Paper 8
`Trials@uspto.gov
`571-272-7822
`
`Date Entered: May 1, 2017
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`FORD MOTOR COMPANY
`Petitioner,
`v.
`VERSATA DEVELOPMENT GROUP, INC.
`Patent Owner.
`____________
`
`Case IPR2017-00148
`Patent 6,405,308 B1
`____________
`
`Before KEVIN F. TURNER, JAMES B. ARPIN, and
`WILLIAM M. FINK, Administrative Patent Judges.
`
`TURNER, Administrative Patent Judge.
`
`DECISION
`Denying Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
`
`
`
`
`Trials@uspto.gov
`571-272-7822
`
`Date Entered: May 1, 2017
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`FORD MOTOR COMPANY
`Petitioner,
`v.
`VERSATA DEVELOPMENT GROUP, INC.
`Patent Owner.
`____________
`
`Case IPR2017-00148
`Patent 6,405,308 B1
`____________
`
`Before KEVIN F. TURNER, JAMES B. ARPIN, and
`WILLIAM M. FINK, Administrative Patent Judges.
`
`TURNER, Administrative Patent Judge.
`
`DECISION
`Denying Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
`
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`
`
`
`I. INTRODUCTION
`Ford Motor Company (“Petitioner”) filed a Petition requesting an
`
`inter partes review of claims 1–36 of U.S. Patent No. 6,405,308 B1 (Ex.
`1101, “the ’308 Patent”). Paper 2 (“Pet.”). Patent Owner, Versata
`Development Group, Inc., filed a Preliminary Response. Paper 7 (“Prelim.
`Resp.”). We have jurisdiction under 35 U.S.C. § 314, which provides that
`an inter partes review may not be instituted “unless . . . the information
`presented in the petition . . . and any response . . . shows that there is a
`reasonable likelihood that the petitioner would prevail with respect to at least
`1 of the claims challenged in the petition.”
`The ’308 Patent is involved in Ford Motor Co. v. Versata Software,
`
`Inc., No. 2:15-cv-10628-MFL-EAS (E.D. Mich.) (“the Ford action”), a
`declaratory judgment action filed on February 19, 2015. Pet. vi; Paper 3, 4.
`In the Ford action, the ’308 Patent was asserted as a counterclaim on
`October 28, 2015. Pet. vi; see Ex. 1130. The ‘308 Patent also was asserted
`in a lawsuit Versata Dev. Grp., Inc. v. Ford Motor Co., No. 4:15-cv-00316-
`RC-CMC (E.D. Tex.) (“the Versata action”), filed on May 7, 2015. Pet. vi;
`Paper 3, 4.
`
`We deny the Petition because it was “filed more than 1 year after the
`date on which the petitioner [was] served with a complaint alleging
`infringement of the [’308] patent.” 35 U.S.C. § 315(b).
`
`II. ANALYSIS
`A.
`The relevant facts regarding the timing of the related actions between
`
`Ford and Versata are largely undisputed. Ford filed a first action (i.e., the
`Ford action) in the Eastern District of Michigan (“the Michigan court”) on
`2
`
`
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`February 19, 2015, seeking a declaratory judgment of non-infringement of
`three Versata patents, including the ’308 Patent. Pet. vi; Prelim. Resp. 5; Ex.
`1129. In a later-filed Eastern District of Texas (“the Texas court”) case (i.e.,
`the Versata action), filed on May 7, 2015, Versata asserted infringement of
`the ’308 Patent by Ford. Pet. vi; Prelim. Resp. 5; Ex. 2001. Ford requested
`an extension of time to file an answer and acknowledged the service date of
`the complaint in the Versata action as May 7, 2015. Prelim. Resp. 5–6; Ex.
`2007 (“Unopposed Application for Extension of Time to Answer
`Complaint”).
`
`On October 14, 2015, the Michigan court denied Versata’s motion to
`dismiss or alternatively transfer the Ford action to the Eastern District of
`Texas. Ex. 1132; Pet. 2; Prelim. Resp. 6. On October 28, 2015 (i.e., one
`year before Ford filed for inter partes review here), Versata answered Ford’s
`declaratory judgment complaint in Michigan and asserted the ’308 Patent by
`filing infringement counterclaims in the Ford action. Prelim. Resp. 6–7; Pet.
