`Trials@uspto.gov
` Date: February 16, 2021
`571-272-7822
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`CODE200, UAB; TESO LT, UAB; METACLUSTER LT,
`UAB; AND OXYSALES, UAB,
`Petitioner,
`
`v.
`
`LUMINATI NETWORKS LTD.,
`Patent Owner.
`____________
`
`IPR2020-01506
`Patent 10,469,614 B2
`____________
`
`
`
`Before THOMAS L. GIANNETTI, SHEILA F. McSHANE, and
`RUSSELL E. CASS, Administrative Patent Judges.
`
`CASS, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`IPR2020-01506
`Patent 10,469,614 B2
`
`I. INTRODUCTION
`Petitioner (collectively, Code200, UAB; Teso LT, UAB; Metacluster
`LT, UAB; and Oxysales, UAB) filed a Petition (Paper 5, “Pet.”) requesting
`inter partes review of claims 1, 2, 4–13, 15–20, 22, 23, 25, 26, 28, and 29
`(“the challenged claims”) of U.S. Patent No. 10,469,614 B2 (Ex. 1001, “the
`’614 patent”). Patent Owner, Luminati Networks, LTD., filed a Preliminary
`Response (Paper 9, “Prelim. Resp.”).
`The Board has authority to determine whether to institute an inter
`partes review. See 35 U.S.C. § 314; 37 C.F.R. § 42.4(a). Under 35 U.S.C.
`§ 314(a), we may not authorize an inter partes review unless the information
`in the petition and the preliminary response “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.” 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.”); NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-
`00752, Paper 8 (PTAB Sept. 12, 2018) (precedential).
`Both the Petition and Preliminary Response address the issue of
`whether we should exercise our discretion under 35 U.S.C. § 314(a) to deny
`institution of inter partes review. Pet. 5–8; Prelim. Resp. 4–13.
`For the reasons that follow, we exercise our discretion under 35
`U.S.C. § 314(a) to deny institution of inter partes review.
`
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`IPR2020-01506
`Patent 10,469,614 B2
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`II. BACKGROUND
`A. Real Parties in Interest
`Petitioner identifies the following as the real parties in interest:
`Code200, UAB; Teso LT, UAB; Metacluster LT, UAB; Oxysales, UAB, and
`coretech lt, UAB. Pet. 1.
`Patent Owner identifies Luminati Networks LTD as the real party in
`interest. Paper 7, 2.
`B. Related Proceedings
`The parties identify the following litigations in the Eastern District of
`Texas involving the ’614 patent: Luminati Networks Ltd. v. Teso LT, UAB et
`al., 2:19-cv-00395-JRG (E.D. Tex.) (“the 395 district court case”), Luminati
`Networks Ltd. v. BI Science, 2-19-cv-397 (E.D. Tex.), and Luminati
`Networks Ltd. v. Tefincom S.A. D/B/A NordVPN, 2:19-cv-00414-JRG (E.D.
`Tex.). Pet. 1; Paper 7, 3.
`The parties also identify two additional inter partes review
`proceedings filed by some or all of the entities of Petitioner against Patent
`Owner’s patents: IPR2020-01266, which is directed to U.S. Patent No.
`10,257,319, and IPR2020-01358, which is directed to U.S. Patent No.
`10,484,510. Pet. 1–2; Paper 7, 2–3.
`C. The ’614 Patent
`The ’614 patent is titled “System and Method for Improving Internet
`Communication by Using Intermediate Nodes” and issued on November 5,
`2019, from an application filed on December 10, 2018. Ex. 1001, codes
`(22), (45), (54). The application for the ’614 patent is a continuation of
`several applications, and other related applications include a divisional
`application and a provisional application. See id., code (60).
`
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`Patent 10,469,614 B2
`The ’614 Patent is directed to a system for fetching content from a
`web server to a client device using tunnel devices serving as intermediate
`devices. Ex. 1001, code (57). The client device accesses an acceleration
`server to receive a list of available tunnel devices. Id. The requested
`content is partitioned into slices, and the client device sends a request for the
`slices to the available tunnel devices. Id. The tunnel devices in turn fetch
`the slices from the data server, and send the slices to the client device, where
`the content is reconstructed from the received slices. Id.
`A client device may also serve as a tunnel device, serving as an
`intermediate device to other client devices. Id. Similarly, a tunnel device
`may also serve as a client device for fetching content from a data server. Id.
`The selection of tunnel devices to be used by a client device may be in the
`acceleration server, in the client device, or both. Id. The partition into slices
`may be overlapping or non-overlapping, and the same slice (or the whole
`content) may be fetched via multiple tunnel devices. Id.
