Paper 14
`Trials@uspto.gov
`Date: July 25, 2023
`571-272-7822
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`SAMSUNG ELECTRONICS CO., LTD.,
`Petitioner,
`
`v.
`
`CALIFORNIA INSTITUTE OF TECHNOLOGY,
`Patent Owner.
`____________
`
`IPR2023-00131
`Patent 7,916,781 B2
`____________
`
`
`
`Before KEN B. BARRETT, JOHN A. HUDALLA, and AMBER L. HAGY,
`Administrative Patent Judges.
`
`HUDALLA, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Petitioner’s Request on Rehearing of
`Decision Denying Institution of Inter Partes Review
`37 C.F.R. § 42.71(d)
`
`
`
`
`Samsung Electronics Co., Ltd. (“Petitioner”) filed a Petition (Paper 1,
`“Pet.”) requesting an inter partes review (IPR) of claims 3–18 and 22 (“the
`challenged claims”) of U.S. Patent No. 7,916,781 B2 (Ex. 1001, “the
`’781 patent”). California Institute of Technology (“Patent Owner”) filed a
`Preliminary Response (Paper 7, “Prelim. Resp.”). With our authorization,
`Petitioner also filed a Preliminary Reply (Paper 8, “Pet. Reply”) and Patent
`
`
`Trials@uspto.gov
`Date: July 25, 2023
`571-272-7822
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`SAMSUNG ELECTRONICS CO., LTD.,
`Petitioner,
`
`v.
`
`CALIFORNIA INSTITUTE OF TECHNOLOGY,
`Patent Owner.
`____________
`
`IPR2023-00131
`Patent 7,916,781 B2
`____________
`
`
`
`Before KEN B. BARRETT, JOHN A. HUDALLA, and AMBER L. HAGY,
`Administrative Patent Judges.
`
`HUDALLA, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Petitioner’s Request on Rehearing of
`Decision Denying Institution of Inter Partes Review
`37 C.F.R. § 42.71(d)
`
`
`
`
`Samsung Electronics Co., Ltd. (“Petitioner”) filed a Petition (Paper 1,
`“Pet.”) requesting an inter partes review (IPR) of claims 3–18 and 22 (“the
`challenged claims”) of U.S. Patent No. 7,916,781 B2 (Ex. 1001, “the
`’781 patent”). California Institute of Technology (“Patent Owner”) filed a
`Preliminary Response (Paper 7, “Prelim. Resp.”). With our authorization,
`Petitioner also filed a Preliminary Reply (Paper 8, “Pet. Reply”) and Patent
`
`
`
`IPR2023-00131
`Patent 7,916,781 B2
`Owner filed a Preliminary Sur-reply (Paper 9, “PO Sur-reply”) addressing
`whether we should exercise our discretion to deny institution under
`35 U.S.C. § 314(a).
`On May 4, 2023, we entered a Decision (Paper 10, “Dec.”) denying
`institution of inter partes review. As part of the Decision, we considered
`Patent Owner’s arguments (Prelim. Resp. 31–46; PO Sur-reply 1–3) that we
`should exercise our discretion to deny institution under 35 U.S.C. § 314(a)
`based on the advanced posture of the related case styled California Institute
`of Technology v. Samsung Electronics Co., No. 2-21-cv-00446 (E.D. Tex.
`filed Dec. 3, 2021) (“the underlying litigation”). Dec. 2, 12–24. We based
`our discretionary denial analysis on the Board’s precedential decision in
`Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020)
`(precedential) (“Fintiv”) and the USPTO Director’s Memorandum issued on
`June 21, 2022, titled “Interim Procedure for Discretionary Denials in AIA
`Post Grant Proceedings with Parallel District Court Litigation” (“Interim
`Procedure”).1 After weighing the factors identified in Fintiv, we exercised
`our discretion under 35 U.S.C. § 314(a) to deny institution of inter
`partes review. Dec. 24.
`Petitioner filed a Request for Rehearing (Paper 11, “Req. Reh’g”)
`asking us to reconsider our analysis of the sixth Fintiv factor and our
`decision to exercise discretion to deny institution. 2 For the reasons stated
`below, we deny the Request for Rehearing.
