`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_________________________
`
`WESTERN DIGITAL CORPORATION
`Petitioner
`
`v.
`
`SPEX TECHNOLOGIES, INC.
`Patent Owner
`_________________________
`
`Case No. IPR2018-00082
`Patent 6,088,802
`_________________________
`
`
`
`
`
`
`
`PETITIONER WESTERN DIGITAL’S REPLY TO PATENT OWNER’S
`PRELIMINARY RESPONSE TO THE PETITION FOR INTER PARTES
`REVIEW OF U.S. PATENT NO. 6,088,802
`(AS AUTHORIZED BY PAPER 7)
`
`
`
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`
`I.
`
`II.
`
`
`
`TABLE OF CONTENTS
`
`Page
`
`GENERAL PLASTIC IS INCONSISTENT WITH THE PATENT
`STATUTE AND THE APA, DOES NOT APPLY TO PETITIONS
`FILED BY A DIFFERENT PARTY, AND DOES NOT WARRANT
`A DISCRETIONARY DENIAL EVEN IF APPLIED ................................... 1
`A. General Plastic Is Contrary to Statutory Authority and the APA ........ 1
`B. General Plastic Should Only Apply to Repeat Petitions by the
`Same Party; But, Even if Applied Here, Does Not Warrant
`Denial .................................................................................................... 3
`THE PETITION PROPERLY STATED HOW THE CHALLENGED
`CLAIMS ARE TO BE CONSTRUED UNDER 37 C.F.R.
`§ 42.104(b)(3) .................................................................................................. 6
`
`i
`
`
`
`
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`
`Cases
`Apple Inc. v. Cal. Inst. of Tech.,
`IPR2017-00210, Paper 18 (June 30, 2017) ........................................................... 3
`Aqua Prod., Inc. v. Matal,
`872 F.3d 1290 (Fed. Cir. 2017) ............................................................................ 2
`Bowen v. Georgetown Univ. Hosp.,
`488 U.S. 204 (1988) .............................................................................................. 2
`Carefusion Corp. v. Baxter Int’l, Inc.,
`IPR2016-01456, Paper 9 (Feb. 6, 2017) ............................................................... 7
`Famy Care Ltd. v. Allergan, Inc.,
`IPR2017-00566, Paper 12 (July 12, 2017) ........................................................... 5
`General Plastic Indus. Co. v. Canon Kabushiki Kaisha,
`IPR2016-01357, Paper 19 (Sept. 6, 2017) ............................................................ 1
`I.M.L. SLU v. WAG Acquisition, LLC,
`IPR2016-01657, Paper 11 (Feb. 27, 2017) ........................................................... 4
`Morton v. Ruiz,
`415 U.S. 199 (1974) .............................................................................................. 2
`NetApp Inc. v. Realtime Data LLC,
`IPR2017-01354, Paper 16 (Nov. 4, 2017) ........................................................ 1, 4
`Power Integrations, Inc. v. Lee,
`797 F.3d 1318 (Fed. Cir. 2015) ............................................................................ 8
`SAP Am. Inc. v. Clouding IP, LLC,
`IPR2014-00306, Paper 12 (May 19, 2014) ........................................................... 3
`SAS Inst., Inc. v. ComplementSoft, LLC.,
`825 F.3d 1341 (Fed. Cir. 2016) ............................................................................ 2
`
` ii
`
`
`
`
`
`Shalala v. Guernsey Memorial Hosp.,
`514 U.S. 87 (1995) ................................................................................................ 2
`Toyota Motor Corp. v. Blitzsafe Texas LLC,
`IPR2016-00422, Paper 12 (July 6, 2016) ............................................................. 7
`Visa Inc. v. Leon Stambler,
`IPR2014-00694, Paper 1 (Apr. 25, 2014) ............................................................. 8
`Visa Inc. v. Leon Stambler,
`IPR2014-00694, Paper 10 (Oct. 31, 2014) ........................................................... 8
`Statutes
`5 U.S.C. §§ 552-553................................................................................................... 2
`5 U.S.C. § 706 ............................................................................................................ 2
`35 U.S.C. § 301(a)(2) ................................................................................................. 8
`35 U.S.C. § 314(a) ..................................................................................................... 1
`35 U.S.C. § 315(d) ..................................................................................................... 1
`35 U.S.C. § 325(d) ..................................................................................................... 1
`Other Authorities
`157 Cong. Rec. S1375 (2011) .................................................................................... 8
`Regulations
`37 C.F.R. § 42.71(d)(1) .............................................................................................. 6
`37 C.F.R. § 42.100(b) ................................................................................................ 5
`37 C.F.R. § 42.104(b)(3) ........................................................................................ 6, 7
`37 C.F.R. § 42.106(a) ................................................................................................. 6
`37 C.F.R. § 42.106(b) ................................................................................................ 6
`
`
`
`
` iii
`
`
`
`
`
`
`
`Exhibit List
`
`Exhibit Number
`1001
`
`Document
`U.S. Patent No. 6,088,802 (“the ’802 Patent”)
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`
`1013
`
`1014
`
`Summons Returned as Executed, SPEX Techs., Inc. v.