`D. Illustrative Claim
`Claim 1 is the only independent claim, and is illustrative of the
`challenged claims. Claim 1 recites:
`1. A method for use with a resource associated with a criterion
`in a client device that communicates with a first server over the
`Internet, the client device is identified in the Internet using a
`first identifier and is associated with first and second state
`according to a utilization of the resource, the method
`comprising:
`initiating, by the client device, communication with the first
`server over the Internet in response to connecting to the
`Internet, the communication comprises sending, by the
`client device, the first identifier to the first server over
`the Internet;
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`IPR2020-01506
`Patent 10,469,614 B2
`when connected to the Internet, periodically or continuously
`determining whether the resource utilization satisfies
`the criterion;
`responsive to the determining that the utilization of the
`resource satisfies the criterion, shifting to the first state
`or staying in the first state;
`responsive to the determining that the utilization of the
`resource does not satisfy the criterion, shifting to the
`second state or staying in the second state;
`responsive to being in the first state, receiving, by the client
`device, a request from the first server; and
`performing a task, by the client device, in response to the
`receiving of the request from the first server,
`wherein the method is further configured for fetching over
`the Internet a first content identified by a first content
`identifier from a web server that is distinct from the first
`server, and the task comprising:
`receiving, by the client device, the first content
`identifier from the first server;
`sending, by the client device, the first content identifier
`to the web server;
`receiving, by the client device, the first content from the
`web server in response to the sending of the first
`content identifier; and
`sending, by the client device, the received first content
`to the first server.
`Ex. 1001, 172:44–173:13.
`E. Prior Art
`Petitioner relies on the following prior art:
`1. Mithyantha, United States Patent No. 8,972,602 B2
`(Ex. 1011, “Mithyantha”);
`2. Marc Rennhard, MorphMix – A Peer-to-Peer-based
`System for Anonymous Internet Access (2004) (Doctoral Thesis)
`(Ex. 1012, “MorphMix”);
`
`5
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`Patent 10,469,614 B2
`3. Network Working Group, RFC 2616 (Ex. 1016, “RFC
`2616”).
`
`F. The Asserted Grounds
`Petitioner challenges claims 1, 2, 4–13, 15–20, 22, 23, 25, 26, 28, and
`29 of the ’614 patent on the following grounds (Pet. 4–5):
`
`Claims Challenged
`1, 2, 4–13, 15–20, 22,
`23, 25, 26, 29
`1, 2, 4–13, 15–20, 22,
`23, 25, 26, 28, 29
`
`1, 2, 4, 5, 7–10, 13,
`17–20, 22, 23, 25, 26,
`29
`1, 2, 4–13, 15–20, 22,
`23, 25, 26, 28, 29
`
`
`
`35 U.S.C. §
`1021
`
`References
`Mithyantha
`
`103
`
`102
`
`103
`
`Mithyantha, Knowledge of
`Person of Ordinary Skill, RFC
`2616
`MorphMix
`
`MorphMix, Knowledge of
`Person of Ordinary Skill, RFC
`2616
`
`III. ANALYSIS
`Patent Owner contends that we should exercise our discretion to deny
`institution under 35 U.S.C. § 314(a), relying on the Board’s precedential
`decision in Apple Inc. v. Fintiv Inc., IPR2020-00019, Paper 11 (PTAB
`March 20, 2020) (“Fintiv”). Prelim. Resp. 4–13. Patent Owner contends
`that the parallel 395 district court case, which asserts the same prior art as
`the Petition, begins jury selection over nine months before a final
`
`
`1 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
`Stat. 284, 287–88 (2011), amended 35 U.S.C. §§ 102 and 103. Because the
`’614 patent was filed after March 16, 2013 (the effective date of the relevant
`amendments), the current versions of §§ 102 and 103 apply.
`
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`determination would be expected in this proceeding. Prelim. Resp. 4.
`Anticipating Patent Owner’s challenge, Petitioner addresses the § 314(a)
`issue in its Petition. Pet. 5–8.
`A. Fintiv Factors
`Fintiv identifies a non-exclusive list of factors the Board may address
`where there is a related, parallel district court action to determine whether
`such action provides any basis to exercise discretion to deny institution of
`inter partes review. Fintiv, Paper 11 at 5–16. Those factors include:
`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.
`Id. at 5–6.
`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.
`
`B. The 395 District Court Case
`The 395 district court case is pending before District Judge Rodney
`Gilstrap, in the United States District Court for the Eastern District of Texas,
`Marshall Division. Judge Gilstrap entered a Docket Control Order setting
`December 14, 2020, as the deadline for completing fact discovery, January
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`Patent 10,469,614 B2
`21, 2021, as the deadline for completing expert discovery, and May 3, 2021,
`for jury selection and trial. Ex. 1004, 1, 3. The parties have advised us that
`the date for jury selection has been moved to May 10, 2021.
`The Court conducted a Markman hearing, and on December 7, 2020,
`issued a Claim Construction Opinion and Order. Ex. 2016.
