Trials@uspto.gov
`571-272-7822
`
`Paper 9
`Entered: September 23, 2020
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`PARUS HOLDINGS, INC.,
`Patent Owner.
`____________
`
`IPR2020-00686
`Patent 7,076,431 B2
`____________
`
`
`
`Before DAVID C. MCKONE, STACEY G. WHITE, and
`SHELDON M. MCGEE, Administrative Patent Judges.
`
`MCKONE, Administrative Patent Judge.
`
`
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`571-272-7822
`
`Paper 9
`Entered: September 23, 2020
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`PARUS HOLDINGS, INC.,
`Patent Owner.
`____________
`
`IPR2020-00686
`Patent 7,076,431 B2
`____________
`
`
`
`Before DAVID C. MCKONE, STACEY G. WHITE, and
`SHELDON M. MCGEE, Administrative Patent Judges.
`
`MCKONE, Administrative Patent Judge.
`
`
`
`DECISION
`Granting Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`
`IPR2020-00686
`Patent 7,076,431 B2
`
`INTRODUCTION
`I.
`Background and Summary
`A.
`Apple Inc. (“Petitioner”) filed a Petition requesting an inter partes
`review of claims 1–7, 9, 10, 13, 14, 18–21, and 25–30 of U.S. Patent
`No. 7,076,431 B2 (Ex. 1001, “the ’431 patent”). Paper 1 (“Pet.”). Parus
`Holdings, Inc. (“Patent Owner”) filed a Preliminary Response to the
`Petition. Paper 6 (“Prelim. Resp.”). Pursuant to our authorization
`(Ex. 1033), Petitioner filed a Reply, Paper 7 (“Reply”), and Patent Owner
`filed a Sur-reply, Paper 8 (“Sur-reply”).
`We have authority to determine whether to institute an inter partes
`review. See 35 U.S.C. § 314 (2016); 37 C.F.R. § 42.4(a) (2019). The
`standard for instituting an inter partes review is set forth in 35 U.S.C.
`§ 314(a), which provides that an inter partes review may not be instituted
`“unless . . . there is a reasonable likelihood that the petitioner would prevail
`with respect to at least 1 of the claims challenged in the petition.” For the
`reasons explained below, we institute an inter partes review of the ’431
`patent.
`
`
`Related Matters
`B.
`The parties identify the following district court proceedings as related
`to the ’431 patent: Parus Holdings Inc. v. Apple, Inc., No. 6:19-cv-00432
`(W.D. Tex.) (“the Texas case”); Parus Holdings Inc. v. Amazon.com, Inc.,
`No. 6:19-cv-00454 (W.D. Tex.); Parus Holdings Inc. v. Samsung
`Electronics Co., Ltd., et al., No. 6:19-cv-00438 (W.D. Tex.); Parus
`Holdings Inc. v. Google LLC, No. 6:19-cv-00433 (W.D. Tex.); and Parus
`Holdings Inc. v. LG Electronics, Inc., et al., No. 6:19-cv-00437 (W.D. Tex.).
`Pet. 72; Paper 5, 1.
`
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`IPR2020-00686
`Patent 7,076,431 B2
`The parties also identify U.S. Patent No. 6,721,705 and U.S. Patent
`No. 9,451,084 as related to the ’431 patent, and further identify that U.S.
`Patent No. 9,451,084 has been asserted in the district court proceedings
`listed above, and is the subject of IPR2020-00687. Pet. 72; Paper 5, 1.
`
`The ’431 Patent
`C.
`The ’431 patent describes a system that allows users to browse web
`sites and retrieve information using conversational voice commands.
`Ex. 1001, 1:20–23. Figures 1 and 3, reproduced below, illustrate an
`example:
`
`Figure 1 is a block diagram of a voice browsing system. Id. at 4:16–17.
`
`
`
`3
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`IPR2020-00686
`Patent 7,076,431 B2
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`Figure 3 is a block diagram of Figure 1’s media server 106. Id. at 4:20–21.
