`Trials@uspto.gov
`571-272-7822
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` Paper 17
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` Entered: January 31, 2018
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`SONOS, INC.,
`Petitioner,
`v.
`D&M HOLDINGS INC.,
`Patent Owner.
`____________
`
`Case IPR2017-01045
`Patent 7,987,294 B2
`____________
`
`
`
`Before JONI Y. CHANG, JENNIFER S. BISK, and
`JON M. JURGOVAN, Administrative Patent Judges.
`
`JURGOVAN, Administrative Patent Judge.
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`
`
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`
`DECISION
`Denying Patent Owner’s Request for Rehearing
`37 C.F.R. § 42.71(d)
`
`
`
`

`

`IPR2017-01045
`Patent 7,987,294 B2
`
`
`I. INTRODUCTION
`On March 7, 2017, Petitioner, Sonos, Inc., filed a Petition (Paper 1, “Pet.”)
`requesting an inter partes review of claims 1–20 and 25–27 of U.S. Patent No.
`7,987,294 B2 (Ex. 1001, “the ’294 patent”). On July 6, 2017, Patent Owner, D&M
`Holdings Inc., filed a Preliminary Response (Paper 7, “Prelim. Resp.”). After
`consideration of the Petition and Preliminary Response, on October 4, 2017, we
`entered a Decision granting institution of inter partes review (Paper 8, “Dec.”).
`On October 19, 2017, Patent Owner filed a Request for Rehearing (Paper 11, “Req.
`Reh’g.”) regarding our Decision.
`For the reasons stated below, Patent Owner’s Request for Rehearing is
`denied.
`
`II. ANALYSIS
`Standard of Review
`When reconsidering a decision on institution, we review the decision for an
`abuse of discretion. 37 C.F.R. § 42.71(c). An abuse of discretion may be
`determined if a decision is based on an erroneous interpretation of law, if a factual
`finding is not supported by substantial evidence, or if the decision represents an
`unreasonable judgment in weighing relevant factors. Star Fruits S.N.C. v. United
`States, 393 F.3d 1277, 1281 (Fed. Cir. 2005); Arnold P’ship v. Dudas, 362 F.3d
`1338, 1340 (Fed. Cir. 2004); In re Gartside, 203 F.3d 1305, 1315–16 (Fed. Cir.
`2000). The party requesting rehearing has the burden of showing the decision
`should be modified, which includes specifically identifying all matters the party
`believes we misapprehended or overlooked. 37 C.F.R. § 42.71(d).
`Background
`Petitioner challenged claims 1–4, 10–20, and 25–27 of the ’294 patent as
`obvious under 35 U.S.C. § 103(a) over U.S. Patent No. 8,243,395 to Millington
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`

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`IPR2017-01045
`Patent 7,987,294 B2
`
`(Millington ’395”) (Ex. 1011) alone or in combination with U.S. 7,571,014 to
`Lambourne (“Lambourne ’014”) (Ex. 1012) and U.S. Patent No. 8,483,853
`(“Lambourne ’853”) (Ex. 1013). Pet. 13–14. Also, Petitioner challenged claims
`5–9 and 17 of the ’294 patent as obvious under 35 U.S.C. § 103(a) over Millington
`’395 (Ex. 1011), Lambourne ’014, Lambourne ’853, and U.S. Patent Publication
`No. 2005/0014467 to Ishiwata (“Ishiwata ’467”) (Ex. 1016). Id. This panel
`instituted inter partes review of all challenged claims based on these grounds.
`Burden of Persuasion and Burden of Production
`In rendering our Decision, Patent Owner contends we overlooked or
`
`improperly shifted the burden of persuasion and burden of production to Patent
`Owner, contrary to Dynamic Drinkware, LLC v. National Graphics, Inc., 800 F.3d
`1375 (Fed. Cir. 2015) (“Dynamic Drinkware”). Req. Reh’g 1–2.
`In Dynamic Drinkware, the petitioner Dynamic Drinkware, LLC
`(“Dynamic”) challenged National Graphics, Inc.’s (“National Graphics”) U.S.
`Patent 6,635,196 (“the ’196 patent”) as anticipated by U.S. Patent 7,153,555 to
`Raymond (“the Raymond patent”) under 35 U.S.C. § 102(e) (2006). Id. at 1377.
`The Board instituted inter partes review and conducted a trial, and in its final
`written decision, found that National Graphics had shown that the ’196 patent was
`reduced to practice by March 28, 2000, before the May 5, 2000 filing date of the
`Raymond patent, and that Dynamic had failed to show that the Raymond patent
`was entitled to the benefit of its provisional filing date of February 15, 2000. Id.