`1; Ex. 1130 (“Defendant’s Answer . . . [and] Counterclaims”). On
`November 5, 2015, the Texas court “ordered the parties to file notice of any
`good faith reasons that [the Versata lawsuit] should not be dismissed,
`without prejudice, so that the issues may [be] dealt with in the Michigan
`court.” Pet. 2 (quoting Ex. 11311 (additional text added by Patent Owner));
`Ex. 1131. On December 3, 2015, noting that “neither party has provided
`arguments against dismissing the case,” the Texas court “ORDERED that
`
`
`1 While Petitioner cited to Ex. 1132 here, the correct citation here is Ex.
`1131. We consider this to be a clerical error; it has no effect on our analysis
`in this case.
`
`3
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`this case is DISMISSED without prejudice to Plaintiff’s ability to assert its
`claims in the Michigan court.” Ex. 1134 (emphasis added); Pet. 2.
`
`
`
`B.
`Pursuant to 37 C.F.R. § 42.104(a), “[t]he petitioner must certify that
`the patent for which review is sought is available for inter partes review and
`that the petitioner is not barred or estopped from requesting an inter partes
`review challenging the patent claims on the grounds identified in the
`petition.” See Changes to Implement Inter Partes Review Proceedings,
`Post-Grant Review Proceedings, and Transitional Program for Covered
`Business Method Patents, 77 Fed. Reg. 48,680, 48,688 (Aug. 14, 2012)
`(setting a strict standard for demonstrating standing and noting that
`“[f]acially improper standing will be a basis for denying the petition without
`proceeding to the merits of the petition.”).
`According to Petitioner, the Petition is timely under 35 U.S.C.
`§ 315(b) because October 28, 2015, the date of service of the infringement
`counterclaim in the Ford action, is exactly one year prior to the filing of the
`instant Petition, on October 28, 2016. Pet. 1. Petitioner contends this
`counterclaim complaint is the complaint for purposes of 35 U.S.C. § 315(b).
`Id. at 1–2. Petitioner argues that the Versata action in Texas is “irrelevant
`for purposes of § 315(b),” because “[t]he dismissal of an action without
`prejudice leaves the parties as though the action had never been brought.”
`Id. at 2–3 (quoting Oracle Corp. v. Click-To-Call Techs. LP, Case IPR2013-
`00312, slip op. at 15–18 (PTAB Oct. 30, 2013) (Paper 26) (precedential in
`relevant part)).
`On this record, we disagree with Petitioner’s assessment of the effect
`of the dismissal of the Texas action. As an initial matter, it is undisputed
`4
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`
`that the complaint in the Versata action, served on Ford on May 7, 2015 (see
`Ex. 2007), is “a complaint alleging infringement of the patent,” and that “the
`petition requesting the proceeding [was] filed more than one year after the
`date on which the petitioner . . . [was] served.” 35 U.S.C. § 315(b). Thus,
`according to the statutory language, the Petition filed by Ford here is time
`barred. The question is whether Ford is correct that the situation here fits
`within a judicial exception for a class of cases that were dismissed without
`prejudice as though the action had never been filed, as was the case in the
`Board’s precedential Oracle decision. In considering this argument, our
`consideration also is informed by the Board’s decisions in Apple, Inc. v.
`Rensselaer Polytechnic Inst., Case IPR2014-00319 (PTAB June 12, 2014)
`(Paper 12) (“Apple I”), reh’g denied (Paper 14) (“Apple II”) (collectively,
`“Apple”) and similar cases, where the Board did not apply the exception for
`dismissals without prejudice. Because the circumstances here align with
`Apple and differ in critical respects from Oracle and related cases, we
`determine the exception is not applicable.
`In Oracle, the Board addressed whether a 2001 infringement case,
`filed against the petitioner Ingenio’s predecessor and subsequently dismissed
`by joint stipulation in 2003, barred Ingenio under § 315(b) from filing its
`petition for inter partes review in 2013. Oracle, slip op. at 15–16. In
`determining that there was no bar based on the 2001 complaint, the Board
`observed that the case was voluntarily dismissed without prejudice under
`Fed. R. Civ. P. 41(a), and that “such dismissals” have been consistently
`interpreted as leaving the parties as though the action had never been
`brought:
`
`5
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`
`
`
`[T]he infringement suit brought by Inforocket against Keen––
`now Ingenio, LLC—was dismissed voluntarily without prejudice
`on March 21, 2003, pursuant to a joint stipulation under Fed. R.
`Civ. P. 41(a). The Federal Circuit consistently has interpreted
`the effect of such dismissals as leaving the parties as though the
`action had never been brought.
`Id. at 17 (emphasis added) (internal record citations omitted). In reaching
`that conclusion, the Board relied on two Federal Circuit cases, Graves v.