`Media server 106 includes speech recognition engine 300, speech
`synthesis engine 302, Interactive Voice Response (IVR) application 304, call
`
`
`
`4
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`IPR2020-00686
`Patent 7,076,431 B2
`processing system 306, and telephony and voice hardware 308 to
`communicate with Public Switched Telephone Network (PTSN) 116. Id. at
`5:62–6:1. When a user speaks into voice enable device 112 (e.g., a wireline
`or wireless telephone), speech recognition engine 300 converts voice
`commands into data messages. Id. at 6:4–8. Media server 106 uses results
`(e.g., keywords) generated by speech recognition engine 300 to retrieve web
`site record 200 stored in database 100 that can provide the information
`requested by the user. Id. at 6:44–50. Media server 106 selects the highest
`ranked web site record and transmits it to web browsing server 102 along
`with an identifier indicating what information is being requested. Id. at
`6:52–56. Speech synthesis engine converts the data retrieved by web
`browsing server 102 into audio messages that are transmitted to voice enable
`device 112. Id. at 6:57–60.
`Claim 1, reproduced below, is illustrative of the invention:1
`1. A system for retrieving information from pre-selected
`web sites by uttering speech commands into a voice enabled
`device and for providing to users retrieved information in an
`audio form via said voice enabled device, said system
`comprising:
`[a] a computer, said computer operatively connected to
`the internet;
`[b] a voice enabled device operatively connected to said
`computer, said voice enabled device configured to
`receive speech commands from users;
`[c] at least one speaker-independent speech recognition
`device, said speaker-independent speech
`
`
`1 For consistency with the parties’ arguments, we add bracketed lettering to
`track the lettering supplied by Petitioner. See Pet. 74–75 (Claims listing
`appendix).
`
`5
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`IPR2020-00686
`Patent 7,076,431 B2
`recognition device operatively connected to said
`computer and to said voice enabled device;
`[d] at least one speech synthesis device, said speech
`synthesis device operatively connected to said
`computer and to said voice enabled device;
`[e] at least one instruction set for identifying said
`information to be retrieved, said instruction set
`being associated with said computer, said
`instruction set comprising:
`a plurality of pre-selected web site addresses, each
`said web site address identifying a web site
`containing said information to be retrieved;
`[f] at least one recognition grammar associated with said
`computer, each said recognition grammar
`corresponding to each said instruction set and
`corresponding to a speech command;
`[g] said speech command comprising an information
`request selectable by the user;
`[h] said speaker-independent speech recognition device
`configured to receive from users via said voice
`enabled device said speech command and to select
`the corresponding recognition grammar upon
`receiving said speech command;
`[i] said computer configured to retrieve said instruction
`set corresponding to said recognition grammar
`selected by said speaker-independent speech
`recognition device;
`[j] said computer further configured to access at least one
`of said plurality of web sites identified by said
`instruction set to obtain said information to be
`retrieved,
`[k] said computer configured to first access said first web
`site of said plurality of web sites and, if said
`information to be retrieved is not found at said first
`web site, said computer configured to sequentially
`access said plurality of web sites until said
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`IPR2020-00686
`Patent 7,076,431 B2
`information to be retrieved is found or until said
`plurality of web sites has been accessed;
`[l] said speech synthesis device configured to produce an
`audio message containing any retrieved
`information from said pre-selected web sites, and
`said speech synthesis device further configured to
`transmit said audio message to said users via said
`voice enabled device.
`
`
`Evidence
`D.
`Petitioner relies on the references listed below.
`Reference
`Date
`US 6,269,336 B1
`July 31, 2001
`
`Ladd
`
`Exhibit No.
`1004
`
`Kurosawa2
`
`JP H9-311869 A
`
`pub. Dec. 2, 1997 1005
`
`Goedken
`
`US 6,393,423 B1
`
`Madnick
`
`US 5,913,214
`
`Houser
`
`US 5,774,859
`
`Rutledge
`
`US 6,650,998 B1
`
`May 21, 2002
`
`June 15, 1999
`
`June 30, 1998
`
`Nov. 18, 2003
`
`1006
`
`1007
`
`1008
`
`1010
`
`
`Petitioner also relies on the Declaration of Loren Terveen, Ph.D.
`(Ex. 1003).
`
`The Asserted Ground of Unpatentability
`E.
`Petitioner contends that claims 1–7, 9, 10, 13, 14, 18–21, and 25–30
`are unpatentable under the following grounds. Pet. 10.
`
`
`2 We rely on the certified translation of JP H09-311869 (Ex. 1005).
