Apple Inc.v.Rensselaer Polytechnic Institute

Patent Trial and Appeal Board

Jun 12, 2014

09861860 (P.T.A.B. Jun. 12, 2014)

Trials@uspto.gov Paper 12
571-272-7822 Entered: June 12, 2014

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

APPLE INC.
Petitioner

v.

RENSSELAER POLYTECHNIC INSTITUTE and
DYNAMIC ADVANCES, LLC
Patent Owner

Case IPR2014-00319
Patent 7,177,798 B2

Before JOSIAH C. COCKS, BRYAN F. MOORE, and
MIRIAM L. QUINN, Administrative Patent Judges.

MOORE, Administrative Patent Judge.

DECISION
Denying Institution of Inter Partes Review
37 C.F.R. § 42.108

Case IPR2014-00319
Patent 7,177,798 B2

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INTRODUCTION
Apple Inc. (“Petitioner”) filed a petition requesting an inter partes
review of claims 1-21 of U.S. Patent No. 7,177,798 B2 (Ex. 1001, “the
’798 patent”) on January 3, 2014. Paper 1 (“Pet.”). In response, Rensselaer
Polytechnic Institute and Dynamic Advances, LLC (“Patent Owner”) filed a
patent owner preliminary response on April 16, 2014. Paper 11 (“Prelim.
Resp.”). We have jurisdiction under 35 U.S.C. § 314.
The standard for instituting an inter partes review is set forth in
35 U.S.C. § 314(a), which provides as follows:
THRESHOLD.—The Director may not authorize an inter
partes review to be instituted unless the Director determines
that the information presented in the petition filed under section
311 and any response filed under section 313 shows that there
is a reasonable likelihood that the petitioner would prevail with
respect to at least 1 of the claims challenged in the petition.
Additionally, Section 315 of Title 35 of the United States Code
provides in pertinent part:
(b) PATENT OWNER'S ACTION.—An inter partes
review may not be instituted if the petition requesting the
proceeding is filed more than 1 year after the date on which the
petitioner, real party in interest, or privy of the petitioner is
served with a complaint alleging infringement of the patent.
The time limitation set forth in the preceding sentence shall not
apply to a request for joinder under subsection (c).
For the reasons that follow, we determine that the petition to institute
an inter partes review was not filed within the statutory period of 35 U.S.C.
§ 315(b), and therefore is denied.

