Trials@uspto.gov
`571.272.7822
`
`
`Paper 28
`Date December 5, 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.
`____________
`
`IPR2018-01138
`Patent 9,659,472 B2
`____________
`
`
`
`Before JUSTIN T. ARBES, STACEY G. WHITE, and
`DANIEL J. GALLIGAN, Administrative Patent Judges.
`
`WHITE, Administrative Patent Judge.
`
`
`
`
`
`
`
`JUDGMENT
`Final Written Decision
`Determining All Challenged Claims Unpatentable
`35 U.S.C. § 318(a)
`
`
`
`

`

`IPR2018-01138
`Patent 9,659,472 B2
`
`
`I. INTRODUCTION
`
`We have authority 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–
`10 and 12–45 (“the challenged claims”) of U.S. Patent No. 9,659,472 B2
`(Ex. 1001, “the ’472 patent”) are unpatentable.
`
`A. Background
`Petitioner requested inter partes review of the challenged claims.
`Paper 3 (“Petition”). InVue Security Products Inc. (“Patent Owner”) filed a
`Patent Owner Preliminary Response. Paper 9. Based on our review of these
`submissions, we instituted a trial on all of Petitioner’s challenges as
`described in the Petition. Paper 12 (“Dec. on Inst.”). Petitioner contends the
`challenged claims are unpatentable on the following grounds (Pet. 6):
`35
`U.S.C. § References
`103(a)
`Rothbaum,1 Denison2
`103(a)
`Rothbaum, Denison, Ott3
`103(a)
`Rothbaum, Denison,
`Deguchi4
`
`Claims Challenged
`1–10, 12–15, 17–32, 34–43, 45
`16, 33, 44
`1–10, 12–15, 17–32, 34–38, 41
`
`
`1 U.S. Patent 5,543,782, issued Aug. 6, 1996 (Ex. 1003, “Rothbaum”).
`2 U.S. Patent Pub. 2004/0201449 A1, pub. Oct. 14, 2004 (Ex. 1002,
`“Denison”).
`3 U.S. Patent No. 6,380,855 B1, issued Apr. 30, 2002 (Ex. 1005, “Ott”).
`4 U.S. Patent Pub. 2004/0003150 A1, pub. Jan. 1, 2004 (Ex. 1004,
`“Deguchi”).
`
`2
`
`

`

`IPR2018-01138
`Patent 9,659,472 B2
`
`
`Claims Challenged
`
`35
`U.S.C. § References
`103(a)
`Rothbaum, Denison,
`Deguchi, Ott
`
`16, 33
`
`Patent Owner filed a Patent Owner Response (Paper 14, “PO Resp.”),
`Petitioner filed a Reply (Paper 17, “Reply”), and Patent Owner filed a Sur-
`Reply (Paper 19, “Sur-Reply”).
`An oral hearing was held on August 29, 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 25. Petitioner filed a brief
`(Paper 26, “Pet. CE Br.”) and Patent Owner filed a responsive brief (Paper
`27, “PO CE Br.”).
`
`B. Related Proceedings
`The parties indicate the ’472 patent is at issue in a series of lawsuits
`that have been consolidated and transferred to the United States District
`Court for the District of Oregon. Paper 11, 2–3; Paper 6, 1. Petitioner
`previously sought post-grant review of the ’472 patent (PGR2018-00004),
`but that petition was denied because the ’472 patent is not eligible for such
`review. See Pet. 3; PGR2018-00004, Paper 15. Petitioner has filed petitions
`for inter partes review involving the same parties and related patents,
`IPR2016-00892, IPR2016-00895, IPR2016-00896, IPR2016-00898,
`
`3
`
`