`Patent Owner advised us (and we have independently confirmed) that
`in a November 20, 2020 Order, Judge Gilstrap continued jury trial dates in
`cases scheduled for trial from December 2020 through February 2021 due to
`the COVID-19 pandemic. Prelim. Resp. 8. Patent Owner asserts that “[t]he
`Order does not impact the present parallel district court case which has a
`trial date scheduled outside of that time frame—May 10, 2021.” Id. at 8–9
`(citing Ex. 2008). We have not been informed of any change in the May 10,
`2021 jury selection date in the 395 district court case.
`A. Analysis of the Fintiv Factors
`Both Petitioner and Patent Owner address the Fintiv factors in their
`submissions. We conclude that overall, the factors favor exercising our
`discretion to decline to institute a trial. Our reasoning follows.
`1. Factor 1 — Stay of Related Litigation Proceeding
`Petitioner filed a motion to stay the 395 district court case, which was
`denied without prejudice as premature because it was filed in advance of the
`Board’s decision to institute inter partes reviews on any of the asserted
`patents in the litigation.2 Ex. 2015, 3. Although the district court denied the
`motion without prejudice, with refiling permitted within 24 days of the
`Board’s institution decisions for all of the asserted patents, Patent Owner
`
`
`2 Three patents, the ’614 patent as well as U.S. Patent Nos. 10,257,319 B2
`and 10,484,510 B2, are asserted in the 395 district court case. Ex. 2015, 1.
`
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`argues that the District Court has not indicated one way or the other whether
`a stay is likely to be granted at that time. Prelim. Resp. 6.
`
`Because the Board has previously “decline[d] to infer” how a District
`Court would decide a stay motion, Petitioner asserts that this factor is
`neutral. Pet. 6 (quoting Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15
`at 12 (PTAB May 13, 2020) (informative) (“Fintiv II”). Patent Owner
`argues that because the District Court has not granted a stay and “would not
`likely grant a stay given the lateness of the Petition (and further, the
`additional lateness that would be associated with another round of briefing in
`the 395 District Court Case on any renewed motion to stay), this factor
`favors denial of institution.” Prelim Resp. 6–7.
`Under the present circumstances, on the record presented, we decline
`to speculate on the likelihood of how the District Court may rule on a future
`motion to stay. Accordingly, we find that this factor is neutral.
`2. Factor 2 — Proximity of Court’s Trial Date
`Patent Owner argues that the Petition should be denied because jury
`selection in the 395 district court case is scheduled approximately nine
`months before a final determination would issue in this case. Prelim. Resp.
`4, 7–9.
`
`Petitioner alleges that Patent Owner has previously sought to delay
`trials as the set trial date approaches. Pet. 6 (referring to Luminati Networks
`Ltd. v. UAB Tesonet, No. 2:18-cv-00299-JRG (E.D. Tex.)). Petitioner
`argues that in light of Patent Owner’s history and the potential for COVID-
`related delays, Factor 2 is neutral. Id. Patent Owner responds that the
`previous litigation has been misrepresented by Petitioner, and instead Patent
`Owner filed a motion to consolidate the referenced case with another case to
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`accelerate the date by which the ’614 patent infringement claims could be
`tried. Prelim. Resp. 6–7.
`
`As mentioned above, Petitioner additionally brings to our attention
`Judge Gilstrap’s Order to continue jury trials from December 2020 through
`February of 2021, but the communication notes that Petitioner does not
`know what impact the continuances may have on the trial date in this case.
`See Ex. 3001. Patent Owner asserts that Judge Gilstrap’s Order does not
`impact the schedule for trial in the case, and “no other facts can be inferred
`from the Order.” Prelim. Resp. 8–9.
`
`As Patent Owner asserts, the related jury trial in the 395 district court
`case is currently scheduled to occur approximately nine months before a
`final determination would issue in this case. Although a delay in the trial
`date is possible, presuming that there would be a delay on the record before
`us, or estimating what such a delay might be, is uncertain at this time.
`Accordingly, we agree with Patent Owner that, under our precedential Fintiv
`decision, on the record before us, the approximately nine month gap between
`the scheduled trial date and the estimated date of a final written decision in
`this proceeding favors exercising our discretion to deny institution of inter
`partes review. See Fintiv at 9.
`3. Factor 3 — Investment in the Parallel Proceeding
`It is undisputed that at this time that claim construction briefing has
`been completed, a Markman hearing was conducted, and a claim
`construction order issued in the 395 district court case, which includes
`interpretation of claim terms associated with the ’614 patent. See Ex. 2016,
`14–16. Under the Docket Control Order, fact discovery in that case was
`completed on December 14, 2020, and expert discovery was completed on
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`January 21, 2021. See Ex. 1004, 1, 3. The parties have not advised us of
`any changes to those dates as scheduled.