`
`
`1 Available at https://www.uspto.gov/sites/default/files/documents/
`interim_proc_discretionary_denials_aia_parallel_district_court_litigation_
`memo_20220621_.pdf
`2 Petitioner also requested rehearing by the Precedential Opinion Panel
`(“POP”) to clarify “[w]hether Fintiv’s multi-factor balancing analysis and
`
`2
`
`
`
`IPR2023-00131
`Patent 7,916,781 B2
`
`I. ANALYSIS
`When reconsidering a decision on institution, we review the decision
`for an abuse of discretion. See 37 C.F.R. § 42.71(c) (2022). An abuse of
`discretion may be determined if a decision is based on an erroneous
`interpretation of law, if a factual finding is not supported by substantial
`evidence, or if the decision represents an unreasonable judgment in weighing
`relevant factors. See Star Fruits S.N.C. v. United States, 393 F.3d 1277,
`1281 (Fed. Cir. 2005); Arnold P’ship v. Dudas, 362 F.3d 1338, 1340 (Fed.
`Cir. 2004); In re Gartside, 203 F.3d 1305, 1315–16 (Fed. Cir. 2000). The
`party requesting rehearing has the burden of showing the decision should be
`modified, which includes specifically identifying all matters the party
`believes we misapprehended or overlooked. See 37 C.F.R. § 42.71(d)
`(2022).
`Petitioner contends that we “erred in [our] overall balancing of the
`Fintiv factors” insofar as we interpreted the Interim Procedure for the sixth
`Fintiv factor “to mean that if a finding of compelling merits is not reached,
`then factor six cannot weigh against discretionary denial.” Req. Reh’g 1–2.
`According to Petitioner, our “erroneous analysis under Fintiv’s sixth factor
`. . . infected the overall multi-factor balancing assessment.” Id. at 2.
`Petitioner also asks us to hold its Request for Rehearing in abeyance “until
`the resolution of a pending Administrative Procedure Act (‘APA’) challenge
`
`
`Director Vidal’s Interim Procedure . . . require a compelling merits showing
`under Fintiv’s sixth factor where an unpatentability challenge may be strong
`even if found not to reach the compelling standard.” Ex. 3001. POP denied
`Petitioner’s request for review. Paper 13. Notwithstanding, we consider
`Petitioner’s arguments regarding Fintiv Factor 6 below.
`
`3
`
`
`
`A.
`
`IPR2023-00131
`Patent 7,916,781 B2
`to the validity of the Fintiv rule.” Id. We now consider Petitioner’s
`arguments about these two issues.
`
`Petitioner’s Arguments Regarding the Sixth Fintiv Factor
`Petitioner contests the manner in which we evaluated the merits of its
`unpatentability challenges as part of our consideration of the sixth Fintiv
`factor. Dec. 3–11. Petitioner contends that we wrongly considered only
`whether the merits were “compelling” as prescribed by certain guidance in
`the Interim Procedure. Req. Reh’g 4 (citing Interim Procedure 4–5).
`Petitioner further contends that we did not properly consider whether the
`merits “seem[ed] particularly strong” in accordance with Fintiv factor 6.
`Id. at 5 (quoting Fintiv, Paper 11 at 14–15). Petitioner also argues that we
`did not properly consider the testimony of its declarant, Dr. Valenti, which
`Petitioner notes is unrebutted in the preliminary record. Id. at 9–10.
`We do not agree with Petitioner’s arguments. As recognized by
`Petitioner (Req. Reh’g 5–6), our analysis of the merits for Fintiv factor 6
`may consider “strengths or weaknesses regarding the merits . . . as part of
`[our] balanced assessment.” Fintiv, Paper 11 at 15–16. For example, Fintiv
`discusses merits that “seem particularly strong” and merits that might be “a
`closer call.” Id. at 14–15. Further, we do not understand the Interim
`Procedure to have changed this calculus. The Director herself noted that the
`Interim Procedure “affirms the PTAB’s current approach of declining to
`deny institution under Fintiv where the evidence of record so far in the case
`would plainly lead to a conclusion that one or more claims are
`unpatentable.” Interim Procedure 5 n.6. The Director also acknowledged a
`potential range of merits, from those that are “merely sufficient to meet the
`
`4
`
`
`
`IPR2023-00131
`Patent 7,916,781 B2
`statutory institution threshold” to merits that “present a compelling
`unpatentability challenge.” Id. at 4–5. Thus, regardless of the descriptors
`employed to characterize the relative merits, the Fintiv factor 6 analysis
`ultimately involves an assessment of the merits along a spectrum of
`outcomes.
