throbber
Trials@uspto.gov
`571.272.7822
`
`
`Paper 29
`Filed: July 16, 2019
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`
`MOBILE TECH, INC.,
`Petitioner,
`
`v.
`
`INVUE SECURITY PRODUCTS INC.,
`Patent Owner.
`____________
`
`Case IPR2018-00481
`Patent 9,576,452 B2
`____________
`
`
`
`Before JUSTIN T. ARBES, STACEY G. WHITE, and
`DANIEL J. GALLIGAN, Administrative Patent Judges.
`
`WHITE, Administrative Patent Judge.
`
`
`
`
`
`
`
`
`FINAL WRITTEN DECISION
`35 U.S.C. § 318(a) and 37 C.F.R. § 42.73
`
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`
`I. INTRODUCTION
`
`We have jurisdiction to hear this inter partes review under 35 U.S.C.
`§ 6. This Final Written Decision is issued pursuant to 35 U.S.C. § 318(a).
`For the reasons discussed herein, we determine that Mobile Tech, Inc.
`(“Petitioner”) has shown, by a preponderance of the evidence, that claims 1–
`35 (“the challenged claims”) of U.S. Patent No. 9,576,452 B2 (“the ’452
`patent,” Ex. 1001) are unpatentable.
`
`A. Background
`Petitioner requested inter partes review of the challenged claims.
`Paper 1 (“Petition”). InVue Security Products Inc. (“Patent Owner”) filed a
`Patent Owner Preliminary Response. Paper 8. Based on our review of these
`submissions, we instituted a trial on all of Petitioner’s challenges as
`described in the Petition. Paper 9 (“Dec. on Inst.”). Petitioner contends the
`challenged claims are unpatentable under 35 U.S.C. § 103 on the following
`specific grounds (Pet. 5–6):
`References
`Rothbaum1 and Denison2
`Rothbaum, Denison, and Deguchi3
`Rothbaum, Denison, and Galant4
`Rothbaum, Denison, Galant, and Deguchi
`
`1 U.S. Patent No, 5,543,782, issued Aug. 6, 1996 (Ex. 1003, “Rothbaum”).
`2 U.S. Patent Pub. No. 2004/0201449 A1, pub. Oct. 14, 2004 (Ex. 1002,
`“Denison”).
`3 U.S. Patent Pub. 2004/0003150 A1, pub. Jan. 1, 2004 (Ex. 1004,
`“Deguchi”).
`4 U.S. Patent No. 6,308,928 B1, issued Oct. 30, 2001 (Ex. 1005, “Galant”)
`
`Claim(s) Challenged
`1–35
`1–31
`20
`20
`
`2
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`
`Claim(s) Challenged
`21
`21
`
`References
`Rothbaum, Denison, and Uchida5
`Rothbaum, Denison, Uchida, and Deguchi
`
`Patent Owner filed a Patent Owner Response (Ex. 20406, “PO Resp.”)
`and Petitioner filed a Reply (Paper 18, “Reply”).
`An oral hearing was held on April 10, 2019, and a transcript of the
`hearing is included in the record (Paper 24, “Tr.”). After the hearing, the
`parties met and conferred regarding the potential application of collateral
`estoppel to certain issues in this proceeding. The parties provided us with a
`list of their agreements and disagreements as to the application of collateral
`estoppel. Ex. 3001. We then authorized the parties to provide further
`briefing “regarding the parties’ stated disagreements regarding the
`application of collateral estoppel to this proceeding.” Paper 23. Petitioner
`and Patent Owner each filed opening (Paper 25, “Pet. CE Br.”; Paper 26,
`“PO CE Br.”) and responsive briefs (Paper 27, “Pet. CE Resp. Br.”; Paper
`28, “PO CE Resp. Br.”).
`
`B. Related Proceedings
`The parties indicate the ’452 patent originally was asserted in InVue
`Security Prods., Inc. v. Mobile Tech, Inc., Case No. 3-17-cv-00075
`(W.D.N.C.), and that the case was consolidated with others involving patents
`
`
`5 Japanese Patent App. Pub. No. 1997-259368, pub. Oct. 3, 1997 (Ex. 1012);
`certified translation (Ex. 1013, “Uchida”).