`

`IPR2018-01138
`Patent 9,659,472 B2
`
`IPR2016-00899, IPR2016-01241, IPR2016-01915, IPR2017-00344,
`IPR2017-00345, IPR2017-01900, IPR2017-01901, and IPR2018-00481.
`Paper 11, 3–4. Final written decisions have been issued in each of those
`inter partes review proceedings. To date, eight of those final written
`decisions have been affirmed by the Court of Appeals for the Federal
`Circuit. Ex. 1029. The parties also identify pending patent applications that
`may be affected by this proceeding. See Paper 11, 5; Paper 6, 1.
`
`C. The ’472 patent
`The ’472 patent describes security systems and methods involving a
`key programmed by a programming station with a security code. Ex. 1001,
`1:30–36. This security system is illustrated in Figure 1, which is reproduced
`below.
`
`
`Figure 1 depicts the components of security system 1. Id. at 5:15–16.
`The primary components of security system 1 are programming station 3,
`programmable key 5, and alarm module 7. Id. at 6:18–21. Merchandise 9 is
`connected to alarm module 7 via cable 11 that preferably contains sense
`loop 13. Id. at 6:21–23. Programming station 3 “includes a housing 15
`formed by an internal housing shell 16 preferably having at least a portion
`4
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`

`

`IPR2018-01138
`Patent 9,659,472 B2
`
`thereof formed of an infrared clear plastic material to facilitate the transfer
`of infrared wireless communication waves.” Id. at 6:29–34.
`In the disclosed method, programming station 3 is placed in an “on”
`position. Id. at 9:18–20. “Programmable key 5 is placed in key receiving
`port 29 and activation switch 85 is actuated . . . caus[ing] logic control
`circuit 18 of programming station 3 to randomly generate a unique security
`code (i.e. SDC) . . . .” Id. at 9:21–26. The SDC is transmitted via
`communication circuit 20 to programmable key 5, where it is stored in
`memory 81. Id. at 9:26–29. Once programmed with the SDC,
`programmable key 5 is taken to one or more alarm modules 7 (or other
`security devices) and inserted into key receiving port 65. Id. at 9:43–46.
`The key then programs the SDC into the memory of alarm module 7. Id.
`at 9:47–53.
`
`D. Illustrative Claim
`Petitioner challenges claims 1–10 and 12–45 of the ʼ472 patent, of
`which claims 1, 17, and 39 are independent. Claim 1 is illustrative of the
`challenged claims and is reproduced below:
`1. A method for protecting items of merchandise from theft, the
`method comprising:
`providing a single security code with a programming station, the
`single security code usable in only a single retail store;
`inserting an end of the programmable key within a port defined
`in a housing of the programming station;
`storing the single security code at the programmable key; and
`storing the single security code at a security device, the security
`device comprising an alarm and a memory for storing the
`single security code, 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,
`
`5
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`

`IPR2018-01138
`Patent 9,659,472 B2
`
`
`controlling the security device if the single security code stored
`by the security device matches the single security code
`stored by the programmable key.
`II. ANALYSIS OF ASSERTED GROUNDS
`
`A. Level of Ordinary Skill in the Art
`As part of our determination as to whether an invention would have
`been obvious, 35 U.S.C. § 103 requires us to ascertain the level of ordinary
`skill in the pertinent art at the time of the invention. Graham v. John Deere,
`383 U.S. 1, 17 (1966). The resolution of this question is important because
`it allows us to “maintain[] objectivity in the obviousness inquiry.” Ryko
`Mfg. Co. v. Nu–Star, Inc., 950 F.2d 714, 718 (Fed. Cir. 1991). The person
`of ordinary skill in the art is a hypothetical person who is presumed to have
`known the relevant art at the time of the invention. In re GPAC, Inc., 57
`F.3d 1573, 1579 (Fed. Cir. 1995).
`Factors that may be considered in determining the level of ordinary
`skill in the art include, but are not limited to, the types of problems
`encountered in the art, the sophistication of the technology, and educational
`level of active workers in the field. Id. In addition, the level of ordinary
`skill in the art may be reflected by the prior art of record. Okajima v.
`Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir. 2001). Generally, it is easier to
`establish obviousness under a higher level of ordinary skill in the art.
`Innovention Toys, LLC v. MGA Entm’t, Inc., 637 F.3d 1314, 1323 (Fed. Cir.
`2011) (“A less sophisticated level of skill generally favors a determination of
`nonobviousness . . . while a higher level of skill favors the reverse.”).
`Petitioner’s declarant, Thaine Allison III, testifies that a person of
`ordinary skill in the art
`
`6
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`

