Trials@uspto.gov
`571-272-7822
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`Paper 19
`Date: October 1, 2020
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`INTEL CORPORATION,
`Petitioner,
`
`v.
`
`VLSI TECHNOLOGY LLC,
`Patent Owner.
`____________
`
`IPR2020-00582
`Patent 7,292,485 B1
`____________
`
`
`
`Before THU A. DANG, BART A. GERSTENBLITH, and
`KIMBERLY McGRAW, Administrative Patent Judges.
`
`GERSTENBLITH, Administrative Patent Judge.
`
`
`DECISION
`Denying Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`571-272-7822
`
`
`
`
`
`
`
`Paper 19
`Date: October 1, 2020
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`INTEL CORPORATION,
`Petitioner,
`
`v.
`
`VLSI TECHNOLOGY LLC,
`Patent Owner.
`____________
`
`IPR2020-00582
`Patent 7,292,485 B1
`____________
`
`
`
`Before THU A. DANG, BART A. GERSTENBLITH, and
`KIMBERLY McGRAW, Administrative Patent Judges.
`
`GERSTENBLITH, Administrative Patent Judge.
`
`
`DECISION
`Denying Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`
`IPR2020-00582
`Patent 7,292,485 B1
`
`I. INTRODUCTION
`
`Intel Corporation (“Petitioner”) filed a Petition requesting an inter
`
`partes review of claims 1–3, 5–8, and 12–14 (the “challenged claims”) of
`
`U.S. Patent No. 7,292,485 B1 (Ex. 1001, “the ’485 patent”). Paper 2
`
`(“Pet.”). VLSI Technology LLC (“Patent Owner”) filed a Preliminary
`
`Response. Paper 9 (“Prelim. Resp.”). Pursuant to our authorization
`
`(Paper 11), Petitioner filed a Reply to Patent Owner’s Preliminary Response
`
`(Paper 12 (“Pet. Prelim. Reply”)) and Patent Owner filed a Sur-reply
`
`(Paper 13, “PO Prelim. Sur-reply”), each directed to whether we should
`
`exercise our discretion to deny institution pursuant to 35 U.S.C. § 314(a).
`
`We also granted each party authorization to file a paper further clarifying the
`
`record as to expert testimony offered in the related district court proceeding
`
`regarding one of the references relied upon by Petitioner—Nii (Ex. 1003).
`
`Paper 16. In response, Petitioner filed Paper 17 and Patent Owner filed
`
`Paper 18.
`
`An inter partes review may not be instituted “unless . . . the
`
`information presented in the petition . . . shows that there is a reasonable
`
`likelihood that the petitioner would prevail with respect to at least 1 of the
`
`claims challenged in the petition.” 35 U.S.C. § 314(a) (2018). The Board,
`
`however, has discretion to deny a petition even when a petitioner meets that
`
`threshold. Id.; see, e.g., 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.”); see also Patent Trial and
`
`Appeal Board Consolidated Trial Practice Guide (Nov. 2019)
`
`(“Consolidated TPG”), 55–63, available at https://www.uspto.gov/sites/
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`default/files/documents/tpgnov.pdf (identifying considerations that may
`
`warrant exercise of this discretion). In particular, 35 U.S.C. § 314(a) permits
`
`2
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`
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`IPR2020-00582
`Patent 7,292,485 B1
`
`the Board to deny institution under certain circumstances. See Gen. Plastic
`
`Indus. Co. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 (PTAB
`
`Sept. 6, 2017) (precedential as to § II.B.4.i); NHK Spring Co. v. Intri-Plex
`
`Techs., Inc., IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential).
`
`Having considered the parties’ submissions, we determine that it is
`
`appropriate in this case to exercise our discretion to deny institution of inter
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`partes review pursuant to 35 U.S.C. § 314(a).
`
`II. BACKGROUND
`
`A. Real Parties in Interest
`
`Petitioner identifies Intel Corporation as the real party in interest.
`
`Pet. 1. Patent Owner identifies VLSI Technology LLC and CF VLSI
`
`Holdings LLC as the real parties in interest. Paper 5 (Patent Owner’s
`
`Mandatory Notices), 1.
