Filed: November 20, 2019
`
`Doug G. Muehlhauser (Reg. No. 42,018)
`William H. Shreve (Reg. No. 35,678)
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`2040 Main Street, Fourteenth Floor
`Irvine, CA 92614
`Tel.:
`(949) 760-0404
`Fax:
`(949) 760-9502
`E-mail: BoxNomadix@knobbe.com
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`GUEST TEK INTERACTIVE ENTERTAINMENT LTD.,
`Petitioner,
`
`v.
`
`NOMADIX, INC.,
`Patent Owner.
`
`
`
`
`
`
`
`Case IPR2019-01191
`Patent 8,606,917
`
`
`
`
`
`
`
`
`PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY IN SUPPORT
`OF PETITION FOR INTER PARTES REVIEW
`
`
`
`
`
`
`
`Doug G. Muehlhauser (Reg. No. 42,018)
`William H. Shreve (Reg. No. 35,678)
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`2040 Main Street, Fourteenth Floor
`Irvine, CA 92614
`Tel.:
`(949) 760-0404
`Fax:
`(949) 760-9502
`E-mail: BoxNomadix@knobbe.com
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`GUEST TEK INTERACTIVE ENTERTAINMENT LTD.,
`Petitioner,
`
`v.
`
`NOMADIX, INC.,
`Patent Owner.
`
`
`
`
`
`
`
`Case IPR2019-01191
`Patent 8,606,917
`
`
`
`
`
`
`
`
`PATENT OWNER’S SUR-REPLY TO PETITIONER’S REPLY IN SUPPORT
`OF PETITION FOR INTER PARTES REVIEW
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page No.
`
`I.
`
`THE BOARD SHOULD DENY THE PETITION ......................................... 1
`
`A.
`
`B.
`
`C.
`
`The record shows unexcused delay and no diligence in
`filing the Petition ................................................................................... 1
`
`The record shows that Petitioner understood the
`advanced stage of the October 2016 Action when it filed
`the Petition ............................................................................................. 3
`
`The record shows that Petitioner raised exactly the same
`obviousness theories in the October 2016 Action at the
`time it filed the Petition ......................................................................... 3
`
`D.
`
`Petitioner cannot distinguish this case from NHK Spring..................... 4
`
`1.
`
`2.
`
`3.
`
`4.
`
`The stage of the October 2016 Action is far more
`advanced than that of the co-pending litigation in
`NHK Spring ................................................................................. 4
`
`The Board should not credit Petitioner’s conjecture
`about “likely” successes and choices in the
`October 2016 Action ................................................................... 5
`
`Additional factors favor denial of institution .............................. 6
`
`Petitioner’s cited authority is readily distinguished .................... 6
`
`E.
`
`Patent Owner’s preliminary response shows that the ’917
`patent is entitled to priority and that Trudeau and Whyte
`are not prior art ...................................................................................... 7
`
`
`
`-i-
`
`
`
`TABLE OF AUTHORITIES
`
`Page No(s).
`
`Abbott Vascular, Inc. v. Fexstent, LLC,
`No. IPR2019-00882, 2019 WL 4940254 (Oct. 7, 2019) ...................................... 7
`Intel Corp. v. Qualcomm Inc.,
`No. IPR2019-00128, 2019 WL 2295763 (May 29, 2019) ................................... 7
`
`Intuitive Surgical, Inc. v. Ethicon LLC,
`No. IPR2018-01703, 2019 WL 764067 (Feb. 19, 2019) .................................. 6, 7
`NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc.,
`IPR2018-00752, slip op. (PTAB Sept. 12, 2018) ................................................. 4
`
`
`
`-ii-
`
`
`
`IPR2019-01191
`Patent 8,606,917
`
`
`
`Exhibit No. Description
`
`EXHIBIT LIST
`
`2001
`
`2002
`
`2003
`
`2004
`
`2005
`
`2006
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`Nomadix’s Complaint for Breach of Contract
`
`[Redacted] Guest-Tek’s Answer and Counterclaims
`
`Case Scheduling Order
`
`Claim Construction Order
`
`Guest-Tek’s Supplemental Response to Nomadix’s Interrogatory
`No. 6
`
`Declaration of Stuart G. Stubblebine, Ph.D.
