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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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`LSI CORPORATION and AVAGO TECHNOLOGIES U.S., INC.
`Petitioner,
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`v.
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`REGENTS OF THE UNIVERSITY OF MINNESOTA
`Patent Owner.
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`______________
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`Case IPR2017-01068
`Patent 5,859,601
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`PETITIONERS’ OPPOSITION TO PATENT OWNER’S
` MOTION TO STAY
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`TABLE OF CONTENTS
`INTRODUCTION ..................................................................................................... 1
`ARGUMENT ............................................................................................................. 2
`I.
`An Immediate Appeal of the Expanded Panel’s Denial of the
`University’s Motion to Dismiss Would Be Frivolous .......................... 2
`A.
`Legal Standard. ........................................................................... 2
`B.
`Any Argument That UMN Did Not Waive Its Alleged
`Immunity by Asserting the Challenged Patent Is Frivolous. ...... 2
`The Board Should Certify that UMN’s Appeal Is Frivolous. ..... 6
`C.
`D. UMN’s Refusal To Stay the Litigation Pending Resolution of
`This IPR Confirms UMN’s Deliberate Strategy of Delay .......... 7
`The Board Lacks Authority to Stay the Proceeding. ............................ 8
`II.
`CONCLUSION .......................................................................................................... 9
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`i
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`TABLE OF AUTHORITIES
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` Page(s)
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`Cases
`Behrens v. Pelletier,
`516 U.S. 299 (1996) .......................................................................................... 2, 6
`Biomedical Patent Mgmt. Corp. v. California,
`505 F.3d 1328 (Fed. Cir. 2007) ............................................................................ 6
`Clark v. Barnard,
`108 U.S. 436 (1883) .............................................................................................. 3
`Corley v. United States,
`556 U.S. 303 (2009) .............................................................................................. 9
`Cuozzo Speed Tech., LLC v. Lee,
`136 S. Ct. 2131 (2016) .......................................................................................... 7
`Gardner v. New Jersey,
`329 U.S. 565 (1947) .............................................................................................. 3
`Gunter v. Atlantic Coast Line R. Co.,
`200 U.S. 273 (1906) .............................................................................................. 3
`Killip v. Office of Pers. Mgmt.,
`991 F.2d 1564 (Fed. Cir. 1993) ............................................................................ 8
`Lampi Corp. v. Amer. Power Prod., Inc.,
`228 F.3d 1365 (Fed. Cir. 2000) ............................................................................ 5
`Landis v. N. Amer. Co.,
`299 U.S. 248 (1936) .............................................................................................. 8
`Lapides v. Board of Regents of Univ. System of Ga.,
`535 U.S. 613 (2002) ...................................................................................... 3, 4, 6
`Lyng v. Payne,
`476 U.S. 926 (1986) .............................................................................................. 8
`Munoz v. Strahm Farms, Inc.,
`69 F.3d 501 (Fed. Cir. 1995) ................................................................................ 6
`ii
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`New Hampshire v. Maine,
`532 U.S. 742 (2001) .............................................................................................. 5
`Reactive Surfaces Ltd. v. Toyota Motor Company,
`IPR2016-01914, Paper No. 23 (March 3, 2017) ................................................... 5
`Regents of Univ. of New Mexico v. Knight,
`321 F.3d 1111 (Fed. Cir. 2003) ........................................................................ 4, 6
`SAP America Inc. v. Arunachalam,
`2016 WL 8944594 (PTAB Aug. 15, 2016) .......................................................... 8
`TVA v. Hill,
`437 U.S. 153 (1978) .............................................................................................. 8
`Statutes
`35 U.S.C. § 315(b) ................................................................................................. 4, 6
`35 U.S.C. § 315(d) ................................................................................................. 8, 9
`Other Authorities
`37 C.F.R. § 42.5(a) ..................................................................................................... 9
`37 C.F.R. § 42.122(a) ............................................................................................. 8, 9
`U.S. Const. amend. XI ............................................................................................... 3
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`iii
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`INTRODUCTION
`Congress intended inter partes review to be an efficient alternative to federal
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`litigation. Further delaying these IPR proceedings will frustrate that Congressional
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`intent. These proceedings already have been greatly delayed pending resolution of
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`a motion to dismiss by UMN—a motion rejected unanimously by an expanded
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`panel after extensive deliberation. In fact, by the time UMN files its notice of
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`appeal, almost a full year will have passed since the Petition was filed. Any further
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`delay of these proceedings as requested by UMN threatens to render the ultimate
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`outcome in this IPR irrelevant to the district court litigation, given that the
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`litigation continues at full speed due to UMN’s refusal to agree to a stay.