`
`B. Related Matters
`
`The parties identify the ’485 patent as the subject of VLSI Tech. LLC
`
`v. Intel Corp., No. 6-19-cv-00256 (“Western District of Texas litigation” or
`
`“third case”). Pet. 2; Paper 5, 1. Petitioner explains that the ’485 patent is
`
`one of several patents asserted by Patent Owner in three venues:
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`Nos. 6-19-cv-00254, -00255, -00256 (W.D. Tex.); 1-18-966-CFC (D. Del.);
`
`and 5-17-cv-05671 (N.D. Cal.). Pet. 4. Petitioner also explains that
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`cases -254, -255, and -256 are consolidated until trial as 1-19-cv-00977. Id.
`
`3
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`
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`IPR2020-00582
`Patent 7,292,485 B1
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`C. Asserted Grounds of Unpatentability
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`Petitioner challenges the patentability of claims 1–3, 5–8, and 12–14
`
`of the ’485 patent on the following grounds (Pet. 4):
`
`Claim(s) Challenged 35 U.S.C. §1
`
`1–3, 5–7, 12–14
`
`8
`
`103
`
`103
`
`References
`
`Nii2
`
`Nii, Hamzaoglu3
`
`Petitioner relies on the Declaration of Vivek Subramanian, Ph.D. (Ex. 1002),
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`dated February 26, 2020, in support of its unpatentability contentions.
`
`III. ANALYSIS – 35 U.S.C. § 314(a)
`
`Under 35 U.S.C. § 314(a), the Director has discretion to deny
`
`institution. In determining whether to exercise that discretion on behalf of
`
`the Director, we are guided by the Board’s precedential decision in NHK.
`
`In NHK, the Board found that the “advanced state of the district court
`
`proceeding” was a “factor that weighs in favor of denying” the petition
`
`under § 314(a). NHK, Paper 8 at 20. The Board determined that
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`“[i]nstitution of an inter partes review under these circumstances would not
`
`be consistent with ‘an objective of the AIA . . . to provide an effective and
`
`efficient alternative to district court litigation.’” Id. (citing Gen. Plastic,
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`Paper 19 at 16–17 (precedential in relevant part)).
`
`
`1 The Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284
`(2011) (“AIA”), amended 35 U.S.C. § 103. Because the ’485 patent has a
`filing date of July 31, 2006, which is prior to the effective date of the
`applicable AIA amendments, we refer to the pre-AIA version of § 103. See
`Ex. 1001, code (22).
`2 U.S. Patent Application Publication No. 2007/0030741 A1, pub. Feb. 8,
`2007 (Ex. 1003, “Nii”).
`3 U.S. Patent Application Publication No. 2006/0268626 A1, pub. Nov. 30,
`2006 (Ex. 1011, “Hamzaoglu”).
`
`4
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`
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`IPR2020-00582
`Patent 7,292,485 B1
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`“[T]he Board’s cases addressing earlier trial dates as a basis for denial
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`under NHK have sought to balance considerations such as system efficiency,
`
`fairness, and patent quality.” Apple Inc. v. Fintiv Inc., IPR2020-00019,
`
`Paper 11 at 5 (PTAB Mar. 20, 2020) (precedential) (collecting cases). Fintiv
`
`sets forth six non-exclusive factors for determining “whether efficiency,
`
`fairness, and the merits support the exercise of authority to deny institution
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`in view of an earlier trial date in the parallel proceeding.” Id. at 6. These
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`factors consider:
`
`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.
`
`We discuss the parties’ arguments in the context of considering the
`
`above factors. 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 the court granted a stay or evidence exists that one may be
`granted if a proceeding is instituted
`
`On the present record, neither party has produced evidence that a stay
`
`has been requested or that the Western District of Texas has considered a
`
`stay in this case. See Pet. Prelim. Reply 5–6; PO Prelim. Sur-reply 3. Thus,
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`5
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`IPR2020-00582
`Patent 7,292,485 B1
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`this factor does not weigh in favor of or against exercising our discretion to
`
`deny institution pursuant to § 314(a).
