`Trials@uspto.gov Paper No. 52
`571-272-7822
`Entered: December 15, 2017
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`TV MANAGEMENT, INC., D/B/A GPS NORTH AMERICA,
`Petitioner,
`v.
`PERDIEMCO LLC,
`Patent Owner.
`
`
`
`
`
`
`
`
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`Case IPR2016-01278
`Patent 9,071,931 B2
`__________________________
`
`Before WILLIAM V. SAINDON, CARL M. DEFRANCO, and
`AMBER L. HAGY, Administrative Patent Judges.
`
`HAGY, Administrative Patent Judge.
`
`
`
`
`
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 318(a) and 37 C.F.R. § 42.73
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`Case IPR2016-01278
`Patent 9,071,931 B2
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`I. INTRODUCTION
`PerdiemCo LLC (“Patent Owner”) is the owner of U.S. Patent
`No. 9,071,931 B2 (Ex. 1001, “the ’931 patent”). TV Management, Inc.,
`d/b/a GPS North America (“Petitioner”)1 requested an inter partes review of
`claims 1–7, 12–16, 20, and 22–26 of the ’931 patent. Paper 5 (“Pet.”). We
`instituted inter partes review of all of the challenged claims (Paper 22, “Inst.
`Dec.”) based on our determination that Petitioner had demonstrated a
`“reasonable likelihood” of prevailing on those claims. 35 U.S.C. § 314(a).
`After institution, Patent Owner filed a Patent Owner Response (Paper
`30, “PO Resp.”), and Petitioner followed with a Reply (Paper 36, “Pet.
`Reply”). With Board authorization, the parties each filed additional briefing
`limited to addressing evidence submitted by Patent Owner in support of
`alleged prior invention. Papers 41–43. Each party had an opportunity to
`present its case in a hearing conducted on September 12, 2017, a transcript
`of which is in the record. Paper 50 (“Tr.”).2
`We have jurisdiction over these proceedings under 35 U.S.C. § 6.
`After considering the evidence and arguments of the parties, we determine
`that Petitioner has proved by a preponderance of the evidence that the
`subject matter of claims 1–7, 12–16, 20, and 22–26 of the ’931 patent is
`
`1 On August 15, 2016, prior to institution, petitioners Teletrac Inc. and
`Navman Wireless North America, Ltd., moved to terminate the proceedings
`with respect to themselves only. Paper 9. The Board granted that motion on
`August 31, 2016. Paper 11. After institution, petitioner Geotab Inc. and
`Patent Owner jointly moved to terminate the proceedings as to Geotab Inc.
`only, Paper 24, and the Board granted that motion on December 29, 2016,
`leaving as sole petitioner TV Management, Inc., d/b/a GPS North America.
`Paper 27.
`2 An oral hearing in related Cases IPR2016-01061 and IPR2016-01064
`occurred on the same day, with similar issues presented and argued.
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`unpatentable. See 35 U.S.C. § 316(e). We issue this Final Written Decision
`pursuant to 35 U.S.C. § 318(a).
`A. Related Matters
`The ’931 patent is part of a family of patents that share a common
`
`specification and claim priority through a continuation chain to U.S. Patent
`No. 7,525,425, which in turn claims priority to a provisional application
`filed on December 23, 2005. Other patents in this family include U.S. Patent
`Nos. 8,149,113; 8,223,012; 8,493,207; 8,717,166; 9,003,499; 9,119,033;
`9,319,471; 9,485,314; 9,621,661; and 9,680,941.
`
`In addition to inter partes review of the ’931 patent, the Board has
`instituted the following inter partes reviews (“IPRs”) directed to certain
`claims of the following patents within this patent family:
`
`1. IPR2016-01061 (the ’012 patent);
`
`2. IPR2016-01062 (the ’207 patent);
`
`3. IPR2016-01063 (the ’166 patent);
`
`4. IPR2016-01064 (the ’499 patent);
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`5. IPR2017-00968 (the ’314 patent);
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`6. IPR2017-00969 (the ’113 patent);
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`7. IPR2017-00973 (the ’471 patent);
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`8. IPR2017-01007 (the ’033 patent); and
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`9. IPR2017-01269 (the ’661 patent).
