Trials@uspto.gov
`571.272.7822
`
`
`
`
`Paper 46
`Entered: October 5, 2020
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`SAMSUNG ELECTRONICS CO., LTD.,
`SAMSUNG ELECTRONICS AMERICA, INC.,
`SAMSUNG RESEARCH AMERICA, INC.,
`Petitioner,
`v.
`DYNAMICS INC.,
`Patent Owner.
`____________
`
`IPR2020-00499
`Patent 8,827,153 B2
`____________
`
`
`
`Before TREVOR M. JEFFERSON, GEORGIANNA W. BRADEN, and
`JON M. JURGOVAN, Administrative Patent Judges.
`
`BRADEN, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Patent Owner’s Request on Rehearing of Decision Granting
`Institution of Inter Partes Review
`37 C.F.R. § 42.71(d)
`
`
`
`
`
`
`571.272.7822
`
`
`
`
`Paper 46
`Entered: October 5, 2020
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`SAMSUNG ELECTRONICS CO., LTD.,
`SAMSUNG ELECTRONICS AMERICA, INC.,
`SAMSUNG RESEARCH AMERICA, INC.,
`Petitioner,
`v.
`DYNAMICS INC.,
`Patent Owner.
`____________
`
`IPR2020-00499
`Patent 8,827,153 B2
`____________
`
`
`
`Before TREVOR M. JEFFERSON, GEORGIANNA W. BRADEN, and
`JON M. JURGOVAN, Administrative Patent Judges.
`
`BRADEN, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Patent Owner’s Request on Rehearing of Decision Granting
`Institution of Inter Partes Review
`37 C.F.R. § 42.71(d)
`
`
`
`
`
`
`
`IPR2020-00499
`Patent 8,827,153 B2
`
`
`I.
`
`INTRODUCTION
`Background
`A.
`Petitioner, Samsung Electronics Co., Ltd., Samsung Electronics
`America, Inc., and Samsung Research America, Inc., filed a Petition under
`35 U.S.C. § 311 requesting inter partes review of claims 1 and 5–8 of
`U.S. Patent No. 8,827,153 B2 (Ex. 1001, the “’153 Patent”). Paper 1
`(“Petition” or “Pet.”). Patent Owner, Dynamics Inc., filed a Preliminary
`Response to the Petition. Paper 8 (“Prelim. Resp.”). Petitioner then filed a
`Reply (Paper 39) to which Patent Owner filed a Sur-Reply (Paper 40). We
`granted Petitioner’s request to institute trial on August 12, 2020. Paper 41
`(“Dec.” or “Institution Decision”). In our Institution Decision, we evaluated
`the factors in Apple v. Fintiv, IPR2020-00016, Paper 11 (PTAB March 20,
`2020) (precedential), which were briefed in the Reply and Sur-Reply, and
`we determined the factors weighed against exercising our discretion to deny
`institution of inter partes review under 35 U.S.C. § 314(a).
`Patent Owner filed a Request for Rehearing of our Institution
`Decision on August 26, 2020 contending some of the Apple v. Fintiv factors
`were evaluated incorrectly. Paper 43 (“Reh’g Req.” or “Request for
`Rehearing”). For the reasons expressed below, we deny the Request for
`Rehearing.
`
`Standard for Reconsideration
`B.
`When rehearing a decision on petition, the Board will review the
`decision for an abuse of discretion. See 37 C.F.R. § 42.71(c). An abuse of
`discretion may be determined if a decision: (1) is clearly unreasonable,
`arbitrary, or fanciful; (2) is based on an erroneous conclusion of law;
`(3) rests on clearly erroneous fact findings; or (4) involves a record that
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`IPR2020-00499
`Patent 8,827,153 B2
`
`contains no evidence on which the Board could rationally base its decision.
`Redline Detection, LLC v. Star Envirotech, Inc., 811 F.3d 435, 442 (Fed.
`Cir. 2015) (internal citations omitted). The party challenging the decision
`has the burden of showing a decision should be modified, and the request for
`rehearing must specifically identify all matters the party believes the Board
`misapprehended or overlooked and the place where each matter was
`previously addressed in its papers. 37 C.F.R. § 42.71(d).