`Western Digital Corp., Case No. 8:16-cv-01799 (C.D. Cal.
`filed Oct. 31, 2016)
`
`File History of the ’802 Patent
`
`U.S. Patent No. 5,887,145 to Harari et al. (“Harari”)
`
`U.S. Patent No. 6,199,163 to Dumas et al. (“Dumas”)
`
`Don Anderson, PCMCIA SYSTEM ARCHITECTURE: 16-
`BIT PC CARDS (MindShare, Inc., 2nd ed. 1995)
`(“PCMCIA Architecture”)
`
`U.S. Patent No. 5,822,196 to Hastings et al. (“Hastings”)
`
`U.S. Patent No. 5,922,060 to Goodrum (“Goodrum”)
`
`U.S. Patent No. 5,941,965 to Moroz et al. (“Moroz”)
`
`U.S. Patent No. 5,943,482 to Culley et al. (“Culley”)
`
`U.S. Patent No. 6,009,151 to Staples (“Staples”)
`
`Windows Developers Journal, Vol. 7, No. 8 (Aug. 1996)
`
`Claim Construction Briefing in SPEX Techs., Inc. v.
`Western Digital Corp., Case No. 16-cv-01799 (C.D. Cal.)
`(“SPEX Claim Construction Brief”)
`
`Tentative Order Regarding Claim Construction in SPEX
`Techs., Inc. v. Western Digital Corp., Case No. 16-cv-
`01799 (C.D. Cal.) (“Tentative Construction”)
`
`1015
`
`Declaration of Dr. Martin Kaliski, Ph.D. (“Kaliski Decl.”)
`
` iv
`
`
`
`
`
`
`
`
`
`1016
`
`1017
`
`1018
`
`1019
`
`1020
`
`1021
`
`Exhibit A (Updated) to Defendants’ Reply Claim
`Construction Brief
`
`Reporter’s Transcript of Proceedings in SPEX Techs, Inc.
`v. Kingston Tech. Corp., et al., Case No. 16-cv-01790
`(C.D. Cal.) (“Markman Hearing Transcript”)
`
`Declaration of Sylvia Hall-Ellis, Ph.D. (“Hall-Ellis Decl.”)
`
`U.S. Patent No. 5,765,027 to Wang et al. (“Wang”)
`
`MARC Record
`
`Teleconference Transcript, IPR2018-00082, -00084 (Feb.
`8, 2018)
`
` v
`
`
`
`
`
`I.
`
`GENERAL PLASTIC IS INCONSISTENT WITH THE PATENT
`STATUTE AND THE APA, DOES NOT APPLY TO PETITIONS
`FILED BY A DIFFERENT PARTY, AND DOES NOT WARRANT A
`DISCRETIONARY DENIAL EVEN IF APPLIED
`A. General Plastic Is Contrary to Statutory Authority and the APA
`The Board’s opinion in General Plastic Indus. Co. v. Canon Kabushiki
`
`Kaisha, IPR2016-01357, Paper 19 (Sept. 6, 2017) (designated precedential Oct. 18,
`
`2017), set forth a framework for denying repeat IPR petitions by the same party
`
`based on discretion. Another Board panel recently applied that analysis to a
`
`second IPR filed by a different party in NetApp Inc. v. Realtime Data LLC,
`
`IPR2017-01354, Paper 16 at 10 (Nov. 4, 2017). But neither of those decisions are
`
`authorized by statute or regulation.
`
`Congress only provided the Board discretion to deny post-grant review
`
`petitions. 35 U.S.C. § 325(d) (applicable only to post-grant reviews when similar
`
`prior art or arguments were previously presented). But the IPR statutes do not
`
`contain any similar provision for discretionary denials of IPR petitions. 35 U.S.C.