`
`Subsequent to institution, two of those IPRs were terminated in an
`adverse judgment in view of Patent Owner’s disclaimer of all challenged
`claims. IPR2016-01062 (Paper 29); IPR2016-01063 (Paper 30). The Board
`has issued Final Written Decisions in IPR2016-01061 (Paper 50), and in
`IPR2016-01064 (Paper 49).
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`The ’931 patent, along with the ’207, ’012, ’166, and ’499 patents,
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`was asserted in the following cases in the Eastern District of Texas, all of
`which have been terminated: PerdiemCo LLC v. Geotab Inc. et al, Case No.
`2:15-cv-00726; PerdiemCo, LLC. v. Industrack LLC, Case No. 2:15-cv-
`00727; PerdiemCo, LLC. v. Omnivations II, LLC D/B/A Fleetronix, Case
`No. 2:15-cv-00729; PerdiemCo, LLC. v. Teletrac, Inc. et al, Case No. 2:15-
`cv-00730; Perdiem Co LLC v. GPS Logic, LLC, Case No. 2:15-cv-01216;
`PerdiemCo LLC v. TV Management, Inc. d/b/a GPS North America, Case
`No. 2:15-cv-01217; PerdiemCo, LLC. v. thingtech LLC, Case No. 2:15-cv-
`01218; PerdiemCo, LLC. v. LiveViewGPS, Inc., Case No. 2:15-cv-01219.
`
`The ’931 patent, along with the ’012, ’499, ’471, ’113, ’033, and ’314
`patents, is currently the subject of a co-pending lawsuit in the Eastern
`District of Texas, which was filed after institution of the present proceeding
`and after termination of the above-referenced cases: PerdiemCo LLC v.
`Telular Corp. et al., 2-16-cv-01408. That district court case is currently
`stayed pending resolution of this IPR proceeding and the related IPR
`proceedings.
`
`B. The ’931 Patent (Ex. 1001)
`The ’931 patent relates to a location-tracking system for conveying
`information about the location of an object, such as a person, vehicle, or
`package, to a group of users. Ex. 1001, 1:8–12, 1:61–2:7. The group of
`users may include a family, a group of friends, or employees of a company.
`Id. at 5:27–33, 13:10–29. According to the ’931 patent, various
`technologies, such as Global Positioning System (“GPS”) technology, may
`be used to track the location of the object. Id. at 6:9–18, Fig. 1. An object
`may be tracked relative to “user-defined zones.” Id. at 1:62–2:8, 5:7–26.
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`The system also monitors “events,” which are, for example, instances when
`a tracked object enters or exits a zone. Id.
`In one exemplary scenario, a mother can track the location of an
`object (her daughter’s car) by equipping it with a tracking beacon and
`assigning it an identification code. Id. at 9:12–56. The mother may then use
`that identification code to set up “events” so that when her daughter’s car
`enters or leaves a pre-defined “zone,” the mother will receive an “alert”
`(such as an email). Id. The mother may also have the location of her
`daughter’s tracked car conveyed to one or more other specified users, such
`as another parent or a guardian, by assigning them identification codes and
`associating a particular level of access with each user’s identification code.
`Id. at 10:30–54.
`Administrative functions may be performed within a group as, for
`example, a “family can set up its own information-sharing environment.”
`Id. at 5:62–65. Various levels of administrator privileges may exist. Id. at
`5:51–54. In addition to associating identification codes with each user, the
`administrator can associate a level of access with the user, and thereby limit
`who receives the location information. Id. at 2:45–3:3, 5:39–54, 6:64–7:60.
`C. Challenged Claims
`Petitioner challenges claims 1–7, 12–16, 20, and 22–26, of which
`claim 1 is independent. Challenged claim 1 is reproduced below.3
`1. [a] A location tracking system comprising:
`[b] one or more servers capable of communicating with a
`plurality of mobile devices, each mobile device is associated
`with an identification (ID) and at least one location
`
`3 For expediency, Petitioner and Patent Owner break claim 1 into limitations
`1(a)–1(n). We adopt that format herein for ease of reference.
