Trials@uspto.gov
`Tel: 571-272-7822
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`Paper 12
`Date: August 14, 2020
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`APPLE, INC.,
`Petitioner,
`v.
`SEVEN NETWORKS, LLC,
`Patent Owner.
`_______________
`
`IPR2020-00266
`Patent 10,135,771 B2
`_______________
`
`
`Before THU A. DANG, KARL D. EASTHOM, and JONI Y. CHANG,
`Administrative Patent Judges.
`
`DANG, Administrative Patent Judge.
`
`
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
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`Tel: 571-272-7822
`
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`
`
`Paper 12
`Date: August 14, 2020
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_______________
`APPLE, INC.,
`Petitioner,
`v.
`SEVEN NETWORKS, LLC,
`Patent Owner.
`_______________
`
`IPR2020-00266
`Patent 10,135,771 B2
`_______________
`
`
`Before THU A. DANG, KARL D. EASTHOM, and JONI Y. CHANG,
`Administrative Patent Judges.
`
`DANG, Administrative Patent Judge.
`
`
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
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`IPR2020-00266
`Patent 10,135,771 B2
`
`I.
`
`INTRODUCTION
`
`Background
`A.
`Apple Inc. (“Petitioner”) filed a Petition requesting an inter partes
`review of claims 1–30 (the “challenged claims”) of U.S. Patent No.
`10,135,771 B2 (Ex. 1001, “the ’771 patent”). Paper 2 (“Pet.”). Seven
`Networks, LLC (“Patent Owner”) filed a Preliminary Response. Paper 8
`(“Prelim. Resp.”).
`Under 37 C.F.R. § 42.4(a), the Board has authority to determine
`whether to institute an inter partes review. Applying the standard set forth
`in 35 U.S.C. § 314(a), which requires demonstration of a reasonable
`likelihood that Petitioner would prevail with respect to at least one
`challenged claim, we grant Petitioner’s request and institute an inter partes
`review of all challenged claims.
`
`Related Proceedings
`B.
`Petitioner identifies the ’771 patent as the subject of SEVEN
`Networks, LLC v. Apple Inc., 2:19-cv-00115 (E.D. Tex.). Pet. 70.
`
`The ’771 Patent
`C.
`The ’771 patent, titled “Secure End-to-End Transport Through
`Intermediary Nodes,” issued on November 20, 2018, from Application No.
`15/639,014 filed June 30, 2017. Ex. 1001, codes (54), (45), (22). The ’771
`patent acknowledges security concerns when information is transferred over
`the Internet, because decrypting packets at intermediary points presents
`security risks as an eavesdropper may be able to access the data after
`decryption at the intermediary network processing nodes. See Ex. 1001,
`1:42–57. Accordingly, the ’771 patent addresses this problem. Id.
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`IPR2020-00266
`Patent 10,135,771 B2
`In accordance with the embodiments of the ’771 patent, a
`communication node encrypts a first portion of a transaction associated with
`point-to-point communications using an encryption key corresponding to a
`first security association, and encrypts a second portion of the transaction
`associated with end-to-end communications using an encryption key
`corresponding to a second security association. Id. at 1:61–67. An
`illustration of one embodiment of the ’771 patent’s communication network
`is depicted in Figure 1, reproduced below:
`
`Figure 1 shows communication network 12 that includes mobile network 14,
`enterprise network 18, and communication management system 16 that
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`IPR2020-00266
`Patent 10,135,771 B2
`manages communications between mobile network 14 and enterprise
`network 18. Id. at 2:33–37. Mobile network 14 includes mobile devices 21
`that communicate with an internet protocol (IP) infrastructure thru a wireless
`or landline service provider, while enterprise network 18 includes email
`server 34 containing user mailbox 44 accessible using personal computer
`(PC) 38. Id. at 2:37–53. PC 38 is connected to email server 34 over Local
`Area Network (LAN) 35, wherein PC 38 includes memory 39 for storing
`local files. Id. at 2:54–61. Communication management system 16 includes
`management server 28 that includes processor 33 which operates transfer
`agent 31, which in turn manages the transactions between mobile devices 21
`and enterprise network 18. User database 42 includes configuration
`information for different users of a mobile communication server. Id. at
`2:62–3:1.