`6 We granted Patent Owner’s Motion to Seal and by that Motion, we sealed
`the Patent Owner Response (Paper 13) in this proceeding. Paper 16. Exhibit
`2040 is a redacted version of the Patent Owner Response. We cite to the
`redacted version unless otherwise indicated, and do not refer to any sealed
`materials herein.
`
`3
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`related to the ’452 patent and transferred to the United States District Court
`for the District of Oregon. Pet. 1; Paper 5, 2–4; Paper 15, 3. Petitioner has
`filed petitions for inter partes and post-grant review involving the same
`parties and related patents in IPR2016-00892, IPR2016-00895, IPR2016-
`00896, IPR2016-00898, IPR2016-00899, IPR2016-01241, IPR2016-01915,
`IPR2017-00344, IPR2017-00345, IPR2017-01900, IPR2017-001901,
`IPR2018-01138, and PGR2018-00004. Paper 15, 3–4. We note that final
`written decisions have been issued in IPR2016-00892, IPR2016-00895,
`IPR2016-00896, IPR2016-00898, IPR2016-00899, IPR2016-01241,
`IPR2016-01915, IPR2017-00344, IPR2017-00345, IPR2017-01900, and
`IPR2017-01901, some of which have been appealed. The parties also
`identify certain patents and pending patent applications that may be affected
`by a decision in this proceeding. Pet. 3; Paper 15, 4.
`
`C. The ʼ452 Patent
`The ’452 patent describes a security system and method including a
`programmable key. Ex. 1001, 1:29–34. This security system is depicted in
`Figure 1, which is reproduced below.
`
`
`4
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`
`
`Figure 1 depicts security system 1. Id. at 6:13–15. The primary components
`of security system 1 are programming station 3, programmable key 5, and
`alarm module 7. Id. at 6:15–20. Merchandise 9 is connected to alarm
`module 7 via cable 11 that preferably contains sense loop 13. Id. at 6:15–20.
`The logic control circuit of programming station 3 randomly generates a
`unique security code (Security Disarm Code, or “SDC”) that is transmitted
`to programmable key 5, which in turn stores the SDC in key memory. Id. at
`9:20–26. Once programmed with an SDC, key 5 is taken to alarm module 7
`and the SDC is stored in the alarm module’s memory. Id. at 9:40–50. “SDC
`memory 53 permanently stores the randomly generated SDC in the alarm
`module 7, preferably for the remaining lifetime of the alarm module.” Id. at
`9:47–50. The storage of the SDC in the memory of key 5 will actuate timer
`82 for a predetermined time period. Id. at 9:56–58. “At the end of this time
`period, controller 80 automatically invalidates use of the SDC in SDC
`memory 81 by logic control circuit 77 to thereby render the key inoperative
`for use with alarm module 7.” Id. at 9:58–62. In addition, counter 83 of
`logic control circuit 77 counts each time that the key is activated. Id. at
`
`5
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`10:44–46. “After a predetermined maximum number of activations . . .
`counter 83 will cause logic control circuit 77 to invalidate use of the SDC in
`SDC memory 81, thereby rendering key 5 inoperative for further use with
`alarm module 7.” Id. at 10:48–52.
`Cable 11 extends between alarm module 7 and item of merchandise 9.
`Ex. 1001, 7:66–8:1. If sense loop 13 (which contains electrical or fiber optic
`conductors) is compromised, such as by cutting cable 11 or by pulling the
`cable loose from alarm module 7 or item of merchandise 9, the alarm
`module emits an audible alarm and/or causes LED 61 to emit a
`predetermined flashing pattern. Id. at 8:1–9. To disarm alarm module 7,
`programmable key 5 is programmed with a valid SDC and circuits in the
`alarm module and the key communicate with one another to deactivate the
`alarm, thereby enabling cable 11 to be removed from the merchandise item.
`Id. at 10:63–11:9. Programmable key 5 may then be used to re-arm the
`alarm module. Id. at 11:9–13. To disarm and re-arm alarm module 7, the
`SDC memory of the alarm module must read the same SDC that was
`generated randomly by programming station 3 and programmed into key 5.
`Id. at 11:16–21.