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`Any appeal of the expanded panel’s unanimous decision that UMN waived
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`immunity would be frivolous, and the Board should certify any appeal as such and
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`thereby retain jurisdiction. Doing so guarantees Congressional intent will be
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`satisfied, and incentivizes UMN to proceed as expeditiously as possible with its
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`appeal. Otherwise, UMN will succeed in using procedure—not substance—to
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`render a nullity of the potential efficiency benefit of this IPR.
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`Finally, the Board lacks authority to stay these proceedings before UMN
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`files its notice of appeal as UMN requests.
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`I.
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`ARGUMENT
`An Immediate Appeal of the Expanded Panel’s Denial of the
`University’s Motion to Dismiss Would Be Frivolous
`A. Legal Standard.
`Courts “recognize a frivolousness exception” to the collateral order doctrine.
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`Mot. at 9. Under this exception, a district court retains jurisdiction during an
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`immediate appeal and, in some Circuits, a district court is required to “certify the
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`appeal as ‘frivolous.’” Mot. at 9. See Behrens v. Pelletier, 516 U.S. 299, 310-311
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`(1996) (“This practice, which has been embraced by several Circuits . . . minimizes
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`disruption of the ongoing proceedings.”).
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`B. Any Argument That UMN Did Not Waive Its Alleged Immunity
`by Asserting the Challenged Patent Is Frivolous.
`UMN contends that it is “immune not only from a decision on the merits in
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`this proceeding, but from being subjected to the process of having to defend itself
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`on the merits.” Mot. at 1. An expanded panel of the Board unanimously held that
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`UMN is wrong. And it did so based on long-standing precedent, holding that “the
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`filing of an action in federal court alleging infringement” waives Patent Owner’s
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`alleged immunity defense. Paper 18 at 6.1 Any challenge to this holding by UMN
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`would be frivolous.
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`UMN’s motion (and intended appeal) ignores a long line of Supreme Court
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`precedent holding that a state waives its Eleventh Amendment immunity when it
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`“selectively” uses that immunity to achieve a litigation advantage. See, e.g.,
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`Lapides v. Board of Regents of Univ. System of Ga., 535 U.S. 613, 620 (2002).2 In
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`view of this clear precedent, the Board held that UMN waived any claim to
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`immunity when it asserted the challenged patent in a civil action; it cannot now
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`“selectively” invoke immunity to shield the patent. See Paper 18 at 8 (“It would be
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`1 The expanded panel in the Ericsson proceedings reached the same conclusion.
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`Ericsson Inc. v. Regents of the University of Minnesota, Cases IPR2017-00186,
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`-01197, -01200, -01213, -01214, -01219 (Dec. 19, 2017).
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`2 See also Gardner v. New Jersey, 329 U.S. 565, 574 (1947) (holding that state
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`“waives any immunity . . . respecting the adjudication of” a “claim” that it
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`voluntarily files in federal court); Gunter v. Atlantic Coast Line R. Co., 200 U.S.
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`273, 284 (1906) (“[W]here a state voluntarily becomes a party to a cause and
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`submits its rights for judicial determination, it will be bound thereby and cannot
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`escape the result of its own voluntary act by invoking the prohibitions of the
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`Eleventh Amendment.”); Clark v. Barnard, 108 U.S. 436, 447 (1883) (holding that
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`a state’s “voluntary appearance” as intervenor waives immunity).
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`unfair and inconsistent to allow a State to avail itself of the federal government’s
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`authority by filing a patent infringement action in federal court, but then selectively
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`invoke its sovereign immunity to ensure that a defendant is barred from requesting
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`an inter partes review of the asserted patent from a different branch of that same
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`federal government.”) (citing Lapides, 535 U.S. at 619-20).
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`Similarly, UMN fails to identify any errors with respect to the expanded
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`panel’s finding of waiver under binding Federal Circuit authority. See Paper 18 at
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`7-8 (citing Regents of Univ. of New Mexico v. Knight, 321 F.3d 1111, 1125-26
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`(Fed. Cir. 2003)). The Knight Court held that a state, as plaintiff, consents to
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`compulsory counterclaims because a state “can surely anticipate that a defendant
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`will have to file any compulsory counterclaims or be forever barred from doing
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`so.” Id. (quoting Knight, 321 F.3d at 1126). And as the expanded panel found, a
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`defendant served with a patent infringement complaint likewise “must request an
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`inter partes review of the asserted patent within one year of service of that
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`complaint or be forever barred from doing so” under 35 U.S.C. § 315(b). Paper 18
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`at 7-8 (emphasis by expanded panel). Therefore, under Knight, a state waives any
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`claim to immunity as to a timely request for inter partes review—particularly
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`when, as here, “the State filed its patent infringement action well after the AIA was
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`enacted.” Id.