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`information source that provides location information for the
`mobile device;
`[c] the one or more servers configured to:
`[d] define first level administrative privileges to protect
`privacy of a group of multiple mobile devices;
`[e] define second level administrative privileges to control
`conveyance of information regarding the group;
`[f] check the first level administrative privileges before
`adding a mobile device to the group;
`[g] provide one or more interfaces for setting a zone, an
`event, and an alert for the group;
`[h] receive a request to set a zone for the group, the zone
`having a boundary that is independent of where the
`group’s mobile devices are located;
`[i] receive a request to set an event for the group;
`[j] receive a request to set an alert for the group, the request
`identifying a recipient of the alert;
`[k] check the second level administrative privileges before
`setting a zone, an event, or an alert for the group;
`[l] store the group’s zone, event and alert in one or more
`databases;
`[m] receive IDs and location information for the multiple
`mobile devices in the group;
`[n] compare the IDs and location information with the
`group’s zone and event to determine whether to send the
`group’s alert; and
`cause the group’s alert to be sent.
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`D. Instituted Grounds
`We instituted inter partes review based on the following three
`references:
`Fast, U.S. Patent No. 7,327,258 B2, filed January 31, 2005, and
`(1)
`issued February 5, 2008 (“Fast”) (Ex. 1003);
`(2)
`Phillips, U.S. Patent No. 7,848,765 B2, filed May 27, 2005, and
`issued Dec. 7, 2010 (“Phillips”) (Ex. 1007); and
`(3) Zou, Pub. No. US 2005/0156715 A1, filed January 16, 2004,
`and published July 21, 2005 (“Zou”) (Ex. 1005).
`The grounds on which we instituted review are as follows:
`
`
`
`Reference(s)
`Fast and Phillips
`(“Ground 1”)
`Fast (“Ground 2”)
`Fast, Zou, and
`Phillips (“Ground 3”)
`Inst. Dec. 30.
`
`Basis
`§ 103
`
`Claims Challenged
`1–7, 12–16, 20, and 22–26
`
`§ 102(e)
`§ 103
`
`1–7, 12–16, 20, and 22–26
`1–7, 12–16, 20, and 22–26
`
`II. ANALYSIS
`Petitioner bears the burden of proving unpatentability of the
`
`challenged claims, and that burden never shifts to Patent Owner. Dynamic
`Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1378 (Fed. Cir.
`2015). To prevail, Petitioner must establish the facts supporting its
`challenge by a preponderance of the evidence. 35 U.S.C. § 316(e); 37 C.F.R.
`§ 42.1(d).
`
`A. Claim Construction
`In the Institution Decision, we concluded that no express construction
`
`of any of the claim terms was necessary for us to assess the reasonable
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`likelihood threshold for inter partes review. Inst. Dec. 11. Neither party
`challenged this conclusion in post-Institution briefing or argument.
`
`Having considered the full record, we again conclude that no express
`construction of any of the claim terms is necessary for us to render a final
`written decision. Wellman, Inc. v. Eastman Chem. Co., 642 F.3d 1355, 1361
`(Fed. Cir. 2011) (noting that “claim terms need only be construed ‘to the
`extent necessary to resolve the controversy’”) (quoting Vivid Techs., Inc. v.
`Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999)).
`B. Description of the Asserted Prior Art
`Petitioner asserts that the subject matter of one or more of claims 1–7,
`12–16, 20, and 22–26 is obvious in view of Fast and Phillips (“Ground 1”);
`is anticipated by Fast (“Ground 2); and is obvious in view of Fast, Phillips,
`and Zou (“Ground 3”). Pet. 6–7. We provide an overview of each of these
`references before turning to the individual grounds.
`1. Fast
`Petitioner asserts that Fast, which was filed on January 31, 2005, and
`
`issued on February 5, 2008, is prior art under 35 U.S.C. § 102(e) (Pet. 5),
`and Patent Owner does not dispute that contention.
