Motion Offense, LLC

Patent Trials and Appeals Board

Sep 23, 2020

IPR2020-00705 (P.T.A.B. Sep. 23, 2020)

Trials@uspto.gov Paper 14
571-272-7822 Date: September 23, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

UNIFIED PATENTS, LLC,
Petitioner,

v.

MOTION OFFENSE, LLC,
Patent Owner.
____________

IPR2020-00705
Patent 10,013,158 B1
____________

Before PATRICK M. BOUCHER, KIMBERLY McGRAW, and
NABEEL U. KHAN, Administrative Patent Judges.

BOUCHER, Administrative Patent Judge.

DECISION
Dismissal Prior to Institution of Trial
35 U.S.C. § 314

With our authorization, Petitioner filed a Motion to Dismiss and
Terminate this proceeding, and Patent Owner filed an Opposition. Papers 12
(“Mot.”), 13 (“Opp.”). Petitioner requests that the Petition be dismissed and
the proceeding terminated because “this proceeding is in a preliminary stage,
IPR2020-00705
Patent 10,013,158 B1

2
prior to institution, and [Petitioner] has recently sought to reallocate its
budgets and resources, including, in light of the COVID-19 pandemic.”
Mot. 1. In making such a motion, Petitioner asserts that “termination will
achieve a just, speedy, and inexpensive resolution of the dispute” and that
“[w]ithdrawal is also in the interest of justice, as the parties have no other
dispute, and dismissal will resolve all matters.” Id.; see also id. at 2–3
(stating that dismissal of the Petition in this proceeding is appropriate
because the proceeding is at an early stage, with no decision having yet been
made whether to institute a proceeding, and because dismissal will “reduce
the parties’ expenses, conserve Board resources, and promote efficiency”).
Petitioner also contends Patent Owner will not be prejudiced by termination
at this preliminary proceeding stage but rather will benefit from preserving
its own resources.
Patent Owner opposes Petitioner’s motion, arguing that termination of
the proceeding before the Board has an opportunity to determine whether
Petitioner failed properly to identify all real parties in interest (“RPIs”) is
prejudicial to Patent Owner. Opp. 1. Patent Owner contends that a finding
that Petitioner failed to identify Dropbox, Inc. as a RPI would deter
Petitioner and others from “attempting to serve as patent-challenging avatars
for paying members who would otherwise be statutorily barred.” Id.
We agree with Petitioner that dismissal is appropriate under the
present circumstances. Our “regulations expressly provide the Board with
broad authority to dismiss a petition where appropriate.” Facebook, Inc. v.
EveryMD.com, IPR2018-00050, Paper 19 at 4 (PTAB Oct. 9, 2018); see
37 C.F.R. § 42.71(a) (“The Board . . . may grant, deny, or dismiss any
petition or motion.”). The proceeding is at an early stage and it is
IPR2020-00705
Patent 10,013,158 B1

3
appropriate to dismiss the Petition and terminate the proceeding to promote
efficiency and unnecessary costs.
We agree with Petitioner that denying the Motion to dismiss the
Petition and terminate the proceeding would impose an unnecessary
“administrative burden” on the Board’s finite resources. See Mot. 3–4. We
also determine that dismissing the Petition will decrease the burden on
Patent Owner. In doing so, we make specific note of the “added
reassurance[s]” provided by Petitioner in its Motion. In particular,
“Petitioner confirms that there are no side or other agreements with any
other party in relation to this proceeding.” Mot. 5. In addition, “Petitioner
has confirmed to Patent Owner, telephonically, and confirms to the Board
that it does not intend to file another patent challenge against this patent or
known related patents.” Id. Given these representations, Patent Owner will
not incur additional burden or expense in defending any later-filed petition
by Petitioner challenging this patent or known related patents.
Patent Owner’s opposition to the Motion is best understood in the
context of the two principal arguments made in its Preliminary Response.
See Opp. 3 (referring to arguments detailed in its Preliminary Response).
First, in its Preliminary Response, Patent Owner attacks Petitioner’s
business model as one in which Petitioner “acts as a proxy for its members,
filing IPRs against patents in a manner that protects the entities from
statutory bars, such as a time bar or rejection due to [a real party in interest
(‘RPI’)] filing a prior declaratory judgment for invalidity.” Paper 8, 20.
Patent Owner specifically alleges that Dropbox is an unnamed RPI that is
itself barred from challenging the subject patent in an inter partes review.
Id. at 23 (“Presumably, Dropbox is not named because it has brought an
IPR2020-00705
Patent 10,013,158 B1

4
action for declaratory judgment of invalidity, and therefore, cannot file its
own petition for IPR against the ’158 patent.”). Notably, Patent Owner
characterizes these facts as “an example” of Petitioner’s wider “ongoing
practice of filing petitions to benefit member parties that are barred from
filing their own petition.” Id. at 25.
Second, Patent Owner argues in its Preliminary Response that a
specific limitation of the only challenged independent claim is not taught or
suggested by the prior art Petitioner’s relies upon. See id. at 26 (“Do fails to
teach or suggest the claim element ‘caus[ing], utilizing particular code
configured to be stored on a storage at the second node and further
configured to cooperate with a file explorer interface, creation of a
representation of the at least one folder. . . .’ recited by independent claim 3
of the ’158 patent.”). Because the remaining challenged claims all depend
from claim 3, thereby incorporating that specific limitation, Patent Owner
contends that Petitioner’s arguments directed at those claims are also
insufficient. Id. at 36 (“Because independent claim 3 is not rendered
obvious, each dependent claim likewise would not have been obvious.”).
Although Patent Owner indicates in its Opposition to the Motion to
Dismiss and Terminate that it “will also benefit to the extent the decision on
institution addresses the merits,” the clear emphasis of its Opposition is
directed at the RPI issue. See Opp. 2. In particular, Patent Owner opposes
primarily on the basis that the Motion “is a thinly-veiled attempt to avoid a
finding that [Petitioner] improperly omitted its members as real-parties-in-
interest (‘RPIs’) and protect its business model built on exploiting the patent
system against patent owners.” Opp. 1. “If the Motion is granted,” Patent
Owner tells us, it “would be deprived of the benefit of a finding as to
IPR2020-00705
Patent 10,013,158 B1

