Filed Jointly
`
`Paper No.: 39
`Filed: July 21, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`FREDMAN BROS. FURNITURE COMPANY, INC.,
`Petitioner
`
`v.
`
`BEDGEAR, LLC
`Patent Owner
`
`Case IPR2017-00524
`U.S. Patent No. 9,155,408
`
`JOINT MOTION TO TERMINATE
`PURSUANT TO 35 U.S.C. § 317 and 37 C.F.R. § 42.74
`
`
`
`Paper No.: 39
`Filed: July 21, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`FREDMAN BROS. FURNITURE COMPANY, INC.,
`Petitioner
`
`v.
`
`BEDGEAR, LLC
`Patent Owner
`
`Case IPR2017-00524
`U.S. Patent No. 9,155,408
`
`JOINT MOTION TO TERMINATE
`PURSUANT TO 35 U.S.C. § 317 and 37 C.F.R. § 42.74
`
`
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`Petitioner Fredman Bros. Furniture Company, Inc. and Patent Owner
`
`Bedgear, LLC have made and signed an agreement that resolves all underlying
`
`disputes between the parties, including this proceeding. Pursuant to 35 U.S.C. §
`
`317, 37 C.F.R. §§ 42.72 and 42.74, and the Board’s authorization via e-mail on
`
`July 9, 2021, the parties jointly move to terminate the present proceeding in
`
`light of the parties’ settlement of their disputes regarding U.S. Patent Nos.
`
`8,646,134; 8,887,332; 9,015,883; and 9,155,408.
`
`The parties are concurrently filing a true and complete copy of the written
`
`Settlement Agreement (Confidential Exhibit 2018) in connection with this matter
`
`as required by statute. The parties jointly certify that, aside from the Settlement
`
`Agreement, there are no other agreements or understandings, oral or written,
`
`between the parties, including any collateral agreements or understandings, made
`
`in connection with, or in contemplation of, the termination of the present
`
`proceeding. A joint request to treat the Settlement Agreement as business
`
`confidential information kept separate from the file of the involved patent pursuant
`
`to 35 U.S.C. § 317(b) is also being filed concurrently herewith.
`
`This motion complies with the Board’s authorization of July 9, 2021 and the
`
`requirements of 35 U.S.C. § 317(b) and 37 C.F.R. § 42.74(b).
`
`
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`LEGAL STANDARD
`
`A proceeding “shall be terminated with respect to any petitioner upon the
`
`joint request of the petitioner and the patent owner, unless the Office has decided
`
`the merits of the proceeding before the request for termination is filed.” 35 U.S.C.
`
`§ 317(a). A joint motion to terminate generally “must (1) include a brief
`
`explanation as to why termination is appropriate; (2) identify all parties in any
`
`related litigation involving the patents at issue; (3) identify any related proceedings
`
`currently before the Office, and (4) discuss specifically the current status of each
`
`such related litigation or proceeding with respect to each party to the litigation or
`
`proceeding.” Heartland Tanning, Inc. v. Sunless, Inc., IPR2014-00018, Paper No.
`
`26, at *2 (P.T.A.B. July 28, 2014).
`
`ARGUMENT
`
`Termination of the present proceeding is appropriate because (1) the parties
`
`have settled all disputes related to the subject patent between the parties; (2) the
`
`Office’s Final Written Decision involving the subject patent, Paper No. 35, was
`
`vacated and remanded by the Federal Circuit and a merits determination on remand
`
`has not been issued; (3) the parties have agreed to terminate all of the proceedings
`
`currently before the Office; and (4) public policy favors the termination.
`
`First, the parties have settled and resolved all of the patent disputes (as well
`
`as all other disputes) between them and agreed to dismiss all of Patent Owner’s
`
`2
`
`
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`pending claims against Petitioner in the co-pending district court litigation
`
`Bedgear, LLC v. Fredman Bros. Furniture Company, Inc., Case No. 2:15-cv-
`
`06759-KAM-AKT (E.D.N.Y.). In particular, the parties entered into a Binding
`
`Memorandum of Understanding on May 26, 2021, settling all of their disputes in
`
`the pending litigation and these related IPR proceedings. See Ex. 2018 at 2. The
`
`parties further memorialized the terms and conditions of the Binding MOU and
`
`entered into the Settlement Agreement (Ex. 2018) on June 17, 2021. See Ex. 2018
`
`at 1-2. Pursuant to the Settlement Agreement, the parties: (i) filed a stipulation to
`
`dismiss all claim with prejudice in the pending litigation on June 18, 2021; (ii)
`
`filed a joint stipulation with the Supreme Court on June 21, 2021, dismissing
`
`Petitioner’s petition for certiorari of the Federal Circuit decisions; and (iii) sent a
`
`joint e-mail to the Board on June 21, 2021, requesting permission to file the instant
`
`motion to terminate this proceeding.