`
`Fast describes a system for monitoring various parameters (such as
`speed, position, and threshold boundaries) of mobile items attached to
`tracking devices called “beacons.” Ex. 1003, Abstract, 1:61–63. Beacons
`communicate, inter alia, geographic location information to remote
`monitoring stations and/or devices through a server. Id. at 4:9–11, 8:38–9:9.
`Beacons may be “carried or worn by a person or attached to an object.” Id.
`at 9:31–32.
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`As an exemplary embodiment, Fast describes the Guardian Mobile
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`Monitoring System (GMMS). Ex. 1003, Fig. 23, 2:63–67, 3:9–35.
`According to Fast, the GMMS is a hierarchical system with multiple levels
`of users, including wholesalers, retailers, and subscribers. Id. at 18:25–37.
`These multiple levels are depicted in Figure 22 of Fast, reproduced below:
`
`
`
`Figure 22 of Fast, reproduced above, is a schematic diagram showing the
`interrelationship between the GMMS, individual wholesalers, individual
`retailers, and individual subscribers in monitoring mobile items. Ex. 1003,
`2:58–62. The GMMS refers to the overall system, within which wholesalers
`work with operators to provide wholesale and retail mobile monitoring
`services to subscribers. Id. at 16:13–17.
`
`A subscriber may purchase multiple beacons to track multiple items
`using GMMS, such as individuals (e.g., members of a family) or objects
`(e.g., vehicles). Ex. 1003, 24:56–65, 33:1–17. The subscriber may create
`zones, such as “allowed or disallowed zones,” to allow monitoring of the
`tracked items in particular areas, which may be activated or deactivated
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`according to a schedule. Id. at 20:63–67. Subscribers may set up the
`GMMS software to automatically notify them upon certain conditions, such
`as a beacon reaching a specified location. Id. at 12:40–44.
`
`According to Fast, the GMMS allows users to create various levels of
`access privileges. For example, a wholesaler may include an administrator,
`which has the highest level of access with unrestricted access to the
`wholesaler’s functions. Ex. 1003, 38:26–45. Each wholesaler may have its
`own portal, accessible through the Internet, with access restricted to users
`that are authorized by system administrators. Id. at 16:5–11, 37:44–38:54,
`Figs. 14-1, 14-2. Each wholesaler may provide monitoring services to
`multiple subscriber accounts. Id. at Fig. 22, 16:29–30.
`
`Also according to Fast, each subscriber account in GMMS may be
`given access to a dedicated portal with a user ID and password required to
`log in. Ex. 1003, 6:21–23, 42:14–35, Figs. 16-1 and 16-2. The subscriber is
`offered “preference settings” for designating other users, such as other
`subscribers or guardians, with various levels of access privileges. Id. The
`subscriber may be considered to have the highest level of access within that
`portal, and has authority to manage other users, including the authority to
`add, update, and delete system users. Id. at Fig. 16-2. For example, a
`subscriber may designate a “guardian” to have temporary or permanent
`responsibility for an item—such as a “babysitter” designated to oversee a
`tracked child. Id. at 4:61–62, 39:6–12, 43:1–11. In adding users, the
`subscriber may indicate whether other users are restricted from using any
`functionality of the portal. Id. at 42:32–35, 42:48–52; Ex. 1010 ¶ 48.
`
`A subscriber may purchase multiple beacons for tracking multiple
`items using GMMS, such as individuals (e.g., members of a family) or
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`objects (e.g., vehicles). Ex. 1003, 24:56–65, 33:1–17. Zones may be
`created, such as “allowed or disallowed zones,” to provide monitoring of the
`tracked items in particular areas, which may be activated or deactivated
`according to a schedule. Id. at 20:63–67, 35:9–36:41.
`
`The GMMS software may be set up to send automatic notifications
`upon certain conditions, such as a beacon reaching a specified location. Ex.
