Trials@uspto.gov
`571-272-7822
`
`Paper 12
`Entered: June 2, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`TESO LT, UAB; CODE200, UAB; METACLUSTER LT, UAB;
`AND OXYSALES, UAB,
`Petitioner,
`v.
`LUMINATI NETWORKS LTD.,
`Patent Owner.
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`
`
`Before THOMAS L. GIANNETTI, SHEILA F. McSHANE, and
`RUSSELL E. CASS, Administrative Patent Judges.
`
`McSHANE, Administrative Patent Judge.
`
`
`
`
`
`
`
`
`
`
`
`DECISION
`Denying Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`571-272-7822
`
`Paper 12
`Entered: June 2, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`TESO LT, UAB; CODE200, UAB; METACLUSTER LT, UAB;
`AND OXYSALES, UAB,
`Petitioner,
`v.
`LUMINATI NETWORKS LTD.,
`Patent Owner.
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`
`
`Before THOMAS L. GIANNETTI, SHEILA F. McSHANE, and
`RUSSELL E. CASS, Administrative Patent Judges.
`
`McSHANE, Administrative Patent Judge.
`
`
`
`
`
`
`
`
`
`
`
`DECISION
`Denying Institution of Inter Partes Review
`35 U.S.C. § 314
`
`
`
`
`
`
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`
`INTRODUCTION
`I.
`Background and Summary
`A.
`Teso LT, UAB, Code200, UAB, Metacluster LT, UAB, and Oxysales,
`UAB (“Teso” or “Petitioner”)1 filed a Petition requesting inter partes review
`of claims 1, 2, 8, 9, 11–18, 24, and 26–28 of U.S. Patent No. 10,637,968 B2
`(Ex. 1001, “the ’968 patent”), along with the supporting Declaration of
`Michael Freedman, Ph.D. Paper 5 (“Pet.”); Ex. 1011. Luminati Networks
`Ltd. (“Luminati” or “Patent Owner”) filed a Preliminary Response to the
`Petition. Paper 10 (“Prelim. Resp.”).
`We have authority under 35 U.S.C. § 314(a), which provides that 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.”
`For the reasons that follow, we exercise our discretion under
`35 U.S.C. § 314(a) to deny institution of inter partes review.
`Related Matters
`B.
`The parties identify the related litigations, Luminati Networks Ltd. v.
`Code200, UAB, 2:19-cv-00396-JRG (E.D. Tex.) (“the 396 district court
`case”), Luminati Networks, Ltd. v. NetNut, Ltd., 2:20-cv-00188-JRG (E.D.
`Tex.), and Luminati Networks Ltd. v. Tefincom S.A. D/B/A NordVPN, 2:19-
`cv-00414-JRG (E.D. Tex.). Pet. 2; Paper 7, 2–3.
`The parties note that another petition was filed in IPR2020-01266
`(now denied), directed to U.S. Patent No. 10,257,319, which claims the
`
`
`1 Petitioner additionally identifies coretech lt, UAB as a real party-in-
`interest. Pet. 1.
`
`2
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`benefit of the same provisional application and is a continuation of the same
`application as the ’968 patent. Pet. 1; Paper 7, 2. The parties note that
`another petition was filed in IPR2020-01358 (now denied) that asserted
`challenges to U.S. Patent No. 10,484,510, which claims the benefit of the
`same provisional application and is a continuation of the same application as
`the ’968 patent. Pet. 1–2; Paper 7, 3. The parties additionally note that
`another petition was filed in IPR2021-00122 (now denied) that asserted
`challenges to U.S. Patent No. 10,484,511, which claims the benefit of the
`same provisional, and is a continuation of the same application as the
`’968 patent. Pet. 2; Paper 7, 3.
`The ’968 Patent
`C.
`The ’968 patent is titled “System Providing Faster and More Efficient
`Data Communication” and issued on April 28, 2010, from an application
`filed on April 28, 2019. Ex. 1001, codes (22), (45), (54). The application
`for the ’968 patent is a continuation of several applications, and other related
`applications include a divisional application and a provisional application.
`See id. at code (60).
`The ’968 patent is directed to a system and method for increasing
`network communication speed for users, while lowering network congestion
`for content owners and internet service providers (ISPs). Ex. 1001,
`code (57). The system employs network elements including an acceleration
`server, clients, agents, and peers, where communication requests generated
`by applications are intercepted by the client on the same machine. Id. The
`IP address of the server in the communication request is transmitted to the
`acceleration server, which provides a list of agents to use for this IP address.
`Id.
`
`3
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`
`The communication request is sent to the agents. Ex. 1001, code (57).
