IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`VMware, Inc.
`Petitioner,
`
`v.
`
`Intellectual Ventures I LLC,
`Patent Owner.
`
`
`
`Case No. IPR2020-00470
`U.S. Patent No. 7,949,752
`
`
`
`PETITIONER’S REPLY BRIEF TO PATENT
`OWNER PRELIMINARY RESPONSE PURSUANT TO
`AUTHORIZATION PROVIDED IN PAPER NO. 8
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`VMware, Inc.
`Petitioner,
`
`v.
`
`Intellectual Ventures I LLC,
`Patent Owner.
`
`
`
`Case No. IPR2020-00470
`U.S. Patent No. 7,949,752
`
`
`
`PETITIONER’S REPLY BRIEF TO PATENT
`OWNER PRELIMINARY RESPONSE PURSUANT TO
`AUTHORIZATION PROVIDED IN PAPER NO. 8
`
`
`
`
`
`TABLE OF CONTENTS
`
`
`I. The fourth Fintiv factor (overlap) favors institution. .......................................... 1
`II. The third Fintiv factor (investment in parallel proceeding) favors institution. ... 2
`III. The sixth Fintiv factor (merits) favors institution. .............................................. 4
`IV. The remaining Fintiv factors do not weigh in favor of denial. ........................... 8
`V. Conclusion. .......................................................................................................... 9
`
`
`
`i
`
`
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`Apple Inc. v. Fintiv, Inc.,
`IPR2020-00019, Paper 11 (P.T.A.B. Mar. 20, 2020) ....................................... 1, 2
`Connell v. Sears, Roebuck & Co.,
`722 F.2d 1542 (Fed. Cir. 1983) ............................................................................ 7
`KSR Int’l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) .............................................................................................. 6
`Realtime Data, LLC v. Iancu,
`912 F.3d 1368 (Fed. Cir. 2019) ............................................................................ 7
`Statutes
`35 U.S.C. § 314(a) ..................................................................................................... 1
`
`
`
`
`
`ii
`
`
`
`PETITIONER’S EXHIBIT LIST
`
`Ex. No.
`1001
`
`Brief Description
`U.S. Patent No. 7,949,752
`
`1002
`
`1003
`
`1004
`
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`
`File History of U.S. Patent No. 7,949,752
`
`File History of U.S. Patent No. 6,839,733
`
`File History of U.S. Patent No. 6,163,794
`
`Declaration of Darrell Long
`
`HCC Ins. Holdings, Inc. v. Intellectual Ventures I LLC,
`IPR2016-01431, Paper No. 1
`
`HCC Ins. Holdings, Inc. v. Intellectual Ventures I LLC,
`IPR2016-01431, Paper No. 6
`
`HCC Ins. Holdings, Inc. v. Intellectual Ventures I LLC,
`IPR2016-01431, Paper No. 8
`
`Report and Recommendation of United States magistrate
`judge, Intellectual Ventures I LLC v. HCC Insurance
`Holdings, Inc., 6:15-cv-660 (E.D.Tx. Aug. 26, 2016), ECF
`No. 102
`
`Plaintiff’s Objections to Magistrate Mitchell’s Report and
`Recommendation, Intellectual Ventures I LLC v. HCC
`Insurance Holdings, Inc., 6:15-cv-660 (E.D.Tx. Sep. 9,
`2016), ECF No. 110
`
`Joint Motion to Stay All Deadlines and Notice of Settlement,
`Intellectual Ventures I LLC v. HCC Insurance Holdings, Inc.,
`6:15-cv-660 (E.D.Tx. Dec. 26, 2018), ECF No. 207
`
`Scheduling Order, Intellectual Ventures I LLC v. VMware,
`Inc., 1:19-cv-01075 (W.D.Tx. Dec. 10, 2019), ECF No. 44
`
`1013
`
`IV’s infringement contentions for ’752 patent
`
`
`
`iii
`
`
`
`Ex. No.
