Paper No. 10
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
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`OBALON THERAPEUTICS, INC.
`Petitioner,
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`v.
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`POLYZEN, INC.
`Patent Owner.
`_____________
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`Case IPR2017-00812
`U.S. Patent No. 7,682,306
`_____________
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`JOINT MOTION TO TERMINATE PROCEEDING
`PURSUANT TO 35 U.S.C. § 317(a)
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`sd-705106
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
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`OBALON THERAPEUTICS, INC.
`Petitioner,
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`v.
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`POLYZEN, INC.
`Patent Owner.
`_____________
`
`Case IPR2017-00812
`U.S. Patent No. 7,682,306
`_____________
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`JOINT MOTION TO TERMINATE PROCEEDING
`PURSUANT TO 35 U.S.C. § 317(a)
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`sd-705106
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`IPR2017-00812 (Patent 7,682,306)
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`Pursuant to the Board’s authorization via e-mail (August 18, 2017,
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`1:44 p.m. PDT), Patent Owner Polyzen, Inc. (“Polyzen”) and Petitioner
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`Obalon Therapeutics, Inc. (“Obalon”) (collectively, the “Parties”) have
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`reached a settlement and, pursuant to 35 U.S.C. § 317 and 37 C.F.R. §
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`42.74(c), jointly request termination of this inter partes review proceeding.
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`I. Statement of Facts
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`The Parties have settled their disputes and have executed a settlement
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`agreement to terminate this proceeding, as well as IPR2017-0813 and
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`IPR2017-01023, and have executed a settlement agreement to terminate
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`related district court litigation involving U.S. Patent No. 7,682,306, Polyzen,
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`Inc. v. Obalon Therapeutics, Inc. U.S. District Court for the Southern
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`District of California, Case No. 3:17-cv-01357-JAH-WVG.
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`Polyzen and Obalon are the parties in the related district court
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`litigation, and a stipulation of dismissal with prejudice is concurrently being
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`filed with the United States District Court for the Southern District of
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`California.
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`In accordance with the provisions of 37 C.F.R. § 42.74(b), the Parties’
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`settlement agreements are in writing, and true and correct copies are being
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`filed as Exhibit 1013 and 1014 in this proceeding. The settlement
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`agreements are being filed electronically with access to “Parties and Board
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`sd-705106
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`IPR2017-00812 (Patent 7,682,306)
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`Only.” A “Joint Request to Keep Separate Pursuant to 35 U.S.C. § 317 and
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`37 C.F.R. § 42.74” is being filed concurrently with this Joint Motion to
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`Terminate to constitute the settlement agreements as business confidential
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`information and to keep them separate from the files of the involved patent,
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`U.S. Patent No. 7,682,306, and be made available only to Federal
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`Government agencies on written request, or to any person on a showing of
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`good cause pursuant to 35 U.S.C. § 317(b) and 37 C.F.R. § 42.74(c).
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`U.S. Patent No. 7,682,306 is not involved in any other litigation or
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`other proceeding. Aside from IPR2017-0813 and IPR2017-01023, in each of
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`which a Joint Motion to Terminate Proceeding is also being filed, there are
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`no pending, related inter partes review proceedings. The parties certify that
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`there are no collateral agreements or understandings made in connection
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`with, or in contemplation of, the termination of this inter partes review, and
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`that the Settlement and License Agreement and Inter Partes Review
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`Proceedings Settlement Agreement reflect the final settlement and resolution
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`of all disputes between Patent Owner and Petitioner regarding this inter
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`partes review. No litigation or proceeding involving the subject patents is
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`contemplated in the foreseeable future.
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`sd-705106
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`IPR2017-00812 (Patent 7,682,306)
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`II. Relief Requested
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`Termination of this inter partes review proceeding as to both parties is
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`requested. The parties respectfully submit that such termination is justified.
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`The statutory provision on settlement relating to inter partes reviews
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`provides that an inter partes review “shall be terminated with respect to any
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`petitioner upon the joint request of the petitioner and the patent owner,
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`unless the Office has decided the merits of the proceeding before the request
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`for termination is filed.” 35 U.S.C. §317(a). It also provides that, “[i]f no
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`petitioner remains in the inter partes review, the Office may terminate the
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`review...” Id.
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`Because the Board has not decided the merits of the present inter
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`partes review proceeding, Section 317 provides that the inter partes review
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`proceeding shall be terminated at least with respect to Obalon. Moreover,
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`because Obalon is the only petitioner in this inter partes review proceeding,
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`after termination, no petitioner will remain, and the Office may terminate the
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`review proceeding in its entirety under Section 317.