`As shown in Figure 1, personal client 40 makes outbound connection
`25 to management server 28, registers the presence of a particular user to
`management server 28, and negotiates a security association specifying a
`cryptographic ciphersuite and unique, secret point-to-point encryption key
`29 over connection 25. Id. at 3:7–19. Further, mobile device 21 negotiates a
`point-to-point security association, specifying a cryptographic ciphersuite
`and a unique encryption key 27, with management server 28. Id. at 3:20–22.
`
`The Challenged Claims
`D.
`Of the challenged claims, claims 1, 14, and 26 are the independent
`
`claims. Claims 2–13, 15–25, and 27–30 depend respectively from claims 1,
`14, and 26. Claim 1 is illustrative, and is reproduced below:
`
`1. A non-transitory computer-readable storage medium
`storing instructions to be implemented by a first computer
`having a processor, wherein the instructions, when executed by
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`IPR2020-00266
`Patent 10,135,771 B2
`the processor, cause the first computer to perform steps
`comprising:
`
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`receiving a token issued by an intermediary server; and
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`transmitting a transaction message comprising payload
`data to the intermediary server, wherein the payload data is
`transmitted to a second computer by the intermediary server
`based on the token and the intermediary server is coupled to the
`second computer over a mobile network.
`
`Ex. 1001, 12:13–24.
`
`E. Asserted Ground of Unpatentability
`Petitioner challenges the patentability of claims 1–30 of the ’771
`patent on the following ground (Pet. 1):
`
`Claim(s) Challenged 35 U.S.C. §1
`1–30
`103
`
`Petitioner relies on the Declaration of Dr. Darrell D. E. Long, Ph.D.
`(Ex. 1003) in support of its unpatentability contentions. Pet. 2.
`
`Reference(s)/Basis
`Stephenson,2 Allen,3
`
`
`1 The Leahy-Smith America Invents Act (“AIA”) included revisions to 35
`U.S.C. §§ 102, 103 that became effective on March 16, 2013. Because the
`’771 patent has an effective filing date before March 16, 2013, we apply the
`pre-AIA versions of the statutory bases for unpatentability.
`2 U.S. Patent No. 7,814,208 B2, issued on October 12, 2010, filed on April 3,
`2001 (Ex. 1004, “Stephenson”).
`3 U.S. Patent No. 6,877,095 B1, issued on April 5, 2005, filed on March 9,
`2000 (Ex. 1005, “Allen”).
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`II. ANALYSIS
`
`Claim Construction
`A.
`We construe claims using the same claim construction standard that
`would be used to construe the claim in a civil action under 35 U.S.C. §
`282(b), including construing the claim in accordance with the ordinary and
`customary meaning of such claim as understood by one of ordinary skill in
`the art and the prosecution history pertaining to the patent. 37 C.F.R. §
`42.100(b) (2019). Thus, we apply the claim construction standard as set
`forth in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc).
`Petitioner proposes construction of the terms “first computer having a
`processor configured for” (claim 26), “non-transitory computer-readable
`storage medium storing instructions . . .” (claim 1), and “identifies and
`authenticates the transaction message based on the token” (claims 5, 12, 18,
`24, 29). Pet. 10–15. At this time, Patent Owner does not address
`Petitioner’s proposed claim construction. See generally Preliminary
`Response.
`Only terms that are in controversy need to be construed, and only to
`the extent necessary to resolve the controversy. See Nidec Motor Corp. v.
`Zhongshan Broad Ocean Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017)
`(“[W]e need only construe terms ‘that are in controversy, and only to the
`extent necessary to resolve the controversy’ . . . .” (quoting Vivid Techs., Inc.
`v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999))). At this
`time, we determine that it is unnecessary to construe any claim term
`expressly to determine whether to institute a trial.
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`Patent 10,135,771 B2
`B. Discretional Denial
`Institution of an inter partes review is discretionary, not mandatory.
`See Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016) (“[T]he
`agency’s decision to deny a petition is a matter committed to the Patent
`Office’s discretion.”); Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356,
`1367 (Fed. Cir. 2016) (“[T]he PTO is permitted, but never compelled, to
`institute an IPR proceeding.”).
`Patent Owner argues as a preliminary matter that we should exercise
`our discretion to deny institution in this case (1) under 35 U.S.C. § 314(a)
`because “a jury in the parallel district court litigation between the same
`parties will resolve the ’771 patent’s validity over substantially the same
`prior art and arguments in a trial scheduled to begin over nine months before
`the final written decision here would be due,” Prelim. Resp. 3, and (2) under
`35 U.S.C. § 325(d) because “the Examiner who found the challenged claims
`allowable has also allowed nearly identical claims in a continuation after
`presentation and careful consideration of the Petition and all of its arguments
`and art.” Prelim. Resp. 1. We address Patent Owner’s arguments in turn.