`
`II. ANALYSIS
`Patent Owner contends we misapprehended or overlooked certain
`facts in analyzing Apple v. Fintiv factors 1, 3 and 4, which Patent Owner
`contends favor exercising our discretion to deny institution of inter partes
`review. Req. Reh’g 1–4. We address Patent Owner’s arguments below in
`correspondence with each argued Apple v. Fintiv factor.
`Apple v. Fintiv Factor 1 – Whether a Stay Exists or is Likely to be
`A.
`Granted if a Proceeding is Instituted
`Patent Owner argues “[t]he Board’s factor 1 analysis relied solely on
`the fact that there is a stay in the district court proceeding, and ignored the
`duplications of efforts at the pending ITC proceeding for factor 1.” Req.
`Reh’g 6. We disagree with Patent Owner’s characterization of our analysis
`under Apple v. Fintiv factor 1. For factor 1, we merely stated that the district
`court’s stay weighed against exercising discretion to deny institution, and
`that the duplicative efforts with the ITC proceeding must be considered
`further in Apple v. Fintiv factors 2 and 4. Dec. 11–13.
`Patent Owner argues “[g]iven that trial has already begun, Fintiv
`factor 1 should have been determined in favor of denial.” Req. Reh’g 7.
`But the proximity of the trial date to the Board’s projected statutory deadline
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`IPR2020-00499
`Patent 8,827,153 B2
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`is exactly what is considered under Apple v. Fintiv factor 2. See Dec. 12–13.
`Likewise, Patent Owner argues “[r]elitigating the exact same issues
`petitioner asserted in its final invalidity contentions at the ITC cannot be
`considered to be efficient, nor a sign of ‘integrity of the system.’” Req.
`Reh’g. 6. This, however, is considered under Apple v. Fintiv factor 4. See
`Dec. 13–14.
`In sum, Patent Owner argues we should have considered Apple v.
`Fintiv factors 2 and 4 under factor 1. We do not agree with this contention.
`Appellant does not show we misapprehended or overlooked any fact,
`evidence, or legal issue in rendering our Institution Decision, regardless of
`the Apple v. Fintiv factor under which it was considered. In any case, we
`considered all factors, including factors 1, 3, and 4, in concluding that the
`balance of the Apple v. Fintiv factors weighed against exercising discretion
`to deny institution. Thus, Patent Owner has not demonstrated we
`misapprehended or overlooked any fact in our Apple v. Fintiv factor 1
`analysis.
`Factor 3 – Investment in the Parallel Proceeding by the Court and
`B.
`Parties
`Patent Owner argues that our analysis of Apple v. Fintiv factor 3 was
`clearly erroneous because “it was based, at least in part, on the number of
`papers filed in the present proceeding as compared to ‘the Fintiv or the Sand
`Revolution case.’” Req. Reh’g 8 (citing Dec. 13). We did not, however,
`base our Apple v. Fintiv factor 3 analysis of the number of papers filed
`relative to these cases, but on the investments made by the ITC and parties
`as demonstrated by the evidence of record. Dec. 12–13. The parties’ filings
`reflect these investments.
`
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`IPR2020-00499
`Patent 8,827,153 B2
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`Patent Owner further argues “nothing in the precedential opinion on
`
`factor 3 concerns the investment by the parties in the present IPR.” Req.
`Reh’g 8 (citing Apple v. Fintiv, Paper 11 at 9). Apple v. Fintiv states,
`however, that “[t]he investment factor is related to the trial date factor, in
`that more work completed by the parties and court in the parallel proceeding
`tends to support the arguments that the parallel proceeding is more
`advanced, a stay may be less likely, and instituting would lead to duplicative
`costs.” Apple v. Fintiv, Paper 11 at 10. In other words, a comparison of the
`investments made in each proceeding indicates which proceeding is more
`advanced.
`
`Patent Owner also argues “the Panel completely ignored the portion of
`the factor 3 analysis related to the ‘matter of petition timing,’ . . . which
`further favors denial.” Req. Reh’g 8. Apple v. Fintiv factor 3 states,
`however, that “the parties should explain facts relevant to timing.” See
`Apple v. Fintiv, IPR2020-00019, Paper 11 at 11. Patent Owner contends
`Petitioner became aware of the asserted claims on July 15, 2019. Req.
`Reh’g 11. Yet Patent Owner does not identify any evidence in the record to
`support this date, nor has Patent Owner provided sufficient information to
`explain why Petitioner would have known of the asserted claims on this
`date. In this regard, we note that attorney argument is not evidence. Elbit
`Systems of America, LLC v. Thales Visionix, Inc., 881 F.3d 1354, 1359 (Fed.