`
`2. proximity of the court’s trial date to the Board’s projected statutory
`deadline for a final written decision
`
`Both parties rely upon the proposed Third Amended Agreed
`
`Scheduling Order (Ex. 1022) as representing the most current district court
`
`schedule. See Pet. Prelim. Reply 6; PO Prelim. Sur-reply 3. The proposed
`
`Third Amended Agreed Scheduling Order reflects the following: (1) the
`
`three cases between the parties (No. 6:19-cv-254, -255, and -256) are
`
`consolidated for much of the pre-trial phase of the cases (see Ex. 1022, 1–3);
`
`(2) the three cases are scheduled to have separate trials; (3) the first case
`
`(-254) is scheduled for trial on November 16, 2020 (id. at 3); and (4) the trial
`
`dates for the second and third cases are “[t]o be set by the Court in each
`
`case” (id. at 4).
`
`Petitioner contends that the uncertainty regarding the precise trial date
`
`for the third trial (which includes the ’485 patent) weighs against exercising
`
`discretion to deny institution. Pet. Prelim. Reply 6 (citing Sand Revolution
`
`II, LLC v. Cont’l Intermodal Grp.-Trucking LLC, IPR2019-01393, Paper 24
`
`at 9–10 (PTAB June 16, 2020) (informative)). In response, Patent Owner
`
`contends that even if the third trial was scheduled with the same intervening
`
`time originally proposed by Patent Owner, it would occur 112 days after the
`
`first trial, on March 8, 2021. PO Prelim. Sur-reply 3–4.
`
`If an inter partes review was instituted, a final written decision in this
`
`matter likely would not issue until October 2021. Despite there not being a
`
`firm trial date in the Western District of Texas litigation, there is no
`
`indication that trial will occur after October 2021. Rather, the only
`
`indications of record suggest the opposite. First, the consolidation of the
`
`6
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`
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`IPR2020-00582
`Patent 7,292,485 B1
`
`pre-trial phases of the three district court cases permitted the Western
`
`District of Texas litigation to move along with the -254 case, which is
`
`scheduled for trial in just over a month. Second, the proposed Third
`
`Amended Agreed Scheduling Order indicates that each of the second and
`
`third cases (-255 and -256) requires only five weeks of lead time prior to
`
`trial. See Ex. 1022, 4 (noting the first listing under “Amended Dates” of
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`“5 weeks before each respective trial date”). Third, the only schedule for
`
`three trial dates previously proposed by either party reflects a spread of
`
`112 days between the first and third trials. See Prelim. Resp. 13 (citing
`
`Ex. 2031 (Proposed Scheduling Order), 3–4). Thus, the evidence of record
`
`suggests that trial is likely to occur months before any final written decision
`
`in this matter.
`
`Accordingly, on the record before us, this factor weighs slightly in
`
`favor of exercising our discretion to deny institution pursuant to § 314(a).
`
`3. investment in the parallel proceeding by the court and the parties
`
`Patent Owner contends there has been “immense” investment in the
`
`parallel proceeding. See PO Prelim. Resp. 17. Petitioner contends that the
`
`“district court’s investment in the challenged claims has been relatively
`
`limited.” Pet. Prelim. Reply 6. Petitioner also asserts that because the
`
`grounds asserted in the Petition are not at issue in the district court, the
`
`relevance of the parties’ investment in the district court litigation is
`
`diminished. Id. at 7 (citing Apple v. Seven Networks, IPR2020-00266,
`
`Paper 12 at 13 (PTAB Aug. 14, 2020)).
`
`The district court issued a claim construction order on January 3,
`
`2020, approximately nine months ago, in which the court construed the term
`
`“capacitance structure” recited in the challenged claims of the ’485 patent.
`
`Ex. 1008, 1. Additionally, the parties’ final infringement and invalidity
`
`7
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`
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`IPR2020-00582
`Patent 7,292,485 B1
`
`contentions were served in January 2020. Ex. 1022, 2. Further, expert
`
`discovery has already closed or is about to close. Id. at 3. Accordingly, in
`
`light of the present posture of the district court action, we find that the
`
`district court’s and parties’ investment in that action, although diminished
`
`because of the differences in challenges raised here and at the district court,4
`
`weighs in favor of exercising our discretion to deny institution pursuant to
`
`§ 314(a).