`
`D. Illustrative Claim
`As noted above, Petitioner challenges claims 1–35 of the ʼ452 patent,
`of which claims 1, 27, and 32 are independent. Claim 1 is illustrative of the
`challenged claims and is reproduced below:
`1. A programmable security system for protecting items of
`merchandise from theft, the programmable security
`system comprising:
`
` programming station comprising a logic control circuit
`configured to generate a security code, wherein the
`
`6
`
` a
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`
`programming station comprises a housing enclosing the
`logic control circuit therein, and wherein the housing
`comprises a port;
`
` a
`
` a
`
`
`
` programmable key comprising a memory configured to store
`the security code, an end of the programmable key
`configured to be inserted within the port for programming
`the security code in the memory of the programmable key;
`and
`
` security device comprising an alarm and a memory for storing
`the security code, the security device comprising a port,
`the security device configured to be attached to an item of
`merchandise, the security device further configured to
`activate the alarm in response to the integrity of the
`security device being compromised,
`
`
`wherein the end of the programmable key is configured to be
`inserted within the port of the security device to
`communicate with the security device and to control the
`security device upon a matching of the security code
`stored by the security device with the security code stored
`by the programmable key.
`
`II. COLLATERAL ESTOPPEL
`
`This case is the latest in a large family of related proceedings. As of
`this date, final written decisions have been issued in eleven related
`proceedings and decisions in eight of those proceedings have been affirmed
`by the Federal Circuit. Appeals are pending in two additional cases and one
`case was not appealed. A chart of the prior decisions is below.
`
`7
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`Patent Number Exhibit/Paper
`Case Number
`IPR2016-00892 US Pat. No.
`Final Written
`8,884,762 B2
`Decision
`(“the ’762
`Ex. 1016 (“the
`patent”)
`892 Decision”)
`
`IPR2016-008957
`IPR2016-00896
`
`IPR2016-00898
`IPR2016-00899
`
`US Pat. No.
`9,135,800 B2
`(“the ’800
`patent”)
`
`US Pat. No.
`9,269,247 B2
`(“the ’247
`patent”)
`
`IPR2016-01241 US Pat. No.
`7,737,846 B2
`(“the ’846
`patent”)
`IPR2016-01915 US Pat. No.
`7,737,844 B2
`(“the ’844
`patent”)
`US Pat. No.
`9,396,631 B2
`(“the ’631
`patent”)
`
`IPR2017-00344
`IPR2017-00345
`
`Final Written
`Decision
`Ex. 1017 (“the
`895/896
`Decision”)
`
`Final Written
`Decision
`Ex. 1015 (“the
`898/899
`Decision”)
`Final Written
`Decision
`1241 IPR8 Paper
`22
`Final Written
`Decision
`Ex. 1020 (“the
`1915 Decision”)
`Final Written
`Decision
`Ex. 1021 (“the
`344 Decision”)
`
`Appeal Status
`Affirmed by Federal
`Circuit in 2018-
`1236, 2018-1238,
`2018-1239, 2018-
`1304 (Rule 36)
`Affirmed by Federal
`Circuit in 2018-
`1236, 2018-1238,
`2018-1239, 2018-
`1304, 2018-1889,
`2018-1898 (Rule 36)
`Affirmed by Federal
`Circuit in 2018-
`1236, 2018-1238,
`2018-1239, 2018-
`1304 (Rule 36)
`Affirmed by Federal
`Circuit in 2018-1597
`(Rule 36)
`
`Not Appealed
`
`Affirmed by Federal
`Circuit in 2018-2202
`(Rule 36)
`
`
`7 Cases IPR2016-00895 and 896; IPR2016-00898 and 899; IPR2017-00344
`and 345; and IPR2017-01900 and 1901 are listed in pairs because a single
`final written decision was issued for each of those sets of cases.
`8 Papers and exhibits from proceedings other than IPR2018-00481 will be
`indicated by a prefix indicating the proceeding. For example, papers from
`IPR2016-01241 will bear the prefix “1241 IPR.”
`
`8
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`Case Number
`IPR2017-01900
`IPR2017-01901
`
`Patent Number Exhibit/Paper
`US Pat. No.