`One or more of the agents respond with a list of peers that have previously
`seen some or all of the content which is the response to this request (after
`checking whether this data is still valid). Id. The client then downloads the
`data from these peers in parts and in parallel, thereby speeding up the Web
`transfer, releasing congestion from the Web by fetching the information
`from multiple sources, and relieving traffic from Web servers by offloading
`the data transfers from them to nearby peers. Id.
`Challenged claim 1 is the only independent claim of the ’968 patent.
`Claim 1 is reproduced below.
`1. A method for use with a requesting client device that comprises an
`Hypertext Transfer Protocol (HTTP) or Hypertext Transfer Protocol
`Secure (HTTPS) client, for use with a first web server that is a HTTP
`or HTTPS server that respectively responds to HTTP or HTTPS
`requests and stores a first content identified by a first content
`identifier, for use with a second server distinct from the first web
`server and identified in the Internet by a second IP address, and for
`use with a list of IP addresses, the method comprising:
`identifying, by the requesting client device, an HTTP or HTTPS
`request for the first content;
`selecting, by the requesting client device, an IP address from
`the list;
`sending, by the requesting client device, to the second server
`using the second IP address over the Internet in response to the
`identifying and the selecting, the first content identifier and the
`selected IP address; and
`receiving, by the requesting client device, over the Internet in
`response to the sending, from the second server using the
`selected IP address, the first content.
`Ex. 1001, 19:16–35.
`
`4
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`
`35 U.S.C. §
`102(b)2
`103(a)
`
`Reference(s)/Basis
`MorphMix3
`MorphMix, RFC 26164
`
`Asserted Grounds of Unpatentability
`D.
`Petitioner challenges the patentability of claims of the ’968 patent on
`the following grounds:
`Claim(s) Challenged
`1, 2, 13–17, 26–28
`1, 2, 8, 9, 11–18, 26–
`28
`1, 2, 8, 9, 11, 12,
`15–18, 24, 26–28
`Pet. 5.
`
`103(a)
`
`Cottrell5, RFC 2616
`
`II. DISCRETIONARY DENIAL UNDER § 314(a)
`A. Overview
`
`Patent Owner requests that we exercise our discretion under 35 U.S.C.
`
`§ 314(a) to deny the Petition under Apple Inc. v. Fintiv, Inc., IPR2020-
`00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) (“Fintiv”). Prelim.
`Resp. 1–14.
`
`In assessing whether to exercise such discretion, the Board weighs the
`following factors:
`
`
`2 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, effective
`March 16, 2013. Because the ’968 patent claims priority to a provisional
`application that was filed before this date, with Petitioner not contesting that
`priority, the pre-AIA versions of §§ 102 and 103 apply. See Ex. 1001,
`code (60); Pet. 10.
`3 Marc Rennhard, MorphMix — A Peer-to-Peer-based System for
`Anonymous Internet Access (2004) (Ph.D. dissertation, published by ETH
`Zurich Research Collection) (Ex. 1013).
`4 Hypertext Transfer Protocol—HTTP/1.1, Network Working Group, RFC
`2616, The Internet Society, 1999 (Ex. 1012).
`5 U.S. Patent Application No. 2008/0196098 A1, published August 14, 2008
`(Ex. 1017).
`
`5
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`
`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.
`Fintiv at 6. Recognizing that “there is some overlap among these factors”
`and that “[s]ome facts may be relevant to more than one factor,” the Board
`“takes a holistic view of whether efficiency and integrity of the system are
`best served by denying or instituting review.” Id.
`
`As identified above, the 396 district court case, which involves the
`’968 patent, is pending in the Eastern District of Texas. See Pet. 2; Paper 7,
`2; Prelim. Resp. 1–2. A Docket Control Order entered in that case sets
`February 22, 2021, as the deadline for completing fact discovery, March 29,
`2021, as the deadline for completing expert discovery, and July 12, 2021, for
`jury selection for a trial. Ex. 1005, 1, 3. The District Court conducted a
`claim construction hearing on January 29, 2021, and, on February 8, 2021,
`issued a Claim Construction Opinion and Order. See Prelim. Resp. 2; Ex.
`2002.
`We address each Fintiv factor below.
`
`
`B. Factor 1 – Stay of Related Litigation Proceeding
`No party has requested a stay of the pending 396 case by the District
`
`Court. Pet. 6; Prelim Resp. 7. Petitioner argues that because the Board has
`
`6
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`previously “decline[d] to infer” how a district court would decide a stay
`motion, this factor is neutral. Pet. 6 (alteration in original).