`
`B1. 35 U.S.C. § 314(a)
`The decision whether to exercise discretion to deny institution under
`§ 314(a) is based on “a balanced assessment of all relevant circumstances in
`the case, including the merits.” Patent Trial and Appeal Board Consolidated
`Trial Practice Guide (Nov. 2019) (“Consolidated Trial Practice Guide”),
`available at https://www.uspto.gov/sites/default/files/documents/tpgnov.pdf,
`at 58 (citing General Plastic Indus. Co. v. Canon Kabushiki Kaisha,
`IPR2016- 01357, Paper 19 at 15 (PTAB Sept. 6, 2017) (precedential)).
`Those circumstances include “events in other proceedings related to the
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`same patent, either at the Office, in district courts, or the ITC.” Id. When
`considering the impact of parallel litigation in a decision to institute, the
`Board seeks, among other things, to minimize the duplication of work by
`two tribunals to resolve the same issue. See NHK Spring Co. v. Intri-Plex
`Techs. Inc., IPR2018-00752, Paper 8 at 19–20 (PTAB Sept. 12, 2018)
`(precedential) (“NHK”). In NHK, the Board determined that it was
`appropriate to consider the advanced state of a parallel district court
`litigation involving the same issues and an earlier trial date in determining
`whether to exercise its discretion to deny institution under § 314(a). Id.
`In Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar.
`20, 2020) (precedential) (“Fintiv”), the Board discussed potential
`applications of NHK, and identified a non-exclusive list of factors to
`consider when determining whether a related, parallel district court action
`provides a basis for discretionary denial. Fintiv at 5–16. Those factors
`include:
`1. whether the court granted a stay or evidence exists that one
`may be granted if a proceeding is instituted;
`2. proximity of the court’s trial date to the Board’s projected
`statutory deadline for a final written decision;
`3. investment in the parallel proceeding by the court and the
`parties;
`4. overlap between issues raised in the petition and in the
`parallel proceeding;
`5. whether the petitioner and the defendant in the parallel
`proceeding are the same party; and
`6. other circumstances that impact the Board’s exercise of
`discretion, including the merits.
`
`Fintiv at 5–6. We authorized the parties to address these factors in a Reply
`(Paper 10 (“Pet. Prelim. Reply”)) and Sur-reply (Paper 11 (“PO Prelim. Sur-
`reply”)).
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`Patent 10,135,771 B2
`We now consider these factors to determine whether we should
`exercise discretion to deny institution under § 314(a). In evaluating the
`factors, we take a holistic view of whether efficiency and integrity of the
`system are best served by denying or instituting review. Fintiv at 6.
`1. Whether a stay exists or is likely to be granted if a
`proceeding is instituted
`
`Petitioner contends that the Petition’s institution would enable the
`Board to efficiently resolve the issue of the ’771 patent’s invalidity, wherein
`that opportunity for simplification “greatly increases the likelihood of a
`District Court stay.” Pet. Prelim. Reply 4 (citing NFC Techs. LLC v. HTC
`Am., Inc., Case No. 13-CV-1058, 2015 WL 1069111 (E.D. Tex. Mar. 11,
`2015); Uniloc USA, Inc. v. Samsung Elecs. Am., Inc., Case No. 2:16-cv-642-
`JRG, 2-3 (E.D. Tex. Jun. 13, 2017)). Further, Petitioner contends that
`institution of inter partes review against the ’771 patent and other Seven
`patents has the potential to simplify other proceedings, “by addressing prior
`art otherwise raised but left unaddressed in settled IPR challenges filed by
`Seven’s earlier targets,” and “by relieving future courts of the need to
`address the same during Seven’s serial litigation campaign.” Id.
`Patent Owner points out that “Petitioner has not even said it would
`move for a stay if one or more IPRs were instituted.” PO Prelim. Sur-reply
`2. Further, Patent Owner contends that Patent Owner’s Preliminary
`Response cites three decisions denying stays, and Petitioner “neither
`mentions nor distinguishes any of them.” Id. (citing Prelim. Resp. 7).