`IPR2018-01138
`Patent 9,659,472 B2
`
`
`would have had a four year technical degree (e.g. B.S.
`engineering) with a minimum of three years of experience in
`using, provisioning, designing or creating, or supervising the
`design or creation, of such theft prevention devices, and other
`related security devices. Extended experience in the industry
`could substitute for a technical degree. A [person of ordinary
`skill in the art] would have known how to research the technical
`literature in fields relating to theft prevention, including in retail
`and other environments, as well as security in general. Also, a
`[person of ordinary skill in the art] may have worked as part of
`a multidisciplinary team and drawn upon not only his or her
`own skills, but also taken advantage of certain specialized skills
`of others in the team, e.g., to solve a given problem. For
`example, designers, engineers (e.g., mechanical or electrical),
`and computer scientists or other computer programmers may
`have been part of a team.
`Ex. 1019 ¶ 20; see Pet. 14 (citing Ex. 1019 ¶¶ 18–21). Based on the
`evidence of record, including the testimony of Mr. Allison, the subject
`matter at issue, and the prior art of record, we adopt the level of ordinary
`skill in the art set forth in the Decision on Institution, which is that a person
`of ordinary skill in the art would have had a four-year technical degree or
`equivalent experience with a minimum of two years of professional
`technical experience in the field of theft prevention devices or related
`security devices. Dec. on Inst. 10; see also PO Resp. 17–18 (agreeing with
`statement of level of ordinary skill in the Decision on Institution). We apply
`this level of ordinary skill in the art in our analysis below.
`
`B. Claim Construction
`In an inter partes review, “[a] claim in an unexpired patent that will
`not expire before a final written decision is issued shall be given its broadest
`reasonable construction in light of the specification of the patent in which it
`
`7
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`

`IPR2018-01138
`Patent 9,659,472 B2
`
`appears.” 37 C.F.R. § 42.100(b) (2017).5 In determining the broadest
`reasonable construction, we presume that claim terms carry their ordinary
`and customary meaning. See In re Translogic Tech., Inc., 504 F.3d 1249,
`1257 (Fed. Cir. 2007). This presumption may be rebutted when a patentee,
`acting as a lexicographer, sets forth an alternate definition of a term in the
`specification with reasonable clarity, deliberateness, and precision. In re
`Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994).
`Petitioner seeks construction of the phrases “single security code,”
`“usable in only a single retail store,” “unique to the single retail store and the
`programming station,” “a ‘housing’ with ‘a port,’” “logic control circuit,”
`and “‘invalidating’ the ‘key.’” Pet. 8–14. Patent Owner seeks construction
`of “single security code” and “invalidates the single security code,” and
`Patent Owner provides arguments responsive to Petitioner’s proposed
`construction of “usable in only a single retail store.” PO Resp. 12–17.
`Based on the issues before us, we discern a need to provide express
`construction for “single security code,” “unique to the single retail store and
`the programming station,” and “invalidating the single security code.” No
`other term requires express construction. See Vivid Techs., Inc. v. Am. Sci.
`& Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999); see also Nidec Motor
`
`
`5 The Petition in this proceeding was filed on May 22, 2018, prior to the
`effective date of the rule change that replaces the broadest reasonable
`interpretation standard with the federal court claim interpretation standard.
`See Changes to the Claim Construction Standard for Interpreting Claims in
`Trial Proceedings Before the Patent Trial and Appeal Board, 83 Fed. Reg.
`51,340, 51,340 (Oct. 11, 2018) (“This rule is effective on November 13,
`2018 and applies to all IPR, PGR and CBM petitions filed on or after the
`effective date.”).
`
`8
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`