`Accordingly, our Decision addressed certain weaknesses in
`Petitioner’s unpatentability challenges. We focused on Petitioner’s analysis
`of Kobayashi’s teachings relative to the recited “second encoding operation
`producing at least a portion of a codeword” in claim 1. Dec. 20–23. We
`noted that “Petitioner’s contentions hinge on its assertion that an ordinarily
`skilled artisan ‘would have understood that this encoded sequence I4 is a
`codeword because the output of an encoder such as Kobayashi’s precoder is
`a codeword.’” Id. at 22 (quoting Pet. 15). Having considered the
`preliminary record, we agreed with Patent Owner’s arguments that
`“Petitioner’s analysis appears to (1) rely on circular reasoning; and (2) run
`counter to Kobayashi’s disclosure of the inner encoder in Figure 8 [of
`Kobayashi] as comprising both the precoder and duobinary signaling
`blocks.” Id. (citing Ex. 1005, 7:9–11, Fig. 8). We found that Patent
`Owner’s arguments “call[ed] into question whether Petitioner would
`ultimately succeed with its unpatentability challenges relative to its analysis
`for the recited ‘codeword.’” Id. We also stated that Petitioner’s case would
`have left “significant open questions for resolution at trial.” Id. at 23.
`Petitioner now suggests that we only considered whether the merits
`were “compelling” and did not consider whether they were “strong.” Req.
`Reh’g 9 (“[E]ven though the Board did not find the merits to be compelling,
`they are nevertheless strong.”). We disagree. Although we did consider the
`
`5
`
`
`
`IPR2023-00131
`Patent 7,916,781 B2
`question of “compelling” merits in conjunction with the Director’s Interim
`Procedure, this question was based on our underlying assessment of
`Petitioner’s unpatentability contentions and Patent Owner’s arguments.
`See Dec. 20–23. And our analysis can scarcely be read to support “strong”
`merits. This is evidenced by our findings that (1) “Patent Owner makes
`several arguments that call into question whether Petitioner would ultimately
`succeed with its unpatentability challenges relative to its analysis for the
`recited ‘codeword’”; and (2) “even if we were to find that Petitioner’s
`contentions support a reasonable likelihood of unpatentability, we would
`have significant open questions for resolution at trial.” Dec. 22–23. As
`Petitioner acknowledges (Req. Reh’g 5), situations such as this—where the
`merits are a “closer call” and other factors support discretionary denial—
`favor exercising discretion to deny institution. Fintiv, Paper 11 at 15. We
`did not go that far in our Decision, and we instead (and somewhat
`generously for Petitioner) considered the merits to be neutral in our analysis.
`Dec. 23. Under these circumstances, we reasonably weighed the merits as
`part of our consideration of Fintiv factor 6 and our holistic view of whether
`efficiency and integrity of the system are best served by denying or
`instituting review. See Fintiv, Paper 11 at 6.
`Petitioner also argues that we did not properly consider the testimony
`of its declarant, Matthew C. Valenti, Ph.D. Req. Reh’g 9–10. In particular,
`Petitioner argues that we “failed to address Dr. Valenti’s testimony that
`‘duobinary signaling is simply a transmission technique, and thus . . . the
`precoder is the component of the inner encoder’ that performs encoding.”
`Id. at 9 (citing Ex. 1002 ¶ 67; Pet. 14). Petitioner also argues that we did not
`consider “Dr. Valenti’s opinion that Kobayashi’s precoder performs the
`
`6
`
`
`
`IPR2023-00131
`Patent 7,916,781 B2
`same accumulating formula described in the ’781 Patent.” Id. at 9–10
`(citing Ex. 1002 ¶¶ 69–70; Pet. 16). Petitioner further argues that we should
`have credited this unrebutted testimony because it was only countered by
`Patent Owner’s attorney argument. Id. at 10.
`We do not agree with Petitioner’s arguments, because we expressly
`considered Dr. Valenti’s testimony and supporting evidence that the output
`of Kobayashi’s precoder (i.e., sequence I4) is a codeword. Dec. 22 & n.6
`(citing Ex. 1002 ¶¶ 45, 68). As explained in the Decision (id. at 22), we
`found this testimony to be based on circular reasoning. See Ex. 1002 ¶ 45
`(“A person of ordinary skill in the art would have understood that this
`encoded sequence I4 is a codeword because the output of an encoder such as
`Kobayashi’s precoder is a codeword.”). We also found that Dr. Valenti’s
`supporting citation to background information on error control coding did
`not support his testimony. Dec. 22–23 (citing Ex. 1002 ¶¶ 24–27).