`
`4. overlap between issues raised in the petition and in the parallel proceeding
`
`Patent Owner contends that there is a “complete” overlap between the
`
`issues raised in the Petition and those in the Western District of Texas
`
`litigation. PO Prelim. Resp. 19–23.
`
`Petitioner contends that there is no overlap between the arguments for
`
`unpatentability in the Petition and the Western District of Texas litigation.
`
`Pet. Prelim. Reply 8. In particular, Petitioner explains that, in the district
`
`court action, it is advancing two invalidity grounds based on references that
`
`are not asserted in the Petition. Id. Petitioner notes that it initially included
`
`Nii in its district court invalidity contentions, but states that it does not
`
`intend to include Nii as an invalidating reference when it reduces the number
`
`of invalidity grounds advanced in the district court. Id. n.3. Petitioner
`
`explains that the district court has ordered Patent Owner to reduce the
`
`number of asserted claims and “[a] trial by the Board avoids complicated
`
`and overlapping jury issues across multiple patents, while allowing the
`
`Board to focus on invalidity issues involving only the ’485 patent.” Id. at 9.
`
`In view of Petitioner’s representation that it does not intend to include
`
`Nii as an invalidating reference when it reduces the number of invalidity
`
`
`4 We discuss this issue further as part of Fintiv Factor 4.
`
`8
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`IPR2020-00582
`Patent 7,292,485 B1
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`grounds advanced in the district court, thus leaving no grounds overlapping
`
`between the Western District of Texas litigation and the Petition, this factor
`
`weighs in favor of not exercising our discretion to deny institution pursuant
`
`to § 314(a).
`
`5. whether the petitioner and the defendant in the parallel proceeding are the
`same party
`
`Petitioner and Patent Owner are the defendant and plaintiff,
`
`respectively, in the Western District of Texas litigation. PO Prelim.
`
`Resp. 24. Therefore, we find that this factor weighs in favor of exercising
`
`our discretion to deny institution pursuant to § 314(a).
`
`6. other circumstances that impact the Board’s exercise of discretion,
`including the merits
`
`Petitioner contends that discretionary denial would reward Patent
`
`Owner’s tactics to evade review of its patents. Pet. Prelim. Reply 1–2.
`
`Petitioner asserts that Patent Owner’s “scheme is evident: to file serial
`
`lawsuits against Intel in multiple venues asserting numerous patents and
`
`claims, to resist narrowing the number of asserted claims, and to delay
`
`adjudication of the validity of its claims.” Id. at 3. In particular, Petitioner
`
`reiterates that other factors should weigh more heavily toward not exercising
`
`discretion to decline institution; e.g., the Patent Owner’s identity and
`
`behavior, and the number and identity of claims ultimately asserted in each
`
`jurisdiction. Id. at 2–4. In particular, Petitioner contends Patent Owner is a
`
`non-practicing entity whose business model is centered on filing an
`
`unreasonably large number of patent suits against Intel in a fast-moving
`
`jurisdiction, with numerous asserted claims, to encourage a quick settlement
`
`or long-shot jury verdict and avoid inter partes review. Id. at 1–3.
`
`9
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`
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`IPR2020-00582
`Patent 7,292,485 B1
`
`Even if Petitioner’s contentions are true, the validity of the ’485 patent
`
`is at issue in the co-pending litigation, which is likely to go to trial well
`
`before the deadline for a final written decision in this proceeding.