`
`Patent Owner refers to Petitioner’s filing of a motion to stay in
`Luminati Networks Ltd. v. Teso LT, UAB, No. 2:19-cv-395 (E.D. Texas),
`which concerns related patents, as instructive. Prelim. Resp. 7. Patent
`Owner argues that in that case, Petitioner conceded that, as a general rule,
`“such stays are not granted.” Id. (emphasis omitted). Patent Owner also
`asserts that in that case: (1) the stay motion was denied before an institution
`decision by the Board; (2) Petitioner could not again seek a stay “until after
`an institution decision issues as to all of the district court patents involved
`under Board review;” and (3) the District Court did not indicate one way or
`the other as to whether a stay would likely be granted at that time. Id.
`Patent Owner refers to the Board’s conclusion in other prior petitions that
`whether a court would grant a stay was speculation. Id. Patent Owner
`argues that factor 1 “strongly favors denial of institution.” Id. at 8.
`
`We are not persuaded by Patent Owner’s arguments because they rely
`on guesswork concerning future District Court actions. We, therefore,
`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.
`
`C. Factor 2 — Proximity of Court’s Trial Date
`
`Patent Owner argues that the Petition should be denied because jury
`selection in the 396 district court case is scheduled approximately eleven
`months before a final determination would issue in this case, if it were
`instituted. Prelim. Resp. 8.
`
`Petitioner alleges that Patent Owner has previously sought to delay
`trials as the set trial date approaches. Pet. 6–7 (referring to Luminati
`
`7
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`Networks Ltd. v. UAB Tesonet, No. 2:18-cv-00299-JRG (E.D. Tex.)).
`Petitioner refers to Judge Gilstrap’s Order to continue jury trials from
`December 2020 through February 2021, and states that “common sense
`counsels that a continuance of three months of jury trials in one of this
`country’s busiest patent dockets may impact trial dates in 2021.” Id. at 7
`(citing Ex. 1008, 1). Petitioner argues that in light of Patent Owner’s
`history, the busy District Court docket, and the potential for COVID-related
`delays, Factor 2 is neutral. Id.
`
`Petitioner also filed a Notice Of Issuance Of Order Relevant To
`Parallel District Court Litigation. Paper 11 (“Notice”). The Notice states
`that in Case No. 2:19-cv-00395-JRG (“395 case”), a parallel litigation, the
`District Court ordered that the beginning of trial (jury selection) date be reset
`to July 12, 2021 pursuant to the parties’ Joint Motion to Reschedule Pretrial
`Conference. Id. at 1–2 (citing Ex. 1037). Petitioner argues that the 396
`district court case is also set for jury selection on July 12, 2021, and because
`Patent Owner contends that the ’395 case should commence first, the
`396 district court case “should not commence” at that time. Id. at 2.
`Petitioner asserts that “it is not clear when the 396 case will reach trial.” Id.
`
`Patent Owner argues that Petitioner’s reference to a potential COVID-
`19 trial delay is speculative. Prelim. Resp. 8. Patent Owner also asserts that
`whether Patent Owner settled a prior lawsuit at the pretrial conference is
`irrelevant here, because that settled case does not mean that this case will
`settle, given the different facts and parties at issue. Id. Patent Owner
`contends that Judge Gilstrap’s December 2020 continuances have no impact
`on the trial date here. Id. at 8–9. Patent Owner further responds to
`Petitioner’s arguments in the Notice related to the ’395 case date change by
`
`8
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`asserting that there has been no change to the 396 district court schedule,
`and “[p]er the practice of the Court, multiple cases often share the same jury
`selection date with the trials to follow.” Notice 3.
`
`As Patent Owner contends, the related jury trial in the 396 district
`court case is currently scheduled to occur approximately eleven months
`before a final determination would issue in this case. Although realistically
`there may be some delay in the trial date due to crowded docket conditions
`or other factors, presuming that there would be extensive delay would be
`conjecture at this time. Accordingly, given the eleven month difference in
`dates, this factor favors exercising our discretion to deny institution of inter
`partes review.
`
`D. Factor 3 — Investment in the Parallel Proceeding
`
`Petitioner notes that this Petition was filed less than five months after
`the asserted claims were disclosed in the 396 district court case and nearly
`six months before co-petitioner’s statutory deadline for filing an inter partes
`review.6 Pet. 7–8. However, there has been substantial investment by the
`parties and the District Court in the litigation. It is undisputed that at this
`time claim construction briefing is completed in the 396 district court case, a
`Markman hearing has been conducted, and a claim construction order
`issued, which includes interpretation of claim terms associated with the ’968
`patent. See Ex. 2002. Under the Docket Control Order, fact discovery in the
`case was completed on February 22, 2021, and expert discovery was
`completed on March 29, 2021. See Ex. 1005, 1, 3. The parties have not
`advised us of any changes to those dates as scheduled.