`Principi, 294 F.3d 1350 (Fed. Cir. 2002) and Bonneville Assocs., Ltd.
`Partnership v. Baram, 165 F.3d 1360, 1364 (Fed. Cir. 1999). Oracle, slip
`op. at 17.
`In Bonneville, the Federal Circuit addressed the voluntary dismissal
`without prejudice of an appeal from the General Services Administration
`Board of Contract Appeals. 165 F.3d at 1364. The court analogized the
`basis of voluntary dismissal there to a Rule 41(a) dismissal, stating that
`effect of such a dismissal without prejudice is to render the proceedings a
`nullity. Id. Based on this reasoning, the court affirmed the Board of
`Contract Appeals’ decision finding that a subsequent appeal, filed after the
`filing deadline for appealing the decision, did not act to reinstate the
`dismissed appeal, but was barred as not timely. Id. at 1364–66.
`Similarly, in Graves, the only Federal Circuit case cited by Petitioner,
`the court addressed the effect of a voluntary dismissal under Rule 42 of the
`Court of Appeals for Veterans Claims Rules of Practice and Procedure. 294
`F.3d at 1356. In holding that this dismissal put the appellant in the position,
`in which he would have been, had he never filed a notice of appeal, the court
`compared the circumstances to the voluntary dismissal in Bonneville, in
`which the “nullifying effect of a voluntary dismissal in accordance with Fed.
`R. Civ. P. 41(a)(1) was applied.” Id. Accordingly, the court determined that
`6
`
`
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`the appellant was time-barred from filing a new appeal after the 120-day
`period for filing a notice of appeal had lapsed. Id.
`Here, unlike in Oracle, Bonneville, and Graves, the dismissal without
`prejudice was not pursuant to Rule 41(a), was not “voluntary,” and, most
`importantly, did not leave the parties as though the action had never been
`brought. Petitioner, citing Exhibit 1134 (“Order of Dismissal”), incorrectly
`characterizes the Versata action dismissal as under Rule 41(a)(2). Pet. 2
`(“The Texas court then dismissed the Versata lawsuit, as permitted by Fed.
`R. Civ. P. 41(a)(2).”). However, the court’s order does not state its reliance
`on Rule 41(a)(2). See Ex. 1134. Moreover, the circumstances there were
`not appropriate to Rule 41(a)(2), because there is no cited evidence that the
`plaintiff, Versata, requested the dismissal. See id.; Fed. R. Civ. P. 41(a)(2)
`(stating that “an action may be dismissed at the plaintiff’s request only by
`court order, on terms the court considers proper” (emphasis added)).
`Instead, the cited evidence strongly suggests that the Texas court
`dismissed the Versata action in favor of the Ford action under the “first-to-
`file rule.” Ex. 2011, 3:16–21 (“[O]ne of the issues that’s going to come up
`is this first-to-file rule.”), 11:5–8 (“I’m also faced with the practical problem
`of in the Fifth Circuit under the first-to-file rule, I’m supposed to give
`deference to [Eastern District of Michigan] Judge Leitman and what he
`decides.”). Indeed, less than a month following the Michigan’s court denial
`of “Versata’s Motion to Dismiss, or Alternatively to Transfer to the Eastern
`District of Texas,” the Texas court instructed “[a]s the first-filed court has
`retained jurisdiction, it is ORDERED that . . . the parties shall file notice of
`any good faith reasons that this case should not be dismissed, without
`prejudice, so that the issues may be dealt with in the Michigan court.”
`7
`
`
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`Ex. 1131 (emphasis added). In addition, although Versata responded in the
`negative, and Ford elected not to respond at all, to the Texas court’s
`instruction to file any good faith reasons why the Texas court should
`maintain the case (Ex. 1134), this does not suggest the dismissal was
`voluntary, but merely that, confronted with the Texas court’s instruction to
`file “good faith reason[s],” Versata lacked any “good faith reasons” for
`maintaining the case.
`Petitioner argues that whether the dismissal here was voluntary or not
`should not matter, because “[t]his rule applies regardless of the basis for the
`dismissal without prejudice.” Pet. 3 (citing Gordon Howard Assocs., Inc. v.
