Case IPR2017-02039
`U.S. Patent No. 7,199,715
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`
`
`FEDEX CORP.
`Petitioner
`
`
`v.
`
`
`INTELLECTUAL VENTURES II LLC
`Patent Owner
`
`__________________
`
`
`Case IPR2017-02039
`
`U.S. Patent No. 7,199,715
`TITLE: SYSTEM AND METHOD FOR TRACKING ID TAGS USING A DATA
`STRUCTURE OF TAG READS
`Issue Date: April 3, 2007
`
`__________________
`
`
`INTELLECTUAL VENTURES II LLC’S
`PATENT OWNER PRELIMINARY RESPONSE
`
`
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`

`

`Case IPR2017-02039
`U.S. Patent No. 7,199,715
`
`
`
`TABLE OF CONTENTS
`
`
`
`Page
`
`I.
`
`INTRODUCTION ........................................................................................... 1
`
`II.
`
`BACKGROUND ............................................................................................. 4
`
`A. Overview Of The ’715 Patent ............................................................... 4
`
`B. Overview Of Petitioner’s First Petition And The First
`Institution Decision ............................................................................... 6
`
`C. Overview Of Petitioner’s Second Petition ............................................ 7
`
`III. THE BOARD SHOULD EXERCISE ITS DISCRETION UNDER 35
`U.S.C. § 314(a), 37 C.F.R. § 42.108(a), AND GENERAL PLASTIC
`TO DENY INSTITUTION ON THIS FOLLOW-ON PETITION. ................ 7
`
`A. All Seven General Plastic Factors Favor Denying Institution. ............ 8
`
`1.
`
`2.
`
`3.
`
`4.
`
`Factor 1 Favors Denying Institution Because Petitioner
`Previously Filed A Petition Against The Same Claims
`Challenged In The Second Petition. ........................................... 8
`
`Factor 2 Favors Denying Institution Because Petitioner
`Cited Bauer In The First Petition And Because Petitioner
`Knew About Smith Either When It Filed The First
`Petition Or Shortly Thereafter. ................................................... 9
`
`Factor 3 Favors Denying Institution Because When
`Petitioner Filed The Second Petition, It Had Received
`Both IV’s Preliminary Response And The Board’s
`Institution Decision For The First Petition. .............................. 12
`
`Factor 4 Favors Denying Institution Because Petitioner
`Has Known About Bauer Since At Least January 2017
`And Has Known About Smith Since At Least March
`2017, If Not Earlier. .................................................................. 15
`
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
`5.
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`Page
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`Factor 5 Favors Denying Institution Because Petitioner
`Waited For The Board’s First Institution Decision To
`Use It As A Roadmap For The Second Petition. ...................... 16
`
`6.
`
`7.
`
`Factor 6 Favors Denying Institution Because The Board’s
`Finite Resources Are Better Spent On First-Time
`Petitions, Not Follow-On Petitions That Challenge The
`Same Claims. ............................................................................ 18
`
`Factor 7 Favors Denying Institution Because Follow-On
`Petitions Impair The Board’s Ability To Issue A Final
`Written Decision Within One Year Of Institution Of
`Review. ..................................................................................... 20
`
`Petitioner’s Abuse Of The Inter Partes Review Process—Not
`Only By Filing This Follow-On Petition, But Also By Filing
`Three Other Follow-On Petitions That Use Prior Institution
`Decisions As Roadmaps—Also Favors Denying Institution. ............. 22
`
`Petitioner’s Arguments In Favor Of Instituting Trial Are
`Meritless. ............................................................................................. 25
`
`B.
`
`C.
`
`IV. CLAIM CONSTRUCTION .......................................................................... 30
`
`A.
`
`“a tool for modifying part of the information stored in the
`database as a function of other information stored in the
`database” (claim 11) ............................................................................ 30
`
`B.
`
`“supply chain” (claims 4, 5, 7, 9, 14, 15, 17, 19, 23, 25) .................... 31
`
`V.
`
`INSTITUTION BECAUSE
`THE BOARD SHOULD DENY
`PETITIONER DID NOT ESTABLISH A REASONABLE
`LIKELIHOOD OF PREVAILING AS TO ANY CLAIM. .......................... 32
`
`A.
`
`The Board Should Deny Institution On Every Challenged
`Claim Because Petitioner Failed To Establish That Smith And
`Bauer, Whether Taken Alone Or In Combination, Teach,
`Suggest, Or Disclose The Tag “Reading” Limitations. ...................... 33
`
`1.
`
`Claims 1, 4, 5, 7, And 9 ............................................................ 33
`
`ii
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`Case IPR2017-02039
`
`U.S. Patent No. 7,199,715
`Page
`
`2.
`Claims 11, 14, 15, And 17 ........................................................ 36
`
`3.
`
`Claims 19, 22, 23, And 25 ........................................................ 37