5
whether [Petitioner] has misused the patent system by omitting its members
as RPIs.”
We agree with Petitioner that Patent Owner is thus requesting an
advisory opinion with respect to how Petitioner’s business model implicates
the statutory mandates regarding real parties in interest to inter partes
reviews. See Mot. 3–4. Several considerations caution against denying the
Motion in order to do so.
First, it is not apparent that we would ever reach the real party-in-
interest issue in a Decision on Institution, particularly in light of Patent
Owner’s argument in its Preliminary Response that the Petition is deficient
on the merits.
Second, the nature of real-party-in-interest inquiries is “highly fact-
dependent.” See Ventex Co., Ltd. v. Columbia Sportswear N. Am., Inc.
IPR2017-00651, Paper 152 at 6 (PTAB Jan. 24, 2019) (precedential)
(quoting Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012));
see also Patent Trial and Appeal Board Consolidated Trial Practice Guide 13
(Nov. 2019) (“Whether a party who is not a named participant in a given
proceeding nonetheless constitutes a ‘real party-in-interest’ or ‘privy’ to that
proceeding is a highly fact-dependent question.”). We are not persuaded by
Patent Owner’s argument that a decision on the RPI issue under the specific
facts in this proceeding could necessarily be widely generalized. See Opp. 5
(“all patent owners[] will be prejudiced by such abusive practices if the
Motion is granted”); see also id. (asserting that “[o]ne loss on this RPI issue
jeopardizes [Petitioner’s] entire practice”).
Although we have considered Patent Owner’s suggestion that
Petitioner’s explanation of budget realignment is “nothing more than an
IPR2020-00705
Patent 10,013,158 B1

6
illusory basis” for seeking dismissal of the Petition, we accord that
suggestion little weight. See Opp. 2. Patent Owner implies that Petitioner’s
explanation is concocted, meant to evade “expos[ing] that this petition was
the only one of many candidates selected for termination due to the risk it
poses to [Petitioner’s] business model built of exploiting the patent system.”
Id. at 3. Patent Owner suggests that a number of facts support its inference,
including that Petitioner “provided no declaration discussing its decision to
select this particular case, its financial status or other means being taken to
cut costs.” Id. at 2. In the context of the various considerations discussed
herein, we are not persuaded that such details are necessary to support
Petitioner’s representation, made by a registered practitioner subject to the
Office’s Rules of Professional Conduct. See 37 C.F.R. § 11.303(a)(1) (“A
practitioner shall not knowingly . . . [m]ake a false statement of fact or law
to a tribunal.”).
The parties also draw our attention to other (nonprecedential)
proceedings in which panels have granted or denied a motion for dismissal
before institution. See, e.g., Samsung Elecs. Co. v. NVIDIA Corp., IPR2015-
01270, Paper 11 (PTAB Dec. 9, 2015) (granting opposed motion to dismiss
before institution); LG Electronics, Inc. v. Koninklijke KPN N.V., IPR2018-
00551, Paper 10 (PTAB Aug. 1, 2018) (denying opposed motion to dismiss
before institution); Fresenius Kabi USA, LLC v. AstraZeneca AB, IPR2017-
01910, IPR2017- 01912, and IPR2017-01913, Paper 7 (PTAB Nov. 2, 2017)
(denying opposed motion to dismiss before institution). We find the
circumstances here most akin to those in Samsung, in which the panel there
granted the motion to dismiss because of the “early juncture” of the
proceeding, as well as “to promote efficiency and minimize unnecessary
IPR2020-00705
Patent 10,013,158 B1

7
costs,” rather than to the proceedings in which the panels denied the opposed
motions to dismiss. Samsung, Paper 11 at 3–4. For example, in LG
Electronics, the decision denying institution issued shortly after the order
denying the petitioner’s request to withdraw, suggesting that the panel in
that proceeding had already expended significant resources on the matter. In
contrast to the circumstances presented here, the petitioner in the Fresenius
Kabi proceedings did not provide any assurances that it would not file any
follow-on petitions challenging the patents at issue. There, the Board agreed
that the patent owner would be prejudiced by its need to defend against any
such follow-on petitions.
In light of these considerations, we grant Petitioner’s Motion and
terminate the proceeding.

It is
ORDERED that Petitioner’s Motion to Dismiss and Terminate this
proceeding is granted;
FURTHER ORDERED that the Petition (Paper 2) is dismissed; and
FURTHER ORDERED that this proceeding is terminated.

IPR2020-00705
Patent 10,013,158 B1

8
PETITIONER:

David M. Tennant
Ashraf Fawzy
Roshan Mansinghani
Unified Patents, LLC
dtennant@whitecase.com
afawzy@unifiedpatents.com
roshan@unifiedpatents.com

PATENT OWNER:

Timothy Devlin
WHITE & CASE LLP
td-ptab@devlinlawfirm.com