`

`IPR2018-01138
`Patent 9,659,472 B2
`
`Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017 (Fed.
`Cir. 2017) (applying Vivid Techs. in the context of an inter partes review).
`1. “Single Security Code”
`In the Decision on Institution, we interpreted “single security code” to
`mean “one security code, but the recited methods and system do not exclude
`programming stations that are capable of programming other codes into
`other keys.” Dec. on Inst. 7. This was consistent with Petitioner’s argument
`that the phrase is broad enough “to encompass a programming station that
`provides or is configured to provide one security code at a time.” Pet. 8.
`We also noted that “[i]n the final written decision in IPR2016-00895, we
`construed the term ‘single security code’ as recited in U.S. Pat. No.
`9,135,800 B2 (‘the ’800 patent’) in the same manner.” Dec. on Inst. 7 n.5
`(citing Paper 35, 10–13). Patent Owner made arguments regarding this term
`in its Patent Owner Response, but it “no longer contests [Petitioner’s]
`proposed construction of a programming station that provides or is
`configured to provide, one security code at a time for a single security code.”
`Tr. 23:12–14. We do not perceive any reason or evidence that compels any
`deviation from our preliminary interpretation in the Institution Decision, and
`we adopt the previous analysis for purposes of this Decision.
`2. Unique to the Single Retail Store and the Programming Station
`In the Decision on Institution, we interpreted “unique to the single
`retail store and the programming station” to encompass (but not be limited
`to) a randomly generated code. Dec. on Inst. 7. We do not perceive any
`reason or evidence that compels any deviation from the interpretation, and
`we adopt the previous analysis for purposes of this Decision.
`
`9
`
`

`

`IPR2018-01138
`Patent 9,659,472 B2
`
`
`3. Invalidating the Single Security Code
`Claim 10 recites “invalidating the single security code.” Claims 26
`and 37 recite substantially similar phrases. According to Petitioner, the ’472
`patent describes two methods of invaliding a security code: (1) preventing
`the key from transmitting the code, and (2) erasing the code. Pet. 13–14.
`Thus, Petitioner asserts that this term is broad enough to encompass “erasing
`the security code.” Id.
`Patent Owner asserts that “invalidating the security code means
`rendering the security code in the key incapable of controlling the security
`device.” PO Resp. 16. Patent Owner notes that this construction was
`adopted in IPR2016-01241 for a similar phrase. Id. (citing 1241 IPR6 Paper
`7, 6–8 (PTAB Dec. 20, 2016)) (Decision on Institution) (construing
`“invalidates the security code in the key”). Additionally, we note that the
`same construction also was adopted in IPR2016-019157 (1915 IPR Paper 7,
`7–10 (construing “invalidating the security code stored in the key”)) and
`IPR2018-00481 for similar phrases (481 IPR Paper 29, 39 (construing
`“security code . . . is configured to be invalidated”)).
`Based on the record before us, we discern no reason to depart from
`our previous analysis of the construction of similar phrases. We adopt the
`previous analysis from the 1241 IPR (1241 IPR Paper 7, 6–8), the 1915 IPR
`(1915 IPR Paper 7, 7–10), and the 481 IPR (481 IPR Paper 29, 39), and
`
`
`6 Papers and exhibits from proceedings other than IPR2018-01138 will be
`indicated by a prefix indicating the proceeding. For example, papers from
`IPR2016-01241 will bear the prefix “1241 IPR.”
`7 In the 1915 IPR and the 1241 IPR, we only construed that phrase at the
`institution phase. We did not institute review of the claims that included that
`term so there was no need for a final construction of the term in either IPR.
`
`10
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`

`

`IPR2018-01138
`Patent 9,659,472 B2
`
`construe “invalidating the single security code,” as recited in claim 10 and
`similarly recited in claims 26 and 37, to mean “rendering the security code
`in the key incapable of controlling the security device.”
`
`C. Collateral Estoppel
`This case is the latest in a large family8 of related proceedings. As of
`this date, final written decisions have been issued in twelve related
`proceedings, and decisions in eight of those proceedings have been affirmed
`by the Federal Circuit. Ex. 1029. An appeal is pending in one case, one
`case was not appealed, and two cases were appealed but the appeal was later
`voluntarily dismissed by Patent Owner prior to a decision from the Federal
`Circuit. A chart of the prior decisions is below.
`Case Number Patent
`Exhibit/Paper
`Number
`U.S. Pat. No.
`8,884,762
`B2 (“the
`’762 patent”)
`U.S. Pat. No.
`9,135,800
`B2 (“the
`’800 patent”)
`
`Appeal Status9
`
`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)
`
`IPR2016-
`00892
`
`IPR2016-
`0089510
`IPR2016-
`00896
`
`Final Written
`Decision
`Ex. 1021 (“the
`892 Decision”)
`Final Written
`Decision
`Ex. 1022 (“the
`895 Decision”)
`
`
`8 The subject patents of these proceedings are all related. For example, the
`’472 patent is a continuation of the ’452 patent and lists the ’110 patent, ’800
`patent, ’247 patent, and ’762 patent as related patents. See Ex. 1001, 1:8–27.
`9 Exhibit 1029 contains copies of the Rule 36 affirmances from the Federal
`Circuit for the following cases: IPR2016-00892, IPR2016-00895, IPR2016-
`00896, IPR2016-00898, IPR2016-00899, and IPR2016-01241.
`10 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
`
`11
`
`

