Trials@uspto.gov
`571-272-7822
`
`
`
`
`Paper 59
`Entered: September 18, 2020
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`ERICSSON INC. and TELEFONAKTIEBOLAGET LM ERICSSON,
`Petitioner,
`
`v.
`
`REGENTS OF THE UNIVERSITY OF MINNESOTA,
`Patent Owner.
`_______________
`
`IPR2017-01214
`Patent RE45,230 E
`_______________
`
`
`
`Before JENNIFER S. BISK, ROBERT J. WEINSCHENK and
`CHARLES J. BOUDREAU, Administrative Patent Judges.
`
`BOUDREAU, Administrative Patent Judge.
`
`
`
`
`DECISION
`Denying Petitioner’s Request on Rehearing of
`Decision Denying Institution of Inter Partes Review
`37 C.F.R. § 42.71(d)
`
`
`
`
`
`

`

`IPR2017-01214
`Patent RE45,230 E
`
`
`INTRODUCTION
`I.
`Ericsson Inc. and Telefonaktiebolaget LM Ericsson (“Petitioner”)
`filed a Request for Rehearing (Paper 57, “Req. Reh’g”) of the Decision
`Denying Institution of Inter Partes Review (Paper 52, “Decision” or “Dec.”)
`of claims 16–18, 36, 39–41, 43–46, 64–66, 68, 70, and 72 (“the challenged
`claims”) of U.S. Reissued Patent No. RE45,230 E (Ex. 1001, “the ’230
`patent”).1 For the reasons set forth below, the Request for Rehearing is
`denied.
`
`II. ANALYSIS
`When considering a request for rehearing of a decision whether to
`institute an inter partes review, the Board reviews its decision for an abuse
`of discretion. 37 C.F.R. § 42.71(c). The party requesting rehearing bears
`the burden of showing that the decision should be modified, and “[t]he
`request must specifically identify all matters the party believes the Board
`misapprehended or overlooked.” 37 C.F.R. § 42.71(d).
`In the Decision, we explained that 35 U.S.C. § 315(b) provides that an
`inter partes review “may not be instituted if the petition requesting the
`proceeding is filed more than 1 year after the date on which the petitioner,
`real party in interest, or privy of the petitioner is served with a complaint
`alleging infringement of the patent.” Dec. 4. We also explained that in
`determining whether a petitioner is in privity with another party, we consider
`the Supreme Court’s decision in Taylor v. Sturgell, 553 U.S. 880 (2008).
`Dec. 4–5. Taylor provides six categories of exceptions to the rule against
`nonparty preclusion, namely 1) when “[a] person . . . agrees to be bound by
`
`1 We cite to a non-public version of the Decision, but a public version is
`available. See Paper 56.
`
`2
`
`

`

`IPR2017-01214
`Patent RE45,230 E
`
`the determination of issues in an action between others”; 2) “based on a
`variety of pre-existing ‘substantive legal relationship[s]’ between the person
`to be bound and a party to the judgment”; 3) when “a nonparty . . . was
`‘adequately represented by someone with the same interests who [wa]s a
`party’”; 4) when “a nonparty . . . ‘assume[d] control’ over the litigation in
`which [the] judgment was rendered”; 5) when a nonparty acts as “a proxy”
`to relitigate for a party; and 6) when “a special statutory scheme may
`‘expressly foreclos[e] successive litigation by nonlitigants.’” Id.
`In the Decision, we explained that the ’230 patent is involved in
`several district court cases (collectively, the “District Court Litigation”) and
`is asserted against several defendants (collectively, the “District Court
`Defendants”). Id. at 3. We determined that the evidence of record indicates
`1) that Petitioner has a preexisting substantive legal relationship with the
`District Court Defendants regarding the base stations at issue in the District
`Court Litigation; and 2) that Petitioner had the opportunity to control the
`defense of the District Court Defendants with respect to the base stations.
`Id. at 14. As a result, based on our consideration of the second and fourth
`Taylor categories, we determined that Petitioner is in privity with the
`District Court Defendants for the purpose of applying § 315(b). Id. We
`concluded that the Petition is barred under § 315(b), because Petitioner filed
`the Petition more than one year after the date on which the District Court
`Defendants were served with a complaint alleging infringement of the ’230
`patent. Id. at 14–15.
`Petitioner argues in its Request for Rehearing that we misapprehended
`the second and fourth Taylor categories. Req. Reh’g 1–2. In particular,
`Petitioner contends that we “overextended the legal precedent for these
`
`3
`
`