`On the present record, neither party has produced evidence that a stay
`has been requested or that the Eastern District of Texas has considered a stay
`in this case. Petitioner’s assertion that institution “greatly increases the
`likelihood of a District Court stay” (Pet. Prelim. Reply 4) is not sufficient
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`evidence that a stay will likely be granted. A judge determines whether to
`grant a stay based on the facts of each specific case as presented in the briefs
`by the parties. Although Patent Owner cites to three decisions denying stays
`(Prelim. Resp. 7), we decline to infer, based on actions taken in different
`cases with different facts, how the District Court would rule should a stay be
`requested by the parties in the case here. Thus, we find that this factor does
`not weigh for or against our exercising our discretion to deny institution
`under § 314(a).
`The Trial Date in the Related District Court Litigation
`2.
`The parties agree that the trial in the Eastern District of Texas
`currently is scheduled to begin on November 2, 2020. See Pet. Prelim.
`Reply 5; PO Prelim. Sur-reply 4; Exs. 1040, 2008 (Agreed Scheduling
`Order). Patent Owner contends that a final written decision in this matter
`would be due August 18, 2021, if instituted, which is “nine months later.”
`Prelim. Resp. 8. However, Petitioner contends that “there are eighteen . . .
`cases scheduled to begin jury selection on November 2” in the Eastern
`District of Texas (Pet. Prelim. Reply 5 (citing Ex. 1050, 1–9)), wherein,
`“given the inevitability of further COVID-19 outbreaks, further scheduling
`issues cannot be ruled out.” Id. (citing Ex. 1047, 1).
`If the District Court’s trial date is earlier than the projected statutory
`deadline, the Board generally has weighed this factor in favor of exercising
`authority to deny institution under § 314(a). Fintiv at 9. However, there are
`variables contributing to the uncertainty that the jury trial will occur on
`November 2, 2020. First, as Petitioner points out, there are eighteen actions
`pending in the Eastern District of Texas, each scheduled for trial on
`November 2, 2020. Pet. Prelim. Reply 5; see Ex. 1050, 1–9. Second, the
`Coronavirus disease 2019 (“COVID-19”) pandemic already disrupted the
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`trial date once, and the situation is evolving daily. See Ex. 1040 (District
`Court scheduling order moving the trial date from September 14, 2020, to
`November 2, 2020, as agreed by the parties, so this would not be the first
`time the trial date has been moved); Ex. 2008 (same).
`A previous agreement to extend scheduling order dates and
`uncertainty as to whether the trial will actually go forward on the presently
`scheduled date may diminish the extent to which this factor weighs in favor
`of exercising discretion to deny institution. See Sand Revolution II, LLC v.
`Continental Intermodal Group – Trucking LLC, IPR2019-01393, Paper 24 at
`9–10 (June 16, 2020) (informative) (“because of the number of times the
`parties have jointly moved for and the district court agreed to extend the
`scheduling order dates . . . and the uncertainty that continues to surround the
`scheduled trial date, we find that this factor weighs marginally in favor of
`not exercising discretion to deny institution under 35 U.S.C. § 314(a)”).
`Even so, given the substantial gap of approximately nine months between
`the trial date and the expected final written decision deadline in this
`proceeding, it is unclear, based on the present record, that the trial date
`would be delayed to a date after a final written decision in this proceeding as
`a result of COVID-19.
`Thus, given the District Court’s currently scheduled trial date being
`nine months earlier than the projected statutory deadline, but accounting for
`the previous agreement to extend scheduling order dates and uncertainty as
`to whether the trial will actually go forward on the presently scheduled date,
`we find that this factor weighs in favor of exercising our discretion to deny
`institution under § 314(a).
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`3.
`Investment in the Parallel Proceeding by the
`District Court and the Parties
`
`Patent Owner contends that, in the parallel district court litigation, the
`Markman hearing order issued on March 31, 2020, the parties have made
`final elections of claims and art, discovery will close, and final pretrial
`disclosures will be made before the institution deadline. PO Prelim.
`Sur-reply 5 (citing Prelim. Resp. 10). According to Patent Owner, “the
`parties and district court have thus invested incredible amounts of time and
`effort.” Id.
