Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 29
`Date: February 25, 2022
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`
`
`
`SWM INTERNATIONAL, LLC and
`NEXTIER COMPLETION SOLUTIONS INC.,
`Petitioner,
`v.
`DYNAENERGETICS EUROPE GMBH,
`Patent Owner.
`_______________
`
`PGR2021-00097
`Patent 10,844,697 B2
`_______________
`
`
`Before ERIC C. JESCHKE, RICHARD H. MARSCHALL, and,
`JASON W. MELVIN, Administrative Patent Judges.
`
`JESCHKE, Administrative Patent Judge.
`
`
`ORDER
`Granting Petitioner’s Motion to Submit Supplemental Information
`37 C.F.R. § 42.223(a)
`Granting Petitioner’s Motion to Seal
`37 C.F.R. §§ 42.5, 42.14, 42.54
`
`
`
`
`
`Tel: 571-272-7822
`
`Paper 29
`Date: February 25, 2022
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`
`
`
`SWM INTERNATIONAL, LLC and
`NEXTIER COMPLETION SOLUTIONS INC.,
`Petitioner,
`v.
`DYNAENERGETICS EUROPE GMBH,
`Patent Owner.
`_______________
`
`PGR2021-00097
`Patent 10,844,697 B2
`_______________
`
`
`Before ERIC C. JESCHKE, RICHARD H. MARSCHALL, and,
`JASON W. MELVIN, Administrative Patent Judges.
`
`JESCHKE, Administrative Patent Judge.
`
`
`ORDER
`Granting Petitioner’s Motion to Submit Supplemental Information
`37 C.F.R. § 42.223(a)
`Granting Petitioner’s Motion to Seal
`37 C.F.R. §§ 42.5, 42.14, 42.54
`
`
`
`
`
`
`PGR2021-00097
`Patent 10,844,697 B2
`
`
`BACKGROUND
`On July 21, 2021, SWM International, LLC and NexTier Completion
`Solutions Inc. (collectively, “Petitioner”) filed a Petition seeking post-grant
`review of claims 1, 2, and 8–10 of U.S. Patent No. 10,844,697 B2. Paper 3.
`DynaEnergetics Europe GmbH (“Patent Owner”) filed a Preliminary
`Response. Paper 9. On January 6, 2022, we instituted post-grant review on
`all claims and on all grounds. Paper 20 (“Dec. Inst.”).
`With prior Board authorization (Ex. 3008), Petitioner filed under seal
`a Motion to Submit Supplemental Information Under 37 C.F.R. § 42.223(a).
`Paper 25 (“Mot.”).1 As the proposed supplemental information, Petitioner
`filed under seal a Declaration of Erik Hawes (Ex. 1040) and a one-page
`document (Ex. 1041). Patent Owner timely filed an Opposition to
`Petitioner’s Motion. Paper 28 (“Opp.”). Petitioner also filed a Motion to
`Seal. Paper 27 (“MTS”). For the reasons below, we grant the Motion to
`Submit Supplemental Information and we grant Petitioner’s Motion to Seal.
`
`DISCUSSION
`A. Motion to Submit Supplemental Information
`A party may file a motion to submit supplemental information in a
`post-grant review in accordance with two requirements: (1) a “request for
`the authorization to file a motion to submit supplemental information is
`made within one month of the date the trial is instituted” and (2) the
`“supplemental information [is] relevant to a claim for which the trial has
`been instituted.” 37 C.F.R. § 42.223(a). Satisfying these requirements,
`
`
`1 Petitioner filed a redacted version of the Motion to Submit
`Supplemental Information as Paper 26.
`
`2
`
`
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`PGR2021-00097
`Patent 10,844,697 B2
`
`however, does not necessarily mean the Board will grant the motion.
`Redline Detection, LLC v. Star Envirotech, Inc., 811 F.3d 435, 445 (Fed. Cir.
`2015). Instead, the “guiding principle” in such a determination is to “ensure
`efficient administration of the Office and the ability of the Office to
`complete IPR proceedings in a timely manner.” Id., quoted at Opp. 1.
`Under this “guiding principle,” the Board has broad discretion in granting or
`denying motions to submit supplemental information. Id. Petitioner must
`show it is entitled to the relief requested. See 37 C.F.R. § 42.20(b).