`
`Accordingly, in view of the status of the progress of the 395 district
`court case, particularly the fact that the deadlines for fact and expert
`discovery have passed and a claim construction order has issued, we agree
`with Patent Owner that this factor favors exercising our discretion to deny
`institution of inter partes review. See Prelim. Resp. 9–10.
`4. Factor 4 — Overlap With Issues Raised in the Parallel
`Proceeding
`Petitioner asserts that because claims 1–2, 4–7, 9–12, 15–20, 22–23,
`25–26, and 28–29 are asserted in the 395 district court case, but the Petition
`also challenges claims 8 and 13 of the ’614 patent, this factor weighs in
`favor of institution. Pet. 7.
`
`Patent Owner argues that the overlap of the issues raised in the
`Petition and the 395 district court case are substantial. Prelim. Resp. 10.
`More specifically, Patent Owner contends that the Mithyantha, MorphMix,
`and RFC 2616 prior art used in the challenges in this proceeding are all
`identified in the invalidity contentions in the 395 district court case. Id. at
`10–11 (citing Ex. 2006, ¶¶ 5–6). Patent Owner also asserts that only claim 1
`of the ’614 patent is independent, and the additional claims challenged in the
`Petition are all dependent. Id. at 11.
`
`In light of the common prior art asserted here and in the 395 district
`court case, as well as the common challenge to the sole independent claim
`and all but two of the dependent claims of the ’614 patent, we agree with the
`Patent Owner that the overlap in issues between the two proceedings is
`substantial. Additionally, we have not been advised of any stipulations filed
`or actions taken by Petitioner to reduce the overlap between the proceedings.
`
`11
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`See, e.g., Sotera Wireless, Inc. v. Masimo Corp., IPR 2020-01019, Paper 12
`at 18–19 (PTAB Dec. 1, 2020) (precedential as to § II.A) (determining that
`Petitioner’s broad stipulation not to pursue in district court any ground that it
`raised or could have raised in the IPR weighs strongly in favor of
`institution); Sand Revolution II, LLC v. Continental Intermodal Group –
`Trucking LLC, IPR2019-01393, Paper 24 at 11–12 (PTAB Jun. 16, 2020)
`(informative) (instituting inter parties review, and noting that Petitioner’s
`stipulation not to pursue the IPR grounds in the district court litigation
`“mitigates to some degree the concerns of duplicative efforts between the
`district court and the Board, as well as concerns of potentially conflicting
`decisions”). Accordingly, we determine that this factor favors exercising
`our discretion to deny institution of inter partes review.
`5. Factor 5 — Commonality of Parties in the Parallel
`Proceedings
`Petitioner asserts that Code200 is a named petitioner here, but is not a
`
`defendant in the 395 district court case. Pet. 7–8. Patent Owner argues that
`three of the four named petitioners are also defendants in the 395 district
`court case. Prelim. Resp. 11. Patent Owner also asserts that there is a close
`corporate relationship between Code200 and the other petitioners because
`they share a common parent company. Id. at 11–13 (citing Ex. 2013; Ex.
`2014). Petitioner does not challenge this contention.
`
`Given the commonality of most of the parties in this proceeding and
`395 district court case, we find that this factor favors exercising our
`discretion to deny of institution.
`6. Factor 6 — Other Circumstances
`Petitioner contends that the challenged patent is “extraordinarily
`
`weak,” and policy favors instituting review under these circumstances. Pet.
`
`12
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`8. Patent Owner disagrees, arguing that Petitioner’s reading of the claims is
`unreasonable and the asserted prior art is weak. Prelim. Resp. 13.
`
`We have reviewed Petitioner’s unpatentability arguments and Patent
`Owner’s preliminary responses, and based on the limited record before us,
`we do not find that the merits outweigh the other Fintiv factors favoring
`exercising our discretion to deny institution.
`7. Conclusion
`The majority of the Fintiv factors, particularly factors 2 (the proximity
`
`of the trial date in the 395 district court case), 3 (investment in the parallel
`proceeding), and 4 (overlap with issues raised in parallel proceeding), favor
`exercising our discretion to deny institution. Thus, based on our assessment
`of the Fintiv factors, we exercise our discretion under 35 U.S.C. § 314(a) to
`deny inter partes review.
`
`IV. ORDER
`
`Accordingly, it is
`ORDERED that the Petition is denied as to all grounds and all
`challenged claims of the ’614 patent.
`
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`PETITIONER:
`
`Craig Tolliver
`George Scott
`CHARHON, CALLAHAN, ROBSON & GARZA
`ctolliver@toliverlawfirm.com
`jscott@ccrglaw.com
`
`
`PATENT OWNER:
`
`Thomas M. Dunham
`Don F. Livornese
`RUYAKCHERIAN LLP
`tomd@dunham.cc
`donl@ruyakcherian.com
`
`
`
`
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