed above, Petitioner fails to show we
misconstrued Fintiv, or erred in our interpretation or weighing of factor 6
under a proper Fintiv analysis.
B. Fintiv Factor 3
This factor asks us to consider “investment in the parallel proceeding
by the court and the parties.” Fintiv, Paper 11 at 6. Although Petitioner
recognizes that our Decision analyzed this factor by considering the
investments the parties and District Court made on various issues, including
claim construction and validity, Petitioner’s argument is focused largely on
the District Court’s claim construction Order. See Reh’g Req. 4–9.
Petitioner argues that our analysis of this factor was in error because Fintiv
“does not state that the claim construction process necessarily weighs in
favor of discretionary denial,” but instead “states that ‘district court claim
construction orders may indicate that the court and parties have invested
sufficient time in the parallel proceeding to favor denial.’” Id. at 4, 6
(quoting Fintiv, Paper 11 at 10).
We are not persuaded by Petitioner’s argument. Fintiv states:
The Board also has considered the amount and type of work
already completed in the parallel litigation by the court and the
parties at the time of the institution decision. Specifically, if, at
the time of the institution decision, the district court has issued
substantive orders related to the patent at issue in the petition,
this fact favors denial. . . . This investment factor is related to the
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Patent 7,747,217 B1
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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.
Fintiv, Paper 11 at 9–10 (emphasis added). Thus, a Fintiv analysis considers
not only work done on claim construction, but “the amount and type of [all]
work already completed . . . by the court and parties.” Id. This is done to
determine whether “the parallel proceeding is more advanced . . . and
instituting would lead to duplicative costs.” Id.
Our Decision performed such an analysis, finding factor 3 favored
denying institution because “the District Court and the parties have invested
significant resources in the district court case on issues of claim construction
and validity, including by completing expert discovery on July 8, 2020.”
Dec. 8. The issuance of the 94-page claim construction order and the
completion of expert discovery on validity, all done in preparation for a trial
scheduled to commence less than two months after our Decision was due, is
evidence that “the parallel proceeding is more advanced, a stay may be less
likely, and instituting would lead to duplicative costs,” all of which are
factors that “favor[] denial” because “the court and parties have invested
sufficient time in the parallel proceeding to favor denial.” Fintiv, Paper 11
at 9–10.
For the reasons discussed above, Petitioner fails to show we
misconstrued Fintiv, or erred in our interpretation or weighing of factor 3
under a proper Fintiv analysis.
C. Fintiv Factor 5
This factor asks us to consider “whether the petitioner and the
defendant in the parallel proceeding are the same party.” Fintiv, Paper 11
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Patent 7,747,217 B1
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at 6. Petitioner argues we misapprehended this factor because although
Fintiv supports the proposition that “a dissimilarity in the parties may favor
institution,” it does not “hold[] that similarity between the parties weighs
against institution.” Reh’g. Req. 9. Thus, Petitioner argues, “factor 5
should be at worst neutral when the parties are the same, if not weigh in
favor of institution.” Id. at 10.
Petitioner’s argument fails to demonstrate any error in our Decision’s
analysis of factor 5. The Decision correctly states that “[t]his factor weighs
against denying institution when a petitioner is not a party in a district court
case involving the same patent.” Dec. 9–10 (quoting Fintiv, Paper 11 at 13–
14). The Decision does not state that this factor, alone, favors denying
institution when the petitioner is a party to the district court case. Rather, it
states that “this factor, when considered together with the remaining factors
. . . weighs in favor of denying institution.” Id. at 10.
For the reasons discussed above, Petitioner fails to show we
misconstrued Fintiv or erred in our interpretation or weighing of factor 5
under a proper Fintiv analysis.
D. Balancing the Fintiv Factors for Abuse of Discretion
We have considered carefully the arguments and evidence before us in
view of the Fintiv factors Petitioner relies upon to argue we erred in our
Decision. As we discussed previously, our analysis is fact driven, and no
single factor is determinative of whether we exercise our discretion to deny
institution under § 314(a). Fintiv factor 6 does not weigh in favor of
institution because the strength of the merits are not clear and it would be
inefficient to expend the resources needed to provide clarity given the
significant resources already spent by the parties and the District Court. In
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Patent 7,747,217 B1
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any case, we considered a balanced assessment of all factors as required by
Fintiv, including the investment in claim construction and discovery
(factor 3), the pending trial date1 (factor 1), and the fact that there is no
difference between the parties (factor 5), and concluded that the balance of
the Fintiv factors weighed in favor of exercising our discretion to deny
institution.
Petitioner’s arguments show no misapprehension of our analysis or
weighing of the Fintiv factors. Although Petitioner would have us weigh the
factors differently, disagreement with how the Board weighed the factors is
not a proper basis for requesting rehearing nor is it evidence that our
Decision mistook Fintiv or overlooked or misapprehended any Fintiv
factors.
III. CONCLUSION
For the reasons expressed above, Petitioner has failed to demonstrate
any error in or abuse of discretion in the issuance of our Decision.
Accordingly, Petitioner has failed to demonstrate that our Decision should
be modified, and their Request for Rehearing is denied. See 37 C.F.R.
§ 42.71(d).
IV. ORDER
For the reasons given, it is:

1 We note that trial was set originally for October 19, 2020. Paper 17, 1.
Petitioner filed a Writ of Mandamus with the Federal Circuit seeking to
overturn the district court’s finding on venue. Id. at 1–2 (citing Ex. 1027, 9).
The Federal Circuit denied that Writ on September 18, 2020. See In re
Google LLC, Case 20-144 (Fed. Cir. 2020).

IPR2020-00723
Patent 7,747,217 B1
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ORDERED Petitioner’s Request for Rehearing of the Decision to
Deny Institution is denied.
IPR2020-00723
Patent 7,747,217 B1
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PETITIONER:

Erika H. Arner
Daniel C. Cooley
Joshua L. Goldberg
Cory C. Bell
Sydney R. Kestle
A. Grace Mills
FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP
erika.arner@finnegan.com
daniel.cooley@finnegan.com
joshua.goldberg@finnegan.com
cory.bell@finnegan.com
sydney.kestle@finnegan.com
gracie.mills@finnegan.com

PATENT OWNER:

Dmitry Kheyfits
Andrey Belenky
Brandon Moore
KHEYFITS BELENKY LLP
dkheyfits@kblit.com
abelenky@kblit.com
bmoore@kblit.com

Thomas J. Scott Jr.
PERSONALIZED MEDIA COMMUNICATIONS, LLC
tscott@pmcip.com