Trials@uspto.gov
`571-272-7822
`
`Paper 9
`Entered: October 21, 2020
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GOOGLE LLC, SAMSUNG ELECTRONICS CO., LTD., SAMSUNG
`ELECTRONICS AMERICA, INC., LG ELECTRONICS INC., and LG
`ELECTRONICS U.S.A., INC.,
`Petitioner,
`
`v.
`
`PARUS HOLDINGS, INC.,
`Patent Owner.
`____________
`
`IPR2020-00846
`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: October 21, 2020
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GOOGLE LLC, SAMSUNG ELECTRONICS CO., LTD., SAMSUNG
`ELECTRONICS AMERICA, INC., LG ELECTRONICS INC., and LG
`ELECTRONICS U.S.A., INC.,
`Petitioner,
`
`v.
`
`PARUS HOLDINGS, INC.,
`Patent Owner.
`____________
`
`IPR2020-00846
`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
`
`
`
`
`
`
`
`
`
`IPR2020-00846
`Patent 7,076,431 B2
`
`INTRODUCTION
`I.
`Background and Summary
`A.
`Google LLC, Samsung Electronics Co., Ltd., Samsung Electronics
`America, Inc., LG Electronics Inc., and LG Electronics U.S.A., Inc.,
`(collectively, “Petitioner”) filed a Petition requesting an inter partes review
`of claims 1, 2, 4–7, 9, 10, 13, and 14 of U.S. Patent No. 7,076,431 B2
`(Ex. 1001, “the ’431 patent”). Paper 2 (“Pet.”). Parus Holdings, Inc.
`(“Patent Owner”) filed a Preliminary Response to the Petition. Paper 6
`(“Prelim. Resp.”). Pursuant to our authorization, 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 (2018); 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.” The
`following findings of fact and conclusions of law are not final, but are made
`for the sole purpose of determining whether Petitioner meets the threshold
`for initiating review. Any final decision shall be based on the full trial
`record, including any response timely filed by Patent Owner. Any
`arguments not raised by Patent Owner in a timely-filed response may be
`deemed waived, even if they were presented in the Preliminary Response.
`For the reasons explained below, we institute an inter partes review of the
`’431 patent.
`
`
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`IPR2020-00846
`Patent 7,076,431 B2
`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.); 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. xi; Paper 5, 1. The case
`against LG Electronics, 6:19-cv-00437, has been transferred to the United
`States District Court for the Northern District of California. Ex. 1032. The
`remaining cases have been consolidated. Ex. 2017. We refer to these cases
`collectively as “the Texas case” and the Waco Division of the United States
`District Court for the Western District of Texas as “the Texas court.”
`The parties also identify the following inter partes review
`proceedings: Apple Inc. v. Parus Holdings, Inc., IPR2020-00686
`(challenging the ’431 patent) and Apple Inc. v. Parus Holdings, Inc.,
`IPR2020-00687 (challenging U.S. Patent No. 9,451,084 (“the ’084 patent”))
`(“the Apple IPRs”); and Google LLC v. Parus Holdings, Inc., IPR2020-
`00847 (challenging the ’084 patent). Pet. xii–xiii; Paper 5, 1–2.
`
`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:
`
`3
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`IPR2020-00846
`Patent 7,076,431 B2
`
`Figure 1 is a block diagram of a voice browsing system. Id. at 4:16–17.
`
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`IPR2020-00846
`Patent 7,076,431 B2
`
`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
`
`
`
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`IPR2020-00846
`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 302 converts the data retrieved by web
`browsing server 102 into audio messages that are transmitted to voice
`enabled device 112. Id. at 6:57–60.
`Claim 1, reproduced below (bracketed numbering added to track the
`numbering used in the Petition), is illustrative of the invention:
`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:
`[1a] a computer, said computer operatively connected to
`the internet;
`[1b] a voice enabled device operatively connected to said
`computer, said voice enabled device configured to
`receive speech commands from users;
`[1c] at least one speaker-independent speech recognition
`device, said speaker-independent speech
`recognition device operatively connected to said
`computer and to said voice enabled device;
`
`6
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`IPR2020-00846
`Patent 7,076,431 B2
`[1d] at least one speech synthesis device, said speech
`synthesis device operatively connected to said
`computer and to said voice enabled device;
`[1e] 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;
`[1f] 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;
`said speech command comprising an information request
`selectable by the user;
`[1g] 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;
`[1h] said computer configured to retrieve said instruction
`set corresponding to said recognition grammar
`selected by said speaker-independent speech
`recognition device;
`[1i] 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,
`[1j] 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
`information to be retrieved is found or until said
`plurality of web sites has been accessed;
`
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`IPR2020-00846
`Patent 7,076,431 B2
`[1k] 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
`WO 01/50453 A2
`pub. July 12, 2001
`
`Kovatch
`
`Exhibit No.