`
`B.
`
`The Board Should Deny Institution On Every Challenged
`Claim Because Petitioner Failed To Analyze All Of The
`Graham Factors For Challenged Independent Claims 1, 11,
`And 19. ................................................................................................ 38
`
`1.
`
`2.
`
`3.
`
`Claim 1 ...................................................................................... 41
`
`Claim 11 .................................................................................... 44
`
`Claim 19 .................................................................................... 45
`
`C.
`
`D.
`
`The Board Should Deny Institution On Every Challenged
`Claim Because Petitioner Failed To Establish A Reason To
`Combine Smith And Bauer. ................................................................ 47
`
`The Board Should Deny Institution On Claims 11, 14, 15, And
`17 Because Petitioner—Despite Persuading The District Court
`That Claim 11’s “Tool” Limitation Is A Means-Plus-Function
`Limitation—Neither Identified It As A Means-Plus-Function
`Limitation Nor Identified Corresponding Structure. ........................... 54
`
`VI.
`
`INTER PARTES REVIEW IS UNCONSTITUTIONAL. ............................. 58
`
`VII. CONCLUSION .............................................................................................. 58
`
`
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`iii
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc.,
`694 F.3d 1312 (Fed. Cir. 2012) .............................................................. 45, 49
`
`Adidas AG v. Nike, Inc.,
`Case IPR2017-00263, Paper 9 (PTAB June 7, 2017) ................................... 29
`
`Akamai Techs. v. Limelight Networks,
`Case IPR2017-00358, Paper 9 (PTAB May 2, 2017) ................................... 13
`
`Alarm.com, Inc. v. Vivint, Inc.,
`Case IPR2016-01091, Paper 11 (PTAB Nov. 23, 2016) .................. 21, 22, 25
`
`Alere, Inc. v. Rembrandt Diagnostics, LP,
`Case IPR2017-01130, Paper 10 (PTAB Sept. 28, 2017) ............................... 18
`
`Apple Inc. v. Immersion Corp.,
`Case IPR2017-00887, Paper 7 (PTAB Aug. 25, 2017) ................................. 21
`
`Apple Inc. v. Immersion Corp.,
`Case IPR2017-01368, Paper 8 (PTAB Nov. 7, 2017) ............................ 10, 11
`
`Apple Inc. v. Samsung Elec. Co., Ltd.,
`839 F.3d 1034 (Fed. Cir. 2016) (en banc) ............................................. passim
`
`Apple Inc. v. Smartflash LLC,
`Case CBM2015-00029, Paper 11 (PTAB May 28, 2015) ...................... 40, 41
`
`Belden Inc. v. Berk-Tek LLC,
`805 F.3d 1064 (Fed. Cir. 2015) ..................................................................... 51
`
`Conopco, Inc. v. Proctor & Gamble Co.,
`Case IPR2014-00506, Paper 17 (PTAB July 7, 2014) .................................. 11
`
`Dali Wireless Inc. v. CommScope Techs. LLC,
`Case IPR2017-01324, Paper 6 (PTAB Nov. 1, 2017) ...................... 39, 41, 44
`
`iv
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`Page(s)
`
`Edwards Lifesciences Corp. v. Boston Sci. Scimed, Inc.,
`Case IPR2017-01301, Paper 7 (PTAB Oct. 13, 2017) ..................... 16, 19, 21
`
`Facebook, Inc. v. Sound View Innovations, LLC,
`Case IPR2017-00998, Paper 13 (PTAB Sept. 5, 2017) .......................... 55, 57
`
`FedEx Corp. v. Intellectual Ventures II LLC,
`Case IPR2017-00729, Paper 7 (PTAB July 25, 2017) .................................. 24
`
`FedEx Corp. v. Intellectual Ventures II LLC,
`Case IPR2017-00787, Paper 7 (PTAB July 25, 2017)
`(Ex. 1009, the “First Institution Decision”)........................................... passim
`
`General Plastic Indus. Co., Ltd. v. Canon Kabushiki Kaisha,
`Case IPR2016-01357, Paper 12 (PTAB Nov. 14, 2016) ............................... 27
`
`General Plastic Indus. Co., Ltd. v. Canon Kabushiki Kaisha,
`Case IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017)
`(designated precedential) ....................................................................... passim
`
`Graham v. John Deere Co.,
`383 U.S. 1 (1966) .................................................................................... 32, 43
`
`Harmonic Inc. v. Avid Tech., Inc.,
`815 F.3d 1356 (Fed. Cir. 2016) ....................................................................... 8
`
`HTC Corp. v. Cellular Commc’ns Equip. LLC,
`Case IPR2016-01504, Paper 7 (PTAB Feb. 1, 2017) ................. 40, 41, 42, 44
`
`IBG LLC v. Trading Techs. Int’l, Inc.,
`Case CBM2016-00087, Paper 11 (PTAB Dec. 1, 2016) ............................... 50
`
`In re Donaldson Co., Inc.,
`16 F.3d 1189 (Fed. Cir. 1994) (en banc) ....................................................... 55
`
`In re Fine,
`837 F.2d 1071 (Fed. Cir. 1988) ............................................................. passim
`
`In re Magnum Oil Tools, Inc.,
`829 F.3d 1364 (Fed. Cir. 2016) ..................................................................... 43
`
`v
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`