`
`7
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`IPR2020-00686
`Patent 7,076,431 B2
`Claims Challenged
`1–6, 9, 10, 13, 14, 18,
`20, 21, 25
`7, 19, 26–30
`
`5, 6
`
`9, 25
`
`
`
`35 U.S.C. §
`103(a)3
`
`103(a)
`
`103(a)
`
`103(a)
`
`References
`Ladd, Kurosawa, Goedken
`Ladd, Kurosawa, Goedken,
`Madnick
`Ladd, Kurosawa, Goedken,
`Houser
`Ladd, Kurosawa, Goedken,
`Rutledge
`
`II. ANALYSIS
`Patent Owner’s Argument under 35 U.S.C. § 314(a)
`A.
`Institution of inter partes review is discretionary. See 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.”); 35 U.S.C.
`§ 314(a). In the Preliminary Response, Patent Owner contends that we
`should exercise our discretion to deny the Petition because Petitioner’s
`invalidity grounds will be resolved in the Texas case before our deadline for
`a final written decision. Prelim. Resp. 1, 4–22.
`The Board has held that the advanced state of a parallel district court
`action is a factor that may weigh in favor of denying a petition under
`§ 314(a). See NHK Spring Co. v. Intri-Plex Techs., Inc. IPR2018-00752,
`Paper 8 at 20 (PTAB Sept. 12, 2018) (precedential); Patent Trial and Appeal
`Board, Consolidated Trial Practice Guide, 58 & n.2 (Nov. 2019). We
`consider the following factors to assess “whether efficiency, fairness, and
`
`
`3 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
`Stat. 284, 287–88 (2011), amended 35 U.S.C. § 103. Because the ’431
`patent was filed before March 16, 2013, the effective date of the relevant
`amendment, the pre-AIA version of § 103 applies.
`
`8
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`
`
`2.
`
`3.
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`4.
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`IPR2020-00686
`Patent 7,076,431 B2
`the merits support the exercise of authority to deny institution in view of an
`earlier trial date in the parallel proceeding”:
`1. whether the court granted a stay or evidence exists that
`one may be granted if a proceeding is instituted;
`proximity of the court’s trial date to the Board’s
`projected statutory deadline for a final written decision;
`investment in the parallel proceeding by the court and the
`parties;
`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
`other circumstances that impact the Board’s exercise of
`discretion, including the merits.
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 at 5–6 (PTAB Mar. 20,
`2020) (precedential) (“Fintiv”). In evaluating these factors, we “take[] a
`holistic view of whether efficiency and integrity of the system are best
`served by denying or instituting review.” Id. at 6.4 Upon consideration of
`these factors, we decline to exercise our discretion to deny the Petition.
`
`
`6.
`
`
`4 Petitioner argues that “[a]llowing a discretionary denial based on the
`timing of district court litigation all but renders the 1-year deadline [of 35
`U.S.C. § 315(b)] moot and replaces Congress’s considered analysis of the
`timeframe in which a petition may be filed.” Pet. 8–9. Nevertheless, Fintiv
`and NHK Spring are precedential decisions that we are bound to follow. See
`Standard Operating Procedure 2 (Rev. 10) (Sept. 20, 2018) (“SOP 2”), at 11
`(available at https://www.uspto.gov/patents-application-process/appealing-
`patent-decisions/procedures/standard-operating-procedures-0). Petitioner
`asks us to overturn the NHK Spring/Fintiv framework. Reply 7. As a panel,
`we lack the authority to overturn Board precedential decisions. See SOP 2.
`
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`1. Whether the court granted a stay or evidence exists that
`one may be granted if a proceeding is instituted
`The Fintiv panel indicated that, in previous Board decisions, the
`existence of a district court stay pending Board resolution of an inter partes
`review has weighed strongly against discretionary denial, while a denial of
`such a stay request sometimes weighs in favor of discretionary denial.
`Fintiv, Paper 11 at 6–8.
`Petitioner argues that the Texas case might be stayed if we institute a
`trial in this proceeding. Pet. 7–8. Nevertheless, Petitioner acknowledges
`that no motion to stay has yet been filed in the Texas case and urges us not
`to speculate as to how the United States District Court for the Western
`District of Texas (“Texas court”) might rule on a motion that it has not yet
`filed. Reply 1.