`
`Second, the Board’s Final Written Decision, Paper 35, was vacated and
`
`remanded by the Federal Circuit in view of Arthrex, Inc. v. Smith & Nephew, Inc.,
`
`941 F.3d 1320 (Fed. Cir. 2019). See Bedgear, LLC v. Fredman Bros. Furniture
`
`Company, Inc., No. 18-2170, D.I. 66 & 67 (Fed. Cir. June 5, 2020). Thereafter,
`
`this proceeding was held in administrative abeyance by the Board “until the
`
`Supreme Court acts on a petition for certiorari in such cases or the time for filing
`
`such petitions expires.” See General Order In Cases Remanded Under Arthrex,
`
`3
`
`
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019). As noted above, the
`
`parties dismissed Petitioner’s certiorari petition on June 21, 2021. As a result, the
`
`Supreme Court’s decision in U.S. v. Arthrex, Inc., Case No. 19-1434, 594 U.S. ___
`
`(2021), which issued on June 21, 2021, does not apply to the instant proceeding.1
`
`To the parties’ knowledge, a new panel has not yet been assigned to this
`
`proceeding pursuant to the Federal Circuit’s mandates, and a new final written
`
`decision has therefore not been issued in this proceeding. Similarly, to the parties’
`
`knowledge, no review by the Acting Director has occurred either. As the Board
`
`recently explained, when there is settlement and a joint motion, termination of a
`
`proceeding before the PTAB in view of the uncertainty surrounding the Arthrex
`
`1 The Supreme Court agreed with the Federal Circuit that APJs of the PTAB were
`
`principal officers and thus, improperly appointed under the Appointments Clause.
`
`However, the Supreme Court disagreed with the remedy set forth by the Federal
`
`Circuit and, instead, held that the proper remedy “is a remand to the Acting
`
`Director for him to decide whether to rehear the petition”. U.S. v. Arthrex, Inc.,
`
`594 U.S. ___, slip op. at 4 (2021). Accordingly, even if the Supreme Court’s
`
`Arthrex decision did apply here, the merits of this proceeding would still not have
`
`been fully decided before this request for termination is filed. 35 U.S.C. § 317(a).
`
`4
`
`
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`decision is justified. See Fidelity Information Services, LLC v. Mirror Imaging,
`
`LLC, CBM2017-00064, Paper No. 70 (P.T.A.B. July 21, 2020).
`
`Third, the Settlement Agreement resolves all of the disputes between the
`
`parties related to these patents and proceedings. Because the disputes have been
`
`resolved, Petitioner intends to no longer participate in this proceeding and to take
`
`no further action in this proceeding, including the filing of papers or participating
`
`in oral argument in this proceeding. Given Petitioner’s non-participation, this
`
`further weighs in favor of dismissal. See Axis Communications, Inc. v. Canatelo,
`
`LLC, IPR2014-00394, Paper 11 (P.T.A.B. July 15, 2014) (noting that Petitioner
`
`will not participate further in the proceedings).
`
`Fourth, public policy favors the termination. Both Congress and the federal
`
`courts have expressed a strong interest in encouraging settlement in litigation. See,
`
`e.g., Delta Air Lines, Inc. v. August, 450 U.S. 346, 352 (1981) (“The purpose of
`
`[Federal Rule of Civil Procedure] 68 is to encourage the settlement of litigation.”);
`
`Bergh v. Dept. of Transp., 794 F.2d 1575, 1577 (Fed. Cir. 1986) (“The law favors
`
`settlement of cases.”), cert. denied, 479 U.S. 950 (1986). The U.S. Court of
`
`Appeals for the Federal Circuit also places a particularly strong emphasis on
`
`settlement. See Cheyenne River Sioux Tribe v. U.S., 806 F.2d 1046, 1050 (Fed.
`
`Cir. 1986) (noting that the law favors settlement to reduce antagonism and hostility
`
`between parties).
`
`5
`
`
`
`Moreover, the Board generally expects that a proceeding will terminate after
`
`the filing of a settlement:
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`There are strong public policy reasons to favor settlement
`between the parties to a proceeding. The Board will be
`available to facilitate settlement discussions, and where
`appropriate, may require a settlement discussion as part of
`the proceeding. The Board expects that a proceeding will
`terminate after the filing of a settlement agreement, unless
`the Board has already decided the merits of the proceeding.
`
`Patent Office Consolidated Trial Practice Guide at 86, 84 Fed. Reg. 64,280 (Nov.
`
`21, 2019), also available at https://www.uspto.gov/sites/default/files/
`
`documents/tpgnov.pdf.
`
`Maintaining this proceeding after Petitioner’s settlement with Patent Owner
`
`would discourage future settlements by removing a primary motivation for
`
`settlement, which is eliminating litigation risk by resolving the parties’ disputes
`
`and ending the pending proceedings between them. For patent owners, litigation
`
`risks include the potential for an invalidity ruling against their patents. If a patent
`
`owner knows that an IPR will likely continue regardless of settlement, it creates a
`
`strong disincentive for the patent owner to settle. Thus, no public interest or other
`
`factors militate against termination of this proceeding.