`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`Page(s)
`
`In re NuVasive, Inc.,
`842 F.3d 1376 (Fed. Cir. 2016) ..................................................................... 47
`
`IPCOM GmbH v. HTC Corp.,
`861 F.3d 1362 (Fed. Cir. 2017) ..................................................................... 55
`
`Kinetic Concepts, Inc. v. Smith & Nephew, Inc.,
`688 F.3d 1342 (Fed. Cir. 2012) ............................................................. passim
`
`LG Elec. Inc. v. Core Wireless Licensing S.A.R.L.,
`Case IPR2016-00986, Paper 12 (PTAB Aug. 22, 2016). ....................... 19, 25
`
`Liberty Mut. Ins. Co. v. Progressive Casualty Ins. Co.,
`Case CBM2012-00003, Paper 7 (PTAB Oct. 25, 2012)
`(designated representative) ............................................................... 40, 41, 44
`
`NVIDIA Corp. v. Samsung Elec. Co.,
`Case IPR2016-00134, Paper 9 (PTAB May 4, 2016) ................................... 25
`
`Oil States Energy Servs. LLC v. Greene’s Energy Grp., LLC,
`__ S.Ct. __, Case No. 16-712, 2017 WL 2507340 (June 12, 2017) .............. 58
`
`PersonalWeb Techs., LLC v. Apple Inc.,
`848 F.3d 987 (Fed. Cir. 2017) ............................................................... passim
`
`Sanofi-Aventis U.S. LLC v. Immunex Corp.,
`Case IPR2017-01129, Paper 19 (PTAB Oct. 4, 2017) ........................... 56, 57
`
`Stratoflex, Inc. v. Aeroquip Corp.,
`713 F.2d 1530 (Fed. Cir. 1983) ..................................................................... 46
`
`Synaptics, Inc. v. Amkor Tech., Inc.,
`Case IPR2017-00085, Paper 12 (PTAB April 18, 2017) .............................. 26
`
`Trivascular, Inc. v. Samuels,
`812 F.3d 1056 (Fed. Cir. 2016) ..................................................................... 47
`
`Xactware Sols., Inc. v. Eagle View Techs.,
`Case IPR2017-00034, Paper 9 (PTAB Apr. 13, 2017) ................................. 25
`
`vi
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`Page(s)
`
`Zimmer Holdings, Inc. v. Bonutti Skeletal Innovations LLC,
`Case IPR2014-01080, Paper 17 (PTAB Oct. 31, 2014) ........................... 7, 18
`
`Statutes
`
`35 U.S.C. § 314(a) ...................................................................................... 1, 7, 8, 25
`
`Regulations
`
`37 C.F.R. § 42.1(b) .................................................................................................. 18
`
`37 C.F.R. § 42.104(b)(2) .......................................................................................... 43
`
`37 C.F.R. § 42.104(b)(3) ....................................................................... 31, 56, 57, 58
`
`37 C.F.R. § 42.104(b)(4) ............................................................................. 36, 37, 38
`
`37 C.F.R. § 42.108(a) .................................................................................. 1, 7, 8, 25
`
`
`All emphases are added unless otherwise indicated.
`
`All citations to 35 U.S.C. §§ 102, 103, and 112 refer to the pre-AIA versions.
`
`vii
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`
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`
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`PATENT OWNER’S EXHIBIT LIST
`
`IV Exhibit No.
`2101
`2102
`
`2103
`
`2104
`
`2105
`
`2106
`
`2107
`
`2108
`
`2109
`
`2110
`
`2111
`
`2112
`
`DESCRIPTION
`Affidavit of Lauren M. Nowierski.
`FedEx Corporation’s Petition for Inter Partes Review of U.S.
`Patent No. 7,199,715, Paper 2 in FedEx Corp. v. Intellectual
`Ventures II LLC, Case IPR2017-00787 (Jan. 27, 2017).
`Defendants’ Invalidity Conventions, Cover Pleading, Intellectual
`Ventures II LLC v. FedEx Corp. et al., Case No. 2:16-cv-980
`(E.D. Tex.) (March 14, 2017).
`Defendants’ Invalidity Contentions, Appendix C01, Intellectual
`Ventures II LLC v. FedEx Corp. et al., Case No. 2:16-cv-980
`(E.D. Tex.) (March 14, 2017).
`IV’s Patent Owner Preliminary Response, Paper 6 in FedEx
`Corp. v. Intellectual Ventures II LLC, Case IPR2017-00787
`(May 2, 2017).
`Defendants’ Responsive Claim Construction Brief, Dkt. No. 102
`in Intellectual Ventures II LLC v. FedEx Corp. et al., Case No.
`2:16-cv-980 (E.D. Tex.) (Aug. 30, 2017).