`
`
`6 As noted below, Teso LT, the first-named petitioner, is not a defendant in
`the 396 district court case.
`
`9
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`Although we acknowledge that Petitioner filed this Petition
`
`substantially in advance of the one-year statutory bar, we are not persuaded
`that filing the Petition less than five months after the asserted claims were
`disclosed in the 396 district court case outweighs the substantial progress
`and investment in the 396 district court case. Accordingly, we agree with
`Patent Owner that this factor favors exercising our discretion to deny
`institution of inter partes review. See Prelim. Resp. 11.
`E. Factor 4 — Overlap With Issues Raised in Parallel Proceeding
`
`
`Petitioner asserts that while claims 1, 2, 8, 9, 11, 12, 15, 17, 18, and
`26–28 of the ’968 patent are asserted in the 396 district court case, the
`Petition also challenges claims 13, 14, 16, and 24, and therefore this factor
`weighs in favor of institution. Pet. 8.
`
`Patent Owner argues that the overlap of the issues raised in Petition
`with those in the 396 district court case is substantial. Prelim. Resp. 12.
`More specifically, Patent Owner contends that the MorphMix, Cottrell, and
`RFC 2616 prior art references asserted in the challenges in this proceeding
`are all identified in the invalidity contentions in the 396 district court case.
`Id. (citing Ex. 2009 ¶¶ 3–4). Patent Owner further asserts that only claim 1
`of the ’968 patent is independent, and the additional claims challenged in the
`Petition are all dependent claims. Id. at 12–13. Thus, Patent Owner argues
`that there is no independent claim challenged here that is not also asserted in
`the District Court case, and that the additional dependent claims challenged
`here do not represent a significant difference. Id.
`
`We note that it is stipulated that the parties to the Petition, excluding
`Teso LT, which is not a defendant in the 396 district court case, are asserting
`
`10
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`the same references—MorphMix, Cottrell, and RFC 2616—for their
`challenges here and in the district court case. Ex. 2009 ¶¶ 3–4.
`
`In light of the common prior art asserted here and in the 396 district
`court case, as well as the common challenge to the sole independent claim of
`the ’968 patent, we agree with Patent Owner that the overlap in issues
`between the two proceedings is substantial. Accordingly, we determine that
`this factor favors exercising our discretion to deny institution of inter partes
`review.
`
`F. Factor 5 — Commonality of Parties in Parallel Proceedings
`
`Petitioner asserts that Teso LT is a named petitioner here, but is not a
`defendant in the 396 district court case, although it has been sued for
`infringement in cases asserting other related patents. Pet. 8. Patent Owner
`argues that three of the four named petitioners are also defendants in the 396
`district court case. Prelim. Resp. 13. Patent Owner also asserts that there is
`a close corporate relationship between Teso LT and the other named
`petitioners because they admittedly are sister companies. Id. (citing Pet. 5).
`
`Given the commonality of most of the petitioners in this proceeding
`and the defendants in the 396 district court case, and the close relationship of
`all the petitioners, we find that this factor favors exercising our discretion to
`deny institution.
`G. Factor 6 — Other Circumstances
`
`
`Petitioner contends that the challenged patent is “extraordinarily
`weak,” and policy favors instituting review under these circumstances. Pet.
`8. Patent Owner disagrees, arguing that Petitioner’s reading of the claims is
`unreasonable and the asserted prior art is weak. Prelim. Resp. 14. Patent
`Owner also asserts that NetNut Ltd. filed an ex parte reexamination request
`
`11
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`against the ’968 patent, which was granted. Id. As such, Patent Owner
`argues that the Patent Office is already considering validity issues of the
`’968 patent. Id.
`
`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.
`
`H. Conclusion
`
`The majority of the Fintiv factors favor the denial of institution. Thus,
`based on our holistic assessment of the Fintiv factors, we exercise our
`discretion under 35 U.S.C. § 314(a) to deny inter partes review.
`
`III. ORDER
`
`Accordingly, it is:
`ORDERED that the Petition is denied as to all grounds and all
`challenged claims of the ’968 patent.
`
`12
`
`
`
`IPR2021-00249
`Patent 10,637,968 B2
`
`For PETITIONER:
`
`Craig Tolliver
`George Scott
`CHARHON, CALLAHAN, ROBSON & GARZA, PLLC
`ctolliver@ccrglaw.com
`jscott@ccrglaw.com
`
`For PATENT OWNER:
`Thomas Dunham
`Don Livornese
`RUYAKCHERIAN LLP
`tomd@dunham.cc
`donl@ruyakcherian.com
`
`13
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