`According to the most recent scheduling order in the parallel district
`court litigation, the deadline to complete fact discovery and file motions to
`compel discovery passed on June 1, 2020, the deadline to serve disclosures
`for expert witnesses by the party with the burden of proof passed on June 8,
`2020, the deadline for the disclosures for rebuttal expert witnesses passed on
`July 2, 2020, the deadline for the completion of expert discovery, filing of
`dispositive motions, and filing of motions to strike expert testimony,
`including Daubert motions, passed on July 23, 2020, and the deadline for
`response to dispositive motions and Daubert motions passed on August 6,
`2020, and the dead line for serving of pretrial disclosures passed on August
`13, 2020. Exs. 1040, 2008. Upcoming activities in the parallel district court
`litigation include: serving of objections to disclosures, and rebuttal
`disclosures (August 24, 2020), serving of objections to rebuttal disclosures
`(September 3, 2020), filing of motions in limine (September 3, 2020), filing
`of the joint pretrial order (September 17, 2020), the pretrial conference
`(September 24, 2020), and trial. Id.
`We find that the parties have invested significant resources in the
`parallel district court litigation, and at least some of the work underway or
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`already completed in the underlying litigation may have relevance to patent
`validity, including claim construction and expert discovery. Nevertheless,
`the potential relevance of such work is diminished by the fact that Petitioner
`has stipulated that it if the Board institutes inter partes review here, it will
`not pursue the same instituted grounds in the underlying litigation regarding
`the ’771 patent, and thus, Petitioner’s unpatentability challenges here will
`not overlap with the invalidity grounds that Petitioner will pursue at trial in
`the underlying litigation. See Ex. 1045, 2; see also Fintiv factor 4 below.
`Based on the current record, it is also unclear to what extent the District
`Court has invested resources in the parallel district court litigation that bear
`directly on the issue of patent validity.
`Petitioner’s timing in filing the Petition is also relevant to this factor.
`If the petitioner, “faced with the prospect of a looming trial date, waits until
`the district court trial has progressed significantly before filing a petition,”
`that decision “may impose unfair costs to a patent owner.” Fintiv at 11. On
`the other hand, “[i]f the evidence shows that the petitioner filed the petition
`expeditiously, such as promptly after becoming aware of the claims being
`asserted, this fact [sic] has weighed against exercising the authority to deny
`institution.” Id.
`Here, the timing of the filing of this Petition mitigates somewhat the
`investment in this litigation by the parties. Petitioner filed the Petition about
`three and a half months before the statutory deadline for filing an inter
`partes review under 35 U.S.C. § 315(b). See Pet. Prelim Reply 5–6; Ex.
`1052; PO Prelim Sur-reply 6 (asserting Petitioner waited nine months before
`filing the Petition (Ex. 2009)); Pet. 4 (asserting service of complaint
`occurred on April 11, 2019). We find that this timing is reasonable,
`particularly considering that Patent Owner’s complaint in the parallel district
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`court litigation asserted sixteen patents and over 550 claims, and Petitioner
`filed fourteen of its inter partes review petitions, including this Petition,
`before Patent Owner’s initial identification of asserted claims, and six of the
`remaining seven petitions within one month of it. See Ex. 1052; Pet. Prelim.
`Reply 6 (citing Ex. 1048, 1).
`Weighing the facts in this particular case, including the time invested
`in the parallel district court proceeding by the parties and the District Court,
`the extent to which the investment in the district court proceeding relates to
`issues of patent validity, and the timing of the filing of the Petition, we find
`that this factor weighs slightly in favor of exercising our discretion to deny
`institution under § 314(a).
`4.
`Overlap Between Issues Raised in the Petition and
`in the Parallel Proceeding
`
`This factor evaluates “concerns of inefficiency and the possibility of
`conflicting decisions” when substantially identical prior art is submitted in
`both the district court and the inter partes review proceedings. Fintiv at 12.
`Patent Owner argues that Petitioner relies upon substantially the same
`art and arguments in both the Petition and the District Court action under the
`same claim construction standard. Prelim. Resp. 10–14. Although Patent
`Owner concedes that Allen was not identified in the District Court Action,
`Patent Owner contends “[it] appears that Petitioner strategically excluded
`Allen in an effort to draw an artificial, and forced, distinction between the
`District Court Action and the IPR.” Id. at 12–13. According to Patent
`Owner, “while Allen may be different in name from the references in the
`invalidity contentions, Petitioner has never argued that it differs in
`substance,” and thus, “use of a facially redundant reference is not basis for
`instituting an IPR.” Id. at 16.
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`Petitioner responds that, consistent with Congressional intent, it “asks
`the Board to consider the unique challenges raised in the Petition,” and thus
`has “eliminated any risk of duplicated effort by stipulating to counsel for
`[Patent Owner] that, if the Board institutes the pending Petition, [Petitioner]
`will not pursue district court invalidity challenges based on the pending
`Petition’s asserted grounds.” Pet. Prelim. Reply 8 (citing Ex. 1045, 1).
