`571-272-7822
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` Paper 24
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` Entered: August 9, 2016
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
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`
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`TWILIO INC.,
`Petitioner,
`
`v.
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`TELESIGN CORPORATION,
`Patent Owner.
`____________
`
`Case IPR2016-00360
`Patent 7,945,034 B2
`____________
`
`
`Before SALLY C. MEDLEY, JUSTIN T. ARBES, and
`KIMBERLY McGRAW, Administrative Patent Judges.
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`McGRAW, Administrative Patent Judge.
`
`
`ORDER
`Conduct of the Proceeding
`37 C.F.R. § 42.5
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`On August 3, 2016, an initial conference call was held between
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`Britton Davis, counsel for Petitioner, Twilio Inc., Jesse Camacho and
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`Elena McFarland, counsel for Patent Owner, TeleSign Corporation, and
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`Judges Medley, Arbes, and McGraw. Patent Owner requested the call to
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`discuss Patent Owner’s list of potential motions and the Scheduling Order.
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`Prior to the call, Patent Owner filed a list of proposed motions. Paper 23.
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`IPR2016-00360
`Patent 7,945,034 B2
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`During the conference call, counsel for Patent Owner stated that no
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`Board action is required at this time on the proposed motions and that the
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`request for the conference call was made to comply with the guidance
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`regarding informing the Board of possible motions prior to an initial
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`conference call. See Office Patent Trial Practice Guide, 77 Fed. Reg.
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`48,756, 48,765–66 (Aug. 14, 2012); Paper 19, 2–3. The parties further
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`indicated that they have no issues with the dates in the Scheduling Order
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`(Paper 19).
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`Counsel for Patent Owner also represented that no final decision had
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`yet been made as to whether Patent Owner would file a motion to amend.
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`Should Patent Owner decide to file a motion to amend, it first must confer
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`with the Board. See 37 C.F.R. § 42.121(a). This conference should take
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`place at least two weeks before filing the motion to amend.
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`During the call, counsel for Patent Owner requested guidance as to
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`adding a new claim that is not a substitute for another claim. Patent Owner
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`is directed to 37 C.F.R. § 42.121, which states, inter alia, that a motion to
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`amend may cancel a challenged claim or propose a reasonable number of
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`substitute claims. As noted during the call, the presumption is that only one
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`substitute claim would be needed to replace each claim, and it may be
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`rebutted by a demonstration of need. See 37 C.F.R. § 42.121(a)(3).
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`Counsel for Patent Owner also requested guidance as to proposing
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`more than one substitute claim. Patent Owner was directed to the Board’s
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`decision in Idle Free Systems, Inc. v. Bergstrom, Inc., Case IPR2012-00027
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`(PTAB June 11, 2013) (Paper 26). Idle Free states, inter alia:
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`IPR2016-00360
`Patent 7,945,034 B2
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`In the event a patent owner proposes more than one
`substitute claim for any one challenged claim, the patent owner
`may additionally label each one after the first as a proposed new
`claim, to signal its special status, but also identify the challenged
`claim which it is intended to replace. As explained above, a
`patent owner has to show a special need to justify more than one
`substitute claim for each challenged claim. In such situations,
`the patent owner needs to show patentable distinction of the
`additional substitute claim over all other substitute claims for the
`same challenged claim. If the patent owner shows no such
`patentable distinction or any other special circumstance, then at
`the Board’s discretion, the proposed additional claim may be
`denied entry, or it may be grouped with, or deemed as standing
`and falling with, another substitute claim for the same challenged
`claim, e.g., the first substitute claim, for purposes of considering
`patentability over prior art. Each substitute claim for the same
`challenged claim should be proposed for a meaningful reason.
`Submission of multiple patentably non-distinct substitute claims
`is redundant and not meaningful in the context of an inter partes
`review.
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`Id. at 8–9.
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`Additional guidance is provided in the Office Patent Trial Practice
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`Guide, 77 Fed. Reg. 48,756, 48,766–67 (Aug. 14, 2012) and in Corning
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`Optical Commc’ns RF, LLC v. PPC Broadband, Inc., Case IPR2014-00441
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`(PTAB Oct. 30, 2014) (Paper 19), and International Flavors & Fragrances
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`Inc. v. United States, Case IPR2013-00124 (PTAB May 20, 2014)
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`(Paper 12).
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`For the “to confer” call, Patent Owner should be prepared to discuss
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`how its duty of candor under 37 C.F.R. § 42.11 would be satisfied. We
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`IPR2016-00360
`Patent 7,945,034 B2
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`direct attention of the parties to MasterImage 3D, Inc., IPR2015-00040, slip
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`op. at 3 (PTAB July 15, 2015) (Paper 42) (precedential), which states:
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`Thus, when considering its duty of candor and good faith under
`37 C.F.R. § 42.11 in connection with a proposed amendment,
`Patent Owner should place initial emphasis on each added
`limitation. Information about the added limitation can still be
`material even if it does not include all of the rest of the claim
`limitations. See VMWare, Inc. v. Clouding Corp., Case
`IPR2014-01292, slip op. at 2 (PTAB Apr. 7, 2015) (Paper 23)
`(“With respect to the duty of candor under 37 C.F.R. § 42.11,
`counsel for Patent Owner acknowledged a duty for Patent Owner
`to disclose not just the closest primary reference, but also closest
`secondary reference(s) the teachings of which sufficiently
`complement that of the closest primary reference to be
`material.”).
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`We also direct the Patent Owner to inform Petitioner, two business
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`days prior to the “to confer” call, how it proposes to amend each claim
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`sought to be amended, so that Petitioner may come to the “to confer” call
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`with any prior art reference it desires to discuss, limited to two in number for
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`each substantive limitation added to the claims.
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`Regarding the related district court case involving the challenged
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`patent, counsel for the parties represented that a request to lift the stay of the
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`proceedings in TeleSign Corp. v. Twilio Inc., No. 2:15-cv-03240 (C.D. Cal.)
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`was filed and that a hearing date on the issue is scheduled for September.
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`It is
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`ORDERED that should Patent Owner decide to file a motion to
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`amend, it first must confer with the Board pursuant to 37 C.F.R. § 42.121(a),
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`IPR2016-00360
`Patent 7,945,034 B2
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`and the conference should take place at least two weeks before filing the
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`motion to amend; and
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`ORDERED that two business days prior to the conference, Patent
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`Owner shall inform Petitioner how it proposes to amend each claim sought
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`to be amended.
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`IPR2016-00360
`Patent 7,945,034 B2
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`FOR PETITIONER:
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`Wayne Stacy
`wstacy@cooley.com
`zTwilioIPR@cooley.com
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`Mikaela Stone
`mstone@cooley.com
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`Britton Davis
`bdavis@cooley.com
`COOLEY LLP
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`
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`FOR PATENT OWNER:
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`Elena McFarland
`emcfarland@shb.com
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`Amy Foust
`TeleSignIPR@shb.com
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`Jesse Camacho
`jcamacho@shb.com
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`Tawni Wilhelm
`twilhelm@shb.com
`SHOOK, HARDY & BACON L.L.P.
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