`
`§ 315(d). Rather, Congress tasked the Board with making a substantive evaluation
`
`of whether each IPR petition presents a “reasonable likelihood that the petitioner
`
`would prevail with respect to at least 1 of the claims challenged in the petition.”
`
`35 U.S.C. § 314(a); IPR2017-01354, Paper 16 at 9. General Plastic and NetApp
`
`exceed any Congressional authorization by allowing non-substantive denials of
`
` 1
`
`
`
`
`
`IPR petitions.
`
`Absent such authorization, the General Plastic and NetApp factors
`
`effectively amount to substantive or legislative rulemaking by adjudication, which
`
`is not permitted under 5 U.S.C. §§ 552-553. Morton v. Ruiz, 415 U.S. 199, 232-36
`
`(1974); Shalala v. Guernsey Memorial Hosp., 514 U.S. 87, 100 (1995)
`
`(Rulemaking required if rule adopted a new inconsistent position). It also violates
`
`Western Digital’s (“WDC”) due process rights because WDC had no notice that
`
`the Board would change its procedure to potentially require all parties to file any
`
`IPR Petition at the same time an earlier petition was filed by another party to avoid
`
`a discretionary dismissal under General Plastic/NetApp. Retroactively creating a
`
`new filing deadline and broadly announcing binding factors without notice violates
`
`Administrative Procedure Act rulemaking and is arbitrary and capricious. 5 U.S.C.
`
`§§ 552-553, 706; Aqua Prod., Inc. v. Matal, 872 F.3d 1290, 1319-20 (Fed. Cir.
`
`2017) (“Notice of agency rulemaking is insufficient where interested parties would
`
`have had to divine [the Agency’s] unspoken thoughts.”); Bowen v. Georgetown
`
`Univ. Hosp., 488 U.S. 204, 208-209 (1988) (no retroactive rulemaking); SAS Inst.,
`
`Inc. v. ComplementSoft, LLC., 825 F.3d 1341, 1351-52 (Fed. Cir. 2016) (new claim
`
`construction after FWD not adequate notice).
`
` 2
`
`
`
`
`
`B. General Plastic Should Only Apply to Repeat Petitions by the
`Same Party; But, Even if Applied Here, Does Not Warrant Denial
`If applied at all, General Plastic should only apply to repeat petitions by the
`
`same party. NetApp is the first time any panel applied a General Plastic discretion
`
`analysis to deny a petition by a different party. To the contrary, other Board panels
`
`previously recognized a party’s right to pursue an IPR even after another petitioner
`
`filed an earlier IPR. See SAP Am. Inc. v. Clouding IP, LLC, IPR2014-00306, Paper
`
`12 at 13 (May 19, 2014) (the Board considers “each petition by a different
`
`petitioner on its own merits, in part, because a second petitioner has no control
`
`over the decision to see a review through [to] a determination on the merits if the
`
`second petitioner is not a party in that matter”); Apple Inc. v. Cal. Inst. of Tech.,
`
`IPR2017-00210, Paper 18 at 11-12 (June 30, 2017) (instituting a petition that
`
`presented different arguments from an earlier petition by a different petitioner).
`
`Further, the General Plastic factors weigh strongly in favor of institution.
`
`Factors 1 and 2 weigh strongly in favor of institution because WDC has not
`
`previously filed a petition challenging the ’802 patent. Indeed, these factors
`
`strongly favor first-time petitioners, indicating that the Board did not intend for
`
`those factors to apply to petitions filed by a different petitioner. The other factors
`
`also support institution.
`
`Factor 3 weighs in favor of institution. It purportedly was designed to avoid
`
` 3
`
`
`
`
`
`“tailor[ing]” of “arguments to address issues identified by the patent owner and/or
`
`the Board during a prior proceeding.” NetApp Inc., IPR2017-01354, Paper 16 at
`
`11. Here, SPEX suggests that WDC was aware of IPR2017-00430 (filed by
`
`Unified Patents) and IPR2017-00824 (filed by Kingston Technology Co.). Yet,
`
`SPEX has not identified a single portion of the present Petition that was tailored to
`
`address SPEX’s arguments or the institution decisions in the earlier petitions. Nor
`
`could it. The 824 IPR raised different prior art than the present Petition. IPR2017-
`
`00824, Paper 8 at 6. The 430 IPR did address one reference from the present
`
`Petition (Harari), but it did so against a wholly different set of claims in
`
`combination with a different reference. IPR2017-00430, Paper 8 at 6. The April
`
`3, 2017 status report WDC filed in the district court does not establish receipt of
`
`the patent owner preliminary responses or institution decisions from the 824 and
`
`430 IPRs because it was filed before those preliminary responses and institution
`
`decisions were filed. This factor thus weighs in favor of institution.