`We first address the two requirements in the relevant regulation. As to
`the first, Petitioner requested authorization to file the Motion to Submit
`Supplemental Information in an email sent February 4, 2022, which is within
`one month of the date of institution: January 6, 2022. See Ex. 3008 at 2–3
`(email dated February 4, 2022); Paper 20 (Decision on Institution dated
`January 6, 2022); see also Mot. 2 (addressing this issue).
`We turn now to the second requirement: whether the “supplemental
`information [is] relevant to a claim for which the trial has been instituted.”
`37 C.F.R. § 42.223(a)(2). Petitioner argues that the proposed supplemental
`information is “directly relevant to Petitioner’s challenges to claims 1, 2, and
`8–10 (all claims for which trial was instituted), as the unpatentability
`challenges in Grounds 1, 4, and 6 rely on the SafeJet System as the primary
`reference.” Mot. 2. Specifically, Petitioner asserts that the proposed
`supplemental information addresses “at least two disputed points”: (1)
`whether the SafeJet System discloses the “connected to” limitation in
`claim 1, and (2) whether the SafeJet System discloses the requirement in
`claim 9 for “a second outer gun carrier connected to the second end of the
`
`3
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`PGR2021-00097
`Patent 10,844,697 B2
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`tandem seal adapter.” Mot. 2–3; see Dec. Inst. 49–54, 57–59 (addressing
`these two issues).
`Patent Owner responds that the proposed supplemental information is
`not relevant. See Opp. 1–4. As part of that argument, Patent Owner first
`contends that Exhibit 1041 does not in fact show that the SafeJet System
`satisfies the requirement in claim 9 for “a second outer gun carrier connected
`to the second end of the tandem seal adapter” and that, instead, “Petitioner’s
`selective cropping of the original figure in [Exhibit] 1041 actually shows a
`gun carrier on the left directly secured to a crossover on the right, not a
`second gun carrier.” Opp. 1–2 (citing Ex. 1008 ¶ 31). With this argument,
`Patent Owner does not address the relevance of the proposed supplemental
`information, but rather its weight—i.e., its sufficiency to prove a particular
`assertion. Moreover, this argument is, at this stage, mere attorney argument
`as to how one of ordinary skill in the art would view the proposed
`supplemental information. See Elbit Sys. of Am., LLC v. Thales Visionix,
`Inc., 881 F.3d 1354, 1359 (Fed. Cir. 2018) (rejecting attorney argument as to
`the alleged understanding of one of skill in the art on an issue when no
`evidence was presented).
`Next, Patent Owner argues that the proposed supplemental
`information should not be entered into the record because “it is improper to
`submit supplemental information to cure deficiencies in evidence—for
`example, the SafeJet Presentation (Ex. 1005)—identified by the Board.”
`Opp. 2–3 (citing Dec. Inst. 51, 58). According to Patent Owner, “that is
`precisely what Petitioner[ is] intending to do” with the proposed
`supplemental information. Id. at 3.
`
`4
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`PGR2021-00097
`Patent 10,844,697 B2
`
`
`In several non-precedential Board decisions, panels have stated that
`the regulations allowing for supplemental information should not be seen as
`presenting a “‘wait-and-see’ opportunity” to supplement the petition based
`on issues raised in a preliminary response or a decision on institution. See,
`e.g., Laboratoire Francais du Fractionnement et des Biotechnologies S.A. v.
`Novo Nordisk Healthcare AG, IPR2017-00028, Paper 22 at 4 (PTAB June
`13, 2017) & Artesian Home Prods. v. Gutterglove, Inc., IPR2018-00031,
`Paper 24 at 3–4 (PTAB May 31, 2018), both cited at Opp. 1, 3. We do not
`see Petitioner as taking a “wait-and-see” approach as in the cited decisions.
`For example, in Laboratoire Francais, the panel denied a motion to
`submit supplemental information consisting of five public documents
`addressing arguments raised in the preliminary response as to three factual
`issues as well as the motivation to combine the prior art. See IPR2017-
`00028, Paper 22 at 3. And in Artesian Home Products, the panel denied a
`motion to submit supplemental information consisting of three documents
`relevant to showing an earlier prior art date for a reference patent deemed
`not prior art in the decision on institution—(1) a public U.S. Patent
`publication, (2) a redline comparison of the publication to the alleged prior
`art patent, and (3) a related supplemental declaration. See IPR2018-00031,
`Paper 24 at 2. In contrast, here, the proposed supplemental information is
`entirely non-public information provided by a third party based on a
`subpoena in the related district court litigation, and the proposed
`supplemental information addresses a narrow band of issues for which
`Petitioner already provided at least some evidence. Mot. 1; see Dec.