`Final Written
`9,478,110 B2
`Decision
`(“the ’110
`1900 IPR Paper
`patent”)
`34 (“the 1900
`Decision”)
`
`Appeal Status
`Appeal Pending
`
`
`The parties assert that collateral estoppel applies to certain aspects of
`this proceeding based on prior proceedings. See Ex. 3001. The parties
`“agree[] and stipulate[] that collateral estoppel applies to” claim 1 as obvious
`over Rothbaum and Denison except as to two limitations of claim 1; claim
`27 as obvious over Rothbaum and Denison except as to three limitations of
`claim 27; and they further agree and stipulate that “[e]stoppel additionally
`applies to claims 2–6, 10–18, 23–24, and 29–35.” Id. Collateral estoppel,
`also known as issue preclusion, precludes a party from relitigating an issue
`“when an issue of fact or law is actually litigated and determined by a valid
`and final judgment, and the determination is essential to the judgment, the
`determination is conclusive in a subsequent action between the parties,
`whether on the same or a different claim.” Restatement (Second) of
`Judgments § 27 (1982). The Supreme Court
`has long recognized that “the determination of a question directly
`involved in one action is conclusive as to that question in a
`second suit.” The idea is straightforward: Once a court has
`decided an issue, it is ‘forever settled as between the parties,”
`thereby “protect[ing]” against “the expense and vexation
`attending multiple lawsuits, conserv[ing] judicial resources, and
`foster[ing] reliance on judicial action by minimizing the
`possibility of inconsistent verdicts.” In short, “a losing litigant
`deserves no rematch after a defeat fairly suffered.”
`B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1302–03
`(2015) (internal citations omitted). Collateral estoppel in inter partes
`
`9
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`reviews “is not limited ‘to patent claims that are identical. Rather, it is the
`identity of the issues that were litigated that determines whether collateral
`estoppel should apply.’” Nestle USA, Inc. v. Steuben Foods, Inc., 884 F.3d
`1350, 1352 (Fed. Cir. 2018) (quoting Ohio Willow Wood Co. v. Alps S.,
`LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013) (emphasis in original)). The
`Federal Circuit has articulated the following test for determining the proper
`application of collateral estoppel:
`(1) a prior action presents [the] identical issue;
`(2) the prior action actually litigated and adjudged that issue;
`(3) the judgment in that prior action necessarily required
`determination of the identical issue; and
`(4) the prior action featured full representation of the estopped
`party.
`VirnetX Inc. v. Apple, Inc., 909 F.3d 1375, 1377 (Fed. Cir. 2018) (quoting
`Stephen Slesinger, Inc. v. Disney Enters., Inc., 702 F.3d 640, 644 (Fed. Cir.
`2012)).
`
`If an exception applies, then collateral estoppel may be inapplicable
`even if all of the prongs of the test are met. B & B Hardware, 135 S. Ct. at
`1303, 1309–10. One such exception is that collateral estoppel may be
`inapplicable if “the party sought to be precluded, as a result of the conduct of
`his adversary or other special circumstances, did not have an adequate
`opportunity or incentive to obtain a full and fair adjudication in the initial
`action.” Restatement (Second) of Judgments § 28(5) (c) (1982). The
`Supreme Court has recognized that “[i]ssue preclusion may be inapt if ‘the
`amount in controversy in the first action [was] so small in relation to the
`amount in controversy in the second that preclusion would be plainly
`unfair.’” B&B Hardware, 135 S. Ct. at 1309 (quoting Restatement (Second)
`
`10
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`of Judgments § 28, cmt. j). It is with these principles in mind that we review
`the parties’ arguments as to collateral estoppel.
`
`A. Real Party-In-Interest
`Petitioner asserts that collateral estoppel applies to our determinations
`as to whether the proper real parties-in-interest have been identified in this
`proceeding. See Ex. 3001. We have addressed the propriety of Petitioner’s
`real party-in-interest (“RPI”) identifications in a number of previous
`proceedings. A chart of the prior RPI decisions is below.