`Petitioner’s stipulation is in the form of a formal letter to Patent Owner’s
`counsel signed by Petitioner’s counsel, and states as follows:
`[Petitioner] hereby stipulates that if the Patent Trial and Appeal
`Board (PTAB) institutes one or more of the IPR petitions on the
`exact same grounds presented (a table of which is reproduced
`below), then [Petitioner] will not pursue those same instituted
`grounds in the above-captioned litigation, 2:19-cv-115.
`
`Ex. 1045, 1–3.
`The table in the stipulation then goes on to list the ground at issue in
`this inter partes review proceeding, in particular, obviousness over
`Stephenson and Allen. Id. at 2.
`Moreover, Petitioner contends that “the Allen reference, which is
`asserted in the Petition, is not included in Apple’s invalidity contentions.”
`Pet. Prelim. Reply 8. Thus, according to Petitioner, the grounds in the
`pending Petition “are unique, and will not be addressed in [Petitioner’s]
`co-pending district court litigation.” Id. at 9 (emphasis omitted).
`Patent Owner responds that, although Allen is not present in
`Petitioner’s contentions in the District Court Action, “Allen is a facially
`redundant reference,” wherein “Petitioner does not identify with specificity
`any substantive difference in its arguments.” PO Prelim. Sur-reply 7 (citing
`PO Prelim. Resp. 10; Ethicon, Inc. v. Bd. of Regents, IPR2019-00406, Paper
`27, 12 (PTAB Jun. 10, 2020)). Further, according to Patent Owner,
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`Petitioner’s stipulation “gives up almost nothing and instead reveals
`Petitioner’s effort to actually increase the overlap between the District Court
`Action and the IPRs.” PO Sur-reply 7. Patent Owner argues that Petitioner
`only stipulates that “if the [PTAB] institutes . . . on the exact same ground
`presented . . . then [Petitioner] will not pursue those same instituted grounds
`in the . . . litigation,” and therefore “[a]ny difference, no matter how trivial,
`falls outside this ‘stipulation.’” Id. at 7–8 (citing Ex. 1045, 1). Thus,
`according to Patent Owner Petitioner’s stipulation “is, rather, a thinly-veiled
`attempt to increase the overlap in art and argument between the District
`Court and here.” Id. at 8.
`We disagree with Patent Owner that Petitioner’s stipulation is “a
`thinly-veiled attempt to increase the overlap in art and argument.” PO
`Prelim. Sur-reply 8. The stipulation is signed by Petitioner’s counsel and
`prevents Petitioner from pursuing in the District Court the ground at issue in
`this inter partes review proceeding with the prior art combination of
`Stephenson and Allen as listed on the Table provided with the stipulation.
`See Ex. 1045, 1–3. Further, as Patent Owner acknowledges, Allen is not
`asserted in the parallel district court litigation. See Prelim. Resp. 11. In
`such case, Petitioner’s stipulation mitigates, at least to some degree, the
`concerns of duplicative efforts between the District Court and the Board, as
`well as concerns of potentially conflicting decisions.
`In addition, the District Court has issued an order requiring the parties
`to “streamline the issues” in the underlying litigation. See Ex. 2016 (“Order
`Focusing Patent Claims and Prior Art”), 1. In particular, the District Court
`orders that Petitioner, the Defendant in the underlying litigation, “shall serve
`a Final Election of Asserted Prior Art.” Id. at 2. In response, Petitioner, as
`Defendant, submitted its Notice Regarding Prior Art Reduction, in which it
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`IPR2020-00266
`Patent 10,135,771 B2
`reduced the prior art to the following prior art combinations: 1) Felsher,
`Stephenson, and Inoue; 2) Stephenson and Gurevich; and 3) Stephenson,
`Gurevich, and Inoue, which do not include Stephenson and Allen as set forth
`in the Table provided with the stipulation. Ex. 2013 (“Apple Inc.’s Notice
`Regarding Prior Art Reduction”), 3.