`Cir. 2018) (citing Icon Health & Fitness, Inc. v. Strava, Inc., 849 F.3d 1034,
`1043 (Fed. Cir. 2017)).
`
`Patent Owner then argues the Reply and Sur-Reply should not be
`considered as investments in the preliminary proceeding for this case
`because they “did not include any substantive patent law analysis pertinent
`
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`IPR2020-00499
`Patent 8,827,153 B2
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`to resolution of the IPR, if instituted.” Req. Reh’g 9. Patent Owner points
`to no authority that the investments in the Reply and Sur-Reply should not
`be considered in the factor 3 analysis.
`
`Patent Owner makes numerous assertions that the investment in the
`parallel ITC proceeding was greater than that in the present inter partes
`review. Req. Reh’g 9–11. Patent Owner identifies some investments
`supported by evidence in the record and others that are not. For example,
`Patent Owner does not indicate where in the record the listing of depositions
`and locations was presented before the request for rehearing. Id. at 10. A
`request for rehearing is not an opportunity to supplement the record by
`presenting new information and arguments without a showing of good cause,
`which has not been made here. See Huawei Device Co., Ltd. v. Optis
`Cellular Tech., LLC, IPR2018-00816, Paper 19 at 4 (PTAB Jan. 8, 2019)
`(precedential). Furthermore, as noted, attorney argument and assertions do
`not constitute evidence. See Elbit, supra.
`Accordingly, Patent Owner has not demonstrated that we
`misapprehended or overlooked any fact in our Apple v. Fintiv factor 3
`analysis.
`C.
`
`Factor 4 – Overlap Between Issues Raised in the Petition and
`in the Parallel Proceeding
`Patent Owner contends “[our] determination that [Apple v. Fintiv]
`factor 4 weighs against denial of institution was clearly erroneous based on a
`misapprehension of the analysis required by the [Apple v. Fintiv] Board and
`overlooking facts that weigh in favor of denial.” Req. Reh’g 12.
`Specifically, Patent Owner contends Apple v. Fintiv states that “if a petition
`involves the same prior art challenges but challenges claims in addition to
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`IPR2020-00499
`Patent 8,827,153 B2
`
`those that are challenged in the district court, it may still be inefficient to
`proceed because the district court may resolve the validity of enough
`overlapping claims to resolve key issues in the petition.” Req. Reh’g 12.
`(citing Apple v. Fintiv, IPR2020-00016, Paper 11 at 13 (emphasis omitted)).
`Patent Owner contends we did not consider whether “enough overlapping
`claims [would] resolve key issues in the petition” but instead “made a simple
`black and white comparison of the claims at issue at the ITC versus the
`claims at issue in the present IPR, and finding that there was not a 100%
`match, found factor 4 in favor of institution.” Id.
`Patent Owner incorrectly characterizes our Apple v. Fintiv factor 4
`analysis. Id. at 12–14. The only “key issue” that Patent Owner identified in
`its briefing on the issue is the assertion that claim 1 of the ’153 Patent
`“indirectly addresses the patentability of “enough” overlapping claims” in
`relation to Apple v. Fintiv factor 1. See Patent Owner’s Sur-Reply, Paper 40
`at 4, 8–10. Patent Owner gave no reasoning to explain this conclusion. Id.
`As we explained in our Institution Decision, the ITC proceeding will not
`resolve the parties’ dispute concerning patentability of claims 5, 6, and 8,
`which recite different and additional elements than claims 1 or 7. Dec. 13–
`14. We further explained that the ITC proceeding will not resolve the
`parties’ dispute concerning dependent claims that recite the (1) retrieval of
`the digital representation from member based on a signal from a button, (2) a
`digital representation associated with a payment account numbers, (3) an
`analog waveform encoded with two tracks of magnetic strip data, or (4) an
`analog waveform encoded with three tracks of magnetic strip data. Id.
`Thus, in our Institution Decision, we assessed the significance of the non-
`overlapping claims in relation to the overlapping claims, and decided the
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`IPR2020-00499
`Patent 8,827,153 B2
`
`non-overlapping claims were sufficient to weigh in favor of institution when
`the parties’ dispute over those claims would not be resolved in either the ITC
`proceeding or the stayed district court case. Id.