`Case Number RPI Decision
`Final Written
`Decision
`Ex. 1020 (“the 1915
`Decision”)
`
`Appeal Status
`
`Not Appealed
`
`IPR2016-01915 Ex. 1018 (Decision
`on Motion to
`Terminate)
`(Sealed); Ex. 1019
`(Public Version)
`Ex. 1018 (Decision
`on Motion to
`Terminate)
`(Sealed); Ex. 1019
`(Public Version)
`1900 IPR Paper 34
`(Final Written
`Decision), 6–21
`(Sealed); Paper 38
`(Public Version)
`
`IPR2017-00344
`IPR2017-00345
`
`IPR2017-01900
`IPR2017-01901
`
`Ex. 1021 (“the 344
`Decision”)
`
`Affirmed
`
`1900 IPR Paper 34
`(Sealed); Paper 38
`(Public Version)
`(“the 1900 Decision”)
`
`Appeal
`Pending
`
`
`The cases that have dealt with the RPI issue either stand unappealed,
`affirmed by the Federal Circuit, or are still pending appeal. The Federal
`Circuit has found collateral estoppel to be proper in the context of both
`affirmed and non-appealed cases. See, e.g., XY, LLC v. Trans Ova Genetics,
`890 F.3d 1282, 1294 (Fed. Cir. 2018) (applying estoppel based on affirmed
`decision); Power Integrations, Inc. v. Semiconductor Components
`
`11
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`Industries, LLC, 926 F.3d 1306, 1311 (Fed. Cir. 2019) (applying estoppel
`based on a non-appealed decision).
`In XY, the Federal Circuit found “that an affirmance of an invalidity
`finding, whether from a district court or the Board, has a collateral estoppel
`effect on all pending or co-pending actions.” XY, 890 F.3d at 1294. In the
`recent precedential Federal Circuit decision in Power Integrations, the court
`also found that collateral estoppel would apply to a non-appealed decision
`(but for an exception that applied under the facts of that proceeding). There,
`the patent owner alleged that the inter partes review (“IPR”) was time-
`barred under 35 U.S.C. § 315(b) because the petitioner was in privity and
`had an RPI relationship with a company that had been sued on the subject
`patent. Power Integrations, 926 F.3d at 1311. The petitioner argued that
`collateral estoppel precluded the patent owner from arguing that the IPR was
`time-barred “because [the patent owner] did not appeal the Board’s final
`written decision reaching the same § 315(b) determination in another IPR.”
`Id. The Federal Circuit found that the patent owner “raise[d] the same
`§ 315(b) time-bar argument in this appeal that it did in the non-appealed IPR
`on a different patent and actually litigated that issue in the non-appealed
`IPR.” Id. at 1312. In light of that finding, the Federal Circuit “agree[d] with
`[the petitioner] that the Board’s § 315(b) determination in the non-appealed
`IPR was essential to the final decision in that proceeding” and “conclude[d]
`that [the petitioner] has established the basic requirements for issue
`preclusion, and [the patent owner] has not substantively disputed that
`conclusion.” Id. Thus, the Federal Circuit found that the basic requirements
`for collateral estoppel had been met based on a final written decision that
`had not been appealed. On the facts of that proceeding, however, the “lack-
`
`12
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`of-incentive-to-litigate exception” to collateral estoppel applied that allowed
`the patent owner to avoid estoppel. Id.
`In our prior RPI decisions in this family of cases, Patent Owner was
`authorized to depose Petitioner’s Chief Executive Officer, Christopher
`Remy, regarding the identification of RPIs. See Ex. 1019, 2–3. We stated
`that unless a showing of good cause was made, that deposition would “be
`the only deposition authorized as to Mr. Remy in any of the proceedings
`involving these parties.” 344 IPR Paper 20, 5. Patent Owner did not seek
`authorization for a subsequent deposition in this proceeding. As to
`IPR2016-01915, IPR2017-00344, and IPR2017-00345, we authorized Patent
`Owner to file a motion to terminate along with supporting evidence, and
`Petitioner was authorized to file a response. Id. at 5–6. We did not
`authorize the filing of a motion to terminate in IPR2017-01900 or IPR2017-
`01901 because we had not yet determined whether those proceedings should
`be instituted. Id. at 5 n.3. In IPR2017-01900 and IPR2017-01901, the
`parties addressed the RPI issue in their Patent Owner Response and Reply,
`respectively. See 1900 IPR Paper 18, 2–3.