`Patent Owner contends that the Texas court “typically does not stay
`trials in these circumstances” and argues that the factors the Texas court
`would consider would weigh against a stay. Prelim. Resp. 8–9. According
`to Patent Owner, “the [Texas] Court does not grant stays in these
`circumstances” and, “to date, [the Texas court] has denied every opposed
`motion to stay pending proceedings in his court pending resolution of an
`instituted IPR.” Sur-Reply 1–2. Patent Owner contends that it presents
`“specific evidence” of how the Texas court would rule. Id. However, all
`Patent Owner offers is conjecture based on how the Texas court has ruled in
`different cases based on different facts.
`We agree with Petitioner that it would be improper to speculate, at
`this stage, what the Texas court might do if presented with a motion to stay,
`and given the particular circumstances of this case. Accordingly, this factor
`is neutral to the exercise of our discretion. Cf. Sand Revolution II, LLC v.
`
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`IPR2020-00686
`Patent 7,076,431 B2
`Continental Intermodal Group – Trucking LLC, IPR2019-01393, Paper 24 at
`7 (PTAB June 16, 2020) (informative) (“In the absence of specific evidence,
`we will not attempt to predict how the district court in the related district
`court litigation will proceed because the court may determine whether or not
`to stay any individual case, including the related one, based on a variety of
`circumstances and facts beyond our control and to which the Board is not
`privy.”); Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 at 12 (PTAB
`May 13, 2020) (informative) (“Fintiv II”) (“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 parallel case here.
`This factor does not weigh for or against discretionary denial in this case”).
`
`
`Proximity of the court’s trial date to the Board’s
`2.
`projected statutory deadline for a final written decision
`A trial date earlier than our projected statutory deadline would weigh
`in favor of a discretionary denial. See Fintiv, Paper 11 at 9. Assessing
`whether a district court trial date set around the same time as or after our
`projected deadline weighs for or against denial requires us to look at other
`factors discussed in Fintiv. Id. For example, the “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.” Id. at 10.
`The Texas court’s scheduling order sets a “Predicted Jury
`Selection/Trial” for July 12–30, 2021. Ex. 1032, 2. If the jury is selected
`and trial is held within this predicted timeframe, the trial date would be
`approximately two months before our final written decision deadline in this
`
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`IPR2020-00686
`Patent 7,076,431 B2
`proceeding. Patent Owner (Prelim. Resp. 10) argues that this is similar to
`the Fintiv case, in which a panel of the Board found a district court trial
`scheduled two months prior to an expected final written decision to “weigh[]
`somewhat in favor of discretionary denial.” Fintiv II, Paper 15 at 13.
`Petitioner (Reply 1–2) urges us to follow Sand Revolution, in which a
`trial date scheduled five months before the statutory deadline for a final
`written decision nevertheless “weigh[ed] marginally in favor of not
`exercising discretion to deny institution” in light of the district court’s own
`recognition of a “continuing degree of . . . uncertainty of the court’s
`schedule.” Sand Revolution, Paper 24 at 8–10. Petitioner argues that “civil
`trials have been canceled and repeatedly rescheduled due to the pandemic
`creating a backlog that makes any future trial date unclear.” Reply 2.
`Petitioner points to a general order of the Chief Judge of the Western District
`of Texas canceling civil trials and an example case in which the trial date
`already has been moved twice. Id. (citing Exs. 1035, 1036). The Chief
`Judge’s order, in particular, stated that “[a]ll civil and criminal bench and
`jury trials scheduled to begin on any date from [May 8, 2020,] through
`June 30, 2020, are continued, to a date to be reset by each Presiding Judge.”
`Ex. 1035, 1.5
`
`
`5 Patent Owner responds that this general order “only concerned trials
`scheduled to occur between May 8, 2020 and June 30, 2020.” Sur-
`Reply 3. Nevertheless, this order has been extended several times and
`currently continues all trials scheduled to take place before September 30,
`2020. See Aug. 6, 2020, Seventh Supplemental Order Regarding Court
`Operations Under the Exigent Circumstances Created by the COVID-19
`Pandemic, available at https://www.txwd.uscourts.gov/coronavirus-covid-
`19-guidance/.
`
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`Patent Owner responds that the Texas court has confirmed that it will
`proceed as scheduled despite the pandemic. Sur-Reply 2–3 (citing
`Ex. 2006). Although the Texas court has indicated that hearings for civil
`cases will continue as scheduled, the Order Patent Owner references is silent
`as to whether trials will proceed as scheduled. Ex. 2006.