`1005
`
`Neal
`
`US 6,324,534 B1
`
`Nov. 27, 2001
`
`Chakrabarti
`
`US 6,418,433 B1
`
`July 9, 2002
`
`DeSimone
`
`US 5,787,470
`
`July 28, 1998
`
`1007
`
`1008
`
`1009
`
`Kurganov-262 US 2001/0047262 A1 pub. Nov. 29, 2001
`
`1004
`
`
`Petitioner also relies on the Declaration of Stuart J. Lipoff (Ex. 1002).
`
`The Asserted Ground of Unpatentability
`E.
`Petitioner contends that claims 1, 2, 4–7, 9, 10, 13, and 14 are
`unpatentable under the following grounds. Pet. 2.
`Claims Challenged
`35 U.S.C. §
`1, 2, 4–7, 10, 13, 14
`103(a)1
`1, 2, 4–7, 9, 10, 13, 14
`103(a)
`
`References
`Kovatch, Neal
`Kovatch, Neal, Chakrabarti
`
`
`1 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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`IPR2020-00846
`Patent 7,076,431 B2
`Claims Challenged
`14
`14
`9
`14
`
`
`
`35 U.S.C. §
`103(a)
`103(a)
`103(a)
`103(a)
`
`References
`Kovatch, Neal, DiSimone
`Kovatch, Neal, Chakrabarti,
`DiSimone
`Kurganov-262, Chakrabarti
`Kurganov-262, DeSimone2
`
`II. ANALYSIS
`Patent Owner’s Argument under 35 U.S.C. § 314(a) Based on
`A.
`Parallel Proceedings
`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. 4–16.
`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),
`https://www.uspto.gov/sites/default/files/documents/tpgnov.pdf. We
`consider the following factors to assess “whether efficiency, fairness, and
`
`
`2 In its listing of grounds, Petitioner includes Chakrabarti in its combination
`with Kurganov-262 and DeSimone. Pet. 2. This appears to be a
`typographical error, as Petitioner’s analysis of claim 14 includes only
`Kurganov-262 and DeSimone. Id. at 63–68.
`
`9
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`
`2.
`
`3.
`
`4.
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`IPR2020-00846
`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. Upon consideration of
`these factors, we decline to exercise our discretion to deny the Petition.3
`
`
`6.
`
`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
`
`
`3 As noted above, the LG case has been transferred to the Northern District
`of California. Below, we analyze the Fintiv factors in the context of the
`upcoming trial in the Texas court.
`
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`IPR2020-00846
`Patent 7,076,431 B2
`such a stay request sometimes weighs in favor of discretionary denial.
`Fintiv, Paper 11 at 6–8.
`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. 8–10. According
`to Patent Owner, “the [Texas] Court does not grant stays in the exact
`circumstances of this particular case” 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 2. Patent Owner
`contends that it presents “specific evidence” of how the Texas court would
`rule. Id. at 2–3. However, all Patent Owner offers is conjecture based on
`how the Texas court has ruled in different cases based on different facts.
`Petitioner urges us not to speculate as to how Texas court might rule
`on a motion to stay. Reply 1.
`We agree with Petitioner that it would be improper to speculate, at
`this stage, what the Texas court might do regarding 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.
`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
`
`11
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`IPR2020-00846
`Patent 7,076,431 B2
`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
`The Texas court’s scheduling order sets a “Predicted Jury
`Selection/Trial” for July 12–30, 2021. Ex. 1016, 2. If the jury is selected
`and trial is held within this predicted timeframe, the trial date would be
`approximately nine months after this institution decision and three months
`before our final written decision deadline in this proceeding. Patent Owner
`(Prelim. Resp. 11) 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 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 similar
`uncertainty surrounds the Texas court’s trial date. Specifically, Petitioner
`argues that, “[d]ue to the pandemic, WDTX has issued a new suspension
`order every month for the past six months and suspended all trials scheduled
`from 3/13/20 to 9/30/20.” Reply 2 (citing Exs. 1034–1039). In one such
`order, the Chief Judge stated that “[a]ll civil and criminal bench and jury
`trials scheduled to begin on any date from [Aug. 6, 2020,] through
`September 30, 2020, are continued, to a date to be reset by each Presiding
`
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`Patent 7,076,431 B2
`Judge.” Ex. 1039, 1. We note that the Western District of Texas recently
`has continued this suspension through November 30, 2020. See Oct. 14,
`2020, Ninth 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/.
`Petitioner also argues that, even when the Texas court resumes
`holding trials, its docket has 140 active criminal cases and 692 active civil
`cases, with 104 of those civil cases filed before the Texas case. Reply 2
`(citing Exs. 1040–1042). Petitioner further argues that the Texas court has
`465 active patent cases with hearings (34 of those earlier-filed than the
`Texas case) that will occupy calendar days (e.g., for Markman hearings) that
`would not be available for trials. Id. (citing Exs. 1043–1044).
`Patent Owner responds that the Texas court “has explicitly stated that
`he intends for this trial to proceed ‘as scheduled,’” despite the pandemic.
`Sur-reply 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.
