Trials@uspto.gov
`571-272-7822
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` Paper 10
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`
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` Entered: December 6, 2018
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GOOGLE LLC,
`Petitioner,
`
`v.
`
`SEVEN NETWORKS, LLC,
`Patent Owner.
`____________
`
`Case IPR2018-01104
`Patent 9,386,433 B2
`____________
`
`
`Before JONI Y. CHANG, THOMAS L. GIANNETTI, and
`ROBERT J. WEINSCHENK, Administrative Patent Judges.
`
`CHANG, Administrative Patent Judge.
`
`
`JUDGMENT
`37 C.F.R. § 42.73(b)
`
`
`
`
`
`
`
`
`
`
`571-272-7822
`
`
`
`
`
`
`
`
` Paper 10
`
`
`
`
` Entered: December 6, 2018
`
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GOOGLE LLC,
`Petitioner,
`
`v.
`
`SEVEN NETWORKS, LLC,
`Patent Owner.
`____________
`
`Case IPR2018-01104
`Patent 9,386,433 B2
`____________
`
`
`Before JONI Y. CHANG, THOMAS L. GIANNETTI, and
`ROBERT J. WEINSCHENK, Administrative Patent Judges.
`
`CHANG, Administrative Patent Judge.
`
`
`JUDGMENT
`37 C.F.R. § 42.73(b)
`
`
`
`
`
`
`
`
`
`
`
`IPR2018-01104
`Patent 9,386,433 B2
`
`
`I.
`
`INTRODUCTION
`
`Google LLC (“Petitioner”) filed a Petition requesting an inter partes
`
`review of claims 1−30 (“the challenged claims”) of U.S. Patent No.
`
`9,386,433 B2 (Ex. 1001, “the ’433 patent”). Paper 1 (“Pet.”). SEVEN
`
`Networks, LLC (“Patent Owner”) filed a Statutory Disclaimer (Ex. 2001),
`
`disclaiming all of the claims of the ’433 patent, and a Preliminary Response
`
`(Paper 7, “Prelim. Resp.”), arguing that the statutory disclaimer should not
`
`be treated as a request for an adverse judgment under 37 C.F.R. § 42.73(b).
`
`Pursuant to our authorization, Petitioner filed a Reply (Paper 8, “Reply”) to
`
`the Preliminary Response, and Patent Owner filed a Sur-Reply (Paper 9,
`
`“Sur-Reply”).
`
`For the reasons stated below, we construe Patent Owner’s statutory
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`disclaimer as a request for adverse judgment under 37 C.F.R § 42.73(b), and
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`grant the request for adverse judgment. Accordingly, we enter adverse
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`judgement against Patent Owner as to disclaimed claims 1−30 of the ’433
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`patent.
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`II. DISCUSSION
`
`Section 42.2 defines “judgment” to mean “a termination of a
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`proceeding” or “a final written decision by the Board.” Section 42.73 is
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`reproduced in part below (underlining added).
`
`§ 42.73 Judgment.
`
`(a) A judgment, except in the case of a termination,
`disposes of all issues that were, or by motion reasonably could
`have been, raised and decided.
`
`2
`
`
`
`IPR2018-01104
`Patent 9,386,433 B2
`
`
`(b) Request for adverse judgment. A party may request
`judgment against itself at any time during a proceeding. Actions
`construed to be a request for adverse judgment include:
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`(1) Disclaimer of the involved application or patent;
`
`(2) Cancellation or disclaimer of a claim such that the
`party has no remaining claim in the trial;
`
`(3) Concession of unpatentability or derivation of the
`contested subject matter; and
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`(4) Abandonment of the contest.
`
`(c) Recommendation. The judgment may include a
`recommendation for further action by an examiner or by the
`Director.
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`(d) Estoppel.
`
`* * * *
`(3) Patent applicant or owner. A patent applicant or owner
`is precluded from taking action inconsistent with the adverse
`judgment, including obtaining in any patent:
`
`(i) A claim that is not patentably distinct from a finally
`refused or canceled claim; or
`
`(ii) An amendment of a specification or of a drawing that
`was denied during the trial proceeding, but this provision does
`not apply to an application or patent that has a different written
`description.
`
`The parties’ dispute centers on whether a statutory disclaimer of all
`
`the challenged claims should be construed as a request for adverse judgment
`
`under § 42.73(b). If the statutory disclaimer is construed as a request for
`
`adverse judgment and the request is granted, Patent Owner would be
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`precluded under the estoppel provision of § 42.73(d)(3)(i) from presenting a
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`claim that is not patentably distinct from the disclaimed claims, in its
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`continuing applications or other subsequent proceedings before the Office.
`
`3
`
`
`
`IPR2018-01104
`Patent 9,386,433 B2
`
`Cf. Ex Parte Aoki, Appeal No. 2012-010117, 2015 WL 3827164 (PTAB
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`June 15, 2015) (affirming Examiner’s final rejection of claims not patentably
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`distinct from claims on which adverse judgment had been entered against
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`applicant in a prior interference proceeding); 37 C.F.R. § 41.127.