`Inst. 49–54, 57–59.
`
`5
`
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`PGR2021-00097
`Patent 10,844,697 B2
`
`
`Further, although not required in the relevant regulation (compare
`37 C.F.R. § 42.223(a), with § 42.223(b)), Petitioner has explained why the
`proposed supplemental information reasonably could not have been
`submitted with the Petition. See B/E Aerospace, Inc. v. MAG Aerospace
`Indus., LLC, IPR2014-01510, Paper 37 at 4 (PTAB May 26, 2015)
`(discussing how “Petitioner’s opportunity to have submitted the proffered
`information with the Petitions rather than as supplemental information is a
`permissible consideration in evaluation of a motion under 37 C.F.R.
`§ 42.123(a)”). Specifically, based on the record here, including the
`submitted Declaration, we find that Petitioner took reasonable steps to
`acquire consent from third-party Schlumberger before filing the Petition and
`then filed the Petition without that requested information. See Mot. 6 (“At
`the time Petitioner first received the document in question, it requested
`consent from Schlumberger to submit the document in support of the
`Petition, but that request was denied.”); Ex. 1040 ¶¶ 4–6.
`In addition, we see the situation here as unique and distinguishable
`from the cited nonprecedential decisions discussing the “‘wait-and-see’
`approach” in that Petitioner relies on the sale and public use of the SafeJet
`System as the basis for the relevant grounds, and relies on several documents
`and declarations to show the features of the relied-upon System. See Dec.
`Inst. 25. In this way, the proposed supplemental information does not
`remedy deficiencies in the evidence, but merely shows more fully the
`features of the relied-upon System. Patent Owner also argues that “the
`proposed supplemental information is cumulative of evidence that was
`timely included in the Petition.” Opp. 3–4. For the same reasons discussed
`
`6
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`PGR2021-00097
`Patent 10,844,697 B2
`
`above, however, the proposed supplemental information merely shows more
`fully certain features of the relied-upon System.
`Patent Owner also argues that the proposed supplemental evidence is
`untimely, thus leading to prejudice. See Opp. 4–6. Patent Owner faults
`Petitioner for not raising the proposed supplemental information until after
`the Decision on Institution, and argues that “Petitioner’s delay prejudices
`Patent Owner, which has already been subject to serial PGR attacks, and
`must now address supplemental information offered long after the 9-month
`window for PGRs has closed, further hindering the efficient administration
`of the Board and its ability to timely compete these proceedings.” Id. at 5–6.
`As an initial matter, as discussed above, we find that Petitioner took
`reasonable steps to acquire consent from third-party Schlumberger before
`filing the Petition without that information. Moreover, Patent Owner does
`not actually identify any prejudice to it based on having to address the
`proposed supplemental information in the Response. See Opp. 6. Indeed, as
`noted by Petitioner (Mot. 5–6), Patent Owner received the proposed
`supplemental information in the related district court litigation on June 22,
`2021, at the same time Petitioner did. See Apple Inc. v. VirnetX, Inc.,
`IPR2015-00810, Paper 21 at 6 (Nov. 2, 2015) (stating that “there is no
`prejudice to Patent Owner because Patent Owner has investigated and even
`had possession of some of the exhibits from the related litigation”), cited at
`Mot. 5–6. Contrary to Patent Owner’s assertion (Opp. 5–6), allowing
`Petitioner to submit the proposed supplemental information will not hinder
`the Board’s ability to complete this proceeding in a timely manner. For
`these reasons, we grant the Motion to Submit Supplemental Information.
`
`7
`
`
`
`PGR2021-00097
`Patent 10,844,697 B2
`
`
`B. Motion to Seal
`In an inter partes review, the moving party bears the burden of
`showing that the relief requested should be granted. 37 C.F.R. § 42.20(c). A
`party moving to seal must show “good cause” for the relief requested.
`37 C.F.R. § 42.54(a). The “good cause” standard for granting a motion to
`seal reflects the strong public policy for making all information in Board
`proceedings open to the public. See Argentum Pharms. LLC v. Alcon
`Research, Ltd., IPR2017-01053, Paper 27 at 3 (PTAB Jan. 19, 2018)
`(informative). When assessing if the good cause standard has been met, we
`may consider whether (1) the information at issue is confidential, (2) harm
`would result upon public disclosure, (3) there exists a genuine need to rely in
`the trial on the specific information sought to be sealed, and (4) the interest
`in maintaining confidentiality as to the information outweighs the strong
`public interest in an open record. Id. at 4.