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A. Related Proceedings
Petitioner indicates that the ’798 patent is involved in a co-pending
case captioned Rensselaer Polytechnic Inst. & Dynamic Advances, LLC v.
Apple Inc., No. 1:13-cv-00633-DNH-DEP (N.D.N.Y). Pet. 2 (Attachment
B). Petitioner has filed additional petitions for inter partes review against
the ’798 patent: IPR2014-00077 (institution was denied); and IPR2014-
00320 (filed concurrently with this inter partes review).
B. Earlier District Court Proceeding
The ’798 patent was included in a complaint for patent infringement
filed October 19, 2012, in Dynamic Advances, LLC v. Apple Inc., No. 1:12-
cv-01579-DNH-CFH (N.D.N.Y) (Dynamic I). Pet. 1. In that case Patent
Owner (Dynamic Advances) served Petitioner (Apple) with the complaint on
October 23, 2012. Prelim. Resp. 4; Ex. 2014. Apple answered and
counterclaimed on December 13, 2012. Ex. 2015, 1, 7. Subsequently,
Rensselaer Polytechnic Institute and Dynamic Advances filed jointly a
complaint for patent infringement in Rensselaer Polytechnic Inst. &
Dynamic Advances, LLC v. Apple Inc., No. 1:13-cv-00633-DNH-DEP
(N.D.N.Y) (Dynamic II) on June 3, 2013. Ex. 1021.
On July 22, 2013, the court ordered the two cases consolidated under
Fed. R. Civ. P. 42 and that Dynamic I “is dismissed without prejudice and
the parties will proceed to litigate their claims and defenses in Civil Action
No. 1:13-cv-633-DNH-DEP,” pursuant to a joint stipulation of the parties.
Ex. 1022 (Dkt. No. 68, Case No. 1:12-cv-1579); Ex. 2018 (Dkt. No. 20,
Case No. 1:13-cv-633) (emphasis added).
That consolidated case remains pending.
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ANALYSIS
Petitioner was served with a complaint alleging infringement of the
’798 patent on two occasions. The first complaint, in connection with a first
case, Dynamic I, was served on Petitioner on October 23, 2012. The second
complaint, in connection with a second case, Dynamic II, was served on
Petitioner on June 6, 2013, less than 12 months prior to the filing date of the
Petition. Pet. 1.
Petitioner raises the following issue with respect to 35 U.S.C. §
315(b): whether service of the second complaint (Dynamic II), but not of
the first complaint (Dynamic I), controls for purposes of 35 U.S.C. § 315(b)
because of the consolidation order dismissing the first case “without
prejudice.”
Petitioner argues that it is not barred from requesting inter partes
review because the service of the Dynamic I complaint was not effective.
Pet. 1. In support of its argument, Petitioner relies on a decision instituting
inter partes review in IPR2012-0004, Macauto U.S.A. v. BOS GmbH & KG
(Macauto) (holding that a voluntary dismissal without prejudice nullified
service of the complaint for purposes of 35 U.S.C. § 315(b)). As pointed out
by Patent Owner, in Macauto the infringement suit against the petitioner was
dismissed voluntarily without prejudice, under Fed. R. Civ. P. 41(a),
pursuant to a joint stipulation. Macauto, slip op. at 14-15 (PTAB 2013)
(Paper 18). The Macauto decision noted that the United States Court of
Appeals for the Federal Circuit has interpreted consistently the effect of
voluntary dismissals without prejudice under Fed. R. Civ. P. 41(a) as leaving
the parties as though the action had never been brought. Id. at 15-16
(quoting Graves v. Principi, 294 F.3d 1350, 1356 (Fed. Cir. 2002);
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Bonneville Associates, Ltd. Partnership v. Baram, 165 F.3d 1360, 1364
(Fed. Cir. 1999) (Bonneville)). With respect to the co-pending litigation
here, however, although the United States District Court for the Northern
District of New York ordered that the voluntary dismissal of Dynamic I was
without prejudice, the Court did so as part of a consolidation of Dynamic I
and Dynamic II pursuant to Fed. R. Civ. P. 42. Prelim. Resp. 6; Ex. 1022, 2.
Macauto, we note, relied on cases interpreting Fed. R. Civ. P. 41(a), not Fed.
R. Civ. P. 42.
Therefore, the issue before us is whether service of the complaint in
Dynamic I should be treated as nullified under the reasoning of Macauto.
Based on the facts presented in this proceeding, we conclude that it should
not be so treated, because Dynamic I cannot be treated as if that case had
never been filed under the rationale of Macauto.
As noted above, the Board in Macauto relied on Bonneville.
Bonneville involved an issue of whether the statute of limitations would be
tolled when a case is brought, and subsequently dismissed, without
prejudice. Bonneville, 165 F.3d at 1364-65. The Court in Bonneville found
that a complaint that was dismissed by joint stipulation without prejudice
under Fed. R. Civ. P. 41(a) did not toll the statute of limitations, and
therefore, an appeal of that case was barred.
We find informative a case from the Third Circuit that recognized,
similar to Bonneville, that a “statute of limitations is not tolled by the filing
of a complaint subsequently dismissed without prejudice,” as “the original
complaint is treated as if it never existed.” Cardio–Medical Assocs. v.
Crozer–Chester Med. Ctr., 721 F.2d 68, 77 (3d Cir.1983) (Cardio-Medical).
Nonetheless, Cardio-Medical recognized an exception where the limitations
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period is tolled by the filing of a complaint, which is later dismissed without
prejudice, if the order of dismissal grants leave to amend within a time
certain. See id. The rationale for this exception is that “[a]n order merely
dismissing a complaint without prejudice could result in a significant period
of delay prior to the bringing of a new action.” Brennan v. Kulick, 407 F.3d
603, 607 (3d Cir.2005). But with a conditional dismissal, “[t]he conditions
specified in the order prevent a plaintiff from indefinitely extending the
limitations period.” Id.
Therefore, the Third Circuit has analyzed the rule regarding treatment
of dismissals without prejudice based on the particular circumstances of
each case. We are persuaded that the circumstances of the instant case
weigh in favor of close scrutiny of the effect of the dismissal of Dynamic I,
because that cause of action, although dismissed, was continued immediately
in Dynamic II.
We also find informative another panel’s decision holding that the
filing of an amended complaint does not render the original complaint a
nullity. Loral Space & Communications, Inc. v. ViaSat, Inc., IPR2014-
00236 (PTAB 2014) (Paper 7) (“An amended complaint is just that-a
complaint that has been amended. The original complaint has been
amended, and has not gone away in the same sense as a complaint dismissed
without prejudice.”). Again, here, Dynamic I immediately continued as a
consolidated case, similar, in effect, to an amended case.
We find the above cases well-reasoned and applicable to the facts
presented here. Although the Court’s order consolidating Dynamic I and
Dynamic II dismissed Dynamic I “without prejudice,” the Court’s order
specifically stated that the “parties will proceed to litigate their claims and
Case IPR2014-00319
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defenses in [Dynamic II],” stated that discovery from Dynamic I would be
treated as if it was filed in Dynamic II, and specifically bound the parties to
positions taken in Dynamic I. Ex. 1022. Given these facts, we conclude that
the Dynamic I case did not cease in the same sense as a complaint dismissed
without prejudice and without consolidation—it was consolidated with
another case, and its complaint cannot be treated as if it never existed.
In sum, Petitioner has failed to show that we should treat a dismissal
without prejudice pursuant to a consolidation under Fed. R. Civ. P. 42 in the
same way as a dismissal without prejudice, without consolidation, under
Fed. R. Civ. P. 41(a). Therefore, the date of service of the Dynamic I
complaint, October 23, 2012, controls for determining whether the petition is
barred under 35 U.S.C. § 315(b). Because the petition has a filing date of
January 3, 2014, the petition was not filed timely within the one-year-
statutory period of 35 U.S.C. § 315(b).

CONCLUSION
We have considered Petitioner’s arguments. We are not persuaded
that the petition was filed timely within the one-year-statutory period of 35
U.S.C. § 315(b), and therefore, the Board denies institution of an inter partes
review of U.S. Patent 7,177,798.

ORDER
Accordingly, it is
ORDERED that that the petition is denied as to all challenged claims,
and no trial is instituted.

Case IPR2014-00319
Patent 7,177,798 B2

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For PETITIONER:

Jeffrey Kushan
jkushan@sidley.com

For PATENT OWNER:

Tarek Fahmi
FAHMI, SELLERS, EMBERT & DAVITZ
tarek.fahmi@fseip.com

Donald E. Tiller
SKIERMONT PUCKETT LLP
dynamic_team@skiermontpuckett.com
don.tiller@skiermontpuckett.com