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`In its Preliminary Response, Patent Owner argues that, by filing its
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`statutory disclaimer before institution of a trial, it is not requesting an
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`adverse judgment under § 42.73(b). Prelim. Resp. 1. Rather, Patent Owner
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`requests that the Petition be terminated without the entry of adverse
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`judgment because the “IPR does not begin until instituted.” Id. at 1−2.
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`Patent Owner also avers that § 42.73(b) requires “no remaining claim in the
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`trial.” Id. at 2. Patent Owner further contends that “(1) the Board lacks
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`authority to enforce adverse judgement where the claims are disclaimed
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`prior to institution; and (2) even if the Board has such authority, public
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`policy discourages such enforcement.” Sur-Reply 1−2.
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`Petitioner counters that adverse judgment should be entered against
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`Patent Owner. Reply 1. Petitioner indicates that the procedural posture here
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`is the same as in Arthrex, Inc. v. Smith & Nephew, Inc., 880 F.3d 1345 (Fed.
`
`Cir. 2018), in which the U.S. Court of Appeals for the Federal Circuit
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`affirmed the Board’s entry of adverse judgment because the patent owner
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`disclaimed all the challenged claims prior to institution of an inter partes
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`review. Reply 1−3. Petitioner argues that the equitable considerations here
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`are also the same as in Arthrex, in that “it would be unfair if Patent Owner
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`were able to avoid Petitioner’s challenge through a statutory disclaimer and
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`then pursue patentably indistinct claims in its continuation applications.” Id.
`
`4
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`
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`IPR2018-01104
`Patent 9,386,433 B2
`
`at 2 (citing the Board’s Decision in Arthrex, Case IPR2016-00917, slip op. at
`
`8−9 (Paper 12) (PTAB Sept. 21, 2016)). We agree with Petitioner.
`
`In this proceeding, Patent Owner filed a statutory disclaimer for all the
`
`claims of the ’433 patent (i.e., all the challenged claims). Ex. 2001. Under
`
`§ 42.73(b), a “party may request judgment against itself at any time during a
`
`proceeding,” not only after a proceeding has been instituted as Patent Owner
`
`suggests. In Arthrex, the Federal Circuit held that “37 C.F.R. § 42.73(b)
`
`permits the Board to enter an adverse judgment when a patent owner cancels
`
`all claims at issue after an IPR petition has been filed, but before an
`
`institution decision.” Arthrex, 880 F.3d at 1350 (emphasis added); see also
`
`id. at 1351 (“agree[ing] that the Board’s interpretation of 37 C.F.R.
`
`§ 42.73(b) is consistent with the text of that regulation”) (Judge O’Malley,
`
`concurring). The Federal Circuit also noted that § 42.2 defines “proceeding”
`
`as “a trial or preliminary proceeding,” which “begins with the filing of a
`
`petition for instituting a trial.” Id. at 1350 (emphasis added). Therefore, it is
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`appropriate here to construe Patent Owner’s statutory disclaimer as a request
`
`for adverse judgment under § 42.73(b). 37 C.F.R. § 42.73(b) (“Actions
`
`construed to be a request for adverse judgment include: (1) Disclaimer of
`
`the involved application or patent; (2) Cancellation or disclaimer of a claim
`
`such that the party has no remaining claim in the trial . . . .”).
`
`Patent Owner’s argument that it is not requesting an adverse judgment
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`is unavailing. As the Federal Circuit indicated, Ҥ 42.73(b) gives the Board
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`authority to construe a patent owner’s actions as a request for an adverse
`
`judgement, suggesting the Board’s characterization of the action rather than
`
`the patent owner’s characterization is determinative.” Arthrex, 880 F.3d at
`
`5
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`
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`IPR2018-01104
`Patent 9,386,433 B2
`
`1349. “The application of the rule on its face does not turn on the patentee’s
`
`characterization of its own request, and such a construction would make no
`
`sense.” Id.
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`Furthermore, Patent Owner’s argument that § 42.73(b)(2) requires “no
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`remaining claim in the trial,” suggesting that the rule only applies if a
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`proceeding has been instituted, also is misplaced. “[T]he language of
`
`subsection 2 relating to remaining claims ‘in the trial’ can be interpreted as
`
`meaning that there is no claim remaining for trial, which occurs when as
`
`here, all of the challenged claims have been cancelled.” Arthrex, 880 F.3d at
`
`1350. There is no dispute that all of the challenged claims are disclaimed in
`
`this proceeding. Ex. 2001.
`
`In addition, we do not agree with Patent Owner that “(1) the Board
`
`lacks authority to enforce adverse judgement where the claims are
`
`disclaimed prior to institution; and (2) even if the Board has such authority,
`
`public policy discourages such enforcement.” Sur-Reply 1−2.