`We recognize that panels of the Board have assessed this factor on a
`case-by-case basis. On one hand, the Fintiv panel took the district court’s
`trial schedule at “face value” and declined to question it “absent some strong
`evidence to the contrary.” Fintiv II, Paper 15 at 12–13. On the other hand,
`the Sand Revolution panel was persuaded by the uncertainty in the schedule
`(including that caused by the parties agreeing to jointly request rescheduling
`of the trial date on several occasions and the global pandemic) despite a
`scheduled trial date. Sand Revolution, Paper 24 at 8–9. Moreover, as the
`Sand Revolution panel recognized, “even in the extraordinary circumstances
`under which the entire country is currently operating because of the COVID-
`19 pandemic, the Board continues to be fully operational.” Id. at 9.
`Although we do not go so far as to find, as the Sand Revolution panel
`did, that this factor weighs against exercise of our discretion, we cannot
`ignore the substantial uncertainty in the Texas court’s “Predicted Jury
`Selection/Trial” date given the ongoing pandemic, the fact that the scheduled
`trial date is 10 months from now and much can change during this time, and
`the Western District of Texas’s general orders continuing trials. Whether
`the Texas court’s trial takes place before, contemporaneously with, or after
`our final written decision statutory deadline involves substantial speculation.
`Accordingly, this factor is, at best, neutral to whether we should exercise our
`discretion to deny the Petition.
`
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`Investment in the parallel proceeding by the court and
`3.
`the parties
`If, at the time of the institution decision, the district court has issued
`substantive orders related to the challenged patent, such as a claim
`construction order, this fact weighs in favor of denial. See Fintiv, Paper 11
`at 9–10. On the other hand, if the district court has not issued such orders,
`this fact weighs against discretionary denial. Id. at 10.
`Patent Owner contends that, by the time we issue this Decision, the
`parties in the Texas case will have completed claim construction discovery
`and briefing and the Texas court will have held a Markman hearing and
`issued claim construction rulings from the bench. Prelim. Resp. 11 (citing
`Ex. 1032). Patent Owner also argues that the parties in the Texas case have
`spent considerable resources and time preparing infringement and invalidity
`contentions. Id. Patent Owner further argues that the parties in the Texas
`case have “extensively briefed and argued motions to dismiss, and the
`district court has ruled on those motions.” Id.
`Petitioner responds that it filed its Petition just after serving its
`invalidity contentions in the Texas case and prior to the submission of claim
`construction positions and that, accordingly, nothing in the claim
`construction process has advantaged Petitioner in this proceeding. Reply 3.
`As the Fintiv court observed, “it is often reasonable for a petitioner to wait to
`file its petition until it learns which claims are being asserted against it in the
`parallel proceeding,” and noted that filing a petition “expeditiously” includes
`“promptly after becoming aware of the claims being asserted” and at
`“around the same time as the service of its initial invalidity contentions.”
`Fintiv, Paper 11 at 11–12 & n.22 (characterizing Next Caller, Inc. v.
`TRUSTID, Inc., IPR2019-00961, Paper 10 at 16 (PTAB Oct. 16, 2019), as
`
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`“noting that had the petitioner filed the petition around the same time as the
`service of its initial invalidity contentions, the PTAB proceeding may have
`resolved the issues prior to the district court.”). Here, Petitioner filed its
`Petition on March 18, 2020, shortly after serving its preliminary invalidity
`contentions and before either party filed its final invalidity or infringement
`contentions in the Texas case. Paper 3 (according the Petition a filing date
`of March 18, 2020); Ex. 1032 (March 13, 2020, deadline for serving
`preliminary invalidity contentions; October 30, 2020, deadline for serving
`final infringement and invalidity contentions). As Petitioner notes, it filed
`its Petition before any significant work had been done on claim construction
`and, thus, did not seek to discover Patent Owner’s claim construction
`positions before filing the Petition. Reply 3. The record includes no
`indication that Petitioner delayed in filing its Petition. Thus, Petitioner acted
`expeditiously, which weighs against exercising our discretion to deny the
`Petition. See Fintiv, Paper 11 at 11–12.
`As to the motions to dismiss, Petitioner responds that they had nothing
`to do with invalidity. Reply 3. Petitioner characterizes “the relevant
`question” as “what resources the Court has invested into the question of
`invalidity,” and argues that the Texas court has made no such investment.