`We denied Patent Owner’s Motion to Terminate because we
`determined that Petitioner’s RPI designation was proper. Ex. 1018
`(Sealed)9; Ex. 1019 (Public Version). Subsequent to that decision, final
`written decisions were entered in IPR2016-01915 (Ex. 1020), and IPR2017-
`00344 and IPR2017-00345 (Ex. 1021). After those decisions were entered,
`we later issued a final written decision in IPR2017-01900 and IPR2017-
`
`
`9 The parties filed the same briefing and evidence in IPR2016-01915,
`IPR2017-00344, and IPR2017-00345. We issued a single decision for all
`three cases.
`
`13
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`01901 in which we once again found that Petitioner’s RPI designation was
`proper. 1900 Decision. No requests for rehearing were filed in any of the
`proceedings. Patent Owner appealed IPR2017-00344 and IPR2017-00345
`(345 IPR, Paper 37) and IPR2017-01900 and IPR2017-01901 (1900 IPR
`Paper 39). The final written decision in IPR2017-00344 and IPR2017-
`00345 has been affirmed by the Federal Circuit. No appeal was filed in
`IPR2016-01915. Patent Owner now asks us to make a different decision in
`this case because it believes that we “based [our prior] decision primarily on
`two assumptions” that Patent Owner believes to be in error. PO Resp. 1–2.
`Patent Owner proceeds to argue, based on the same evidence addressed in
`the prior decisions, that we should change our determination regarding the
`propriety of Petitioner’s RPI identification. Id. at 1–16.
`Petitioner argues in reply that Patent Owner is collaterally estopped
`from raising issues that were resolved against it in the prior Board decisions.
`Reply 17–19; see MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1376
`(Fed. Cir. 2018) (stating “[i]t is well established that collateral estoppel, also
`known as issue preclusion, applies in the administrative context”).
`Petitioner also argues that regardless of whether the unnamed parties argued
`by Patent Owner are RPIs, the RPI challenge is not dispositive because the
`Petition was filed within one year of service of the complaint asserting
`infringement of the ’452 patent and Patent Owner’s “argument thus
`improperly conflates § 315(b) with § 312(a)(2).” Reply 19.
`Patent Owner argues that collateral estoppel should not be applied
`here because the instant case has different facts. PO CE Resp. Br. 6.
`Specifically, Patent Owner points out that MTI Holdings, LLC changed its
`name to ITM Holdings, LLC after the Petition was filed. Id. at 6–7; see
`
`14
`
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`

`IPR2018-00481
`Patent 9,576,452 B2
`
`Paper 5, 2 (Petitioner’s amended mandatory notices noting name change,
`filed Jan. 22, 2018). Patent Owner also argues that Petitioner relies upon “a
`new [declaration from Mr. Remy] and facts in support of the RPI issue.” PO
`CE Resp. Br. 7. Patent Owner also asserts that there has been a change in
`law since we made the RPI decisions in IPR2017-00344 and IPR2017-
`00345. Id. at 7 n.3.
`Patent Owner’s arguments are unpersuasive. To the extent that Patent
`Owner asserts that there was a change in law based on recent Federal Circuit
`decisions in Applications in Internet Time, LLC v. RPX Corp., 897 F.3d
`1336 (Fed. Cir. 2018) (“AIT”), and Worlds Inc. v. Bungie, Inc., 903 F3d
`1237 (Fed. Cir. 2018), those decisions were considered in our RPI decision
`in IPR2017-01900 and IPR2017-01901. The parties presented argument at
`oral hearing in IPR2017-01900 and IPR2017-01901 regarding the impact of
`those Federal Circuit decisions. 1900 IPR Paper 32 (Sealed) (transcript of
`oral hearing including an extensive RPI argument). We analyzed the facts
`presented in light of all appropriate precedent, including Worlds and AIT.
`1900 Decision 6–21.
`Patent Owner’s argument that collateral estoppel should not be
`applied due to a change in the facts is similarly unpersuasive. First, the
`parties have not asked for any new depositions or written discovery as to
`RPI issues. In the 1900 Decision, Patent Owner argued that as to the facts in
`the 1900 proceeding as compared to those in the early proceedings, “[t]he
`evidence is the same documents. The facts are different.” 1900 Decision 9.