`1003, 12:40–44. In particular, using the GMMS subscriber portal, a
`subscriber (or other authorized user, such as a guardian if not restricted from
`this functionality by the subscriber) may build and manage “scenarios” to
`trigger alerts relating to tracked items. Id. at Fig. 16-1 (subscriber portal),
`Figs. 11-1 and 11-2 (Scenario Manager), 32:15–56, 35:8–36:41. Fast
`describes a “scenario” as “[a] set of monitoring parameters where events are
`monitored automatically according to a schedule,” and when a specified
`parameter “exceeds a specified threshold,” while the scenario is active,
`“specified notifications are automatically sent by the GMMS.” Id. at 5:42–
`45. For example, according to Fast, a scenario could be built to send a
`specified message to specified people if a certain tracked vehicle travels
`outside of a specified zone. Id. at 32:53–56; see also id. at 35:7–36:41.
`
`One aspect of building a scenario within Fast’s “Scenario Manager” is
`the selection of a “notification scheme.” See Ex. 1003, Fig. 11-1 (boxes
`272, 276, and 278). According to Fast, a notification scheme identifies a
`selected group of entities (e.g., guardians, the subscriber herself, and/or other
`specified entities) who are notified when a scenario is triggered. Id. at
`35:46–53; see also id. at 36:34–39. Fast explains that:
`[t]he ultimate function of the Scenario Manager is to allow
`users to command the GMMS system to automatically monitor
`mobile events. An example would be “If the specified vehicle
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`is outside of the specified zone, at the specified time, send the
`specified message, to the specified people/places, using the
`specified communications methods.”
`Id. at 32:51–56. Also according to Fast, “[n]otification schemes are named
`and saved for use in any number of scenarios.” Id. at 34:36–37.
`2. Phillips
`Petitioner asserts that Phillips is prior art under 35 U.S.C. § 102(e).
`
`Pet. 5. As discussed below, Patent Owner disputes whether Phillips is prior
`art to the ’931 patent. PO Resp. 29–30 and Ex. 2009.
`
`Phillips discloses “location-based services” for tracking mobile
`devices, providing geofences, and providing location-based alerts. Ex. 1007,
`Abstract; 1:23–25. Phillips discloses that a portable electronic facility
`(“PEF”) sends location information to a server, and this location information
`may be used by the server in both a geofence application and an alert
`application. Id. at 2:12–18, 4:11–22, 8:42–53, 8:64–67, 9:53–67. The PEF
`may be, for example, a mobile phone or a mobile device equipped with GPS.
`Id. at 1:34–43. Phillips discloses an application server that provides an
`“application based service” to PEF users via a web interface, such as a web
`browser. Id. at 6:63–7:3. The application server may “host a geospatial
`application” to provide geo-coding, mapping, and routing functionality. Id.
`at 9:37–39. The server may also host an “alert application” that may, in
`response to the occurrence of an event, “transmit the alert to a user.” Id. at
`9:54–57.
`
`3. Zou
`Petitioner contends Zou is prior art under 35 U.S.C. § 102(e) and is a
`
`printed publication under 35 U.S.C. § 102(a). Pet. 6. Patent Owner does not
`dispute these contentions.
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`Zou describes a fleet manager using mobile GPS tracking devices
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`referred to as “telemetry devices.” Ex. 1005 ¶ 9. Each telemetry device is
`assigned to a tracked object, id. ¶ 12, communicating with a Network
`Operations Center (“NOC”), id. ¶ 9; see also id. at Fig. 3. A user of the
`system communicates with the NOC over a network such as the Internet. Id.
`at Fig. 3. A user’s desktop client interfaces to the NOC through a
`presentation server. Id. ¶ 113, Fig. 3. The presentation server provides
`functions including fleet and asset tracking and “general purpose I/O
`monitoring and control.” Id. ¶ 111. The server also maintains a database
`“for user accounts and other related data (e.g., configuration data, user
`management information, device management, and data acquired from the
`devices 103).” Id. Zou’s user interfaces “manage and control user
`administration.” Id. ¶ 9.