`Id. According to Petitioner, “[n]o Markman hearing has occurred, fact
`discovery is not open, dispositive motions have not been filed, no expert
`reports have been completed, and no Daubert challenges have been filed.”
`Id.
`
`Patent Owner contends that Fintiv does not limit this factor to
`investment related to invalidity. Sur-Reply 4. Fintiv states, however, that
`we are to consider the “type of work already completed” and explains that
`the “investment factor is related to the trial date factor, in that more work
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`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.” Fintiv,
`Paper 11, at 9–10. The risk of duplication is most prominent for issues of
`invalidity, as we have no authority to address issues of infringement or
`Texas court procedures. The Sand Revolution panel recognized this as well,
`and found this factor to weigh only marginally, if at all, in favor of
`discretionary denial, even though the district court had issued a claim
`construction order and ruled on several procedural motions. Sand
`Revolution, Paper 24 at 10–11. Aside from Petitioner having served its
`initial invalidity contentions, we see no other significant investment by the
`parties or the Texas court in issues related to invalidity.
`Patent Owner contends that “the [Texas] Court’s claim construction
`order will undoubtedly affect validity issues.” Sur-Reply 4–5. However,
`Patent Owner does not explain whether any of the claim construction issues
`disputed in the Texas court bear on validity or how the expected claim
`construction order might affect this proceeding. Petitioner does not propose
`any claim terms for construction in this proceeding. Pet. 11. As explained
`below, Patent Owner argues that the ordinary meaning of “instruction set”
`should be limited based, in part, on an alleged admission by Petitioner (in a
`section of a joint claim construction brief that Petitioner did not join).
`Prelim. Resp. 48 (citing Ex. 2012, 20). However, there is no indication that
`Patent Owner sought that construction before the Texas court. Otherwise,
`Patent Owner does not propose any constructions here or indicate that
`forthcoming Texas court constructions will impact our validity analysis.
`It appears that the parties’ and the Texas court’s investment pertains
`primarily to infringement and procedural issues that are of limited relevance
`
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`to a PTAB proceeding. Thus, as far as claim construction is concerned,
`there is little risk of the parties or us duplicating work performed in the
`Texas case should we proceed to a trial.
`Patent Owner also argues that, by the time we issue a final written
`decision, the Texas court and the parties will have expended the time and
`resources necessary to litigate the Texas case fully. Prelim. Resp. 11.
`Fintiv, however, asks us to consider “the amount and type of work already
`completed in the parallel litigation by the court and the parties at the time of
`the institution decision,” rather than work that might be done in the future.
`Fintiv, Paper 11 at 9. Patent Owner does not cite authority for the
`proposition that we must also speculate as whether the Texas case will
`proceed on its current schedule, and without a stay, and consider the amount
`and type of work that the parties and the Texas court might perform in those
`circumstances. We decline to speculate.
`On balance, this factor is neutral. Petitioner was diligent in filing its
`Petition. It is clear that some discovery has taken place in the Texas case,
`including exchange of invalidity contentions. However, it appears that much
`discovery, including the expert discovery most likely to be relevant to
`patentability issues, has yet to take place in the Texas case. This is similar to
`the Sand Revolution case, in which the district court issued a Markman order
`and issued several other orders that “relate[d] to ancillary matters untethered
`to the validity issue itself,” while “much work remain[ed] in the district
`court case as it relates to invalidity: fact discovery [was] still ongoing,
`expert reports [were] not yet due, and substantive motion practice [was] yet
`to come.” Sand Revolution, Paper 24 at 10–11.
`
`
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`IPR2020-00686
`Patent 7,076,431 B2
`Overlap between issues raised in the petition and in the
`4.
`parallel proceeding
`If the prior art and arguments in the parallel proceeding are
`substantially identical to those presented here, “concerns of inefficiency and
`the possibility of conflicting decisions [would be] particularly strong.”
`Fintiv, Paper 11 at 12. “Conversely, if the petition includes materially
`different grounds, arguments, and/or evidence than those presented in the
`district court, this fact has tended to weigh against exercising discretion to
`deny institution under NHK.” Id. at 12–13.
`Patent Owner contends that Petitioner’s invalidity contentions in the
`Texas case assert the same references relied upon in this proceeding,
`namely, Ladd as a primary reference and Kurosawa, Goedken, Madnick,
`Houser, and Rutledge as secondary references to combine with Ladd.
`Prelim. Resp. 12 (citing Ex. 2003 Ex. A3, Ex. C).