`
`With respect to Factor 4, SPEX concedes that the prior petitions did not
`
`include one of the prior art references (Wang) in WDC’s petition and that it was
`
`not included in WDC’s initial invalidity contentions. Moreover, the Petition was
`
`filed within the statutory period, before NetApp was issued, and before General
`
`Plastic was made precedential. See I.M.L. SLU v. WAG Acquisition, LLC,
`
`IPR2016-01657, Paper 11 at 8 (Feb. 27, 2017) (“[W]e do not penalize Petitioner
`
` 4
`
`
`
`
`
`for filing within the time allotted under 35 U.S.C. § 315(b).”). This factor should
`
`not weigh against institution.
`
`Because WDC did not file multiple petitions directed to the same claims,
`
`Factor 5 should not apply. Further, WDC and SPEX were briefing claim
`
`construction in the district court during the summer of 2017. Because the Board
`
`construes claims of an expired patent (like the ’802 Patent) in IPR using the district
`
`court standard, 37 C.F.R. § 42.100(b), it was entirely appropriate for WDC to wait
`
`for a district court claim construction ruling before filing a Petition. But the
`
`district court ruling had not issued by WDC’s statutory deadline, so WDC filed its
`
`Petition using the SPEX’s then-proposed constructions. This explanation is
`
`reasonable, and this factor weighs in favor of institution.
`
`With respect to Factor 6, SPEX suggests that Petitioner should have filed the
`
`Petition with the 824 IPR to conserve Board resources. But the present Petition is
`
`different from the 824 Petition—different prior art, combinations, motivations to
`
`combine, expert testimony, and challenged claims. In similar situations, the Board
`
`has denied joinder. Famy Care Ltd. v. Allergan, Inc., IPR2017-00566, Paper 12 at
`
`9 (July 12, 2017). This factor weighs in favor of institution.
`
`Factor 7 also weighs in favor of institution because the 430 IPR and 824 IPR
`
`were not instituted, as SPEX agrees.
`
` 5
`
`
`
`
`
`II. THE PETITION PROPERLY STATED HOW THE CHALLENGED
`CLAIMS ARE TO BE CONSTRUED UNDER 37 C.F.R. § 42.104(b)(3)
`A petition must identify “[h]ow the challenged claim is to be construed.” 37
`
`C.F.R. § 42.104(b)(3). The Petition here provided a statement of exactly how the
`
`challenged claims are to be construed for this proceeding, specifically noting that
`
`the Petition was “based on the claim constructions urged by Patent-Owner in the
`
`DCT Litigation, or as the parties agreed.” Pet. at 8. The Petition then listed, in
`
`detail, how each challenged claim is to be construed by explicitly providing
`
`SPEX’s construction or the agreed-upon constructions from the district court. Id.
`
`at 8-15. The Petition has thus met the requirements of section 42.104(b)(3).
`
`Yet, SPEX argues that WDC’s proposed claim constructions do not meet the
`
`requirements of 37 C.F.R. § 42.104(b)(3). But the Petition’s compliance with
`
`section 42.104(b)(3) was already determined when the filed date was accorded
`
`under section 42.106(a). 37 C.F.R. § 42.106(a) (according a filing date when the
`
`petition “[c]omplies with section 42.104”). Had there been a deficiency, section
`
`42.106 required an opportunity for WDC to fix the lack of compliance. 37 C.F.R.
`
`§ 42.106(b). If SPEX disagreed, it should have sought rehearing of the accorded
`
`filing date. 37 C.F.R. § 42.71(d)(1). It did not do so and thus waived any
`
`objection to the Petition’s compliance with § 42.104(b)(3).
`
`SPEX, instead, points to two panel decisions of the Board that it argues add
`
` 6
`
`
`
`
`
`subjective and formalistic requirements simply not found in the regulations or
`
`statute: (1) that Petitioner “believes” the construction is correct and should apply
`
`and (2) that Petitioner “take ownership” of the construction by explicitly
`
`“agree[ing],” “adopt[ing],” or “propos[ing]” the construction. Toyota Motor Corp.