`Memorandum Opinion And Order, Dkt. No. 165 in Intellectual
`Ventures II LLC v. FedEx Corp. et al., Case No. 2:16-cv-980
`(E.D. Tex.) (Nov. 29, 2017).
`Return of Summons and Proof of Service for Federal Express
`Corp., Dkt. No. 5 in Intellectual Ventures II LLC v. FedEx Corp.
`et al., Case No. 2:16-cv-980 (E.D. Tex.) (Sept. 1, 2016).
`Return of Summons and Proof of Service for FedEx Corp., Dkt.
`No. 6 in Intellectual Ventures II LLC v. FedEx Corp. et al., Case
`No. 2:16-cv-980 (E.D. Tex.) (Sept. 1, 2016).
`Return of Summons and Proof of Service for FedEx Custom
`Critical, Inc., Dkt. No. 7 in Intellectual Ventures II LLC v. FedEx
`Corp. et al., Case No. 2:16-cv-980 (E.D. Tex.) (Sept. 1, 2016).
`Return of Summons and Proof of Service for FedEx Freight, Inc.,
`Dkt. No. 8 in Intellectual Ventures II LLC v. FedEx Corp. et al.,
`Case No. 2:16-cv-980 (E.D. Tex.) (Sept. 1, 2016).
`Return of Summons and Proof of Service for FedEx Ground
`Package System, Inc., Dkt. No. 9 in Intellectual Ventures II LLC
`v. FedEx Corp. et al., Case No. 2:16-cv-980 (E.D. Tex.) (Sept. 1,
`2016).
`
`
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`
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`IV Exhibit No.
`2113
`
`2114
`
`2115
`
`2116
`
`DESCRIPTION
`Return of Summons and Proof of Service for FedEx Office and
`Print Services, Inc., Dkt. No. 10 in Intellectual Ventures II LLC
`v. FedEx Corp. et al., Case No. 2:16-cv-980 (E.D. Tex.) (Sept. 1,
`2016).
`Return of Summons and Proof of Service for GENCO
`Distribution System, Inc., Dkt. No. 11 in Intellectual Ventures II
`LLC v. FedEx Corp. et al., Case No. 2:16-cv-980 (E.D. Tex.)
`(Sept. 1, 2016).
`Defendants’ Motion To Stay Pending Inter Partes Review, Dkt.
`No. 104 in Intellectual Ventures II LLC v. FedEx Corp., Case
`No. 2:16-cv-00980, (E.D. Tex.) (Sept. 1, 2017).
`Petitioner’s Petition for Inter Partes Review of U.S. Patent No.
`8,494,581, Paper 2 in FedEx Corp. v. Intellectual Ventures II
`LLC, Case IPR2017-02030 (Aug. 31, 2017).
`Memorandum Order and Opinion, Dkt. No. 141 in in Intellectual
`Ventures II LLC v. FedEx Corp., Case No. 2:16-cv-00980, (E.D.
`Tex.) (Oct. 24, 2017).
`Docket Control Order, Dkt. No. 135 in Intellectual Ventures II
`LLC v. FedEx Corp. et al., Case No. 2:16-cv-980 (E.D. Tex.)
`(Oct. 19, 2017).
`FedEx Corporation’s Petition for Inter Partes Review, Paper 2 in
`FedEx Corp. v. Intellectual Ventures II LLC, Case
`IPR2017-02028 (August 31, 2017).
`FedEx Corporation’s Petition for Inter Partes Review, Paper 2 in
`FedEx Corp. v. Intellectual Ventures II LLC, Case
`IPR2017-02043 (August 31, 2017).
`Defendants’ Proposed Terms And Claim Elements For
`Construction, Intellectual Ventures II LLC v. FedEx Corp. et al.,
`Case No. 2:16-cv-980 (E.D. Tex.) (May 24, 2017).
`Defendants’ Preliminary Claim Constructions And Preliminary
`Identification Of Extrinsic Evidence Pursuant To P.R. 4-2,
`Intellectual Ventures II LLC v. FedEx Corp. et al., Case No.
`2:16-cv-980 (E.D. Tex.) (June 14, 2017).
`
`All citations to specific pages of exhibits follow the pagination added to those
`exhibits per 37 C.F.R. § 42.63(d)(2)(i).
`
`2117
`
`2118
`
`2119
`
`2120
`
`2121
`
`2122
`
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`I.
`
`INTRODUCTION
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`
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`
`
`Intellectual Ventures II LLC (“IV” or “Patent Owner”) submits this
`
`preliminary response to the Petition (Paper 2, the “Second Petition”) FedEx Corp.
`
`(“Petitioner”) filed on August 31, 2017. This preliminary response is timely filed
`
`within three months of the Notice of Filing Date Accorded of September 22, 2017.
`
`(Paper 5.)
`
`The Second Petition challenges claims 1, 4, 5, 7, 9, 11, 14, 15, 17, 19, 22,
`
`23, and 25 of U.S. Patent No. 7,199,715 (Ex. 1001, “the ’715 patent”). Petitioner
`
`previously challenged each of those claims in Case IPR2017-00787 (Ex. 2102, “the
`
`First Petition”), but the Board denied institution on all of those claims except for
`
`claims 1 and 11.
`
` FedEx Corp. v. Intellectual Ventures II LLC, Case
`
`IPR2017-00787, Paper 7, at 34 (PTAB July 25, 2017) (Ex. 1009, the “First
`