`Patent Owner further argued that “[t]he difference in evidence would be the
`[passage of] time.” Id. at 10. In an effort to make sure that the evidence was
`fully reviewed under the appropriate standards, we reviewed all of the
`
`15
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`evidence anew and came to the same conclusion that Petitioner’s
`identification of RPIs was proper. Id. at 10–21. Second, MTI Holdings,
`LLC’s name change was disclosed in each of the prior cases and thus, it is
`not new information. See, e.g., 344 IPR Paper 19, 1 (“Petitioner learned on
`January 18, 2018 that MTI Holdings, LLC legally changed its name to ITM
`Holdings, LLC.”). Third, the new declaration in this matter is the
`Supplemental Declaration of Christopher Remy. Ex. 1028 (Sealed);
`Ex. 1029 (Public Version). There, Mr. Remy states that everything in his
`original declaration was and still is correct except as supplemented.
`Ex. 1029 ¶ 4. He testifies that “nothing relevant has changed” and asserts
`that he continues to “make all decisions with respect to the IPRs, to direct
`them, and to control them.” Id. ¶ 7. The only new information in this
`declaration is a statement noting that the membership of the Board of
`Directors had been updated and certain stock ownership percentages had
`changed over time. Id. ¶¶ 5–6. These minor facts are not significant enough
`to disturb the earlier decisions made in five proceedings that resulted in final
`written decisions.
`Here, the same RPI issue was raised in the prior decisions, the RPI
`issue was actually litigated by the parties (replete with discovery and
`dispositive motions on this issue), and our determination that the RPI
`identification was proper was essential to the prior decisions (especially
`because Patent Owner has sought to have the proceedings terminated due to
`an allegedly improper identification of RPIs). This case is different from the
`facts before the Federal Circuit in Power Integrations; there, the Federal
`Circuit declined to apply collateral estoppel because an exception applied
`(lack of incentive to litigate). 926 F.3d at 1311. No such exception is
`
`16
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`applicable here. In this case, the parties have fully participated in the
`appeals of IPR2017-00344 and IPR2017-00345 (affirmed); and IPR2017-
`01900 and IPR2017-01901 (pending). As such, we find that collateral
`estoppel applies to the RPI issue in this case, and conclude that no exception
`to collateral estoppel applies.
`Thus, we determine that collateral estoppel prevents the relitigation of
`the RPI issue in this proceeding and therefore, we decline Patent Owner’s
`request to terminate this proceeding due to an allegedly incorrect
`identification of RPIs.
`In addition, we note that as discussed above, the evidence of record in
`this proceeding as to RPI analysis is substantially identical to the evidence of
`record in IPR2017-00344 and IPR2017-00345; and IPR2017-01900 and
`IPR2017-01901. We reviewed our analysis in those prior decisions and we
`determine that that analysis is also correct as applied to this proceeding. In
`lieu of reproducing our RPI analysis from the 1900 Decision and the 344
`Decision here, we adopt and incorporate by reference, in its entirety, our
`previous RPI analysis, which concluded that Petitioner’s RPI designation
`was proper. See 1900 Decision 6–21; Ex. 1018 (Decision on Motion to
`Terminate) (Sealed); Ex. 1019 (Public Version). Accordingly, for the
`reasons given in the 1900 Decision and in the Order on Patent Owner’s
`Motion to Terminate from IPR2017-00344, we determine that Petitioner
`identified all RPIs in this proceeding, as required by 35 U.S.C. § 312(a)(2).
`
`B. Estoppel Based on Rothbaum and Denison
`Claims 1–35 of the ’452 patent are alleged to be obvious over
`Rothbaum and Denison. Pet. 12–56. The combination of Rothbaum and
`Denison has been applied to the claims of several of the related patents. See
`
`17
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`Ex. 1015, 77 (finding claims 1 and 3–37 of the ’247 patent to be
`unpatentable over Rothbaum and Denison); Ex. 1016, 69 (finding claims 1,
`5–20, 22–25, and 27 of the ’762 patent to be unpatentable over Rothbaum
`and Denison); Ex. 1017, 80 (finding claims 1, 3–22, 24–30, and 32–49 of the
`’800 patent to be unpatentable over Rothbaum and Denison); Ex. 1021, 92
`(finding claims 1–5, 8–27, and 29 of the ’631 patent to be unpatentable over
`Rothbaum and Denison). The Federal Circuit has affirmed our final written
`decisions in IPR2016-00892 (’762 patent), IPR2016-00895 and 896 (’800
`patent), IPR2016-00898 and 899 (’247 patent), and IPR2017-00344 and 345
`(’631 patent).