`
`Zou describes an “exemplary system” that “includes a GeoFence
`Violation Report.” Ex. 1005 ¶ 171. According to Zou, “[t]his report will
`detail each time a vehicle entered or exited a GeoFence set for that vehicle.
`It will also report the date, time, speed, direction, and location of the vehicle
`when the GeoFence was violated.” Id. Zou also describes how users may
`“organize the exemplary system to meet specific needs. Options here allow
`the user to group vehicles into fleets, edit system user authority levels, and
`customize the way telemetry devices record and transmit data.” Id. ¶ 189.
`Within a given fleet, a manager can select specific permissions for
`authorizing users to view fleets, build alert templates, and manage other
`users. Id. ¶¶ 191–193, 202, 203, Figs. 18a and 18e.
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`C. Ground # 3: Obviousness of Claims 1–7, 12–16, 20, and 22–26
`in View of Fast, Phillips, and Zou
`For the reasons expressed below, having considered the full record,
`we are not persuaded by Petitioner’s arguments of unpatentability on
`Ground 1 (obviousness over Fast and Phillips) or Ground 2 (anticipation by
`Fast), but we are persuaded on Ground 3 (obviousness over Fast, Phillips,
`and Zou). We address Ground 3 first, and then provide our analysis and
`reasoning on Grounds 1 and 2.
`A patent claim is unpatentable under 35 U.S.C. § 103(a) if the
`differences between the subject matter sought to be patented and the prior art
`are such that the subject matter as a whole would have been obvious to a
`person of ordinary skill in the art at the time the invention was made. KSR
`Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007). Obviousness is resolved
`based on underlying factual determinations, including: (1) the scope and
`content of the prior art; (2) any differences between the claimed subject
`matter and the prior art; (3) the level of ordinary skill in the art; and
`(4) objective evidence of nonobviousness, i.e., secondary considerations.
`See Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966).
`In Ground 3, Petitioner challenges claims 1–7, 12–16, 20, and 22–26
`as unpatentable in view of Fast combined with Phillips and Zou. Pet. 19–54
`(arguing claims over combination of Fast and Phillips); Pet. 56–63 (arguing
`claims over the combination of Fast, Phillips, and Zou, building on earlier
`arguments). For the reasons discussed below, we are persuaded that
`Petitioner has demonstrated by a preponderance of the evidence, including
`annotated figures, a detailed claim analysis, and expert testimony, that the
`challenged claims would have been obvious in view of Fast, Phillips, and
`Zou.
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`Patent Owner raises several points of contention with Petitioner’s
`combination of Fast, Phillips, and Zou: (1) “Phillips is not prior art” (PO
`Resp. 29–30); (2) the combination of Fast, Phillips, and Zou does not teach
`at least the server-based threshold monitoring limitation and the “group”
`elements “that are recited throughout ’931 claim 1” (PO Resp. 16–26, 29–
`32); (4) a skilled artisan would not have had reason to combine Fast and Zou
`as argued by Petitioner (PO Resp. 31–32); and (5) “the secondary
`consideration of licensing amply rebuts the obviousness case” (PO Resp.
`32–34). We address each of these contentions below.
`1. Phillips as Prior Art Under 35 U.S.C. § 102(e)
`a. Parties’ Arguments
`Before addressing the combination of Fast, Phillips, and Zou, we
`
`consider Patent Owner’s argument that “Phillips is not prior art.” PO Resp.
`29–30. In particular, Patent Owner asserts that the inventor named on the
`’931 patent, Darrell Diem, “conceived of the ’931 claims before Phillips’
`priority date of May 27, 2005.” Id. at 29. In support of this assertion, Patent
`Owner presents a declaration from Mr. Diem, which includes Exhibits A–I.
`See Ex. 2009.
`
`Petitioner challenges Mr. Diem’s declaration as an improper
`incorporation by reference, noting that Patent Owner does not present
`argument in its Patent Owner Response but instead refers wholesale to
`Mr. Diem’s declaration. Pet. Reply 12. Petitioner also challenges
`Mr. Diem’s declaration on several substantive bases.4 Id. at 12–14.