`Institution Decision”). The Board should deny institution on all of the challenged
`
`claims in this proceeding.
`
`First, the Board should exercise its discretion under 35 U.S.C. § 314(a), 37
`
`C.F.R. § 42.108(a), and General Plastic Indus. Co., Ltd. v. Canon Kabushiki
`
`Kaisha, Case IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017) (designated
`
`precedential) to deny institution. Petitioner’s First Petition and its papers in the
`
`related litigation Intellectual Ventures II LLC v. FedEx Corp. et al., Case No. 2:16-
`
`cv-980 (E.D. Tex.) show that Petitioner knew about the references cited in the
`
`1
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`
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`Second Petition well before filing it. Petitioner indisputably knew about U.S.
`
`Patent No. 8,321,302 to Bauer et al. (Ex. 1005, “Bauer”) when it filed the First
`
`Petition in January 2017, because the First Petition asserted Bauer against many
`
`of the same claims challenged here. (First Petition at 10, 44-72.) Petitioner also
`
`charted the very combination of U.S. Patent No. 7,312,752 to Smith et al. (Ex.
`
`1004, “Smith”) and Bauer that it asserts in the Second Petition against the
`
`challenged claims in its March 2017 invalidity contentions in the related litigation.
`
`(Ex. 2103, at 8, 15, 22-24; Ex. 2104.) Smith, which Petitioner falsely claims is a
`
`“new” reference in the Second Petition, is anything but. (Second Petition at 4-5.)
`
`Petitioner sat on its combination of Smith and Bauer until after it received
`
`IV’s preliminary response to the First Petition in May 2017 and after the Board
`
`denied institution on most of the challenged claims in the First Institution Decision
`
`in July 2017. (Ex. 2105; First Institution Decision, at 1, 34.) After receiving the
`
`First Institution Decision, Petitioner crafted its obviousness arguments in the
`
`Second Petition to respond to the Board’s reasons for denying institution. As
`
`Petitioner admitted in the Second Petition, “[t]his Petition’s application of Smith
`
`instead of Jones directly addresses the Board’s concerns with the Jones-Bauer
`
`combination….” (Second Petition at 5.) Petitioner’s failure to assert Smith and
`
`Bauer promptly and Petitioner’s use of the First Institution Decision as a roadmap
`
`for the Second Petition justify denying institution.
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`2
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`Second, the Board should deny institution on the Second Petition because
`
`Petitioner did not establish a reasonable likelihood of prevailing against any
`
`challenged claim. Petitioner failed to show that the combination of Smith and
`
`Bauer teaches, suggests, or discloses the tag “reading” limitations in the challenged
`
`claims. Petitioner’s obviousness analysis is also fatally defective because
`
`Petitioner failed to address all of the Graham factors for independent claims 1, 11,
`
`and 19, and in particular the differences between the challenged claims and the
`
`alleged prior art. Petitioner further failed to establish that a person of ordinary skill
`
`in the art would have had a reason to combine Smith and Bauer to achieve the
`
`subject matter of any challenged claim.
`
`The Board should also deny institution on claims 11, 14, 15, and 17 because
`
`Petitioner has taken two irreconcilable positions on the “tool” limitation of
`
`independent claim 11, from which claims 14, 15, and 17 depend. Before filing the
`
`Second Petition, Petitioner argued in the related litigation that the “tool” limitation
`
`is a means-plus-function limitation. (Ex. 2106, at 31-32.) The district court
`
`ultimately accepted Petitioner’s argument. (Ex. 2107, at 65-69.) But in the Second
`
`Petition, Petitioner did not identify the “tool” limitation as a means-plus-function
`
`limitation or identify corresponding structure for that limitation. Nor did Petitioner
`
`notify the Board of its contradictory positions. Petitioner’s lack of corresponding
`
`structure and lack of candor justify denying institution on those claims.
`
`3
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`