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`It should be noted that UMN’s current unequivocal position denying waiver
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`of immunity contradicts the position UMN took in an earlier IPR proceeding. In
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`that IPR, UMN agreed that “there is ‘no bright-line rule’ that prevents waiver in
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`one forum (e.g., a district court) from giving rise to waiver in another forum (e.g.,
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`an agency tribunal)”; rather, waiver exists whenever and wherever there is a “need
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`to avoid ‘unfairness’ and ‘inconsistency.’” Reactive Surfaces Ltd. v. Toyota Motor
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`Company, IPR2016-01914, Paper No. 23 at 20 (March 3, 2017) (citing Biomedical
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`Patent Mgmt. Corp. v. California, 505 F.3d 1328, 1329 (Fed. Cir. 2007)). UMN
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`thus acknowledged “[b]y voluntarily invoking federal jurisdiction in the
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`infringement litigation, [a] state entity could be deemed to have waived its
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`sovereign immunity to the IPR process.” IPR2016-01914, Paper No. 23, at 19-20.
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`UMN’s adoption of a different position in its Motion demonstrates that
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`UMN’s intended appeal is tactical, and has no non-frivolous basis in the law. New
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`Hampshire v. Maine, 532 U.S. 742, 749 (2001) (holding that a party should not be
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`allowed to “assume a contrary position” in a later proceeding “simply because [its]
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`interests have changed.”); Lampi Corp. v. Amer. Power Prod., Inc., 228 F.3d 1365,
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`1377 (Fed. Cir. 2000) (“The [judicial estoppel] doctrine also applies to
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`administrative proceedings in which a party obtains a favorable order by making
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`an argument that it seeks to repudiate in a subsequent judicial proceeding.”); also
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`Paper 18 at 8-9 (noting UMN’s prior inconsistent position in Reactive Surfaces).
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`C. The Board Should Certify that UMN’s Appeal Is Frivolous.
`UMN identifies no error in either of the expanded panels’ waiver findings.
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`Instead, it summarily concludes that an immediate appeal is not “frivolous”
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`because there allegedly is no “binding caselaw that compelled a finding that”
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`UMN waived its immunity. Mot. at 9-10. UMN is not correct, as shown above.
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`See, e.g., Lapides, 535 U.S. at 620; Biomedical Patent Mgmt., 505 F.3d at 1339;
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`Knight, 321 F.3d at 1125-26; see also 35 U.S.C. § 315(b). Thus, UMN’s appeal is
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`“frivolous” because there is no “basis in law or fact” as to why the Federal Circuit
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`would contravene the Supreme Court and change its own precedent by reversing
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`the expanded panel’s finding of waiver. Behrens v. Pelletier, 516 U.S. 299, 310
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`(1996) (finding that the district court “appropriately certified petitioner’s immunity
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`appeal as ‘frivolous’” in light of existing Circuit-court precedent); Munoz v.
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`Strahm Farms, Inc., 69 F.3d 501, 504 (Fed. Cir. 1995) (finding an appeal frivolous
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`where the appelant had “no arguable basis” for its position under the law).
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`Therefore, should UMN immediately appeal, Petitioner respectfully asks the Board
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`for a certification that UMN’s appeal is frivolous so that these proceedings may
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`advance consistent with Congressional intent. See Behrens, 516 U.S. at 310-311.
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`D. UMN’s Refusal To Stay the Litigation Pending Resolution of This
`IPR Confirms UMN’s Deliberate Strategy of Delay
`The challenged patent was filed in 1996 and expired shortly after UMN sued
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`Petitioners in 2016. See Paper 1 at 7; Paper 11 at 1. As such, there is no prospect
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`of an injunction in the litigation, and damages are fixed. UMN would suffer no
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`prejudice if the district court litigation was delayed pending resolution of this IPR.
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`In light of this, Petitioner “offered to stipulate to stay these [IPR] proceedings
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`[pending appeal] if Patent Owner would agree to stay the associated litigation,” but
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`Patent Owner refused this request. Ex. 2003 at 18:14-19:23:5. This confirms that
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`UMN seeks to parlay the delay of these IPR proceedings into strategic advantage
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`in the litigation.
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`Congress intended IPR proceedings to be a “quick and cost effective
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`alternative[e] to litigation.” Cuozzo Speed Tech., LLC v. Lee, 136 S. Ct. 2131,
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`2143 (2016) (quoting legislative history of the AIA). Allowing UMN to stall these
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`administrative proceedings while UMN pursues an appeal that has no meaningful
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`prospect of success—all while the patent litigation proceeds unchecked in the
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`district court—would be grossly unjust and would frustrate Congressional intent.
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`Certifying UMN’s intended appeal as frivolous would mitigate this prejudice,
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`satisfy Congressional intent, and strip UMN of any incentive to delay its intended
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`appeal in order to gain tactical advantage in the litigation.