`Here, the District Court ordered Petitioner to employ “no more than
`nine (9) asserted prior art references per patent from among the eighteen
`(18) prior art references previously identified for that particular patent and
`no more than a total of forty-five (45) references.” Ex. 2016, 2. Adding
`unnecessary references, such as Allen, increases the total number of
`references employed, and will be against streamlining the issues as ordered
`by the court. Also, even if adding Allen somehow fails to violate the
`stipulation according to Patent Owner’s arguments, Petitioner likely will not
`and cannot do so in coordinating its invalidity challenges across ten patents,
`because Petitioner asserted a similar stipulation across the ten patents and
`already reached the District Court ordered limit of forty-five patents across
`those ten patents in its invalidity challenges. See Ex. 1045; Ex. 2013.
`Furthermore, in its order requiring the parties to streamline the issues
`in the underlying litigation, the District Court also orders that Patent Owner,
`the Plaintiff in the underlying litigation, “shall serve a Preliminary Election
`of Asserted Claims.” See Ex. 2016, 1. The District Court action initially
`involved sixteen patents-in-suit and multiple issues, including all thirty
`claims of the ’771 patent. Ex. 1052 (complaint); Ex. 1043 (invalidity
`contentions). After its complaint, pursuant to the District Court order, Patent
`Owner narrowed its infringement assertions to seventy-five claims and
`sixteen patents-in-suit, including nine claims of the ’771 patent. Ex. 1048, 2.
`Thereafter, pursuant to the District Court’s order, Patent Owner narrowed its
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`IPR2020-00266
`Patent 10,135,771 B2
`infringement assertions further to thirty-six claims and ten patents-in-suit,
`including five claims of the ’771 patent. Ex. 2002, 1; Ex. 2016, 2.
`Accordingly, pursuant to the District Court’s order, Petitioner narrowed its
`prior art challenges to forty-five prior art references to challenge the ten
`patents-in-suit. Ex. 1041 (prior art reduction); Ex. 2013 (same).
`This narrowing of issues, including the number of patents-in-suit,
`claims, and prior art invalidity challenges, evidences the complexity of
`multiple patents and issues in the District Court action. A trial here avoids
`potentially complicated and overlapping jury issues of ten patents, while
`allowing the panel to focus on multiple issues in depth that involve only the
`’771 patent. Therefore, this inter partes trial will provide the parties with an
`in depth analysis of the ’771 patent, providing a full record that will enhance
`the integrity of the patent system.
`Based on the facts in this particular case, we find that this factor
`weighs against exercising our discretion to deny institution under § 314(a).
`5.
`Identity of Petitioner and the Defendant in the
`Underlying Litigation
`
`“If a petitioner is unrelated to a defendant in an earlier court
`proceeding, the Board has weighed this fact [sic] against exercising
`discretion.” Fintiv at 13–14. Both parties acknowledge that Petitioner here
`is the defendant in the underlying litigation. Pet. Prelim. Reply 10; PO
`Prelim. Sur-reply 9. Thus, this factor weighs slightly in favor of exercising
`our discretion to deny institution under § 314(a).
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`Patent 10,135,771 B2
`6.
`Other Circumstances That Impact the Board’s
`Exercise of Discretion, Including the Merits
`
`The final Fintiv factor is a catch-all that takes into account any other
`relevant circumstances. The decision whether to exercise discretion to deny
`institution under § 314(a) is based on “a balanced assessment of all relevant
`circumstances in the case, including the merits.” Consolidated Trial Practice
`Guide 58.
`First, we take into account the fact that the Office already has
`instituted proceedings challenging other patents in dispute in the co-pending
`parallel litigation— IPR2020-00156 (instituted June 18, 2020), IPR2020-
`00157 (instituted June 18, 2020), IPR2020-00188 (instituted June 11, 2020),
`IPR2020-00180 (instituted August 14, 2020), IPR2020-00235 (instituted
`July 28, 2020), IPR2020-00255 (instituted July 28, 2020), IPR2020-00279
`(instituted August 14, 2020); and IPR2020-00285 (instituted July 28, 2020.
`We acknowledge that it would be inefficient to discretionarily deny
`institution of this petition, which we find meets the statutory threshold for
`institution, after having instituted petitions challenging other patents in
`dispute in the parallel proceeding.
`Second, considering the merits of the unpatentability arguments in the
`Petition and Patent Owner’s arguments in the Preliminary Response, as
`discussed below in Section II(C), we determine Petitioner has established a
`reasonable likelihood that Petitioner would prevail with respect to the
`challenged claims. As discussed below in Section II(C), we determine that
`the information presented establish a reasonable likelihood that Petitioner
`would prevail in sho
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