`Exhibit 1041 is a one-page document that, according to Petitioner,
`“was provided by a third-party to this proceeding—Schlumberger
`Technology Corporation (‘Schlumberger’)—in response to a subpoena in a
`related district-court matter.” MTS 1. Petitioner states that
`Schlumberger has indicated by email to Petitioner’s counsel that
`the material in Exhibit 1041 is “non-public confidential
`information,” but consented to Petitioner’s use of the excerpt of
`the cross-sectional drawing as long as it was filed under seal and
`limited to outside counsel eyes only.
`MTS 3. Sealed Exhibit 1040 is a Declaration of attorney Erik Hawes that
`discusses Exhibit 1041. MTS 3–4. The redacted portions of the Motion to
`Submit Supplemental Information reflect and discuss Exhibit 1041. Id.
`
`8
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`PGR2021-00097
`Patent 10,844,697 B2
`
`
`Given the subject matter of the information in Exhibits 1040 and 1041
`and the redacted portions of the Motion to Submit Supplemental
`Information, we determine that the entirety of it is truly confidential, that
`third-party Schlumberger would be harmed by not sealing the information,
`that at least one party has a need to rely on this information at trial, and that
`the interest in maintaining the information as confidential outweighs the
`public interest in having the information unsealed. Accordingly, we
`conclude that good cause exists to retain Exhibits 1040 and 1041 under seal
`in their entirety. We also conclude that good cause exists to retain the
`redacted portions of Petitioner’s Motion to Submit Supplemental
`Information Reply under seal. Patent Owner does not oppose the Motion to
`Seal. Accordingly, we grant Petitioner’s Motion to Seal.
`
`
`CONCLUSION
`For the reasons above, we grant the Motion to Submit Supplemental
`Information and we grant Petitioner’s Motion to Seal.
`We remind the parties of the public’s interest in maintaining a
`complete and understandable file history, and of the general expectation that
`information will be made public when a final written decision indicates that
`the information exists. See Consolidated Trial Practice Guide 19–22
`(Nov. 2019), https://www.uspto.gov/TrialPracticeGuideConsolidated. We
`also note that confidential information subject to a protective order
`ordinarily becomes public 45 days after final judgment in a trial. See id. at
`21–22. After final judgment, a party may file a motion to expunge
`
`9
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`PGR2021-00097
`Patent 10,844,697 B2
`
`confidential information from the record prior to the information becoming
`public.2 See id. at 22 (citing 37 C.F.R. § 42.56).
`
`
`ORDER
`
`It is hereby:
`ORDERED that Petitioner’s Motion to Submit Supplemental
`Information is granted;
`FURTHER ORDERED that Exhibits 1040 and 1041 are entered into
`the record of this proceeding;
`FURTHER ORDERED that Petitioner’s Motion to Seal is granted;
`FURTHER ORDERED that the confidential version (Paper 25) and
`the redactions in the public version (Paper 26) of Petitioner’s Motion to
`Submit Supplemental Information are maintained under seal;
`FURTHER ORDERED that Exhibits 1040 and 1041 are maintained
`under seal in their entirety.
`
`
`
`2 The confidential documents filed in this proceeding will remain under
`seal at least until the time for filing a notice of appeal has expired or, if an
`appeal is taken, the appeal process has concluded. The records for these
`proceedings will be preserved in their entirety, and the confidential
`documents will not be expunged or made public, during any appeal.
`
`10
`
`
`
`PGR2021-00097
`Patent 10,844,697 B2
`
`For PETITIONER:
`
`Clay Hawes
`Alexander Stein
`Sujohn Das
`MORGAN, LEWIS & BOCKIUS LLP
`erik.hawes@morganlewis.com
`alexander.stein@morganlewis.com
`sujohn.das@morganlewis.com
`
`For PATENT OWNER:
`
`Lisa Moyles
`Jason Rockman
`MOYLES IP, LLC
`lmoyles@moylesip.com
`jrockman@moylesip.com
`
`Barry Herman
`Preston Heard
`WOMBLE BOND DICKINSON (US) LLP
`Barry.Herman@wbd-us.com
`Preston.Heard@wbd-us.com
`
`11
`
`
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