`Accordingly, the Board concluded that Dynamic failed to demonstrate by a
`preponderance of the evidence that claims 1 and 12 of the ’196 patent were
`anticipated by Raymond under § 102(e). Dynamic appealed to the Court of
`Appeals for the Federal Circuit (“Federal Circuit”).
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`IPR2017-01045
`Patent 7,987,294 B2
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`On appeal, in affirming the Board’s decision, the Federal Circuit noted that
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`there are two distinct burdens of proof: the burden of persuasion and the burden of
`production. Id. at 1378 (citing Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d
`1316, 1326–27 (Fed. Cir. 2008) (“Tech Licensing”)).
`The burden of persuasion “is the ultimate burden assigned to a party
`who must prove something to a specified degree of certainty,” such as
`by preponderance of the evidence or by clear and convincing
`evidence. In an inter partes review, the burden of persuasion is on the
`petitioner to prove “unpatentability by a preponderance of the
`evidence,” 35 U.S.C. § 316(e), and that burden never shifts to the
`patentee.
`
`Id. “Failure to prove the matter as required by the applicable standard means that
`the party with the burden of persuasion loses on that point—thus, if the fact trier of
`the issue is left uncertain, the party with the burden loses.” Id. at 1378–79. In
`contrast, the burden of production is a shifting burden, “the allocation of which
`depends on where in the process of trial the issue arises.” Id. (citing Tech
`Licensing, 545 F.3d at 1327). “The burden of production may entail ‘producing
`additional evidence and presenting persuasive argument based on new evidence or
`evidence already of record.’” Id.
`
`Applying these burdens to the present case, the ultimate burden of
`persuasion was on the Petitioner to show a reasonable likelihood that Petitioner
`would prevail with respect to at least 1 claim based on the information presented.
`35 U.S.C. § 314(a). Petitioner also had the initial burden of production to provide
`argument and evidence to establish a reasonable likelihood of unpatentability for at
`least 1 claim, and chose to do so by relying on Lambourne ’853 in addition to other
`prior art references.
`Petitioner demonstrated that Lambourne ’853 is an issued patent (Pet. 13)
`that has a filing date of September 11, 2007 (Pet. 14), which is before the October
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`IPR2017-01045
`Patent 7,987,294 B2
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`16, 2007 filing date of the ’294 patent (Ex. 1013). Thus, Petitioner established at
`least a prima facie case that Lambourne ’853 is prior art under 35 U.S.C. § 102(e).
`At this point, the burden of production shifted to Patent Owner to show that the
`’294 patent is entitled to its provisional application’s filing date of October 17,
`2006. Patent Owner did not meet this burden of production, and accordingly, the
`burden of production never shifted back to the Petitioner to show Lambourne ’853
`was entitled to the benefit of the filing date of its provisional application,
`Lambourne ’407. Thus, we deny Patent Owner’s request for rehearing for this
`reason.
`No Presumption of Entitlement to Benefit of Provisional Filing Date
`Patent Owner’s argument presumes that the ’294 patent is entitled to the
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`benefit of its provisional application filing date. Req. Reh’g 4, Prelim. Resp. 55.
`However, “the PTO does not examine provisional applications as a matter of
`course, [and] such a presumption is therefore not justified.” Dynamic Drinkware,
`800 F.3d at 1380. “[A] patentee bears the burden of establishing that its claimed
`invention is entitled to an earlier priority date than an asserted prior art reference.”
`In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364, 1376 (Fed. Cir. 2016).
`Accordingly, the effective filing date of the ’294 patent for purposes of our
`Decision to institute inter partes review is its actual filing date as Patent Owner did
`not show entitlement to the benefit of the filing date of its provisional application.
`Waiver
`Patent Owner argues Petitioner failed to establish that Lambourne ’853 is
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`entitled to the benefit of the filing date of its provisional application, Lambourne
`’407, because Petitioner did not show that the subject matter of the provisional
`application provides support under 35 U.S.C. § 112, first paragraph, for at least one
`claim of the nonprovisional application in the Petition or request the opportunity to
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`IPR2017-01045
`Patent 7,987,294 B2
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`reply to the Preliminary Response to address this issue. Req. Reh’g 2, 8, 11. As
`support for its waiver proposition, Patent Owner cites In re Giacomini, 612 F.3d
`1380 (Fed. Cir. 2010) (“Giacomini”). Id.
`In Giacomini, the Federal Circuit determined that the appellants failed to
`argue that a prior art patent was not entitled to the priority of its provisional
`application under 35 U.S.C. § 119(e), which resulted in waiver of the issue on
`appeal. However, because the present case is proceeding to trial following our
`Decision to institute inter partes review, where Petitioner will have the opportunity
`to make such a showing, if necessary, any determination of waiver of the issue by
`this panel at this stage of the proceeding would be premature.
