Maxell, Ltd.

Patent Trials and Appeals Board

Dec 15, 2020

IPR2020-00204 (P.T.A.B. Dec. 15, 2020)

Trials@uspto.gov Paper 21
571-272-7822 Date: December 15, 2020
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

APPLE INC.,
Petitioner,

v.

MAXELL, LTD.,
Patent Owner.
____________

IPR2020-00204
Patent 6,928,306 B2
____________

Before MICHAEL R. ZECHER, KEVIN C. TROCK, and
JOHN A. HUDALLA, Administrative Patent Judges.

HUDALLA, Administrative Patent Judge.

DECISION
Denying Patent Owner’s Request for Rehearing
37 C.F.R. § 42.71(d)

Apple Inc. (“Petitioner”) filed a Petition (Paper 1, “Pet.”) requesting
an inter partes review (“IPR”) of claims 2, 5, 6, and 12–15 (“the challenged
claims”) of U.S. Patent No. 6,928,306 B2 (Ex. 1001, “the ’306 patent”).
Patent Owner, Maxell, Ltd. (“Patent Owner”), filed a Preliminary Response
(Paper 6, “Prelim. Resp.”). With our authorization (Paper 7), Petitioner also
filed a Reply (Paper 8, “Pet. Reply”) and Patent Owner filed a Sur-Reply
IPR2020-00204
Patent 6,928,306 B2
2
(Paper 10, “PO Sur-reply”) addressing whether we should exercise our
discretion to deny institution under 35 U.S.C. § 314(a).
On June 19, 2020, we entered a Decision on Institution (Paper 11,
“Dec.”) that instituted inter partes review on all claims and all grounds
presented in the Petition. As part of the Decision, we considered Patent
Owner’s arguments (Prelim. Resp. 2–20; PO Sur-reply 1–10) that we should
exercise our discretion to deny institution under 35 U.S.C. § 314(a) based on
the duplicative nature and advanced stage of the related case styled Maxell,
Ltd. v. Apple Inc., No. 5:19-cv-00036 (E.D. Tex. Mar. 15, 2019) (“the
underlying litigation”). Dec. 2, 11–20. We based our discretionary denial
analysis on the Board’s precedential decision in Apple Inc. v. Fintiv, Inc.,
IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) (“Fintiv”).
After weighing the factors identified in Fintiv, we declined to exercise our
discretion under 35 U.S.C. § 314(a) to deny inter partes review. Dec. 19–
20.
Patent Owner filed a Request for Rehearing (Paper 13, “Req. Reh’g”)
asking us to reconsider our analysis of the Fintiv factors and our decision not
to exercise discretion to deny institution.1 For the reasons stated below, we
deny the Request for Rehearing.

1 Patent Owner also requested rehearing by the Precedential Opinion Panel
(“POP”) to “clarify the date from which Fintiv Factor 4 should be analyzed,
namely, the Petition’s filing date.” Req. Reh’g 1. POP denied Patent
Owner’s request for review. Paper 19. Notwithstanding, we consider
Petitioner’s arguments regarding Fintiv Factor 4 below.
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Patent 6,928,306 B2
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I. ANALYSIS
When reconsidering a decision on institution, we 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 is based on an erroneous interpretation of
law, if a factual finding is not supported by substantial evidence, or if the
decision represents an unreasonable judgment in weighing relevant factors.
See Star Fruits S.N.C. v. United States, 393 F.3d 1277, 1281 (Fed. Cir.
2005); Arnold P’ship v. Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004); In re
Gartside, 203 F.3d 1305, 1315–16 (Fed. Cir. 2000). The party requesting
rehearing has the burden of showing the decision should be modified, which
includes specifically identifying all matters the party believes we
misapprehended or overlooked. See 37 C.F.R. § 42.71(d).
In our Decision on Institution, we found that Fintiv Factor 4, i.e.,
overlap between issues raised in the Petition and in the underlying litigation,
weighed against exercising our discretion to deny institution. Dec. 15–17.
Specifically, we cited Petitioner’s proposal to withdraw the Van der Salm
reference in the underlying litigation if we were to institute inter partes
review. Id. at 16 (citing Ex. 1047, 3 n.4). We found that Petitioner’s
proposal “alleviates, to some degree, concerns of duplicative efforts between
the district court and the Board, and further minimizes the potential for
conflicting decisions.” Id. (citing Sand Revolution II, LLC v. Cont’l
Intermodel Grp.–Trucking LLC, IPR2019-01393, Paper 24 at 11–12 (PTAB
June 16, 2020) (informative2) (“Sand Revolution”). In weighing all of the
Fintiv factors, we found that the proposal to withdraw Van der Salm and