`
`4 Prior to the oral hearing, Petitioner also objected to certain pages of Patent
`Owner’s demonstrative exhibits on the basis that those pages contained
`arguments outside of Patent Owner’s briefing. Paper 49. This objection was
`overruled at the oral hearing and the slides were allowed, with the comment
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`Shortly after Petitioner filed its Reply, the parties sent an email to the
`
`Board, in which Patent Owner requested authorization to file a sur-reply to
`address Petitioner’s alleged new allegations concerning Mr. Diem’s
`conception of the invention disclosed in the ’931 patent. In the same email,
`Petitioner requested authorization to file a motion to strike Patent Owner’s
`conception argument for improper incorporation by reference under 37
`C.F.R. § 42.6(a)(3). In an Order issued July 26, 2017, the Board authorized
`Patent Owner to file a sur-reply and also authorized Petitioner to file a sur-
`sur-reply. Paper 41, 5. The Board denied Petitioner’s request to file a
`motion to strike. Id. at 6. Patent Owner’s sur-reply was filed August 2,
`2017 (Paper 42 (“PO Sur-reply”)), and Petitioner’s sur-sur-reply was filed
`August 7, 2017 (Paper 43 (“Pet. Sur-sur-reply”)).
`
`In his declaration, Mr. Diem states that he “had written much of the
`computer code” for his proposed system by “late 2004.” Ex. 2009 ¶ 6. As
`support for that assertion, Mr. Diem provides Exhibits A, C, and E–G to his
`declaration, which he characterizes as “computer code” or “source code”
`files that he states were last modified in December 2004. Id. ¶¶ 6, 8, 10, 11.
`Mr. Diem also provides Exhibit B, which he characterizes as a “manual” that
`was “last modified on December 30, 2004 (id. ¶ 7), and Exhibit D, which he
`characterizes as “a brochure” that he “created to advertise [his] system” and
`which he says was “last modified on February 2, 2005” (id. ¶ 9).
`
`Mr. Diem additionally provides Exhibit H to support his assertion of a
`specific date by which he had completed his conception. Id. ¶ 12. Mr. Diem
`characterizes Exhibit H as “a screenshot” showing his “registration of the
`
`
`from the panel that the Board would rely only on what is in the briefing.
`Tr. 4:20–5:2.
`
`
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`Case IPR2016-01278
`Patent 9,071,931 B2
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`website name ‘perdiemco.com’ on May 13, 2005.” Id. According to his
`declaration, Mr. Diem did not register for this website until he had “fully
`conceived all elements” of his “location-tracking system.” Id.
`
`Mr. Diem also states that he “continued to implement and
`commercialize [his] system throughout 2005.” Id. ¶ 13. As support for that
`assertion, Mr. Diem provides Exhibit I to his declaration, which he
`characterizes as “two screenshots with directory listings for project files on
`[his] system,” wherein the screenshots purportedly show “53 different files
`modified during that interval,” and that “at least one file has a last-modified
`date in every month from June 2005 to December 2005.” Id.
`
`In challenging Mr. Diem’s declaration, Petitioner argues, inter alia:
`(1) Mr. Diem fails to provide corroborating evidence of alleged prior
`conception of every limitation of the ’931 patent claims (Pet. Reply 12–14);
`and (2) Patent Owner has not shown reasonable diligence from the alleged
`date of conception until reduction to practice (id. at 14).
`
`b. Legal Standards for Antedating Prior Art Reference
`Whether Phillips is prior art to the ’931 patent under 35 U.S.C.
`
`§ 102(e) depends on whether the effective filing date of the Phillips patent
`(May 27, 2005) pre-dates the invention of the ’931 patent. See 35 U.S.C.
`§ 102(e)(2)5: “A person shall be entitled to a patent unless . . . (e) the
`invention was described in . . . (2) a patent granted on an application for
`patent by another filed in the United States before the invention by the
`applicant for patent” (emphasis added).