`Patent Owner next argues “the claims asserted in the ITC proceeding
`were 100% identical to the claims challenged in the present proceeding
`throughout fact and expert discovery, so all of those issues have already
`been fully litigated between the parties.” Req. Reh’g 12. Patent Owner
`further argues “the claims asserted in these related IPRs matched 100% with
`the claims asserted in the ITC proceeding when the petitions were filed with
`the Board.” Id. at 12–13. Patent Owner states Petitioner complained that
`there were too many claims in the case for a one-week trial before the ITC,
`and under direction from the ITC judge, Patent Owner withdrew a number of
`dependent claims from the ITC investigation. Id. at 13. Patent Owner
`argues Petitioner should not “be rewarded by being permitted to use that
`difference in scope as the basis for the institution.” Id. Patent Owner
`contends we misapprehended or overlooked “that the ITC proceeding will
`resolve patentability issues of “enough overlapping claims to resolve key
`issues in the petition” because the ITC proceeding involves the same
`independent claim, the same prior art challenges, and the same parties.” Id.
`For reasons already explained, we do not agree we misapprehended or
`overlooked the patentability issues to be resolved in the ITC proceeding.
`The ITC proceeding involves only claims 1 and 5 of the ’153 Patent so the
`patentability of claims 5, 6 and 8 will not be resolved in that proceeding.
`Whatever the history between the parties as to why the non-overlapping
`claims were litigated and then withdrawn from the ITC proceeding,
`seemingly with Patent Owner’s acquiescence, the fact is the non-overlapping
`
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`IPR2020-00499
`Patent 8,827,153 B2
`
`claims remain in the ’153 Patent and Petitioner has challenged their
`patentability in this proceeding. Although Patent Owner asserts “resolution
`of the validity and infringement issues by Judge Elliot at the ITC are
`substantially likely to resolve the dispute between the parties” (Req. Reh’g
`14), this is mere speculation, and Patent Owner points to no evidence to
`support its assertion. In any case, Patent Owner’s assertion does not show
`we misapprehended or overlooked any fact in rendering our Institution
`Decision.
`Patent Owner further argues “the Panel overlooked the fact that ITC
`trial has already commenced, that the ITC initial determination is scheduled
`to issue March 16, 2021, and that the target date for completion of the
`investigation is July 16, 2021, which facts were provided via e-mail prior to
`the issuance of the Decision.” Req. Reh’g 14 (citing Ex. 2027; Ex. 2028).
`The evidence Patent Owner presented for the Request for Rehearing,
`however, shows the ITC trial is scheduled for November 16–20, 2020, so
`Patent Owner is incorrect in asserting the ITC trial has begun. See Ex. 2028.
`That the initial determination is scheduled for March 16, 2021, and the target
`date for completion of the investigation is July 16, 2021, merely means a
`final written decision in this proceeding will be entered before any exclusion
`order in the ITC proceeding becomes effective.
`Accordingly, Patent Owner has not demonstrated we misapprehended
`or overlooked any fact in our Apple v. Fintiv factor 4 analysis.
`
`
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`IPR2020-00499
`Patent 8,827,153 B2
`
`
`III. CONCLUSION
`For the reasons expressed above, we determine Patent Owner has
`failed to demonstrate error or an abuse of discretion in our Institution
`Decision. Accordingly, we decline to change our Institution Decision and,
`thus, deny Patent Owner’s Request for Rehearing.
`
`
`IV. ORDER
`For the reasons given, it is:
`ORDERED Patent Owner’s Request for Rehearing of the Institution
`Decision is denied.
`
`
`
`
`
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`IPR2020-00499
`Patent 8,827,153 B2
`
`For PETITIONER:
`
`F. Christopher Mizzo
`Gregory Arovas
`James Marina
`Alan Rabinowitz
`KIRKLAND @ ELLIS LLP
`Chris.misso@Kirkland.com
`Greg.arovas@kirkland.com
`James.marina@kirkland.com
`Alan.rabinwoitz@kirkland.com
`
`
`
`
`For PATENT OWNER:
`
`Robert W. Morris
`ECKERT SEAMANS CHERIN & MELLOTT, LLC
`rwmorris@eckertseamans.com
`
`Michael V. Messinger
`SHAMI MESSINGER PLLC
`mike@shamimessinger.com
`
`
`
`
`11
`
`
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