`1014
`
`Brief Description
`F. Cheong, Internet Agents (1996)
`
`1015
`
`1016
`
`1017
`
`1018
`
`1019
`
`1020
`
`1021
`
`1022
`
`1023
`
`1024
`
`1025
`
`1026
`
`1027
`
`U.S. Patent No. 7,043,532
`
`U.S. Patent No. 6,247,056
`
`U.S. Patent No. 5,740,231
`
`U.S. Patent No. 6,029,175
`
`U.S. Patent No. 5,367,635
`
`U.S. Patent No. 5,603,031
`
`Complaint, Intellectual Ventures I LLC v. VMware, Inc.,
`1:19-cv-01075 (W.D.Tx. Dec. July 31, 2019), ECF No. 1.
`
`Curriculum vitae of Darrell Long, Ph.D.
`
`Dolan, “But _I_ can’t FTP” Re: shared X systems available,
`comp.sources.d newsgroup post (January 13, 1991)
`
`Fielding, Relative Uniform Resource Locators, IETF
`RFC1808 (June 1995)
`
`Berners-Lee et al., Uniform Resource Locators (URL), IETF
`RFC1738 (December 1994)
`
`Defendant VMware, Inc.’s Stipulation of Invalidity
`Contentions for U.S. Patent No. 7,949,752, Intellectual
`Ventures I LLC v. VMware, Inc., 1:19-cv-01075 (W.D.Tx.
`June 3, 2020), ECF No. 91.
`
`Transcript of Telephonic Markman hearing in Intellectual
`Ventures I, LLC v. VMware, Inc., 1:19-cv-01075 (W.D.Tx.
`May 14, 2020)
`
`
`
`iv
`
`
`
`The Board should institute the Petition and reject Patent Owner’s request for
`
`a discretionary denial. Here, the Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11
`
`(P.T.A.B. Mar. 20, 2020) (precedential) (“Fintiv”) factors do not weigh in favor of
`
`a discretionary denial under 35 U.S.C. § 314(a). For example, there will be zero
`
`overlap of invalidity issues between VMware’s petition and the parallel district court
`
`proceeding (in both grounds and references). As another example, it is more likely
`
`than not that the Board will reach a Final Written Decision before the District Court
`
`reaches trial. Each Fintiv factor is discussed below in order of importance for the
`
`present consideration.
`
`I.
`
`The fourth Fintiv factor (overlap) favors institution.
`The fourth Fintiv factor (overlap between issues raised in the petition and in
`
`the parallel proceeding) weighs substantially in favor of instituting inter partes
`
`review. VMware has stipulated that if the Board institutes inter partes review of the
`
`challenged claims of the ’752 patent, VMware will not pursue invalidity on the same
`
`grounds or even the same references in the parallel district court proceeding. Ex.
`
`1026.1
`
`VMware hereby stipulates that if the Patent Trial and
`Appeal Board institutes inter partes review on IPR2020-
`
`
`1 VMware filed this stipulation with the District Court as the Board requested in
`
`Paper No. 8.
`
`
`
`1
`
`
`
`00470, then VMware will not assert invalidity of claims
`1–4, 6, 9–11, 13–14, and 22–26 the ’752 patent in this case
`based on any of the four grounds listed [in VMware’s
`petition], or on any other ground involving the Chow,
`Bauer, or White references alone or in combination with
`any other reference.
`
`Ex. 1026 at 1–2. There will, therefore, be no overlap of invalidity issues between the
`
`parallel district court proceeding and this inter partes review. As for claim
`
`construction overlap—if that is even part of the fourth Fintiv factor—the Petition
`
`has made clear that the challenged claims would have been obvious no matter how
`
`the claims are construed. See Petition, 21, 32, 34-35, 49, (explaining how claims
`
`would have been obvious under all constructions of various terms).
`
`In view of VMware’s stipulation, this fourth factor alone should be
`
`dispositive. It fully addresses the efficiency and fairness policy concerns underlying
`
`the Board’s decision in Fintiv. See, e.g., Fintiv at 5. The parties would only litigate
`
`these grounds once, and neither party would have to duplicate any significant work
`
`(such as working with experts to prepare reports) in the parallel proceeding.
`
`II. The third Fintiv factor (investment in parallel proceeding) favors
`institution.
`The third Fintiv factor (investment in the parallel proceeding by the court and
`
`the parties) also weighs substantially in favor of instituting inter partes review.