2 Sand Revolution has been designated as an “Informative” decision of the
Board since the time of our Decision on Institution.
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Patent 6,928,306 B2
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Petitioner’s relatively strong preliminary showing of unpatentability
outweighed concerns about inefficiency due to the impending trial date and
the investment in the underlying litigation, among other things. See id. at
19–20. Thus, we declined to exercise our discretion under 35 U.S.C.
§ 314(a) to deny inter partes review. Id. at 20.
Patent Owner contends our weighing of the Fintiv factors—
particularly with regard to Factor 4—represents an unreasonable judgment.
See Req. Reh’g 4–7. Specifically, Patent Owner argues that we should have
considered the overlap only at the time the Petition was filed and that we
should not have considered any developments affecting the overlap arising
thereafter. See id. at 1–2, 5, 7–10. Patent Owner argues that there was
complete overlap in prior art, challenged claims, and grounds at the time the
Petition was filed. Id. at 2, 6; see also id. at 8 (timeline chart regarding
overlap). Patent Owner also highlights that Petitioner made its proposal to
withdraw Van der Salm in the underlying litigation four months after filing
the Petition in this case. Id. at 1–2. According to Patent Owner, our
consideration of post-filing developments such as this “necessarily leads to
gamesmanship, allowing petitioners to assert positions in the district court
and the petition and then switch positions when it suits their purpose.” Id. at
1; see also id. at 1–2, 5–10 (similar arguments).
We do not agree with Patent Owner that our analysis of Fintiv
Factor 4 must be constrained to the facts as they existed when the Petition
was filed. In the Board’s informative Sand Revolution decision, the panel
considered and gave weight to a petitioner’s stipulation to withdraw certain
prior art references from a related litigation if inter partes review was
instituted. Sand Revolution at 11–12. Importantly, the stipulation in Sand
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Patent 6,928,306 B2
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Revolution arose long after the Petition was filed. Compare
IPR2019-01393, Paper 1, 88 (petition with July 25, 2019, filing date), with
IPR2019-01393, Ex. 1015 (stipulation to withdraw prior art dated April 13,
2020). Just as in Sand Revolution, we focused on the effects of Petitioner’s
proposal to withdraw Van der Salm here: alleviating concerns of duplicative
efforts between the district court and the Board and minimizing the potential
for conflicting decisions. Dec. 16. This is consistent with the policy
considerations underlying Factor 4 in Fintiv, namely, “concerns of
inefficiency and the possibility of conflicting decisions.” Fintiv at 12. Thus,
we do not agree with Patent Owner that it was unreasonable for us to
consider Petitioner’s post-filing proposal to withdraw Van der Salm.
Patent Owner also argues we improperly “placed emphasis on
Factor 4 when there was overlap present in the prior art grounds presented
by [Petitioner] here and in the District Court.” Req. Reh’g 3; see also id. at
6 (same argument). Patent Owner argues there is still overlap between this
case and the underlying litigation in prior art and claims. Id. at 3–4, 6.
Nevertheless, we expressly considered the overlap in a secondary prior art
reference, Miura, but found that “Petitioner’s challenges here based on
Van der Salm and Huang are necessarily different than those based on
Borland ’347 in the underlying litigation.”3 Dec. 17. We also expressly
considered the overlap in claims. See Dec. 15 (“Petitioner notes that only
claims 12 and 15 are challenged in the underlying litigation, which is a