`
`v. Blitzsafe Texas LLC, IPR2016-00422, Paper 12 at 26-27 (July 6, 2016);
`
`Carefusion Corp. v. Baxter Int’l, Inc., IPR2016-01456, Paper 9 at 11 (Feb. 6,
`
`2017). There is simply no basis in statute, regulation, or the trial practice guide for
`
`requiring a subjective belief of correctness and an affirmative statement of
`
`ownership through agreement, adoption, or proposition. The rule merely requires a
`
`statement of “[h]ow the claims are to be construed.” 37 C.F.R. § 42.104(b)(3). To
`
`the extent the Board requires these procedural hurdles to comply with its
`
`regulations, the APA requires more notice and comment.
`
`Even so, the cited portion of the Toyota decision about a subjective belief
`
`and explicit ownership was ultimately dictum because the Board decided that the
`
`Petitioner was impermissibly arguing indefiniteness of a means-plus-function term.
`
`Toyota, IPR2016-00422, Paper 12 at 27-28. In Carefusion, the basis for the
`
`Board’s decision was Petitioner’s specific statement that the patent owner’s
`
`constructions were incorrect. Carefusion, IPR2016-01456, Paper 9 at 6-7, 11
`
`(“[R]emarkably, however, Petitioner also states that it does not agree that those
`
`constructions are in fact correct.”). Neither of those situations are present here.
`
` 7
`
`
`
`
`
`The Board has evaluated and adopted claim construction positions of
`
`Petitioners that relied on district court constructions proposed for an expired patent
`
`solely “for the purposes of th[e] petition.” Visa Inc. v. Leon Stambler, IPR2014-
`
`00694, Paper 10 at 7-9 (Oct. 31, 2014); IPR2014-00694, Paper 1 at 7-10 (Apr. 25,
`
`2014). The Federal Circuit has also admonished the Board for not addressing a
`
`district court’s claim construction when directly argued by a Petitioner. Power
`
`Integrations, Inc. v. Lee, 797 F.3d 1318, 1327 (Fed. Cir. 2015) (Board has
`
`“obligation, in these circumstances, to evaluate [the district court’s]
`
`construction.”).
`
`Congress authorized anyone to cite at any time “statements of the patent
`
`owner filed in a proceeding before a Federal court … in which the patent owner
`
`took a position on the scope of any claim of a particular patent.” 35 U.S.C.
`
`§ 301(a)(2). The purpose was to allow a patent owner’s statements about claim
`
`scope to “be considered in … inter partes and post-grant reviews for purposes of
`
`claim construction.” 157 Cong. Rec. S1375 (2011) (Kyl).
`
`For these reasons, the Petition thus properly relied on SPEX’s proposed
`
`constructions from the district court.
`
`
`
`
`
` 8
`
`
`
`
`
`Date: February 20, 2017
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`
`
`By: /Brian M. Buroker/
`
`Brian M. Buroker (Reg. No. 39,125)
`Blair A. Silver (Reg. No. 68,003)
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, DC 20036-5306
`Telephone: (202) 955-8541
`Facsimile: (202) 467-0539
`bburoker@gibsondunn.com
`bsilver@gibsondunn.com
`
`Attorneys for Petitioner
`
` 9
`
`
`
`
`
`Certificate of Service
`The undersigned certifies service pursuant to 37 C.F.R. § 42.6(e) on the
`
`Petitioner by e-mail of a copy of this Reply to the Patent Owner’s Preliminary
`
`Response to the Petition for Inter Partes Review of U.S. Patent No. 6,088,802 on
`
`the following parties:
`
`Peter Lambrianakos, plambrianakos@brownrudnick.com
`
`Alfred R. Fabricant, afabricant@brownrudnick.com
`
`Vincent J. Rubino, III, vrubino@brownrudnick.com
`
`Enrique W. Iturralde, eiturralde@brownrudnick.com, eiturralde@gmail.com
`
`
`
`
`
`
`By: /Brian M. Buroker/
`
`
`Brian M. Buroker (Reg. No. 39,125)
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, DC 20036-5306
`Telephone: 202.955.8541
`Facsimile: 202.467.0539
`bburoker@gibsondunn.com
`
`Attorney for Petitioner
`
`
`
`Date: February 20, 2018
`
`
`
`
`
`
`
`
`
`
`
` 10
`
`
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