`Furthermore, we considered Dr. Valenti’s citation to Kobayashi establishing
`that the output of a Hamming encoder is a codeword, but we found that this
`citation did not support Dr. Valenti calling the output of a precoder a
`codeword. Id. at 22 (citing Ex. 1005, 7:50–8:2). And, although Petitioner
`now cites other testimony from Dr. Valenti that we allegedly did not
`consider (see Req. Reh’g 9–10 (citing Ex. 1002 ¶¶ 67, 69–70)), none of this
`testimony cures the deficiencies mentioned above with respect to
`Petitioner’s showing regarding the recited “second encoding operation
`producing at least a portion of a codeword.” Indeed, Petitioner does not
`directly contest our analysis of the testimony from Dr. Valenti that we
`discussed in our Decision. See Dec. 22–23. Thus, Petitioner has not
`established that we abused our discretion relative to Dr. Valenti’s testimony.
`
`7
`
`
`
`B.
`
`IPR2023-00131
`Patent 7,916,781 B2
`Finally, Petitioner makes arguments in footnotes regarding our
`consideration for Fintiv factor 6 of past inter partes review challenges to the
`’781 patent. Req. Reh’g 10–11 nn.4–5. Petitioner recapitulates the same
`factual circumstances that we considered in our Decision and argues that we
`should have weighed them differently. See id.; Dec. 23–24. As such,
`Petitioner’s arguments merely express disagreement with how we weighed
`these circumstances, which is not a sufficient basis for rehearing.
`
`Petitioner’s Suggestion to Hold the Instant Request for Rehearing in
`Abeyance
`Petitioner argues that we should hold the instant Request for
`Rehearing in abeyance pending resolution of a case styled Apple Inc. v.
`Vidal, No. 5:20-cv-06128-EJD (N.D. Cal. filed Aug. 31, 2020). See Req.
`Reh’g 2–3, 11–15. That case is an APA challenge to instructions the
`Director has issued to the Board to inform it how to exercise, under
`delegation by the Director, the Director’s discretion whether to institute a
`requested inter partes review. See Apple Inc. v. Vidal, 63 F.4th 1, 6 (Fed.
`Cir. 2023). The precedential Fintiv decision is within the ambit of the Apple
`Inc. v. Vidal case. See id. at 8–9. Petitioner contends that “the Board should
`hold [Petitioner’s] rehearing request until this procedural challenge to Fintiv
`is resolved.” Req. Reh’g 12. Petitioner also presents certain arguments of
`its own under the APA regarding the propriety of the Director designating
`the Fintiv decision as precedential. See id. at 12–14.
`Petitioner has not previously presented arguments related to the Apple
`Inc. v. Vidal case. Nor has Petitioner previously challenged under the APA
`the Director’s decision to designate the Fintiv decision as precedential. As
`such, we could not have misapprehended or overlooked such arguments.
`
`8
`
`
`
`IPR2023-00131
`Patent 7,916,781 B2
`Furthermore, to the extent Petitioner suggests that we should hold the instant
`Request for Rehearing in abeyance pending resolution of the Apple Inc. v.
`Vidal case, we decline to do so.
`
`
`II. CONCLUSION
`For the reasons above, we conclude that Petitioner has not met its
`burden of showing that we abused our discretion in evaluating and weighing
`the Fintiv factors as part of our decision to exercise discretion under
`35 U.S.C. § 314(a) to deny institution of inter partes review. Therefore, we
`deny Petitioner’s Request for Rehearing.
`
`
`III. ORDER
`
`Accordingly, it is
`ORDERED that Petitioner’s Request for Rehearing is denied.
`
`9
`
`
`
`IPR2023-00131
`Patent 7,916,781 B2
`PETITIONER:
`
`Robert A. Appleby
`Greg S. Arovas
`KIRKLAND & ELLIS, LLP
`robert.appleby@kirkland.com
`greg.arovas@kirkland.com
`
`
`PATENT OWNER:
`
`Michael T. Rosato
`Matthew A. Argenti
`Patrick M. Medley
`WILSON SONSINI GOODRICH & ROSATI
`mrosato@wsgr.com
`margenti@wsgr.com
`pmedley@wsgr.com
`
`10
`
`
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