`
`Stuart G. Stubblebine Consultant Curriculum Vitae
`
`Hague Certificate of Service of Complaint
`
`Stipulation to Reset Guest-Tek’s Deadline to Respond to Complaint
`
`November 4, 2019 Email string from Steven Rocci to Doug
`Muehlhauser regarding conference of counsel
`
`June 7, 2019 Complaint for Breach of Contract, Case No. 2:19-cv-
`04980 (C.D. Cal)
`
`2012
`
`Excerpts, Opening Expert Report of Dr. Oded Gottesman
`
`Exhibit List Page 1
`
`
`
`IPR2019-01191
`Patent 8,606,917
`
`I. THE BOARD SHOULD DENY THE PETITION
`Petitioner cannot escape the inefficiencies created by the advanced stage of
`
`copending litigation—the full ramifications of which were well known to Petitioner
`
`when it filed the Petition two-and-a-half years after the district court litigation began.
`
`Petitioner cannot escape three fundamental facts:
`
`1.
`
`Patent Owner sued Petitioner in 2016 (“the October 2016 Action”), and
`
`Petitioner answered in September 2017 alleging invalidity of the ’917 patent.
`
`2.
`
`Petitioner filed its Petition in June 2019 asserting three grounds of
`
`invalidity, and in the same month (and for the first time) asserted exactly the same
`
`three invalidity theories in the October 2016 Action.
`
`3. When Petitioner filed its Petition in June 2019, it did so despite
`
`knowing that claim construction, fact discovery and expert discovery would all be
`
`complete before any institution decision on the Petition; and it did so despite
`
`knowing that a district court trial would commence ten months before any decision
`
`by the Board (if review were instituted).
`
`In these circumstances, Petitioner’s delay weighs heavily in favor of the Board
`
`exercising its discretion under § 314(a) to deny institution.
`
`A. The record shows unexcused delay and no diligence in filing the Petition
`Petitioner argues there was no delay in filing the present petition, and that
`
`Petitioner was diligent. Reply at 1-2. The record shows otherwise.
`
`-1-
`
`
`
`IPR2019-01191
`Patent 8,606,917
`
`By its own admission, Petitioner knew the ’917 patent was at issue in the
`
`October 2016 Action no later than August 2017, when it alleged that claims 1 and
`
`11 of the ’917 patent do not cover its products, and also alleged invalidity of any
`
`patent claim alleged by Patent Owner to encompass a product of Petitioner. Ex.
`
`2002 Counterclaims ¶¶ 26-27; Twelfth Affirm. Def. Despite alleging invalidity of
`
`the ’917 patent in August 2017, but waiting until June 2019 to file the Petition,
`
`Petitioner nevertheless argues it was diligent in pursuing the Petition. Reply at 2.
`
`But Petitioner makes no record of anything it did to pursue the Petition for the
`
`seven months from August 2017 through March 2018 when the district court stayed
`
`the October 2016 Action. The stay lasted eleven months and was not lifted until
`
`February 2019. Petitioner argues that it “did not file an IPR during the stay to
`
`preserve resources and attorney’s fees . . ..” Id. It is hard to see how Petitioner can
`
`represent that to the Board when Petitioner filed four IPR petitions against Patent
`
`Owner during the stay.1
`
`Nor does Petitioner make any record of any pursuit of the IPR once the stay
`
`was lifted in February 2019 for the next five months until June 2019 when it finally
`
`
`1
`The four IPRs Guest-Tek filed during the stay are: IPR2018-01660
`
`(filed September 5, 2018); IPR2018-01668 (filed September 7, 2018); IPR2019-
`
`00211 (filed November 12, 2018); and IPR2019-00253 (filed November 12, 2018).
`
`-2-
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`
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`IPR2019-01191
`Patent 8,606,917
`
`filed the present Petition. In short, the present record contains nothing that supports
`
`Petitioner’s claim to diligence in pursuing the instant IPR. Rather, the record shows
`
`only unexcused delay for more than two-and-a-half years.
`
`B.
`
`The record shows that Petitioner understood the advanced stage of the
`October 2016 Action when it filed the Petition
`When Petitioner finally filed the Petition in June 2019, it did so knowing the
`
`district court had already ordered a trial in April 2020. Ex. 2003 at 4. Petitioner
`
`knew that decisions from the trial would be made ten months before any written
`
`decision by the Board if review were instituted. Petitioner further knew that even
`
`before an institution decision, claim construction would be completed, both fact and
`
`expert discovery would be completed, and any summary judgment motions would
`
`be on file if not already decided. Id. at 2-3.
`
`C. The record shows that Petitioner raised exactly the same obviousness
`theories in the October 2016 Action at the time it filed the Petition
`Petitioner filed the Petition with its stated obviousness grounds in June 2019.