`
`Notably, 35 U.S.C. § 316(a)(4) provides that “[t]he Director shall
`
`prescribe regulations . . . establishing and governing inter partes review
`
`under this chapter and the relationship of such review to other proceedings
`
`under this title.” This statutory provision is not limited to instituted
`
`proceedings. Cf. 35 U.S.C. § 316(a)(8) (“providing for the filing by the
`
`patent owner of a response to the petition under section 313 after an inter
`
`partes review has been instituted” (emphasis added)). The Federal Circuit
`
`consistently has recognized that an inter partes review proceeding begins
`
`with the filing of a petition, in that “IPR proceedings involve two distinct
`
`phases: (1) the institution phase, beginning with the filing of an IPR petition
`
`6
`
`
`
`IPR2018-01104
`Patent 9,386,433 B2
`
`and culminating in the decision of whether to institute an IPR proceeding
`
`(‘institution decision’); and, if instituted, (2) the merits phase, beginning
`
`after the Board’s institution decision and culminating in the Board’s
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`determination of patentability in light of the instituted ground(s) (‘final
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`written decision’).” Harmonic Inc. v. Avid Technology, Inc., 815 F.3d 1356,
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`1364−65 (Fed. Cir. 2016) (emphasis added); see also In re Cuozzo Speed
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`Technologies, LLC, 793 F.3d 1268, 1272 (Fed. Cir. 2015); Achates
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`Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652, 654−55 (Fed. Cir. 2015);
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`St. Jud Med., Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373,
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`1375−76 (Fed. Cir. 2014) (noting that “IPRs proceed in two phases”).
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`Indeed, the Board resolves many discovery, real party in interest, and privity
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`disputes prior to institution in the preliminary phase, minimizing the burden
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`on the parties and costs of a trial. See, e.g., Zerto, Inc. v. EMC Corp., Case
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`IPR2014-01254 (PTAB Nov. 25, 2014) (Papers 15, 35).
`
`Moreover, the Federal Circuit has explained that “[t]he purpose of 37
`
`C.F.R. § 42.73(b) is to define the circumstances in which the estoppel
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`provision of 37 C.F.R. § 42.73(d) applies,” and “[t]he purpose of the
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`estoppel provision is to ‘provide[ ] estoppel against claims that are
`
`patentably indistinct from those claims that were lost.’” Arthrex, 880 F.3d at
`
`1350 (citing Rules of Practice for Trials Before the Patent Trial and Appeal
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`Board and Judicial Review of Patent Trial and Appeal Board Decisions, 77
`
`Fed. Reg. 48,612, 48,649 (Aug. 14, 2012) (“the 2012 Final Rule”)). The
`
`Federal Circuit concluded that “[f]or this purpose, there seems to be no
`
`meaningful distinction between claims that are cancelled before an IPR
`
`7
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`
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`IPR2018-01104
`Patent 9,386,433 B2
`
`proceeding is instituted and claims that are cancelled after an IPR
`
`proceeding is instituted.” Id. (emphases added).
`
`In the 2012 Final Rule, the Office explained:
`
`[Section] 42.73(d)(3) set forth in this final rule is consistent with
`the AIA, other statutory provisions, the common law related to
`estoppel, and the common law related to the recapture rule. See,
`e.g., In re Deckler, 977 F.2d 1449, 1452 (Fed. Cir. 1992); In re
`Clement, 131 F.3d 1464, 1468 (Fed. Cir. 1997) (the recapture
`rule prevents a patentee from regaining through reissue the
`subject matter that the patentee surrendered in an effort to obtain
`allowance of the claim).
`
`77 Fed. Reg. at 48,649.
`
`Construing a statutory disclaimer of all the challenged claims as a
`
`request for adverse judgment aligns with the policies underlying the estoppel
`
`provision of our rules. For instance, treating a disclaimer as a request for
`
`adverse judgment is in keeping with “the policies of finality and repose
`
`embodied in the doctrines of res judicata and collateral estoppel.” Decker,
`
`977 F.2d at 1452; see also the Board’s Decision in Arthrex, Case IPR2016-
`
`00917, slip op. at 8−9. More importantly, it has been well established over
`
`69 years that “[c]laims may be rejected on the ground that applicant has
`
`disclaimed the subject matter involved” and “[t]he rejection on disclaimer
`
`applies to all claims not patentably distinct from the disclaimed subject
`
`matter as well as to the claims directly involved.” Manual of Patent
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`Examining Procedure § 706.03(u) (1st ed.) (1949).
`
`For the foregoing reasons, we construe Patent Owner’s statutory
`
`disclaimer of claims 1−30 of the ’433 patent as a request for adverse
`
`judgment, and we grant the request for adverse judgment.
`
`8
`
`
`
`IPR2018-01104
`Patent 9,386,433 B2
`
`
`Accordingly, it is
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`III. ORDER
`
`ORDERED that adverse judgement is entered against Patent Owner as
`
`to claims 1−30 of the ’433 patent; and
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`FURTHER ORDERED that this proceeding is hereby terminated.
`
`
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`
`
`For PETITIONER:
`
`Naveen Modi
`Joseph Palys
`Daniel Zeilberger
`Arvind Jairam
`Paul Hastings, LLP
`PH-Google-Seven-IPR@paulhastings.com
`
`
`
`For PATENT OWNER:
`
`Sangeeta Shah
`John Halan
`Andrew Turner
`James Proscia
`Brooks Kushman P.C.
`SEVE0101IPR2@brookskushman.com
`
`
`
`9
`
`
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