`
`Neither the District Court nor the parties will have invested significant effort in
`
`
`
`2
`
`
`
`determining obviousness in the parallel proceeding by the time of the August 20,
`
`2020, institution deadline. The August institution deadline is well before the
`
`currently scheduled close of fact and expert discovery in the parallel district court
`
`proceeding (October 16, 2020, and December 21, 2020, respectively). Ex. 1012, 6.
`
`The institution deadline is also nearly five months before the dispositive motion
`
`deadline in the parallel district court proceeding (January 13, 2021). Id.
`
`This analysis, however, assumes that the dates in the parallel district court
`
`proceeding remain unchanged. That is unlikely. The District Court has already
`
`significantly altered the schedule by delaying the start of fact discovery until
`
`sometime after a yet-to-be-scheduled second Markman hearing. Ex. 1027, 65:22-
`
`67:10. The District Court will also reschedule the dates for the district court trial
`
`during that hearing and suggested that trial might be set for any time between June
`
`and late December 2021. Ex. 1027, 64:2-22. The district court trial will only occur
`
`before the Final Written Decision if the District Court selects a date in roughly the
`
`first half of that range and if that date does not change. There is thus a roughly equal
`
`chance the district court trial will be set for after the Final Written Decision deadline
`
`even before considering the likelihood of further extensions to the district court
`
`schedule. While it is hard to quantify the likelihood of further extensions, it is
`
`reasonable to assume it is greater than zero. That non-zero chance for further
`
`
`
`3
`
`
`
`extensions tips the scales to make it is more likely than not that the district court trial
`
`will occur after the Final Written Decision.
`
`III. The sixth Fintiv factor (merits of petition) favors institution.
`The sixth Fintiv factor (other circumstances, including the merits), also
`
`weighs substantially in favor of instituting inter partes review. First, the references
`
`forming the grounds in this petition have already been the subject of a prior petition
`
`brought by HCC Insurance that settled before institution (IPR2016-01431). See
`
`Petition, 62. If the Board has already expended resources considering these
`
`references, it would be efficient to put those expended resources to use and move
`
`forward in this proceeding. Second, the strength of the merits of the grounds in this
`
`proceeding weigh in favor of institution. As shown below, in this proceeding, the
`
`weakness of the counter-arguments IV offered in Patent Owner’s Preliminary
`
`Response (“POPR”) demonstrate that the Petition’s grounds are strong.2
`
`
`2 While it is unusual for a petitioner to have an opportunity to address the
`
`arguments raised in the preliminary response of a patent owner, the sixth Fintiv
`
`factor seems to call for such an analysis. For example, the reply brief authorized in
`
`Fintiv addressed the merits of the preliminary response in that proceeding. See
`
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 12 (Mar. 27, 2020).
`
`
`
`4
`
`
`
`First, IV’s argument that grounds 1 and 2 are based on IV’s prior construction
`
`of “agent” rather than IV’s current construction of agent fails to address the Petition.
`
`See POPR, 19-20. VMware has consistently agreed from the very beginning that,
`
`under the construction that “agent” must be “mobile” from Intellectual Ventures I
`
`LLC v. HCC Insurance Holdings, Inc., 6:15-cv-660 (E.D.Tx.), grounds 1 and 2 do
`
`not teach a mobile agent. Petition, 17. IV used to disagree with the prior construction.
`
`See POPR, 19-20. Petitioner, thus, included grounds 1 and 2 to show the challenged
`
`claims are obvious in view of IV’s prior construction that “agent” is not “mobile”
`
`and included alternative grounds 3 and 4 to show how the challenged claims are
`
`obvious in view of IV’s current construction that “agent” is “mobile” (i.e., the HCC
`
`Insurance construction). Petition, 17. The fact that the Petition address both
`
`constructions shows that the Petition is strong.
`
`Second, IV’s argument that VMware has not explained how the combination
`
`achieves the invention fails to address the substance of the Petition. IV instead
`
`focuses on the form (e.g., the length) of the Petition’s motivation to combine
`
`analysis. See POPR, 20-22. The Petition lays out a straightforward motivation to
`
`combine. White taught a mobile agent implemented using “remote programming.”