`

`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`II. BACKGROUND
`
`
`
`
`
`A. Overview Of The ’715 Patent
`
`The ’715 patent claims a novel rule-based data structure for tracking tags
`
`associated with products in a supply chain. That novel rule-based data structure
`
`incorporates not only a pre-established set of valid pathways, but also incoming
`
`data from data tags in the supply chain, such that data regarding the progress of
`
`tagged items at each successive point in the supply chain can be modified based on
`
`the incoming data.
`
`At the time of the invention of the ’715 patent, tracking systems for supply
`
`chains using radio frequency identification (“RFID”) tags suffered from problems
`
`in accuracy and precision. (Ex. 1001, at 1:7-26.) Accuracy reflects the ability of
`
`RFID equipment to read a tag’s electronic product code (EPC). (Id. at 1:26-28.)
`
`Precision measures the sharpness of the accuracy. (Id. at 1:28-30.) Variations in
`
`precision could lead to missing tag data. For example, tag data may be missed in a
`
`supply chain with several successive read points where only some points were
`
`read. (Id. at 1:33-35.)
`
`To address those problems and others, the inventors of the ’715 patent
`
`created a data structure for tracking tag data by using time-stamped tag readings,
`
`which allowed missing tag data for one object in the supply chain to be reliably
`
`inferred as a function of other incoming time-stamped tag data from other products
`
`4
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`Case IPR2017-02039
`U.S. Patent No. 7,199,715
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`in the supply chain. (Ex. 1001, at 1:45-49.) Through this rule-based data structure
`
`for tracking time-stamped tag data in the supply chain, incoming tag data could be
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`reliably used to modify, adjust, or update the tag data for that supply chain. (Id. at
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`1:38-41, 7:1-9, 11:6-9, 12:8-19.)
`
`In one example, the ’715 patent describes determining the “expected or
`
`known pathways that objects can take in the supply chain” and addressing
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`“unusual or new pathways” using a precedence table. (Ex. 1001, at 9:61-66.)
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`“The precedence table can be built by observing valid paths that have occurred in
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`the past.” (Id. at 9:66-10:20, Table 6.) In addition, “new observations of
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`unintended pathways can be used to continually update a precedence table or a
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`database of information about pathways and products.” (Id. at 11:6-9.) When a
`
`system observes a product tagged in an invalid path in the supply chain, the system
`
`can review any “premature termination of a path” or “unusual delay of successive
`
`reads,” and “[i]f [a product] later shows up further down in the supply chain, one
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`or more missed reads may have occurred and can be inferred.” (Id. at 12:29-35.)
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`When the system infers a missed tag read, “the system adds information to the
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`database to identify a valid pathway that the product traveled, the valid pathway
`
`including information about the readers that experienced missed reads.” (Id. at
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`12:8-19.)
`
`5
`
`

