`571-272-7822
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` Paper No. 47
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`Date Entered: July 19, 2017
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`_____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`PRIME FOCUS CREATIVE SERVICES CANADA INC.,
`Petitioner,
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`v.
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`LEGEND3D, INC.,
`Patent Owner.
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`______________________
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`Case IPR2016-01243
`Patent 7,907,793 B1
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`__________________________________
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`
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`Before LYNNE E. PETTIGREW, CARL M. DEFRANCO, and
`KAMRAN JIVANI, Administrative Patent Judges.
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`JIVANI, Administrative Patent Judge.
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`
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`ORDER
`Conduct of the Proceeding
`37 C.F.R. § 42.5
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`IPR2016-01243
`Patent 7,907,793 B1
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`A conference call in the above proceeding was held on July 17, 2017,
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`among respective counsel for the parties and Judges DeFranco, Pettigrew,
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`and Jivani. Prime Focus Creative Services Canada Inc. (“Petitioner”) was
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`represented by Mr. Joshua Glucoft. Legend3D, Inc. (“Patent Owner”) was
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`represented by Messrs. Daniel N. Yannuzzi and Trevor J. Quist. The
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`purpose of the call was to discuss Patent Owner’s request for authorization
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`to file a motion to strike Section IV of Petitioner’s Reply. Paper 43
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`(“Reply”), 24–31.
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`Background
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`Petitioner requested inter partes review of claims 1–20 (the
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`“Challenged Claims”) of U.S. Patent No. 7,907,793 B1 (“the ’793 patent”).
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`Paper 1 (“Petition” or “Pet.”). Petitioner’s unpatentability arguments in this
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`case rely heavily on U.S. Patent No. 7,181,081 B2 (“the ’081 patent”) and
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`U.S. Patent No. 7,333,670 B2 (“the ’670 patent”), both of which are parents
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`of the ’793 patent, the instant challenged patent. Exs. 1003, 1004. For
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`example, Petitioner relies on the ’081 and ’670 patents as teaching or
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`suggesting every limitation of the challenged independent claims but for the
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`claimed “depth parameter.” Pet. 19–21, 34–36, 39–43, 46–47, 49–52.
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`A central question in this case is whether the ’081 and ’670 patents
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`can serve as prior art in an obviousness analysis of the Challenged Claims.
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`Patent Owner argued in its Preliminary Response to the Petition that the
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`’081 and ’670 patents are not available as prior art to the ’793 patent because
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`the ’793 patent is entitled to priority on the basis of the disclosure in the ’081
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`and ’670 patents themselves. Paper 12 (“Prelim. Resp.”), 15.
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`In our Decision on Institution (Paper 14, “Dec. on Inst.”), we
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`determined that the ’081 and ’670 patents are available as prior art for
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`IPR2016-01243
`Patent 7,907,793 B1
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`purposes of our Decision. Dec. on Inst. 10. We based this determination on
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`our finding that Petitioner had established a reasonable likelihood that it will
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`prevail in showing the Challenged Claims are not entitled to a priority date
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`based on the ’081 and ’670 patents given the evidence of record at that stage
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`of the proceeding. Id.
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`During the course of the proceeding, the parties sought leave to bring
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`several motions, including cross-motions for sanctions. See Paper 21.
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`Petitioner’s proposed motion for sanctions was based on alleged
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`misrepresentations made by Patent Owner. Id. at 1. We did not authorize
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`the proposed motions. Paper 24 (“January 30th Order”). We did, however,
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`remind Petitioner that it may raise in its Reply potential misrepresentations
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`made in Patent Owner’s Response to the Petition. Id. at 5.
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`Patent Owner subsequently filed its Response (Paper 36) and
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`Petitioner filed its Reply (Paper 43). Section IV of Petitioner’s Reply is
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`titled “Inequitable Conduct” and addresses purported acts that Petitioner
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`asserts rise to the level of inequitable conduct. Reply 24–31.
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`Analysis
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`During the call, Patent Owner argued that Section IV of Petitioner’s
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`Reply exceeds the scope of what was authorized in our January 30th Order
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`and the scope of Patent Owner’s Response. Patent Owner contends that it
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`may suffer harm from Petitioner’s contention being on the public docket
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`and, moreover, that it should not be required to incur the expense of
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`defending against an assertion of inequitable conduct. Patent Owner further
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`contends that this latter reason causes it not to seek a sur-reply on the issue
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`of inequitable conduct.
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`2
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`IPR2016-01243
`Patent 7,907,793 B1
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`Petitioner argued during the call that Section IV of the Reply is within
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`the scope of both our January 30th Order and Patent Owner’s Response.
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`More specifically, Petitioner contends that the preceding sections of its
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`Reply detail Patent Owner’s alleged misrepresentations to this Board and
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`that Section IV gives context and color to Patent Owner’s purported
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`motivations for these alleged misrepresentations. At the conclusion of the
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`call, we took the matter under advisement.
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`Upon further consideration and review of the Response and Reply, we
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`are not persuaded that a motion to strike Section IV of the Reply would be
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`appropriate under the circumstances. A motion to strike is not, ordinarily, a
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`proper mechanism for raising the issue of whether a reply is beyond the
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`proper scope permitted under the rules. In the absence of special
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`circumstances, we typically determine whether a reply contains material
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`exceeding the proper scope when we review all of the pertinent papers and
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`prepare the final written decision. We may exclude portions of a reply or
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`decline to consider any improper argument at that time.
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`In this case, we are not persuaded that the propriety of Section IV of
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`the Reply should be resolved prior to the final written decision. We are
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`mindful of Patent Owner’s concern regarding the possible expense of
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`defending against an assertion of inequitable conduct. Inequitable conduct is
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`a matter outside the statutory scope of inter partes review. See 35 U.S.C.
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`§ 311(b) (limiting inter partes review to anticipation and obviousness
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`challenges). Further, our procedures are intended “to secure the just, speedy,
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`and inexpensive resolution of every proceeding.” 37 C.F.R. § 42.1(b). In
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`light of these tenets, we decline to impose on the parties the expense and
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`3
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`IPR2016-01243
`Patent 7,907,793 B1
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`burden of formal briefing on a motion to strike, opposition, and reply
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`regarding a matter beyond our statutory purview.
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`We are mindful also of Petitioner’s need to bring to our attention any
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`purported misrepresentations related to the issues of priority and claim
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`construction. For this reason, we will permit the parties to address at oral
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`argument the issues of priority and claim construction—including
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`potentially inconsistent statements made regarding assertions of priority—
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`should either party request a hearing in this case. The parties, however, shall
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`not address the doctrine of inequitable conduct.
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`It is, therefore,
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`ORDER
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`ORDERED that Patent Owner is not authorized to file a motion to
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`strike Section IV of Petitioner’s Reply.
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`.
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`4
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`IPR2016-01243
`Patent 7,907,793 B1
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`FOR PETITIONER:
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`Joshua Glucoft
`Jonathan Kagan
`IRELL & MANELLA LLP
`PrimeFocusIPR@irell.com
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`PATENT OWNER:
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`Daniel N. Yannuzzi
`Trevor J. Quist
`SHEPPARD MULLUIN LLP
`dyannuzzi@sheppardmullin.com
`tquist@sheppardmullin.com
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`5
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