`
`Accordingly, this argument does not weigh against exercising our discretion
`
`to deny institution pursuant to § 314(a).5
`
`Patent Owner contends that other circumstances weigh in favor of
`
`exercising our discretion to deny institution. In particular, Patent Owner
`
`asserts that Nii, a reference relied upon by Petitioner in each of the two
`
`grounds presented in the Petition, does not constitute prior art to the
`
`’485 patent because Patent Owner has antedated the reference by proving an
`
`earlier conception and reasonable diligence in reducing the invention to
`
`practice. Prelim. Resp. 25–26; PO Prelim. Sur-reply 9. In particular, Patent
`
`Owner contends: (1) the ’485 patent was filed July 31, 2006; (2) Nii was
`
`filed in the U.S. on July 25, 2006, six days earlier; (3) the inventions claimed
`
`in the ’485 patent were conceived by at least July 12, 2006 as evidenced by a
`
`draft patent application with that date; (4) the applicant exercised reasonable
`
`diligence during the “critical period”—from before July 25, 2006, through
`
`the filing of the ’485 patent application on July 31, 2006; and (5) testimony,
`
`in the form of a declaration, by the prosecuting patent attorney, Mr. Hill,
`
`confirms these actions and support Patent Owner’s arguments. See Prelim.
`
`
`5 In a footnote, Petitioner argues that the NHK/Fintiv framework should not
`be applied because it is “inconsistent with the AIA’s purpose and creates
`significant practical challenges, particularly when the Petition challenges a
`patent subject to litigation in a ‘rocket docket’ jurisdiction.” Pet. Prelim.
`Reply 1 n.1. Although Petitioner’s argument may be appropriate for review
`in another forum, we are bound to follow the precedential NHK/Fintiv
`framework.
`
`10
`
`
`
`IPR2020-00582
`Patent 7,292,485 B1
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`Resp. 26–43. Petitioner contends that it can show that Nii is prior art, but
`
`does not elaborate as to how it would do so. Pet. Prelim. Reply 10.
`
`For the above reasons, on this record Patent Owner’s evidence
`
`supporting its arguments regarding antedating Nii weighs strongly in favor
`
`of exercising our discretion to deny institution pursuant to § 314(a).6
`
`7. Weighing the factors
`
`There is no dispute that the related district court litigation involves the
`
`same parties as this proceeding. At this juncture, the related litigation is
`
`quite advanced and trial will likely be scheduled months prior to the
`
`issuance of any final written decision in this case. Although the district
`
`court may not address the grounds presented in the Petition, Patent Owner’s
`
`evidence and argument suggests that Patent Owner may antedate Nii, thus
`
`negating the grounds asserted here. After weighing all of the factors and
`
`taking a holistic view of the relevant circumstances of this proceeding, we
`
`determine that instituting an inter partes review would be an inefficient use
`
`of the Board’s and parties’ resources, and we exercise discretion to deny
`
`institution under 35 U.S.C. § 314(a).
`
`IV. CONCLUSION
`
`For the foregoing reasons, we exercise our discretion pursuant to
`
`35 U.S.C. § 314(a) to deny institution of inter partes review.
`
`
`6 In so finding, we make no determination on the ultimate question whether
`Patent Owner has antedated Nii.
`
`11
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`IPR2020-00582
`Patent 7,292,485 B1
`
`V. ORDER
`
`In consideration of the foregoing, it is hereby:
`
`ORDERED that the Petition (Paper 2) is denied as to the challenged
`
`claims of the ’485 patent; and
`
`FURTHER ORDERED that no inter partes review is instituted.
`
`12
`
`
`
`IPR2020-00582
`Patent 7,292,485 B1
`
`FOR PETITIONER:
`
`Taeg Sang Cho
`S. Calvin Walden
`Donald R. Steinberg
`WILMER, CUTLER, PICKERING, HALE AND DORR LLP
`tim.cho@wilmerhale.com
`calvin.walden@wilmerhale.com
`don.steinberg@wilmerhale.com
`
`
`FOR PATENT OWNER:
`
`Kenneth J. Weatherwax
`Bridget Smith
`Flavio Rose
`Edward Hsieh
`Parham Hendifar
`Patrick Maloney
`Jason C. Linger
`LOWENSTEIN & WEATHERWAX LLP
`weatherwax@lowensteinweatherwax.com
`smith@lowensteinweatherwax.com
`rose@lowensteinweatherwax.com
`hseih@lowensteinweatherwax.com
`hendifar@lowensteinweatherwax.com
`maloney@lowensteinweatherwax.com
`linger@lowensteinweatherwax.com
`
`
`13
`
`
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