3 Moreover, contrary to Patent Owner’s argument (PO Sur-reply 9–10; Req.
Reh’g 14), Petitioner’s boilerplate reservation of rights regarding asserted
prior art in the underlying litigation (see Ex. 1047, 2) has no impact on our
analysis.
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Patent 6,928,306 B2
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subset of the seven claims challenged here.”), 17 (“[C]laims 2, 5, 7, 13, and
14 are being challenged here, but not in the underlying litigation . . . .”).
Patent Owner merely expresses its disagreement with our weighing of these
facts with others in favor of institution and does not state any persuasive
reason why our judgment was unreasonable based on these facts. And,
contrary to Patent Owner’s contentions (Req. Reh’g 6), our Decision did not
“require[] complete overlap in claims and prior art in its analysis of
Factor 4” in order for this factor to favor denial of institution. No such
statement appears in our Decision.
Patent Owner also argues that Petitioner “failed to articulate a reason
why it would be harmed” with respect to claims 2, 5, 7, 13, and 14, which
are not challenged in the underlying litigation, if we were to deny institution
here. See Req. Reh’g 3–4 (citing Next Caller v. TRUSTID, IPR2019-00961,
Paper 10 at 14 (PTAB Oct. 14, 2019)), 6. Nevertheless, we are not aware of
a requirement to show harm in this instance. Instead, we reasonably
considered that five of seven asserted claims are absent in the underlying
litigation (Dec. 17), which necessarily impacts how much overlap there is in
the two proceedings. Correspondingly, Petitioner noted that claims 5 and 14
include the limitation “generate the ringing sound when the signal comes
within a time zone which is set up in advance,” which Petitioner
characterizes as a “non-overlapping, notable limitation.” Pet. Reply 10. As
such, we reasonably considered the lack of overlap in the asserted claims
here as one factor (among many) that impacted our Factor 4 analysis.
Patent Owner also alleges error in our analysis of other Fintiv factors.
Req. Reh’g 10–11, 14–15. Regarding Factor 5, we quoted language from
Fintiv: “If a petitioner is unrelated to a defendant in an earlier court
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Patent 6,928,306 B2
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proceeding, the Board has weighed this fact against exercising discretion.”
Dec. 17 (quoting Fintiv at 13–14). We noted that Petitioner here is the
defendant in the underlying litigation, so we found that Factor 5 does not
weigh against exercising discretionary denial. Id. Patent Owner contends
we should have found this factor to favor denial. Req. Reh’g 11. We
disagree. We applied the direct language of Fintiv. Nonetheless, for added
clarity, we view Factor 5 as neutral under the particular facts and
circumstances of this case because the overlap between the claims and
grounds here and in the underlying litigation is minimal, especially given
Petitioner’s stipulation to withdraw Van der Salm discussed above.4
Patent Owner additionally argues that we “improperly discounted
[Petitioner’s] extreme delay in filing its Petition.” Req. Reh’g 14.
According to Patent Owner, Petitioner had already drafted invalidity
contentions for all of the asserted claims here four months before the filing
date of the Petition. Id. (citing Ex. 2004). Patent Owner also argues that
Petitioner does not explain why “work being done in the District Court
Action by a completely different law firm and experts had any bearing on
delays in its filing of the IPR Petition.” Id. at 14–15.
Nevertheless, Fintiv recognizes “that it is often reasonable for a
petitioner to wait to file its petition until it learns which claims are being