`

`Case IPR2017-02039
`U.S. Patent No. 7,199,715
`
`
`
`
`
`B. Overview Of Petitioner’s First Petition And The First Institution
`Decision
`
`As discussed above in the introduction, Petitioner previously challenged
`
`claims 1, 4, 5, 7, 9, 11, 14, 15, 17, 19, 22, 23, and 25 in Case IPR2017-00787.
`
`(First Petition at 10.) The Board instituted trial on claims 1, 2, 11, and 12 as
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`allegedly obvious over U.S. Patent No. 6,952,645 to Jones (“Jones”). The Board
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`described Jones as “a vehicle travel monitoring system” that employs a
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`GPS-capable vehicle control unit installed in a vehicle for communicating with a
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`base station control unit. (First Institution Decision at 12-13.)
`
`But the Board denied institution on all of the other claims that Petitioner
`
`challenged in the First Petition. (First Institution Decision at 34.) The claims on
`
`which the Board denied institution include nearly all of the claims Petitioner is
`
`challenging again in the Second Petition: 4, 5, 7, 9, 14, 15, 17, 19, 22, 23, and 25.
`
`The Board found particular fault with Petitioner’s purported reasons for combining
`
`Bauer and Jones, which did not account for the differences between how Jones and
`
`Bauer operate. (First Institution Decision at 28-29, 32.) The Board also held that
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`for claim 9, Petitioner failed to establish that either Jones or Bauer described a
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`“method of improving an RFID system for business process associated with a
`
`supply chain.” (Id. at 31.)
`
`6
`
`

`

`Case IPR2017-02039
`U.S. Patent No. 7,199,715
`
`
`
`C. Overview Of Petitioner’s Second Petition
`
`
`
`The Second Petition was filed on August 31, 2017, about four months after
`
`IV filed and served Petitioner with IV’s preliminary response to the First Petition
`
`on May 2, 2017 (Ex. 2105, at 50), and just over a month after the Board rendered
`
`the First Institution Decision on July 25, 2017. August 31, 2017 is the day before
`
`the one-year anniversary of IV serving its infringement complaint on September 1,
`
`2016. (Ex. 1006 ¶¶ 13, 23-24, 55-64; Exs. 2108-2114.)
`
`The Second Petition challenges claims 1, 4, 5, 7, 9, 11, 14, 15, 17, 19, 22,
`
`23, and 25—which Petitioner also challenged in the First Petition—as allegedly
`
`obvious over Smith in view of Bauer. According to Petitioner, “this Petition’s use
`
`of Smith addresses the Board’s reasons for partially denying review in the earlier
`
`IPR.” (Second Petition at 2.)
`
`III. THE BOARD SHOULD EXERCISE ITS DISCRETION UNDER 35
`U.S.C. § 314(a), 37 C.F.R. § 42.108(a), AND GENERAL PLASTIC TO
`DENY INSTITUTION ON THIS FOLLOW-ON PETITION.
`
`“A petitioner is not entitled to unlimited challenges against a patent.”
`
`Zimmer Holdings, Inc. v. Bonutti Skeletal Innovations LLC, Case IPR2014-01080,
`
`Paper 17, at 5 (PTAB Oct. 31, 2014). And, institution of an inter partes review is
`
`discretionary. See 35 U.S.C. § 314(a) (authorizing institution of an inter partes
`
`review under particular circumstances, but not requiring institution under any
`
`circumstances); 37 C.F.R. § 42.108(a) (“The Board may authorize the review to
`
`7
`
`