`A final judgment of unpatentability of a patent claim from the Board
`precludes the patent owner from arguing for the patentability of those
`claims. XY, LLC, 890 at 1294; see MaxLinear, 880 F.3d at 1376. Under
`traditional principles of issue preclusion, however, a party may be bound not
`simply by the ultimate conclusion (e.g., unpatentability of a claim), but by
`any subsidiary factual determinations that were actually litigated and
`essential to the judgment. Stephen Slesinger, Inc. v. Disney Enters., Inc.,
`702 F.3d 640, 644 (Fed. Cir. 2012); see MaxLinear, 880 F.3d at 1377
`(noting “that the collateral-estoppel effect of an administrative decision of
`unpatentability generally requires the invalidation of related claims that
`present identical issues of patentability”). Key factors in determining if
`“issues” are identical under collateral estoppel is whether “there [is] a
`substantial overlap between the evidence or argument to be advanced in the
`second proceeding and that advanced in the first” and whether the “new
`evidence or argument involve[s] application of the same rule of law as that
`involved in the prior proceeding.” Restatement (Second) of Judgments § 27,
`
`18
`
`

`

`IPR2018-00481
`Patent 9,576,452 B2
`
`cmt. c (1982). Below we shall examine the parties’ assertions regarding the
`application of collateral estoppel to claims alleged to be unpatentable over
`Rothbaum and Denison.
`1. Claim 1
`The parties agree that
`[Patent Owner] is estopped from arguing against the combination
`of Rothbaum and Denison on independent claim 1 except to the
`extent that the claim covers [1] “an end of the programmable key
`is configured to be inserted within the port” of the programming
`station, and [2] “the end of the programmable key is configured
`to be inserted within the port of the security device.”
`Ex. 3001. Petitioner asserts that estoppel should extend to the entirety of
`claim 1 including the exceptions labeled [1] and [2]. Id.
`We begin with a comparison between claim 1 of the ’452 patent and
`claim 1 of the ’247 patent. Claim 1 of the ’247 patent was held to be
`unpatentable over Rothbaum and Denison and that decision was affirmed by
`the Federal Circuit. See Ex. 1015, 22–44. Claim 1 of the ’247 patent is but
`one of the more than 100 related patent claims that we have reviewed and
`determined to be obvious over the teachings of Rothbaum and Denison. It is
`readily apparent from a side-by-side comparison of claims 1 of the ’452 and
`’247 patents that there is substantial identity between the claims.
`
`
`Claim 1 of the ’452 patent
`
`1. A programmable security
`system for protecting items of
`merchandise from theft, the
`programmable security system
`comprising:
`
`
`Claim 1 of the ’247 patent
`(found unpatentable in the 898/899
`Decision (affirmed))
`1. A programmable security
`system for protecting items of
`merchandise from theft, the
`programmable security system
`comprising:
`
`
`19
`
`

`

`Claim 1 of the ’247 patent
`(found unpatentable in the 898/899
`Decision (affirmed))
`a programming station
`comprising a logic control circuit
`configured to generate a unique
`security code, and a memory for
`storing the unique security code;
`
`
`
`
` plurality of programmable
`keys each configured to
`communicate with the programming
`station to receive and store the
`unique security code in a memory,
`each of the plurality of
`programmable keys having the
`unique security code stored in its
`memory; and
`
` a
`
` plurality of security devices
`each comprising an alarm and a
`memory for storing the unique
`security code, each of the plurality of
`security devices having the unique
`security code stored in its memory,
`each of the plurality of security
`devices configured to be attached to
`an item of merchandise, each of the
`plurality of security devices further
`configured to activate the alarm in
`response to the integrity of

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