`

`Exhibit/Paper
`
`Appeal Status9
`
`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)
`
`Appeal voluntarily
`dismissed by Patent
`Owner
`
`Notice of Appeal filed
`September 17, 2019
`
`Final Written
`Decision
`Ex. 1020 (“the
`898 Decision”)
`Final Written
`Decision
`Ex. 1027 (“the
`1241 Decision”)
`Final Written
`Decision
`Ex. 1025 (“the
`1915 Decision”)
`Final Written
`Decision
`Ex. 1026 (“the
`344 Decision”)
`Final Written
`Decision
`Ex. 1028 (“the
`1900 Decision”)
`Final Written
`Decision
`481 IPR Paper
`29 (“the 481
`Decision”)
`
`IPR2018-01138
`Patent 9,659,472 B2
`
`
`Case Number Patent
`Number
`U.S. Pat. No.
`9,269,247
`B2 (“the
`’247 patent”)
`U.S. Pat. No.
`7,737,846
`B2 (“the
`’846 patent”)
`U.S. Pat. No.
`7,737,844
`B2 (“the
`’844 patent”)
`U.S. Pat. No.
`9,396,631
`B2 (“the
`’631 patent”)
`U.S. Pat. No.
`9,478,110
`B2 (“the
`’110 patent”)
`U.S. Pat. No.
`9,576,452
`(“the ’452
`patent”)
`
`IPR2016-
`00898
`IPR2016-
`00899
`IPR2016-
`01241
`
`IPR2016-
`01915
`
`IPR2017-
`00344
`IPR2017-
`00345
`IPR2017-
`01900
`IPR2017-
`01901
`IPR2018-
`00481
`
`
`The parties assert that collateral estoppel applies to certain aspects of
`this proceeding based on prior proceedings. See Ex. 3001. Specifically, the
`parties listed the following areas of agreement as to the application of
`collateral estoppel:
`
`
`final written decision was issued for each of those sets of cases. For ease of
`reference, unless otherwise indicated, we will refer to the lowest numbered
`case.
`
`12
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`IPR2018-01138
`Patent 9,659,472 B2
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`
`1. The parties agree that estoppel does not apply to claim 25.
`2. The parties agree that [Patent Owner] is estopped from
`arguing against the combination of Rothbaum and Denison on
`independent claims 1, 17, and 39, except to the extent that the
`claims cover “the single security code usable in only a single
`retail store.”
`3. The parties agree that estoppel applies to dependent claim 37
`of the ’472 patent (pursuant to the Board’s FWD in IPR2018-
`481, and subject to [Patent Owner’s] appeal rights).
`4. The parties agree that estoppel applies to dependent claim 36
`of the ’472 patent (pursuant to the Board’s FWD in IPR2018-
`481, and subject to [Patent Owner’s] appeal rights).
`5. The parties agree, should independent claims 1, 17, and 39 be
`found invalid, then estoppel applies to the port limitations
`recited in claims 14, 27, 29, 30, and 41 (pursuant to the Board’s
`FWD in IPR2018-481, and subject to [Patent Owner’s] appeal
`rights).
`6. The parties agree that estoppel applies to the real party-in-
`interest issue.
`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.”
`
`13
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`B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1302–03
`(2015) (internal citations omitted). Collateral estoppel in inter partes
`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)). 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)). It is with these principles in mind that we review the parties’
`contentions as to the application of collateral estoppel to the issues in this
`case.
`
`D. Real Party-In-Interest
`The parties have agreed that “estoppel applies to the real party-in-
`interest issue.” Ex. 3001. We have addressed the propriety of Petitioner’s
`real party-in-interest (“RPI”) identifications in a number of previous
`proceedings, and we agree that collateral estoppel applies to this issue. A
`chart of the prior RPI decisions is below.
`
`
`14
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`IPR2018-01138
`Patent 9,659,472 B2
`
`
`RPI Decision
`
`Ex. 1023 (Decision on
`Motion to Terminate)