`
`See Petition, 59 (“a remote programming agent process like the one taught in
`
`White”). White also taught that remote programming was an improvement over
`
`“remote procedure calling.” Petition, 58 (citing Ex. 1020, 4:22–28). Chow
`
`
`
`5
`
`
`
`implemented its non-mobile agent using remote procedure calling. Petition, 58
`
`(citing Dr. Long’s declaration (Ex. 1005) at ¶ 188 (citing Ex. 1018, 17:44–20:64,
`
`Figs. 18–22)). Given White’s teaching that remote programming was better than
`
`remote procedure calling for implementing an agent, a POSITA would have been
`
`motivated to replace the non-mobile remote procedure calling agent in Chow with
`
`the mobile remote programming agent in White. Petition, 59.
`
`It is not true, as IV suggests, that the differences between “remote
`
`programming” and “remote procedure calling” “have nothing to do with whether an
`
`agent is mobile or not.” See POPR, 21. In fact, “remote programming” has
`
`everything to do with an agent being mobile. As taught by White, in “remote
`
`programming” a client process sends instructions to a server process to be executed
`
`by the server process.
`
`An alternative approach to remote procedure calling is
`“remote programming.” In remote programming, a
`process, which is called a “client process” and which
`executes on a first computer system, sends to a server
`process executing on the second computer system a list of
`instructions. The instructions are then carried out by the
`server process effectuating the goal of the client process.
`
`Ex. 1020, 4:22-28. Thus, remote programming makes a process “mobile” because
`
`the process can move the locus of its execution from a first place (the client) to a
`
`second place (the server). See Ex. 1020, 16:65-67 (“An agent is a process which
`6
`
`
`
`
`
`occupies a place and which is mobile, i.e. can move from a first place to a second
`
`place.”) (emphasis added).
`
`Third, IV’s argument that a POSITA would not modify Chow’s agent system
`
`to include White’s mobile agent (e.g., because Chow did not teach how to implement
`
`a mobile agent) is a non-starter. See POPR, 23-25. IV essentially argues that the
`
`claims were not obvious because Chow did not anticipate them. IV’s argument
`
`misrepresents the law and is exactly the kind of rigid teaching, suggesting, and
`
`motivation requirement that the Supreme Court overruled in KSR Int’l Co. v. Teleflex
`
`Inc., 550 U.S. 398, 419 (2007).
`
`Fourth, IV’s argument that the prior art does not teach how a service resource
`
`is “exhausted upon being consumed” requires an indiscernible meaning of “upon.”
`
`See POPR, 25-26. The Petition shows how Chow taught that the agent consumed
`
`money (an exhaustible service resource). Petition, 34-35. If the consumption of
`
`money does not show money being “exhausted upon being consumed,” then it is
`
`hard to imagine what would. Particularly because the ’752 patent itself describes
`
`users (“principals”) being “charged” for the resources consumed by their agents. Ex.
`
`1001, 9:36-39.
`
`Finally, IV’s argument that the claims would not have been obvious in view
`
`of Chow (e.g., because Chow discloses every element of several claims) essentially
`
`argues that the claims are not obvious because Chow anticipates them. See POPR,
`
`
`
`7
`
`
`
`27-29. IV essentially repeats the patent owner’s losing argument in Realtime Data,
`
`LLC v. Iancu, 912 F.3d 1368 (Fed. Cir. 2019). There, the patent owner argued that
`
`the patent was not obvious because obviousness was based on a single reference that
`
`“would have been more properly raised under § 102.” Id. at 1373. The Federal
`
`Circuit rejected that argument and affirmed the Board’s finding of obviousness
`
`based on a single prior art reference because “anticipation is the epitome of
`
`obviousness.” Id. (quoting Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548
`
`(Fed. Cir. 1983)). The Board should reach the same conclusion here.
`
`IV. The remaining Fintiv factors do not weigh in favor of denial.