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`Termination as to both parties would avoid substantial further
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`expenditure of resources by the Board and the USPTO, as well as by
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`Polyzen and Obalon. Termination as to both parties upon settlement as
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`requested would also further the purpose of inter partes review proceedings
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`sd-705106
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`IPR2017-00812 (Patent 7,682,306)
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`to provide an efficient and less costly alternative forum for patent disputes.
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`Additionally, maintaining
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`the proceeding would discourage
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`further
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`settlements, as patent owners in similar situations would have a strong
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`disincentive to settle if they perceived that an inter partes review proceeding
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`would continue regardless of a settlement.
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`Indeed, the Board has stated an expectation that proceedings such as
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`these will be terminated after the filing of a settlement agreement: “[t]here
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`are strong public policy reasons to favor settlement between the parties to a
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`proceeding. …The Board expects that a proceeding will terminate after the
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`filing of a settlement agreement, unless the Board has already decided the
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`merits of the proceeding. 35 U.S.C. 317(a), as amended….” Office Patent
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`Trial Practice Guide, 77 Fed. Reg. 48,756, 48,768 (Aug. 14, 2012).
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`Additionally, Congress and the federal courts have expressed a strong
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`interest in encouraging settlement in litigation. See, e.g., Delta Air Lines,
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`Inc. v. August, 450 U.S. 346, 352 (1981) (“The purpose of [Federal Rule of
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`Civil Procedure] 68 is to encourage the settlement of litigation.”); Bergh v.
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`Dept. of Transp., 794 F.2d 1575, 1577 (Fed. Cir. 1986) (“The law favors
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`settlement of cases.”), cert. denied, 479 U.S. 950 (1986). For at least these
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`reasons, the Board’s expectation that such proceedings should be terminated
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`is proper and well justified here.
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`sd-705106
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`IPR2017-00812 (Patent 7,682,306)
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`In light of the foregoing, termination of this proceeding as to both
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`parties is warranted. As stated in 35 U.S.C. § 317(a) and 37 C.F.R.
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`§ 42.73(d), because Patent Owner and Petitioner jointly request this
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`termination, no estoppel under 35 U.S.C. § 315(e) shall attach to the
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`Petitioner.
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`III. Further Participation
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`Patent Owner Polyzen will continue to participate in IPR2017-00812
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`if this Joint Motion to Terminate is not granted. Petitioner Obalon will not
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`participate further in IPR2017-00812.
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`sd-705106
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`IPR2017-00812 (Patent 7,682,306)
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`IV. Conclusion
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`For at least the reasons stated above, the Parties jointly request
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`termination of this proceeding in its entirety as to both Petitioner Obalon and
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`By / Peng Chen /
`Peng Chen
`pchen@mofo.com
`Registration No. 43,543
`Desmond O’Sullivan
`dosullivan@mofo.com
`Registration No. 67,576
`MORRISON & FOERSTER LLP
`12531 High Bluff Ave, Suite 100
`San Diego, CA 92130
`(858) 720-5100
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`Patent Owner Polyzen.
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`Respectfully submitted,
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`By / Steven J. Hultquist /
`Steven J. Hultquist
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`hultquist@hultquistip.com
`Registration No. 28,021
`Mary B. Grant
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`mgrant@hultquistip.com
`Registration No. 32,176
`HULTQUIST IP
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`1414 Raleigh Rd., Suite 201
`Chapel Hill, NC 27517
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`(919) 419-9350
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`Dated: August 18, 2017
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`sd-705106
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`IPR2017-00812 (Patent 7,682,306)
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`Certificate of Service (37 C.F.R. § 42.6(e)(4))
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`I hereby certify that the attached JOINT MOTION TO TERMINATE
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`PROCEEDING PURSUANT TO 35 U.S.C. § 317(a) was served as of the
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`below date by electronic mail, on the Patent Owner at the following
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`correspondence address:
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`Steven J. Hultquist
`Reg. No. 28,021
`hultquist@hultquistip.com
`HULTQUIST IP
`P.O. Box 14329
`Research Triangle Park, NC 27709
`Phone: (919) 419-9350
`Fax: (919) 419-9354
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`Dated: August 18, 2017
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`By / Desmond O’Sullivan /
`Desmond O’Sullivan
`dosullivan@mofo.com
`Registration No. 67,576
`MORRISON & FOERSTER LLP
`12531 High Bluff Ave, Suite 100
`San Diego, CA 92130
`(858) 720-5100
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`sd-705106
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