`Patent Owner also contends that the Texas court expressed its “goal” to try
`the Texas case in July. Id. at 3–4 (quoting Ex. 2015, 52–54). The Texas
`court, however, noted that it was “not going to pick a date right now” for the
`trial, and that the court might “look at pushing it back a little bit” if there
`were “legitimate direct conflict[s]” with the schedules of the many lawyers
`working on the cases. Ex. 2015, 52:16–53:13.
`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,
`
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`IPR2020-00846
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`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 and the fact that the scheduled trial date is nine months
`from now and much can change during this time. Whether the Texas court’s
`trial takes place before, contemporaneously with, or after our final written
`decision statutory deadline involves substantial speculation.
`This factor looks at the proximity of the trial date to the date of our
`final decision to assess the weight to be accorded a trial date set earlier than
`the expected final written decision date. This proximity inquiry is a proxy
`for the likelihood that the trial court will reach a decision on validity issues
`before the Board reaches a final written decision. A trial set to occur soon
`after the institution decision is fairly likely to happen prior to the Board’s
`final decision, even if the trial date were postponed due to intervening
`circumstances. Here, however, where the trial is scheduled for only three
`months before the final decision, and there is at least some persuasive
`evidence that delays are possible, the efficiency and system integrity
`concerns that animate the Fintiv analysis are not as strong all other things
`being equal. 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. 12. In the
`Sur-reply, Patent Owner updates us that the Texas court held a Markman
`hearing and issued a Claim Construction Order. Sur-reply 4 (citing Ex. 2016
`(Claim Construction Order)); see also Ex. 2015 (Transcript of Markman
`hearing).
`Patent Owner also argues that the parties in the Texas case have spent
`considerable resources and time preparing infringement and invalidity
`contentions and briefing venue-related issues. Prelim. Resp. 12–13. 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. at 12. In the Sur-reply, Patent Owner argues that the
`parties have “exchanged their initial infringement and invalidity contentions;
`completed their initial document productions; extensively briefed and argued
`motions to dismiss and motions to transfer; conducted claim construction
`discovery; and begun fact discovery.” Sur-reply 5.
`Petitioner responds that it filed its Petition only five weeks after
`serving its invalidity contentions in the Texas case and that final
`
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`infringement and invalidity contentions will not be served until after our
`institution. Reply 3–4. 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 “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 April 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 April 18, 2020); Ex. 1016
`(March 13, 2020, deadline for serving preliminary invalidity contentions;
`October 30, 2020, deadline for serving final infringement and invalidity
`contentions). The record includes no indication that Petitioner delayed in
`filing its Petition.
`As to the motions to dismiss and venue-related briefing, Petitioner
`responds that they relate to ancillary matters not related to invalidity.
`Reply 3.
`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
`completed by the parties and court in the parallel proceeding tends to
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`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.
`It appears that the parties’ and the Texas court’s investment pertains
`primarily to infringement and procedural issues that are of limited relevance
`to a PTAB proceeding. As to the Texas court’s claim construction, neither
`party asserts that it is relevant to invalidity. Neither party proposes any
`claim terms for construction in this proceeding. Pet. 6; Prelim. Resp.
`(generally). The majority of the Texas court’s constructions are “plain and
`ordinary meaning” or “[n]ot subject to § 112, ¶6.” Ex. 2016, 2–3. There is
`no indication by either party that it applies in this proceeding a construction
`provided by the Texas court or a construction that it argued before that court
`(and won or lost). On the current record, the Texas court’s claim
`construction appears to have little bearing on the issues of patentability that
`we are being asked to resolve. 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
`
`17
`
`
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`IPR2020-00846
`Patent 7,076,431 B2
`resources necessary to litigate the Texas case fully. Prelim. Resp. 13; Sur-
`reply 5. 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 “weighs only marginally, if at all, in favor of
`exercising discretion to deny institution.” Sand Revolution, Paper 24 at 11.
`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.
`
`
`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
`
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`IPR2020-00846
`Patent 7,076,431 B2
`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, Kovatch as a primary reference and Neal, Chakrabarti, and
`DeSimone as secondary references to combine with Ladd. Prelim. Resp.
`13–14 (citing Ex. 2002 Ex. A9). Patent Owner further argues that
`Petitioner’s grounds based on Kurganov-262 also are raised in the Texas
`case. Id. at 14 (citing Ex. 2011).
`Petitioner “stipulate[s] that if the PTAB institutes inter partes review
`in either or both of IPR2020-00846 and IPR2020-00847, then Petitioners
`will not pursue in their respective current district court proceedings (WDTX-
`6-19-cv-00433, WDTX-6-19-cv-00438, and NDCA-3-20-cv-05896) any of
`the same invalidity grounds presented in the instituted IPR petition.”
`Ex. 1048; accord Reply 4 (“Petitioners have stipulated that if this IPR is
`instituted, they will not pursue in district court any ground presented in this
`IPR.”). We note that 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
`
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`IPR2020-00846
`Patent 7,076,431 B2
`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 Petitioner’s Petition,”
`and 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 5–6. 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 6–7. 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. Id. at
`7 (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,
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`20
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`IPR2020-00846
`Patent 7,076,431 B2
`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
`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 fa
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