`Ex. 1023 (Decision on
`Motion to Terminate)
`
`Final Written
`Decision
`Ex. 1025 (“the
`1915 Decision”)
`Ex. 1026 (“the 344
`Decision”)
`
`Appeal
`Status
`Not
`Appealed
`Affirmed
`
`Case
`Number(s)
`IPR2016-
`01915
`IPR2017-
`00344
`IPR2017-
`00345
`IPR2017-
`01900
`IPR2017-
`01901
`IPR2018-
`00481
`
`Ex. 1028 (Final
`Written Decision), 6–
`21
`
`Ex. 1028 (“the
`1900 Decision”)
`
`Appeal
`Dismissed
`
`Final Written
`Decision 481 IPR
`Paper 29, 11–17
`
`Final Written
`Decision 481 IPR
`Paper 29
`
`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 Indus.,
`LLC, 926 F.3d 1306, 1311 (Fed. Cir. 2019) (applying estoppel based on a
`non-appealed decision).
`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). As such, we agree with the
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`parties’ assertion that collateral estoppel applies to the RPI issue in this case,
`and we conclude that no exception to collateral estoppel applies.
`Thus, we determine that collateral estoppel prevents the relitigation of
`the RPI issue in this proceeding. Accordingly, for the reasons given in the
`1900 IPR 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).
`
`E. Asserted Obviousness over Rothbaum and Denison
`Petitioner contends that claims 1–10, 12–15, 17–32, 34–43, and 45
`would have been obvious over Rothbaum and Denison. Pet. 14–58.
`Petitioner explains how Rothbaum and Denison allegedly teach the claimed
`subject matter and relies upon the testimony of Mr. Allison to support its
`positions. Id. The parties agree that many of the issues implicated by
`Petitioner’s assertions regarding the obviousness of these claims over
`Rothbaum and Denison are barred from further litigation due to collateral
`estoppel. Ex. 3001. There are also several issues upon which collateral
`estoppel is disputed. Id.; PO Resp. 57; Reply 1–2, 6–7, 9–10, 14–16; PO CE
`Br.; Pet. CE Br. We will address the application of collateral estoppel and
`analyze any remaining issues of patentability.
`
`1. Overview of Rothbaum
`Rothbaum is directed to an electronic security system for monitoring
`merchandise that provides for the sounding of an alarm based on an
`indication from a sensor. Ex. 1003, code (57). The system is intended to be
`used for theft prevention in retail stores, hotels, and other businesses. Id. at
`1:6–9. Figure 1 of Rothbaum is reproduced below.
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`Figure 1 depicts a perspective view of Rothbaum’s security system.
`Id. at 4:22–23. Specifically, it depicts “a twelve jack security system 10 . . .
`which can protect twelve items of merchandise.” Id. at 5:10–11. Article 22
`is the merchandise being protected by security system 10. Id. at 5:5–9,
`5:49–50. Sensor 24 is attached to article 22. Id. at 5:54–56, 5:62–64. Item
`cord 28 connects sensor 24 to the alarm circuitry located in housing 12. Id.
`at 5:16–17, 6:1–2. An alarm will sound and an LED will light when an
`alarm condition occurs. Id. at 3:43–47; see id. at 12:10–18 (describing the
`activation of an alarm if someone tampers with the security device).
`“[O]nce a breach of security condition is detected, the alarm horn 126 will
`sound [u]ntil key switch 38 is turned from the ON position to the SET
`position.” Id. at 8:23–25.
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`2. Overview of Denison
`Denison is directed to vending machines that are equipped with
`electronic locks. Ex. 1002 ¶ 2. Denison describes vending machines as
`automated means for selling products. Id. ¶ 3. Access to the contents of the
`vending machine is controlled by an electronic lock and key. Id. ¶ 7. In
`order to unlock the electronic lock, there must be a match between codes
`stored in the electronic key and electronic lock. Id. ¶ 42.