`In addition, if we were to apply waiver to the issue of whether Lambourne
`’853 is entitled to the benefit of the Lambourne ’407 filing date, then we would
`likewise apply waiver to the issue of whether the ’294 patent is entitled to the
`benefit of its earlier provisional filing date, thereby conclusively establishing that
`Lambourne ’853 is § 102(e) prior art as of its filing date.. Rather than foreclose
`the issue of whether Lambourne ’853 is § 102(e) prior art to the ’294 patent, we
`prefer to afford Patent Owner the opportunity to show at trial that the ’294 patent is
`entitled to the benefit of its earlier provisional filing date. Likewise, Petitioner will
`be afforded the opportunity at trial to show that Lambourne ’853 is entitled to the
`benefit of the filing date of Lambourne ’407.
`Alleged Improper Burden Shifting and “Standing In Basis for Missing
`Limitations” of Claims 13 and 18
`Petitioner argued in its Petition that, although claims 13 and 18 were not
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`identical to claim 1, they substantively tracked its language and were obvious for
`the same reasons. Pet. 49–50, 52–53. Patent Owner contended that Petitioner
`overlooked certain limitations present in claims 13 and 18, but not present in claim
`1. Prelim. Resp. 68, 70–71. Specifically, those limitations are “determining
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`IPR2017-01045
`Patent 7,987,294 B2
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`whether the device is a group leader relative to the one or more complementary
`devices” and “determining whether the device is a zone leader relative to the one
`or more complementary devices and one or more further groups of complementary
`devices.” Id.
`In our Decision instituting inter partes review, we acknowledged Petitioner
`did not explicitly address these limitations but nonetheless found them disclosed in
`Lambourne ’014 and Lambourne ’853, or its provisional Lambourne ’407
`(collectively, “the Lambourne references”), which mention applicability of their
`inventions to stereo systems, which may be considered “complementary devices”
`since stereos typically have right and left speakers and associated circuitry. Dec.
`19–20; Ex. 1012, 5:28–32; Ex. 1013, 4:56–59. Patent Owner contends Petitioner
`bears the burden of proving unpatentability and the Board cannot “stand in basis
`for the missing limitations” of claims 13 and 18 or shift the burden to Patent
`Owner to prove patentability. Req. Reh’g 2, 11–13.
`However, Petitioner’s citations to the Lambourne references concerning
`claim 1 repeatedly mention “zone players” (see, e.g., Pet. 28–31; Ex. 1012, 4:11–
`26, 5:34–38, 11:53–12:9; Ex. 1015, 10:20–24). The Lambourne references explain
`that these “zone players,” numbered 102, 104, and 106, are multimedia players
`which may be audio devices installed or provided in one particular area or zone,
`and they are shown in Figure 1 of the references as stereo systems with right and
`left speaker pairs, i.e., “complementary devices” as claimed. Ex. 1012, 4:63–67;
`Ex. 1013, 4:24–28. In addition, as mentioned, the Lambourne references establish
`the zone players are used in a stereo system. Ex. 1012, 5:28–32; Ex. 1013, 4:56–
`59. Thus, Petitioner’s reliance on particular parts of the Lambourne references to
`teach “zone players” was sufficient in this case to link other parts of the
`Lambourne references describing “zone players” and their context for purposes of
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`IPR2017-01045
`Patent 7,987,294 B2
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`determining whether a reasonable likelihood of unpatentability exists for claims 13
`and 18.
`Accordingly, after review of Patent Owner’s arguments in the Request for
`Rehearing, we remain of the opinion that Petitioner provided sufficient evidence
`and explanation to establish a reasonable likelihood that the challenged claims are
`unpatentable, and thus we decline to change our Decision to institute inter partes
`review.
`
`
`III. CONCLUSION
`For the foregoing reasons, we conclude that Patent Owner has not met its
`burden of showing an abuse of discretion in our Decision. We, therefore, deny
`Patent Owner’s request to reverse our determination to institute an inter partes
`review.
`
`
`IV. ORDER
`For the foregoing reasons, it is
`ORDERED that Patent Owner’s Request for Rehearing is denied.
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`IPR2017-01045
`Patent 7,987,294 B2
`
`For PETITIONER:
`George I. Lee
`Sean M. Sullivan
`Rory P. Shea
`John Dan Smith III
`LEE SULLIVAN SHEA & SMITH LLP
`lee@ls3ip.com
`sullivan@ls3ip.com
`shea@ls3ip.com
`smith@ls3ip.com
`
`For PATENT OWNER:
`Christopher J. Rourk
`Wasif H. Qureshi
`JACKSON WALKER L.L.P.
`crourk@jw.com
`wqureshi@jw.com
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