`Lunareye, Inc., Case IPR2014-01213, slip op. at 13–15 (PTAB Feb. 3, 2015)
`(Paper 11) (“Lunareye”); Nautique Boats Co. v. Malibu Boats, LLC, Case
`IPR2014-01045, slip op. at 10 (PTAB Nov. 26, 2014) (Paper 13)). The cited
`portion of Lunareye addressed the applicability of the § 315(a) bar, not the
`§ 315(b) bar at issue here, in the situation of a dismissal without prejudice
`for lack of personal jurisdiction. See Lunareye, slip op. at 14. There, the
`Board determined that, regardless of how the dismissal was characterized, a
`dismissal for lack of personal jurisdiction left the parties in the position they
`were in had the original action not been filed, despite Lunareye’s arguments
`to the contrary.2 See id. at 12, 14. In Nautique Boats, again addressing the §
`315(a) bar, the Board found that the dismissal of the declaratory judgment
`
`
`2 We note that Petitioner also contends that the complaint in the Versata
`action was a “nullity” because the Eastern District of Texas lacked personal
`jurisdiction over Ford. Pet. 2. However, Ford has not provided evidence or
`further developed this argument, and there is no cited evidence that the
`Texas court found this argument persuasive.
`8
`
`
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`action at issue, whether voluntary or not, left the parties in the position they
`were in had the declaratory action not been filed. See Nautique Boats, slip
`op. at 10–11 (“Patent Owner has not shown persuasively that the dismissal .
`. . would bar Petitioner from re-filing a declaratory judgment action, in
`Florida or elsewhere.”).
`However, even if we disregard the voluntariness of the dismissal here,
`the circumstances nonetheless differ from both Lunareye and Nautique
`Boats, as well as from Oracle, in additional key respects. First, the dismissal
`of the Versata action did not “leave the parties as if the action had never
`been brought.” Bonneville, 165 F.3d at 1364. Rather, as the evidence makes
`abundantly clear, it was the presence of the first-filed Ford action in
`Michigan that caused the Texas court to dismiss the Versata action (“so that
`the issues may be dealt with in the Michigan court” (Ex. 1131)), after
`Versata already had served its infringement counterclaims in the Ford action
`(Ex. 1130). In fact, the order dismissing the Texas action specifically states
`the dismissal is “without prejudice to [Versata’s] ability to assert its claims
`in the Michigan court.” Ex. 1134 (emphasis added). Unlike the cases
`discussed above, there is no evidence suggesting that the parties could have
`refiled the action in the Texas court as if the Versata action had never
`occurred, given the case was dismissed, so that the parties could continue in
`the Michigan court.
`Second, the continuation of the dismissed Texas action in Michigan
`further distinguishes this case from Oracle, in which there was roughly a
`“nine-year hiatus” (Prelim. Resp. 11–12) between the action dismissed in
`2003 and the second action initiated in 2012. See Oracle, slip op. at 15.
`Indeed, Petitioner does not cite any cases in which the Board applied the
`9
`
`
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`exception to the § 315(b) bar for a dismissal where, as here, there was a
`continuous chain of assertion of the involved patent going back more than
`one year. In both Graves and Bonneville, the issue was that dismissed
`appeals could not be reinstated by later time-barred appeals. Similarly, in
`both Lunareye and Nautique Boats, there is no discussion of existing
`assertions of the patents at issue. Instead, as discussed above, both Lunareye
`and the Nautique Boats decisions suggested the possibility of refiling at a
`later time. See, e.g., Lunareye, slip op. at 12 (finding no preclusive effect);
`Nautique Boats, slip op. at 10–11.
`On the other hand, as Patent Owner points out (Prelim. Resp. 9–12),
`where earlier actions were dismissed without prejudice in favor of a co-
`pending action, the Board consistently has held that the dismissed complaint
`“cannot be treated as if it never existed” for purposes of § 315(b). Apple I,
`slip op. at 4–7; see Histologics, LLC v. CDx Diagnostics, Inc., IPR2014-
`00779, slip op. at 5 (PTAB Sept. 12, 2014) (Paper 6); eBay, Inc. v. Adv.
`Auctions LLC, Case IPR2014-00806, slip op. at 6–8 (PTAB Sept. 25, 2014))
`(Paper 14). For example, in Apple I, the Board determined that the
`complaint in an earlier-filed case was operative for purposes of § 315(b),
`even though it was dismissed without prejudice and consolidated into a later-
`filed case. Apple I, slip op. at 6–7.
`Both Histologics and eBay are similar to Apple in relevant respects.
`In eBay, the Board determined a first, dismissed action controlled for
`purposes of § 315(b), noting that “[f]rom the day [eBay] was served with the
`complaint in the First Action to the present, [eBay] has been involved in
`litigation regarding its alleged infringement of the ’000 patent.” eBay, slip
`op. at 7. Likewise, in Histologics, the Board determined that the § 315(b)
`10
`
`
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`bar applied to an earlier dismissed action, noting that “the parties remain
`engaged in a dispute first raised in the complaint of the ’612 action, a dispute
`that has been pending continuously since that complaint was filed.”