`
`6
`
`
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`As to the remaining Heartland Tanning requirements, the following tables
`
`respectively identify all district court litigations or petitions for review that involve
`
`the subject patent or any related patents, and discuss the status of each. See TD
`
`Ameritrade Holding Corp. v. Trading Techs. Int’l, Inc., CBM2014-00131, Paper 64
`
`(P.T.A.B. July 7, 2015) (granting motion to terminate); id., Paper 60 at 7-11
`
`(P.T.A.B. July 5, 2015) (motion to terminate); see, e.g., Wockhardt Bio Ag v. Jazz
`
`Pharms., Inc., IPR2016-00370, Paper 14 (P.T.A.B. May 17, 2016) (finding good
`
`cause exists to terminate the proceeding even when “related district court
`
`proceedings remain pending against other defendants”); Mercedes-Benz USA, LLC
`
`v. Z-Dimensional, LLC, IPR2014-01521, Paper 11 (P.T.A.B. January 5, 2015)
`
`(same); Toyota Motor Corp. v. Am. Vehicular Scis. LLC, IPR2013-00413, Paper 34
`
`(P.T.A.B. March 28, 2014) (same).
`
`Pending District Court cases resolved or that may also be resolved in view of
`settlement:
`Cases to be dismissed are identified below:
`
`District Court Case
`Bedgear, LLC v. Fredman Bros.
`Furniture Company, Inc., Case No. 2:15-
`cv-06759-KAM-AKT (E.D.N.Y.).
`
`Status
`
`Dismissed.
`
`7
`
`
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`Patent Office Proceedings:
`
`PTAB Case
`IPR2017-00350
`
`U.S. Patent No.
`8,887,332
`
`IPR2017-00351
`
`9,015,883
`
`IPR2017-00352
`
`8,646,134
`
`IPR2017-00524
`
`9,155,408
`
`Status
`Joint motion to terminate being
`filed herewith;
`Final written decision vacated and
`on remand from the Federal Circuit
`for further proceedings consistent
`with Arthrex, Inc. v. Smith &
`Nephew, Inc., 941 F.3d 1320 (Fed.
`Cir. 2019);
`Petition for Certiorari dismissed.
`
`Joint motion to terminate being
`filed herewith;
`Final written decision vacated and
`on remand from the Federal Circuit
`for further proceedings consistent
`with Arthrex, Inc. v. Smith &
`Nephew, Inc., 941 F.3d 1320 (Fed.
`Cir. 2019);
`Petition for Certiorari dismissed.
`
`Joint motion to terminate being
`filed herein;
`Final written decision vacated and
`on remand from the Federal Circuit
`for further proceedings consistent
`with Arthrex, Inc. v. Smith &
`Nephew, Inc., 941 F.3d 1320 (Fed.
`Cir. 2019);
`Petition for Certiorari dismissed
`
`Joint motion to terminate being
`filed herewith;
`Final written decision vacated and
`on remand from the Federal Circuit
`for further proceedings consistent
`with Arthrex, Inc. v. Smith &
`
`8
`
`
`
`PTAB Case
`
`U.S. Patent No.
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`Status
`Nephew, Inc., 941 F.3d 1320 (Fed.
`Cir. 2019);
`Petition for Certiorari dismissed
`
`Thus, no district court proceedings involving the patent subject to this IPR remain
`
`pending and there are no other Patent Office proceedings involving this patent that
`
`remain pending. Therefore, this factor, too, supports termination.
`
`CONCLUSION
`
`For at least the foregoing reasons, Petitioner and Patent Owner jointly
`
`request the Board terminate this proceeding in its entirety.
`
`Date: July 21, 2021
`
`Respectfully submitted,
`
`
`By: /Joseph J. Richetti/
`Joseph J. Richetti (Reg. No. 47,024)
`BRYAN CAVE LEIGHTON
`PAISNER LLP
`1290 Avenue of the Americas
`New York, NY 10104
`General Tel: (212) 541-2000
`Fax: (212) 541-4630
`Email: joe.richetti@bryancave.com,
`
`Attorney for Patent Owner – Bedgear LLC
`
`9
`
`
`
`IPR2017-00524
`U.S. Patent No. 9,155,408
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that the foregoing JOINT MOTION TO
`
`TERMINATE PURSUANT TO 35 U.S.C. § 317 and 37 C.F.R. § 42.74 was served
`
`electronically via e-mail on July 21, 2021, in its entirety on the following:
`
`Jason R. Mudd
`Jason.mudd@eriseip.com
`Eric A. Buresh
`Eric.buresh@eriseip.com
`ptab@eriseip.com
`
`ERISE IP, P.A.
`7015 College Blvd., Suite 700
`Overland Park, Kansas 66211
`
`Date: July 21, 2021
`
`Respectfully submitted,
`
`By: /Joseph J. Richetti/
`Joseph J. Richetti (Reg. No. 47,024)
`Lead Attorney for Petitioner
`BRYAN CAVE LEIGHTON
`PAISNER LLP
`1290 Avenue of the Americas
`New York, NY 10104
`Direct Tel: (212) 541-1092
`Email: joe.richetti@bryancave.com
`Attorney for Patent Owner – Bedgear, LLC
`
`
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