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`- 7 -
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`II.
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`The Board Lacks Authority to Stay the Proceeding.
`A district court’s authority to “stay proceedings” is incidental to its
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`“inherent” authority, as an Article III Court, to manage its docket. Landis v. N.
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`Amer. Co., 299 U.S. 248, 254 (1936). The Board does not possess such “inherent
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`authority”; the Board’s authority as an agency is limited to that expressly granted
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`by statute. Lyng v. Payne, 476 U.S. 926, 937 (1986) (“[A]n agency’s power is no
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`greater than that delegated to it by Congress.”); Killip v. Office of Pers. Mgmt., 991
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`F.2d 1564, 1569 (Fed. Cir. 1993) (“An agency is but a creature of statute. Any and
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`all authority pursuant to which an agency may act ultimately must be grounded in
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`an express grant from Congress.”). The only authority the Board possesses to
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`“stay” an inter partes review is due to another proceeding or matter that is “before
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`the Office.” 35 U.S.C. § 315(d) (emphasis added); 37 C.F.R. § 42.122(a) (same).
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`See SAP America Inc. v. Arunachalam, 2016 WL 8944594, CBM2016-00081
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`(PTAB Aug. 15, 2016), at *2 (“[W]e are not persuaded that this panel is
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`empowered to stay the present proceeding until the indeterminate outcome of
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`litigation proceedings before district courts or other tribunals.”) (citing 37 C.F.R. §
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`42.122(a)). Because Congress expressly gave the Board the authority to stay
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`proceedings pending other matters before the Office, the Board “must presume”
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`that such stays “were the only” stays authorized. TVA v. Hill, 437 U.S. 153, 188
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`(1978) (“[E]xpressio unius est exclusion alterius.”). As such, while the Board had
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`- 8 -
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`authority to stay the IPR proceeding while UMN’s motion to dismiss was pending
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`“before the Office,” § 315(d), the Board has no such authority to renew that stay
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`pending UMN’s intended appeal before the Federal Circuit as UMN now requests.
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`UMN’s argument that the Board can issue a stay under 37 C.F.R. § 42.5(a)
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`would render the express “stay” provisions of 35 U.S.C. § 315(d) and 37 C.F.R. §
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`42.122(a) “superfluous,” thereby violating “one of the most basic interpretive
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`canons.” Corley v. United States, 556 U.S. 303, 314 (2009). Moreover, the
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`section 42.5(a) provision only permits the Board to determine a course of conduct
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`in a proceeding “for any situation not specifically covered” by Part 42 of Title 37
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`of the Code of Federal Regulations; however, stays are specifically covered by 37
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`C.F.R. § 42.122(a) and 35 U.S.C. § 315(d). Cf. Corley, 556 U.S. at 316 (“[A]
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`more specific statute will be given precedence over a general one.”) (citation
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`omitted). Therefore, for all of these reasons, the Board should disregard UMN’s
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`over-expansive interpretation of 37 C.F.R. § 42.5(a).
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`CONCLUSION
`For the reasons discussed, the Board should deny UMN’s motion to stay.
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`And if UMN nonetheless proceeds with filing an immediate appeal, the Board
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`should certify that the appeal is frivolous and set a deadline for UMN’s
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`Preliminary Response.
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`- 9 -
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`Dated: January 16, 2018
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`Respectfully submitted,
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`/s/ Kristopher Reed
`By:
`Kristopher Reed (Lead Counsel)
`Registration No. 58,694
`David Sipiora (pro hac vice)
`Edward Mayle (Back-up Counsel)
`Registration No. 65,444
`Kilpatrick Townsend & Stockton LLP
`1400 Wewatta St, #600
`Denver, CO 80202
`Counsel for Petitioner
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`- 10 -
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`CERTIFICATE OF SERVICE
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`I hereby certify that on January 16, 2018, I caused a true and correct copy of
`this Petitioner’s Opposition to Patent Owner’s Motion to Stay to be served via
`electronic mail as agreed by the Patent Owner on the following attorneys of record:
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`Patrick J. McElhinny (Patrick.mcelhinny@klgates.com);
`Mark G. Knedeisen (mark.knedeisen@klgates.com);
`Richard F. Giunta (rgiunta-PTAB&wolfgreenfield.com); and
`Gerald B. Hrycyszyn (ghrycyszyn-PTAB&wolfgreenfield.com)
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`
`
`
`/s/ Kristopher Reed
`By:
`Kristopher Reed
`Registration No. 58,694
`Kilpatrick Townsend & Stockton LLP
`1400 Wewatta St, #600
`Denver, CO 80202
`Lead Counsel for Petitioner
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`70464345V.1
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`- 11 -
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