`Histologics, slip op. at 6.
`Petitioner acknowledges the holdings in Apple, eBay, and Histologics,
`but contends those cases are distinguishable because, unlike here, they
`involved a consolidation of the dismissed case with the continued case under
`Fed. R. Civ. P. 42. See Pet. 3–4. We are not persuaded the outcome here
`should turn on whether the cases were consolidated under Rule 42(a). See
`Apple II, slip op. at 3 (denying request for rehearing; “[W]hether or not the
`dismissal could occur under Fed. R. Civ. P. 42 would not change the result
`of the Decision.”).
`In the first place, as Petitioner observes, the Versata action and the
`Ford action could not have been consolidated under Rule 42(a) because they
`were pending in different courts. Pet. 4; Fed. R. Civ. P 42(a). Second,
`despite the absence of nominal consolidation, it is indisputable that the
`Texas court dismissed the Versata action “without prejudice to [Versata’s]
`ability to assert its claims in the Michigan court.” Ex. 1134 (emphasis
`added); Ex. 1131 (instructing the parties to provide good faith reasons why
`the Versata action should not be dismissed, “so that the issues may be dealt
`with in the Michigan court”). Similarly, as Patent Owner points out, in
`denying Ford’s motion for a stay of the Ford action, the Michigan court
`pointed out that it kept the case in Michigan at Ford’s request, and,
`therefore, “[w]hy isn’t it fair for Versata to say Ford wanted it here, we were
`concerned about timing, at least try to keep it like the Eastern District of
`Texas would?” Prelim. Resp. 10; Ex. 2010, 40:2–10.
`11
`
`
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`
`Essentially, in resolving the forum dispute in favor of the Michigan
`court, the respective courts treated the cases as if they were a single
`proceeding at least in terms of ability to assert claims and recognition of
`timing. Consequently, we agree that the relevant factor in determining
`whether the earlier complaint in the Versata action is operative for purposes
`of § 315(b) is the continuous assertion of the patent against Ford, not
`whether the case was formally consolidated. See Prelim. Resp. 9. This is
`consistent with Apple II, where, in addressing Petitioner’s request for
`rehearing, the Board emphasized that the “relevant fact” was that the earlier-
`filed case was immediately continued in the later-filed case and that “there
`was no interval during which no action was pending.” Apple II, slip op. at
`4–5.
`
`For the foregoing reasons, we find the circumstances here do not
`warrant a departure from the statutory language of § 315(b) in favor of
`extending the exception for voluntary dismissals without prejudice to a case
`where the dismissal without prejudice was not voluntary and did not leave
`the parties in the position they were in had the action never been filed.
`Accordingly, we find the complaint in the Versata action bars institution of
`inter partes review.
`
`III. CONCLUSION
`The Board denies institution of inter partes review because the
`Petition was not filed within the time limit imposed by 35 U.S.C. § 315(b).
`
`12
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`
`IV. ORDER
`In consideration of the foregoing, it is
`ORDERED that Petitioner’s request for institution of inter partes
`review is denied.
`FURTHER ORDERED that no inter partes review will be instituted
`pursuant to 35 U.S.C. § 314(a) with respect to any of the challenged claims
`of the ’308 Patent on the ground of unpatentability asserted in the Petition.
`
`
`
`13
`
`
`
`
`
`
`IPR2017-00148
`Patent 6,405,308 B1
`
`FOR PETITIONER:
`John S. LeRoy
`Thomas A. Lewry
`Frank A. Angileri
`John P. Rondini
`Christopher C. Smith
`Jonathan D. Nikkila
`BROOKS KUSHMAN P.C.
`FPGP0127IPR2@brookskushman.com
`
`
`
`FOR PATENT OWNER:
`Robert Greene Sterne
`Salvador M. Bezos
`Joseph E. Mutschelknaus
`Jonathan Tuminaro
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`rsterne-PTAB@skgf.com
`sbezos-PTAB@skgf.com
`jmustche-PTAB@skgf.com
`jtuminar-PTAB@skgf.com
`
`Kent B. Chambers
`TERRILE, CANNATTI, CHAMBERS & HOLLAND, LLP
`kchambers@tcchlaw.com
`
`Sharoon Saleem
`JONES & SPROSS, P.L.L.C.
`sharoon.saleem@jonesspross.com
`
`
`14
`
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