`

`IPR2017-01214
`Patent RE45,230 E
`
`factors, disregarded critical underlying facts, and conducted an inflexible
`privity analysis, contrary to Wi-Fi One.” Id. at 2. For the reasons discussed
`below, Petitioner does not demonstrate that we misapprehended or
`overlooked any matters.
`1. Second Taylor Category
`Petitioner argues that “[w]ith respect to the Second Taylor Factor, the
`Decision suggests a bright-line rule that the existence of an indemnity
`provision creates privity in every instance.” Id. at 2. According to
`Petitioner, “[n]o legal authority supports such a bright-line rule,” and “[i]n
`fact, the Federal Circuit rejects this proposition.” Id. at 3–7. Petitioner’s
`argument is not persuasive.
`First, we did not determine that the existence of an indemnity
`provision creates privity in every instance.2 See Dec. 7–14. Rather, we
`determined that Petitioner is in privity with the District Court Defendants
`based on our consideration of the second and fourth Taylor categories,
`which includes evidence that Petitioner has a preexisting indemnity
`relationship with the District Court Defendants and had the opportunity to
`control the defense of the District Court Defendants with respect to the base
`stations. Id. at 14. We expressly declined to decide whether Petitioner’s
`
`
`2 Petitioner argues that our citations to Intel Corp. v. U.S. International
`Trade Commission, 946 F.2d 821, 839 (Fed. Cir. 1991), and 18A Charles
`Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and
`Procedure § 4451 (3d ed. 2020) (“Wright & Miller”), do not indicate that an
`indemnity relationship creates privity in every instance. Req. Reh’g 3–6.
`Petitioner misinterprets our Decision. We relied on Intel and Wright &
`Miller to show that “an indemnity relationship is the type of relationship that
`can establish privity,” not that it does so in every instance. Dec. 8 (emphasis
`added).
`
`4
`
`

`

`IPR2017-01214
`Patent RE45,230 E
`
`preexisting indemnity relationship with the District Court Defendants by
`itself would have been sufficient to find privity. Id. at 14 n.6.
`Second, our analysis of the second Taylor category is consistent with
`the Board’s precedential decision in Ventex Co. v. Columbia Sportswear
`North America, Inc., IPR2017-00651, Paper 148 (PTAB Jan. 24, 2019)
`(precedential). Specifically, Ventex states the following:
`Here, at least factors 2 and 5 support our conclusion that Seirus
`and Ventex are privies. As discussed above, the parties had a
`preexisting substantive legal relationship in the form of two
`contracts, a Supplier Agreement with an obligation to
`indemnify and defend, and an Exclusive Manufacturing
`Agreement. Further, these agreements directly related to the
`product accused of infringing the patent at issue in this
`proceeding because they governed the contracts between the
`parties that resulted in Ventex’s sale of fabric to Seirus.
`Finding Seirus and Ventex in privity with one another comports
`with the goal of “tak[ing] into account the ‘practical situation’,
`and [extending privity] to parties, to transactions, and other
`activities relating to the property in question.”
`Id. at 12–13 (internal citations and original emphasis omitted). In other
`words, as we explained in the Decision, Ventex determines that agreements
`with “an obligation to indemnify and defend” that “directly relate[] to the
`product accused of infringing the patent at issue” constitute a preexisting
`substantive legal relationship under the second Taylor category. Id.;
`Dec. 10. In this case, we similarly determined that Petitioner’s supply
`agreements with the District Court Defendants include indemnity obligations
`that directly relate to the base stations at issue in the District Court
`
`5
`
`

`

`IPR2017-01214
`Patent RE45,230 E
`
`Litigation.3 Dec. 7–8, 10. Thus, our finding that Petitioner has a preexisting
`substantive legal relationship with the District Court Defendants is
`consistent with the Board’s precedential decision in Ventex.
`Third, our Decision does not contradict the Federal Circuit’s decision
`in Wi-Fi One, LLC v. Broadcom Corp., 887 F.3d 1329 (Fed. Cir. 2018). In
`Wi-Fi One, the Federal Circuit affirmed the Board’s decision that “Wi-Fi
`had not shown that Broadcom was in privity with the D-Link defendants.”
`Id. at 1340–41. Specifically, the Federal Circuit explained that “Wi-Fi’s
`evidence showed that Broadcom’s interests as to the issue of infringement
`were generally aligned with those of its customers, and that Broadcom had
`indemnity agreements with at least two of the D-Link defendants,” but “the
`evidence did not show that Broadcom had the right to control that litigation
`or otherwise participated in that litigation to the extent that it should be
`bound by the results.” Id. at 1341. In contrast, here, the evidence of record
`shows that Petitioner has a preexisting indemnity relationship with the
`District Court Defendants and had the opportunity to control the defense of
`the District Court Defendants with respect to the base stations. Dec. 14.
`2. Fourth Taylor Category
`Petitioner argues that in analyzing the fourth Taylor category, we
`“applie[d] too rigid a test that contradicts controlling authority.” Req.
`Reh’g 7. According to Petitioner, we “relie[d] on no binding precedent and
`
`3 Petitioner argues that Ventex is distinguishable because Ventex involved an
`exclusive manufacturing agreement, whereas Petitioner’s supply agreements
`with the District Court Defendants are not exclusive. Req. Reh’g 5. We
`disagree. We explained in the Decision that “Ventex does not specifically
`rely on exclusivity as a factor when addressing the second Taylor category,”
`and Petitioner acknowledges that is “technically correct.” Dec. 10; Req.
`Reh’g 5.
`
`6
`
`