`Figure 17 of Denison is reproduced below.
`
`
`Figure 17 depicts “a system in which one or more programming
`schemes may be implemented for field-programming the electronic lock 402
`of the vending machine 400 without having to open the vending machine to
`access a program switch.” Id. ¶ 77. The vending machine may be opened
`using electronic key 410, which may be programmed by external computing
`device 426. Id. ¶ 85. External computing device 426 has a memory that
`includes an “access code or codes for electronic locks on vending machines,
`and access control parameters for the electronic locks.” Id. ¶ 79. Database
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`436 may be resident on external computing device 426. Id. “[D]atabase 436
`may alternatively or additionally contain programs for computing new
`access codes and generating control parameters for electronic locks and
`keys.” Id. In addition, “external computing device 426 may . . . have
`programs that implement[] mathematical algorithms for computing the
`access codes and control parameters. Such calculations may generate the
`access codes randomly or based on a function that includes the time as a
`variable.” Id. ¶ 84.
`In addition, Denison’s keys may be limited to operating during certain
`hours. Id. ¶¶ 41, 60. Figure 9 of Denison is reproduced below.
`
`
`Figure 9 depicts a computer for programming operation limits into an
`electronic key. Id. ¶ 23. Operation limits may be customized for each key
`in the system. Id. ¶ 61. These limits could be used to render a key inactive
`outside of specified work hours. Id. A supervisor programs these limits on
`a personal computer (PC), and the limits are then transferred to the key. Id.
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`3. Estoppel Based on Rothbaum and Denison
`Petitioner asserts that claims 1–10, 12–15, 17–32, 34–43, and 45
`would have been obvious over Rothbaum and Denison. Pet. 14–58. As
`indicated in the chart below, we have found approximately 200 claims from
`related patents to be obvious over Rothbaum and Denison.
`Case Number
`Patent
`Exhibit/Paper
`Claims obvious over
`Rothbaum and
`Denison
`’762 patent Ex. 1021, 18–50 1, 5–20, 22–25, 27
`’800 patent Ex. 1022, 23–61 1, 3–22, 24–30, 32–49
`’247 patent Ex. 1020, 22–59
`1, 3–37
`’846 patent Ex. 1027, 22–31
`9
`’631 patent Ex. 1026, 13–53 1–5, 8–27, 29
`’110 patent Ex. 1028, 45–69 1–17, 19–36
`’452 patent
`481 IPR Paper 29 1–3511
`
`IPR2016-00892
`IPR2016-00895
`IPR2016-00898
`IPR2016-01241
`IPR2017-00344
`IPR2017-01900
`IPR2018-00481
`
`Patent Owner withdrew its appeal of the 1900 IPR and the appeal for the 481
`IPR is still pending, but the Federal Circuit has affirmed our final written
`decisions in all of the other cases listed above. See Ex. 1029.
`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 F.3d at 1294; see MaxLinear, Inc. v. CF CRESPE
`LLC, 880 F.3d 1373, 1376 (Fed. Cir. 2018). It has long been understood that
`a party may be bound not simply by the ultimate conclusion (e.g.,
`unpatentability of a claim), but by any subsidiary factual determinations that
`
`
`11 Our determinations as to claims 1–7, 9–18, and 23–35 of the ’452 patent
`were based in part on the application of collateral estoppel to those claims in
`regards to Petitioner’s allegations of unpatentability over Rothbaum and
`Denison.
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`were actually litigated and essential to the judgment. Restatement (Second)
`of Judgments § 27, cmt. j (stating that the issue must have been “actually
`recognized by the parties as important and by the trier as necessary to the
`first judgment”); 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