`
`Also in June 2019, Petitioner raised the same three obviousness theories for the first
`
`time in the October 2016 Action. Ex. 2005 at 33-34 (see first three combinations
`
`identified in table), 43 (dated June 27, 2019). Now, with expert discovery drawing
`
`to a close within two days of this writing, Petitioner’s expert witness in the October
`
`2016 Action continues to rely on precisely the same theories and expects to present
`
`them at trial. Ex. 2012.
`
`-3-
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`
`
`IPR2019-01191
`Patent 8,606,917
`
`D.
`
`Petitioner cannot distinguish this case from NHK Spring
`1.
`The stage of the October 2016 Action is far more advanced than
`that of the co-pending litigation in NHK Spring
`In the Board’s precedential decision in NHK Spring Co., Ltd. v. Intri-Plex
`
`Techs., Inc., IPR2018-00752, Paper 8 (Sept. 12, 2018), the Board decided to exercise
`
`its discretion to deny institution under § 314(a) because (1) the petitioner asserted
`
`the same invalidity theories in a parallel district-court litigation, (2) expert discovery
`
`would close in the litigation in less than two months from the institution decision,
`
`and (3) the district-court trial was scheduled to take place six months before an
`
`expected Board decision. NHK Spring, slip op. at 19–20. The Board explained that
`
`under such a timeline, institution would be inconsistent with the AIA objective of
`
`providing an efficient alternative to district court litigation. Id. at 20.
`
`Here the district court timeline is far more advanced. Expert discovery in the
`
`October 2016 Action will close two months before any institution, not two months
`
`after institution as in NHK Spring. And trial in the October 2016 Action is scheduled
`
`to commence ten months before any expected Board decision, significantly longer
`
`than the six-month difference in NHK Spring. There can be no question that the
`
`drastic offset between trial in the October 2016 Action and any Board decision on
`
`the present Petition (if instituted) is a direct and foreseeable result of Petitioner’s
`
`delay in filing the Petition.
`
`-4-
`
`
`
`IPR2019-01191
`Patent 8,606,917
`
`2.
`
`The Board should not credit Petitioner’s conjecture about “likely”
`successes and choices in the October 2016 Action
`Petitioner advocates several points of conjecture to try to downplay the
`
`advanced stage of the October 2016 Action:
`
`
`
`
`
`Petitioner speculates about a different trial date because Petitioner
`
`would seek a stay and consolidation with another case. Reply at 4.
`
`Petitioner suggests pursuit of potentially different invalidity positions.
`
`Id. But Petitioner never stipulates that it will not present exactly the
`
`same theories before the district court. In fact, in a tacit admission,
`
`Petitioner argues that “even assuming the district court addresses the
`
`same invalidity issues,” Petitioner will likely appeal. Id. at 5.
`
`
`
`Petitioner speculates about prevailing on summary judgment that the
`
`’917 patent does not cover its products. Id.
`
`Petitioner’s self-serving conjecture is not evidence, and the Board should not
`
`credit Petitioner’s wish-list of theoretical litigation outcomes regarding the October
`
`2016 Action, particularly when they involve positions Patent Owner opposes.
`
`Importantly, while Petitioner is quick to identify likely summary judgment
`
`motions and likely alternative invalidity theories in its Reply, Petitioner never
`
`advises the Board about its recently stated intent to litigate the Trudeau reference on
`
`summary judgment of invalidity of the ’917 patent. Ex. 2010.
`
`-5-
`
`
`
`IPR2019-01191
`Patent 8,606,917
`
`3.
`Additional factors favor denial of institution
`The Board may consider Petitioner’s case on the merits. Grounds 1 and 2 fail
`
`because the Trudeau and Whyte references (necessary for both grounds) fail to even
`
`qualify as prior art. Ground 3 fails because Petitioner failed to make a threshold
`
`showing of a motivation to combine the NIST and Fuh references.
`
`Fairness and equities also favor denial. First, the record amply demonstrates
`
`Petitioner’s lack of diligence and inexcusable delay. Second, Petitioner’s conduct
`
`in challenging patents before the Board violates the parties’ license agreement.
`
`Petitioner filed the present Petition knowing that litigation on Patent Owner’s breach
`
`of contract claims is ongoing in the district court. Exs. 2010, 2011. Patent Owner
`
`believes efficiency and fairness require that these breach of contract claims be
`
`resolved before Petitioner should be permitted to proceed on the present Petition.