`The remaining Fintiv factors do not weigh against instituting inter partes
`
`review. For the first factor (evidence of district court stay), the District Court has not
`
`issued a stay in the parallel proceeding. For the second factor (proximity of the
`
`court’s trial date to the Board’s projected statutory deadline for a final written
`
`decision), the District Court has not yet set trial in the parallel proceeding, and the
`
`trial could occur months after a Final Written Decision in this proceeding. As
`
`mentioned above, the District Court will push back the trial date to an as-of-yet
`
`undetermined date. See supra at § II; Ex. 1027, 64:2-22. The range of trial dates
`
`suggested by the District Court coupled with the chance of further extensions make
`
`it more likely than not that the district court trial will occur after the Final Written
`
`Decision. For the fifth factor (whether the petitioner and the defendant in the parallel
`
`
`
`8
`
`
`
`proceeding are the same party), VMware is the defendant in the parallel proceeding
`
`and the petitioner in this proceeding. Yet as discussed in the fourth Fintiv factor,
`
`there will be no overlap of invalidity issues between this case (if instituted) and the
`
`district court proceeding.
`
`V. Conclusion.
`Given VMware’s stipulation, the likelihood that the district court trial will
`
`occur after the Final Written Decision, and the strength of the Petition’s grounds, the
`
`Fintiv factors weigh substantially in favor of instituting inter partes review. For at
`
`least these reasons, VMware requests the Board institute inter partes review.
`
`Dated: June 5, 2020
`
`Respectfully submitted,
`
`/ Louis L. Campbell /
`Louis L. Campbell
`USPTO Reg. No. 59,963
`llcampbell@winston.com
`Katherine A. Vidal
`USPTO Reg. No. 46,333
`kvidal@winston.com
`Winston & Strawn LLP
`275 Middlefield Rd, Suite 205
`Menlo Park, California 94025
`T: 650.858.6500, F: 650.858.6550
`
`Michael A. Tomasulo
`Winston & Strawn LLP
`333 S. Grand Ave, 38th Floor
`Los Angeles, California 90071
`mtomasulo@winston.com
`T: 213.615.1700, F: 213.615.1750
`USPTO Reg. No. 43,957
`Counsel for Petitioner VMware, Inc.
`9
`
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`Pursuant to 37 C.F.R. §§ 42.6(e) and 42.105(a), this is to certify that on June
`
`5, 2020, I caused counsel of record for the Patent Owner (listed below) to be
`
`electronically served a true and correct copy of the foregoing PETITIONER’S
`
`REPLY BRIEF TO PATENT OWNER PRELIMINARY RESPONSE
`
`PURSUANT TO AUTHORIZATION PROVIDED IN PAPER NO. 8 and
`
`James R. Hietala
`Intellectual Ventures
`3150 139th Avenue S.E.
`Bellevue, WA 98005
`Telephone: (425) 283-4789
`Facsimile: (425) 467-2350
`jhietala@intven.com
`
`Russell J. Rigby
`Intellectual Ventures
`3150 139th Avenue S.E.
`Bellevue, WA 98005
`Telephone: (425) 283-8628
`Facsimile: (425) 467-2350
`rrigby@intven.com
`
`
`Courtesy Service Email:
`PTAB@sternekessler.com
`
`EXHIBITS 1026 and 1027:
`
`Byron L. Pickard
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`1100 New York Avenue, N.W.
`Washington, D.C. 20005-3932
`Telephone: (202) 772-8521
`Facsimile: (202) 371-2540.
`bpickard-PTAB@sternekessler.com
`
`Daniel S. Block
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`1100 New York Avenue, N.W.
`Washington, D.C. 20005-3932
`Telephone: (202) 772-8735
`Facsimile: (202) 371-2540;
`dblock-PTAB@sternekessler.com
`
`
`Lestin L. Kenton
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`1100 New York Avenue, N.W.
`Washington, D.C. 20005-3932
`Tel.: 202-772-8594
`Fax: 202-371-2540
`lkenton-PTAB@sternekessler.com
`
`
`
`
`
`
`
`
`
`
`
`
`
`Dated: June 5, 2020
`
`
`/Louis L. Campbell/
`Louis L. Campbell
`Reg. No. 59,963
`WINSTON & STRAWN LLP
`275 Middlefield Rd, Suite 205
`Menlo Park, California 94025
`llcampbell@winston.com
`T: (650)858-6500; F: (650)858-6550
`Counsel for Petitioner VMware, Inc.
`
`2
`
`
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