`

`IPR2017-01214
`Patent RE45,230 E
`
`overlook[ed] facts submitted into evidence in the form of a declaration of
`Ericsson’s in-house counsel.” Id. at 7–10. Petitioner’s argument is not
`persuasive.
`First, our analysis of the fourth Taylor category is consistent with
`relevant authority. Although the fourth Taylor category refers to a nonparty
`that “assume[d] control” over a litigation, the Taylor categories are just “a
`framework” and not “a definitive taxonomy.” Dec. 4–5. In the Decision, we
`explained that relevant authority indicates that “[a]ctual control of a
`proceeding is not required” and “preclusion is fair as long as the nonparty
`had a practical opportunity to control the proceeding.”4 Dec. 12. For
`example, the Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756
`(Aug. 14, 2012) (“Trial Practice Guide” or “TPG”), states that “[a] common
`consideration is whether the non-party exercised or could have exercised
`control over a party’s participation in a proceeding.” Id. at 48,759
`(emphasis added). Further, according to the Trial Practice Guide, “[t]he
`concept of control generally means that ‘it should be enough that the
`nonparty has the actual measure of control or opportunity to control that
`might reasonably be expected between two formal coparties.’” Id.
`(emphasis added). Consistent with the Trial Practice Guide, we determined
`that the evidence of record indicates that Petitioner had the opportunity to
`
`
`4 Petitioner argues that our citations to Gonzalez v. Banco Central Corp., 27
`F.3d 751, 758 (1st Cir. 1994), and Wright & Miller § 4451, are not relevant
`authority because they do not expressly analyze the fourth Taylor category.
`Req. Reh’g 7–8. We disagree. Because the Taylor categories are just “a
`framework” for privity analyses and not “a definitive taxonomy” (Dec. 4–5),
`we see no reason why our analysis must be confined to only those authorities
`that expressly analyze the Taylor categories.
`
`7
`
`

`

`IPR2017-01214
`Patent RE45,230 E
`
`control the defense of the District Court Defendants with respect to the base
`stations. Dec. 14.
`Second, our Decision did not overlook the Declaration of Mr. Ryan
`Wirtz. Mr. Wirtz states the following:
`In view of Ericsson’s limited role and the differing interests of
`the various parties, Ericsson, the mobile carrier defendants, and
`the other intervenors are each represented in the district court
`lawsuits by different counsel, and Ericsson has not controlled,
`and does not control, the defense of any of the mobile carrier
`defendants or other intervenors. Ericsson is free to settle with
`Patent Owner with respect to Ericsson’s products independent
`of any mobile carrier defendant or other intervenor. Because
`the allegations against the standards-based components of
`mobile carrier defendants’ networks largely relate to
`non-Ericsson equipment (e.g., base stations from multiple
`third-party suppliers, including but not limited to other
`intervenors Nokia and ALU, non-base station hardware and
`software, and handsets supplied by various third-parties),
`Ericsson could not control the defense of any of the mobile
`carrier defendants unless it agreed to indemnify the mobile
`carrier defendants for Patent Owner’s infringement allegations
`against non-Ericsson equipment.
`Ex. 1065 ¶ 7. In other words, Mr. Wirtz asserts that Petitioner could not
`control the defense of the District Court Defendants with respect to the
`accused products that other parties supply to the District Court Defendants.
`Id. But Mr. Wirtz does not dispute that Petitioner had the opportunity to
`control the defense of the District Court Defendants with respect to the base
`stations that it supplies to the District Court Defendants. See id. As we
`explained in the Decision, even if Petitioner did not have the ability to
`completely control the District Court Litigation, Petitioner’s ability to
`control the District Court Litigation with respect to its own products is the
`amount of control Petitioner would reasonably expect if it were a formal
`
`8
`
`

`

`IPR2017-01214
`Patent RE45,230 E
`
`coparty. Dec. 13; see TPG at 48,759 (“The concept of control generally
`means that ‘it should be enough that the nonparty has the actual measure of
`control or opportunity to control that might reasonably be expected between
`two formal coparties.’”).
`
`III. CONCLUSION
`The Request for Rehearing does not demonstrate that the Decision
`misapprehended or overlooked any matters.
`IV. ORDER
`
`It is hereby
`ORDERED that the Request for Rehearing is denied.
`
`
`
`9
`
`

`

`IPR2017-01214
`Patent RE45,230 E
`
`PETITIONER:
`
`J. Andrew Lowes
`John Russell Emerson
`Greg Webb
`Clint Wilkins
`HAYNES AND BOONE, LLP
`andrew.lowes.ipr@haynesboone.com
`russ.emerson@haynesboone.com
`greg.webb.ipr@haynesboone.com
`clint.wilkins.ipr@haynesboone.com
`
`
`PATENT OWNER:
`
`W. Karl Renner
`Lawrence K. Kolodney
`Christopher Hoff
`Andrew B. Patrick
`Andrew Dommer
`FISH & RICHARDSON P.C.
`axf-ptab@fr.com
`kolodney@fr.com
`hoff@fr.com
`patrick@fr.com
`dommer@fr.com
`
`10
`
`