4 In our view, our treatment of Factor 5 as neutral in this case due to the lack
of overlap of issues with the underlying litigation is not inconsistent with
other Board decisions viewing Factor 5 as favoring denial when issues
overlap with the related district court litigation. See, e.g., Apple Inc. v.
Maxell, Ltd., IPR2020-00203, Paper 12 at 16 (PTAB July 6, 2020)
(determining that Factor 5 favors the exercise of discretionary denial when
“the trial court may reach the overlapping issues before the Board would in a
final written decision” (emphasis added)).
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Patent 6,928,306 B2
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asserted against it in the parallel proceeding.” Fintiv at 11. As stated in our
Decision, this is consistent with the legislative history of the America
Invents Act (“AIA”) as to the one-year statutory bar under § 315(b),
particularly with respect to complex underlying litigation. Dec. 18–19
(citing 157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (statement of Senator
Kyl)). Our Decision credited Petitioner’s arguments about Patent Owner’s
initial assertion of 10 different patents and 132 claims in the underlying
litigation as a reason why it took nine months for Petitioner to file its
Petition here. Dec. 18–19. We also noted that Petitioner filed its Petition
only one month after Patent Owner made a preliminary election of asserted
claims in the underlying litigation. Id. at 19. In light of this, and
considering the multiple patents and numerous claims in the underlying
litigation, we did not find Petitioner’s filing to be untimely. Id. The fact
that multiple law firms and experts were involved does not negate the
complexity of the underlying litigation. And, even if Petitioner had prepared
invalidity charts earlier, Fintiv and the AIA’s legislative history recognize
why Petitioner reasonably may have waited to file here until after Patent
Owner identified its asserted claims. Thus, we did not render an
unreasonable judgment regarding the time of Petitioner’s filing.
Patent Owner also disputes the manner in which we collectively
weighed all of the Fintiv factors. See Req. Reh’g 10–11. In particular,
Patent Owner contends we placed undue weight on Factor 4. Id. at 11.
Patent Owner also contends we should have weighed Factor 2 more than
others based on the following statement from Fintiv: “[I]f the court[’s trial]
date is at [or] around the same time [as the projected statutory deadline] or
[even] significantly after the [projected] statutory deadline, the decision
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Patent 6,928,306 B2
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whether to institute will likely implicate other factors discussed herein
. . . .” Id. (quoting Fintiv at 9) (emphasis added by Patent Owner). As stated
above, however, the Board’s informative Sand Revolution decision supports
our rationale for crediting Petitioner’s stipulation made after the filing of the
present Petition to withdraw Van der Salm from the underlying litigation.
Regarding Factor 2, we do not interpret the quote from Fintiv as suggesting
that Factor 2 should be given more weight. Rather, it recognizes how other
Fintiv factors likely come into play when a trial in related litigation is on a
similar or slower timeline. And we credited the trial date in the underlying
litigation as supporting the exercise of discretionary denial. Dec. 14, 19.
Moreover, in our conclusion, we weighed these factors against each other
per the guidance provided in Fintiv. Dec. 19–20; see Fintiv at 6 (“[I]n
evaluating the factors, the Board takes a holistic view of whether efficiency
and integrity of the [patent] system are best served by denying or instituting
review.”). Given that we reasonably accounted for the various factors, we
do not agree with Patent Owner that we failed to conduct a balanced
assessment of all relevant circumstances.
Finally, Patent Owner argues that Petitioner “has continued to use
Van der Salm in the underlying litigation” after institution by citing it in a
summary judgment motion as “evidence that the claimed elements were
routine and conventional.” Req. Reh’g 2–3 (citing Ex. 2019, 4, 115); see
also id. at 8, 12–13 (arguing same). In this way, Patent Owner argues
Petitioner “is seeking to invalidate the challenged claims by still relying on

5 Patent Owner’s page number references in Exhibit 2019 are made to the
page numbers within the exhibit rather than the page numbers added by
Patent Owner in a footer.
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Patent 6,928,306 B2
10
Van der Salm.” Id. at 3. As such, Patent Owner argues Petitioner “went
back on its word” regarding its stipulation after institution in this case. Id. at
8. Nevertheless, we could not have overlooked or rendered an unreasonable
judgment on these developments because they were not before us (and had
not yet occurred) at the time of institution. Thus, we are not persuaded by
Patent Owner’s arguments.6

II. CONCLUSION
For the reasons above, we conclude that Patent Owner has not met its
burden of showing that we abused our discretion in evaluating and weighing
the Fintiv factors as part of our decision not to exercise discretion under
35 U.S.C. § 314(a) to deny inter partes review. Therefore, we deny Patent
Owner’s requests to reweigh the Fintiv factors and to exercise our discretion
to deny institution in this proceeding.

III. ORDER
Accordingly, it is
ORDERED that Patent Owner’s Request for Rehearing is denied.

6 Indeed, to the extent Patent Owner believes Petitioner has violated the
letter or spirit of its stipulation in the underlying litigation, Patent Owner
could seek relief in the district court.
IPR2020-00204
Patent 6,928,306 B2
11
PETITIONER:

Adam P. Seitz
Paul R. Hart
Jennifer C. Bailey
adam.seitz@eriseip.com
paul.hart@eriseip.com
jennifer.bailey@eriseip.com

PATENT OWNER:

Robert G. Pluta
Amanda S. Bonner
Luiz Miranda
James A. Fussell
William J. Barrow
Saqib J. Siddiqui
rpluta@mayerbrown.com
asbonner@mayerbrown.com
lmiranda@mayerbrown.com
jfussell@mayerbrown.com
wbarrow@mayerbrown.com
ssiddiqui@mayerbrown.com