`Petitioner “stipulates that, if the IPR is instituted, [Petitioner] will not
`pursue the same grounds in the district court litigation.” Reply 4. As
`Petitioner notes (Reply 4), substantially the same stipulation has been found
`to effectively address the risk of duplicative efforts in previous Board
`decisions. See, e.g., Sand Revolution, Paper 24, at 11–12 (The petitioner
`“stipulated to counsel for Patent Owner that, if the IPR is instituted,
`Petitioner will not pursue the same grounds in the district court litigation.”
`According to the Sand Revolution panel, “Petitioner’s stipulation . . .
`mitigates to some degree the concerns of duplicative efforts between the
`district court and the Board, as well as concerns of potentially conflicting
`decisions.”).
`Patent Owner responds that “the other co-defendants in the Parallel
`Proceedings are also asserting the same art there as in Apple’s Petition,” and
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`IPR2020-00686
`Patent 7,076,431 B2
`that “[Petitioner’s] conditional stipulation thus will not prevent the Petition
`art from still being asserted in the Parallel Proceeding, so complete overlap
`still exists.” Sur-Reply 5. Patent Owner does not explain persuasively why
`we should preclude Petitioner from raising its challenges here based on the
`speculation that unrelated parties in litigation might later raise those same
`challenges.
`Patent Owner further argues that, even with Petitioner’s stipulation,
`there is still a large degree of overlap as to what Petitioner raises here and
`could raise in the Texas case. Sur-Reply 5–6. Substantially the same
`stipulation was sufficient, however, in the Sand Revolution case, as noted
`above. Patent Owner argues that Sand Revolution specifically noted that the
`stipulation in that case could have been stronger and more preclusive. Sur-
`Reply 6 (citing Sand Revolution, Paper 24 at 12 n.5. We agree with the
`Sand Revolution panel’s reasoning that a stronger stipulation here would
`have resulted in this factor weighing more heavily against discretionary
`denial. Nevertheless, like the Sand Revolution panel, we find that this factor
`“weighs marginally in favor of not exercising discretion to deny institution.”
`Sand Revolution, Paper 24 at 11–12.
`
`
`5. Whether the petitioner and the defendant in the parallel
`proceeding are the same party
`If the petitioner here was unrelated to the defendant in the parallel
`proceeding, that might weigh against discretionary denial. See Fintiv,
`Paper 11 at 13–14. Here, however, Petitioner is the defendant in the parallel
`proceeding. This fact could weigh either in favor of, or against, exercising
`discretion to deny institution, depending on which tribunal was likely to
`address the challenged patent first. However, as noted above, we decline to
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`IPR2020-00686
`Patent 7,076,431 B2
`speculate as to whether we are likely to address the challenged patent before
`the Texas court. Thus, this factor is neutral.
`
`
`Other circumstances that impact the Board’s exercise of
`6.
`discretion, including the merits.
`Additional factors we can consider include the merits.
`For example, if the merits of a ground raised in the petition
`seem particularly strong on the preliminary record, this fact has
`favored institution. In such cases, the institution of a trial may
`serve the interest of overall system efficiency and integrity
`because it allows the proceeding to continue in the event that
`the parallel proceeding settles or fails to resolve the
`patentability question presented in the PTAB proceeding.
`Fintiv, Paper 11 at 14–15 (footnotes omitted).
`As explained below, on the preliminary record, the merits of
`Petitioner’s case are straightforward and strong, and Patent Owner has not
`yet raised a persuasive defense to Petitioner’s allegations. We see no close
`calls at this stage of the proceeding. This factor weighs against discretionary
`denial. Cf. Sand Revolution, Paper 24 at 13 (“We determine, on this
`preliminary record, that Petitioner has set forth a reasonably strong case for
`the obviousness of most challenged claims. Thus, this factor weighs in favor
`of not exercising discretion to deny institution under 35 U.S.C. § 314(a).”);
`compare with Fintiv II, Paper 15 at 17 (“It is sufficient that Patent Owner
`has pointed out that Petitioner’s case, at least as to two of three independent
`claims, is a close call. . . . The merits, taken as a whole, do not tip the
`balance in favor of Petitioner and instead also weigh in favor [of]
`discretionary denial in a balanced assessment of all the circumstances.”).
`
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`IPR2020-00686
`Patent 7,076,431 B2
`O
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