`
`4.
`Petitioner’s cited authority is readily distinguished
`In Intuitive Surgical, Inc. v. Ethicon LLC, No. IPR2018-01703, 2019 WL
`
`764067 (Feb. 19, 2019), the Board noted in its institution decision that it would apply
`
`a different claim construction standard from the district court. Moreover, the Board
`
`decided Intuitive Surgical before NHK Spring was designated precedential. Id. n.7.
`
`Unlike Petitioner here, the petitioner in Abbott Vascular, Inc. v. Fexstent,
`
`LLC, No. IPR2019-00882, 2019 WL 4940254 (Oct. 7, 2019) acted diligently, filing
`
`its petition before it answered in district court. Moreover, fact discovery had not
`
`-6-
`
`
`
`IPR2019-01191
`Patent 8,606,917
`
`completed, expert discovery had not begun, and no claim construction had been
`
`done. Additionally, the Board noted district court inclination to stay the co-pending
`
`litigation. Here, nothing suggests any stay of the October 2016 Action.
`
`In Intel Corp. v. Qualcomm Inc., No. IPR2019-00128, 2019 WL 2295763
`
`(May 29, 2019), the Board chose not to exercise its discretion to deny institution in
`
`view of co-pending ITC litigation because (1) different claim construction standards
`
`would be applied, (2) relief on patent invalidity before the ITC differed from that
`
`available before a district court, and (3) the parties had moved to terminate the ITC
`
`proceeding, leaving no co-pending challenge to the patent. These factors distinguish
`
`the Intel decision from the circumstances here.
`
`E.
`
`Patent Owner’s preliminary response shows that the ’917 patent is
`entitled to priority and that Trudeau and Whyte are not prior art
`Patent Owner has shown in its preliminary response that the ’917 patent is
`
`entitled to priority based on the ’060 priority application. That priority disqualifies
`
`Trudeau and Whyte as prior art. Petitioner has not shown otherwise in its Reply.
`
`-7-
`
`
`
`IPR2019-01191
`Patent 8,606,917
`
`Dated: November 20, 2019
`
`
`
`
`
`Respectfully submitted,
`
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`
`
`
`/Doug Muehlhauser/
`Douglas G. Muehlhauser (Reg. No. 42,018)
`William H. Shreve (Reg. No. 35,678)
`
`Attorneys for Patent Owner
`NOMADIX, INC.
`
`Customer No. 20995
`(949) 760-0404
`
`-8-
`
`
`
`IPR2019-01191
`Patent 8,606,917
`
`CERTIFICATE OF COMPLIANCE
`This document complies with the page limitations of the August 2018 Trial
`
`Practice Guide and 37 C.F.R. § 42.24(c)(3). This Sur-Reply contains 8 pages,
`
`excluding the parts of the document exempted by 37 C.F.R. § 42.24(c).
`
`
`
`Dated: November 20, 2019
`
`
`
`/Doug Muehlhauser/
`Douglas G. Muehlhauser (Reg. No. 42,018)
`William H. Shreve (Reg. No. 35,678)
`
`Attorneys for Patent Owner
`NOMADIX, INC.
`
`
`
`
`
`
`
`-9-
`
`
`
`IPR2019-01191
`Patent 8,606,917
`
`CERTIFICATE OF SERVICE
`I hereby certify that, pursuant to 37 C.F.R. § 42.6(e) and with the agreement
`
`of counsel for Petitioner, a true and correct copy of PATENT OWNER’S SUR-
`
`REPLY TO PETITIONER’S REPLY IN SUPPORT OF PETITION FOR INTER
`
`PARTES REVIEW AND EXHIBITS 2010-2012 are being served electronically on
`
`November 20, 2019, to the e-mail addresses shown below:
`
`Jeffrey W. Lesovitz
`Baker & Hostetler LLP
`jlesovitz@bakerlaw.com
`
`Steven J. Rocci
`Baker & Hostetler LLP
`srocci@bakerlaw.com
`
`Daniel J. Goettle
`Baker & Hostetler LLP
`dgoettle@bakerlaw.com
`
`Guest-TekIPR@bakerlaw.com
`
`
`
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`
`Dated: November 20, 2019
`
`
`31741195
`
`/Douglas G. Muehlhauser/
`Douglas G. Muehlhauser (Reg. No. 42,018)
`William H. Shreve (Reg. No. 35,678)
`
`Attorneys for Patent Owner
`NOMADIX, INC.
`
`
`
`-10-
`
`
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