`

`Case IPR2017-02039
`U.S. Patent No. 7,199,715
`
`
`
`
`
`proceed.”); see also Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1367 (Fed.
`
`Cir. 2016) (“[T]he PTO is permitted, but never compelled, to institute an IPR
`
`proceeding.”). The Board’s recent precedential decision in General Plastic makes
`
`clear that the Board has discretion under 35 U.S.C. § 314(a) and 37 C.F.R.
`
`§ 42.108(a) to deny institution on follow-on petitions like the Second Petition,
`
`where the same petitioner has previously unsuccessfully challenged the same
`
`claims. General Plastic, Case IPR2016-01357, Paper 19. The Board should
`
`exercise that discretion to deny institution on the Second Petition.
`
`A. All Seven General Plastic Factors Favor Denying Institution.
`
`General Plastic enumerates seven factors for the Board to consider in
`
`adjudicating follow-on petitions like the Second Petition. General Plastic, Case
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`IPR2016-01357, Paper 19, at 16. Those factors were formulated “to take undue
`
`inequities and prejudices to Patent Owner into account” in deciding whether
`
`institution on a follow-on petition is warranted. Id. at 17. Here, all seven General
`
`Plastic factors favor denying institution. Each factor is explained below.
`
`1.
`
`Factor 1 Favors Denying Institution Because Petitioner
`Previously Filed A Petition Against The Same Claims
`Challenged In The Second Petition.
`
`The first General Plastic factor is “whether the same petitioner previously
`
`filed a petition directed to the same claims of the same patent.” General Plastic,
`
`Case IPR2016-01357, Paper 19, at 16. The Board considers that factor in
`
`8
`
`

`

`Case IPR2017-02039
`U.S. Patent No. 7,199,715
`
`
`
`
`
`recognition of “the potential for abuse of the review process by repeated attacks on
`
`patents.” Id. at 17. Here, Petitioner has repeatedly attacked claims 1, 4, 5, 7, 9, 11,
`
`14, 15, 17, 19, 22, 23, and 25. Petitioner’s First Petition challenged each of those
`
`claims. (First Petition at 9-10.) Petitioner’s Second Petition also challenges each
`
`of those claims. Because Petitioner’s Second Petition challenges the same claims
`
`as Petitioner’s First Petition, factor 1 weighs against institution.1
`
`2.
`
`Factor 2 Favors Denying Institution Because Petitioner
`Cited Bauer In The First Petition And Because Petitioner
`Knew About Smith Either When It Filed The First Petition
`Or Shortly Thereafter.
`
`The second General Plastic factor is “whether at the time of filing of the
`
`first petition the petitioner knew of the prior art asserted in the second petition or
`
`should have known of it.” General Plastic, Case IPR2016-01357, Paper 19, at 16.
`
`Here, Petitioner asserted Bauer in the First Petition against many of the same
`
`claims it challenges in this proceeding: claims 4, 5, 7, 9, 14, 15, 17, 19, 22, 23, and
`
`25. (First Petition at 10, 44-72.) There can be no question that Petitioner actually
`
`
`1 The Board should also reject Petitioner’s specious assertions that most of the
`
`claims it is challenging in the Second Petition “will not be reviewed in
`
`IPR2017-00787.” (Second Petition at 1; see also id. at 4.) The Board considered
`
`each of claims 1, 4, 5, 7, 9, 11, 14, 15, 17, 19, 22, 23, and 25 in the First Institution
`
`Decision. (First Institution Decision at 2, 34.)
`
`9
`
`

`

`Case IPR2017-02039
`U.S. Patent No. 7,199,715
`
`
`
`
`
`knew about Bauer when it filed the First Petition. Apple Inc. v. Immersion Corp.,
`
`Case IPR2017-01368, Paper 8, at 10 (PTAB Nov. 7, 2017) (“Petitioner knew of
`
`Martin when it filed the First Petition because, as discussed above, the First
`
`Petition asserted grounds involving Martin.”).
`
`Petitioner almost certainly knew about Smith when it filed the First Petition.
`
`In its motion to stay pending inter partes review in the related litigation, Petitioner
`
`represented that it was “diligent in reviewing and identifying prior art for the five
`
`asserted patents,” including the ’715 patent, in advance of filing its first round of
`
`petitions in January 2017 and February 2017. (Ex. 2115, at 15.) And in its March
`
`14, 2017 invalidity contentions in the related litigation, Petitioner extensively cited
`
`and analyzed Smith and Bauer together. (Ex. 2103, at 8, 15, 22-24; Ex. 2104.)
`
`That timeline suggests that Petitioner knew about Smith when it filed the First
`
`Petition on January 27, 2017, just weeks before Petitioner filed 25 pages of
`
`invalidity contentions combining Smith and Bauer against the challenged claims.
`
`(Ex. 2104.) And even if Petitioner’s “review and identification” of prior art prior
`
`to filing the First Petition did not include Smith, Petitioner unquestionably kn