`
`5 Section 3(b) of the Leahy-Smith America Invents Act altered the § 102
`conditions for patentability; novelty. Pub. L. No. 112-29, 125 Stat. 284,
`285–287 (2011). Because the ’931 patent has a filing date before September
`16, 2012 (effective date), we refer to the pre-AIA § 102(e) in this Decision.
`
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`Case IPR2016-01278
`Patent 9,071,931 B2
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`Patent Owner bears the burden of producing evidence showing
`
`Mr. Diem’s prior invention. See Dynamic Drinkware, LLC v. National
`Graphics, Inc., 800 F.3d 1375, 1378–80 (Fed. Cir. 2015) (noting that the
`patent owner had the burden of going forward with evidence that the prior art
`did not anticipate). The ultimate burden of persuasion in an inter partes
`review, however, remains on the petitioner to prove unpatentability by a
`preponderance of the evidence and that burden never shifts to the patent
`owner. 35 U.S.C. § 316(e); see also Dynamic Drinkware, 800 F.3d at 1378.
`
`To remove Phillips as a prior art reference, Patent Owner must
`produce evidence showing either (1) a conception and reduction to practice
`before the filing date of Phillips; or (2) a conception before the filing date of
`the Phillips patent combined with reasonably continuous diligence up to
`reduction to practice after that date. See Taurus IP, LLC v. DaimlerChrysler
`Corp., 726 F.3d 1306, 1323 (Fed. Cir. 2013); see also Perfect Surgical
`Techniques, Inc. v. Olympus America, Inc., 841 F.3d 1004, 1008 (Fed. Cir.
`2016). Under either approach, Patent Owner must produce evidence showing
`that Mr. Diem’s conception occurred prior to May 27, 2005 (the effective
`date of the Phillips reference). See Taurus, 726 F.3d at 1323.
`
`Priority of invention and its constituent issues of conception and
`reduction to practice “are questions of law predicated on subsidiary factual
`findings.” Singh v. Brake, 317 F.3d 1334, 1340 (Fed. Cir. 2003).
`Conception is “the formation, in the mind of the inventor of a definite and
`permanent idea of the complete and operative invention, as it is thereafter to
`be applied in practice.” Coleman v. Dines, 754 F.2d 353, 359 (Fed. Cir.
`1985) (citing Gunter v. Stream, 573 F.2d 77, 80 (CCPA 1978)) (emphasis
`omitted). This requires more than accidental creation; there must be
`
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`Case IPR2016-01278
`Patent 9,071,931 B2
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`evidence that the inventor appreciated that he made “something new.”
`Invitrogen Corp. v. Clontech Labs., Inc., 429 F.3d 1052, 1063–64 (Fed. Cir.
`2005). The conception analysis “necessarily turns on the inventor’s ability to
`describe his invention with particularity. Until he can do so, he cannot prove
`possession of the complete mental picture of the invention.” Burroughs
`Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228 (Fed. Cir. 1994).
`
`Proof of conception cannot turn on the inventor’s testimony alone, but
`must include “corroborating evidence which shows that the inventor
`disclosed to others his ‘completed thought expressed in such clear terms as to
`enable those skilled in the art’ to make the invention.” Coleman, 754 F.2d at
`359 (citing Field v. Knowles, 183 F.2d 593, 601 (CCPA 1950)); see also
`Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1577 (Fed. Cir. 1996) (noting
`that corroboration requirement “arose out of a concern that inventors
`testifying in patent infringement cases would be tempted to remember facts
`favorable to their case by the lure of protecting their patent or defeating
`another’s patent”) (citations omitted). The sufficiency of corroboration is
`determined according to a “rule of reason.” Price v. Symsek, 988 F.2d 1187,
`1195 (Fed. Cir. 1993) (citation omitted). This, however, does not dispense
`with the requirement that some independent evidence must provide
`corroboration. Coleman, 754 F.2d at 360; see also In re NTP, Inc., 654 F.3d
`1279, 1291–92 (Fed. Cir. 2011) (noting requirement of evidence
`corroborating inventor testimony).
`c. Analysis
`We conclude that Patent Owner has not come forward with suf
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