Trials@uspto.gov
`571-272-7822
`
`Paper 10
`Entered: November1, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`G&H DIVERSIFIED MANUFACTURING,LP,
`Petitioner,
`
`V.
`
`DYNAENERGETICS EUROPE GMBH,
`Patent Owner.
`
`PGR2021-00078
`Patent 10,844,697 B2
`
`Before ERIC C. JESCHKE, RICHARD H. MARSCHALL,and,
`JASON W. MELVIN,Administrative Patent Judges.
`
`JESCHKE, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Post-Grant Review
`35 US.C. § 324
`
`
`571-272-7822
`
`Paper 10
`Entered: November1, 2021
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`G&H DIVERSIFIED MANUFACTURING,LP,
`Petitioner,
`
`V.
`
`DYNAENERGETICS EUROPE GMBH,
`Patent Owner.
`
`PGR2021-00078
`Patent 10,844,697 B2
`
`Before ERIC C. JESCHKE, RICHARD H. MARSCHALL,and,
`JASON W. MELVIN,Administrative Patent Judges.
`
`JESCHKE, Administrative Patent Judge.
`
`DECISION
`Granting Institution of Post-Grant Review
`35 US.C. § 324
`
`
`
`PGR2021-00078
`Patent 10,844,697 B2
`
`I. BACKGROUND
`
`Petitioner, G&H Diversified Manufacturing, LP, filed a Petition to
`
`institute a post-grant review of claims 1—21 (the “challenged claims”) of
`
`US. Patent No. 10,844,697 B2 (Ex. 1001, “the °697 patent’). Paper 1
`
`(‘Pet.”). Patent Owner, DynaEnergetics Europe GmbH,filed a Preliminary
`
`Response. Paper 7 (“Prelim. Resp.”). With our authorization (Ex. 3001),
`
`Petitioner filed a Preliminary Reply (Paper8, “Prelim. Reply’) and Patent
`
`Ownerfiled a Preliminary Sur-reply (Paper9, “Prelim. Sur-reply”).
`
`Wehaveauthority to determine whetherto institute a post-grant
`review. See 35 U.S.C. § 324 (2018); 37 C.F.R. § 42.4(a) (2020) (“The
`
`Boardinstitutes the trial on behalf of the Director.”). Section 324(a) of
`
`Title 35 of the United States Code providesthat a post-grant review may not
`
`be instituted “unless .
`
`.
`
`. the information presented in the petition. .
`
`.
`
`, if
`
`such information is not rebutted, would demonstrate that it is more likely
`
`than not that at least 1 of the claims challengedin the petition is
`
`unpatentable.” Upon consideration of the evidence and arguments in the
`
`briefing (including supporting testimonial evidence), for the reasons below,
`
`we determine that the information presented showsthatit is more likely than
`
`not that Petitioner would prevail with respect to at least one of the
`
`challenged claims. Wethusinstitute a post-grant review onall challenged
`
`claims on all asserted grounds. See SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348,
`
`1354, 1359-60 (2018); PTAB Rules of Practice for Instituting on All
`
`Challenged Patent Claims and All Grounds and Eliminating the Presumption
`
`at Institution Favoring Petitioner as to Testimonial Evidence (“PTAB
`
`Rules”), 85 Fed. Reg. 79,120, 79,120 (Dec. 9, 2020) (to be codified at
`
`37 C.F.R.pt. 42) (“[T]he Board will either institute review onall of the
`
`
`
`PGR2021-00078
`Patent 10,844,697 B2
`
`challenged claims and grounds of unpatentability presented in the petition or
`
`denythe petition.”).
`
`A. Related Proceedings
`
`Theparties identify several proceedings involving the ’697 patent:
`
`DynaEnergetics Europe GmbH v. Yellow Jacket Oil Tools,
`
`LLC, No. 6:20-cv-01110 (W.D. Tex.), filed Dec. 4, 2020 (“the
`
`W.D.Tex.Litigation”)!;
`
`G&H Diversified Mfg., LP v. DynaEnergetics Europe GmbH,
`
`No. 3:20-cv-00376 (S.D. Tex.), filed Dec. 14, 2020 (“the S.D.
`
`Tex. Litigation”);? -
`
`NexTier Completion Sols. Inc. v. DynaEnergetics Europe
`
`GmbH, No. 4:21-cv-01328 (S.D. Tex.), filed Apr. 21, 2021;
`
`DynaEnergetics Europe GmbHv. Oil States Int'l, Inc., No.
`
`6:21-cv-00372 (W.D.Tex.), filed Apr. 16, 2021;
`
`DynaEnergetics Europe GmbH v. PerfX Wireline Servs., LLC,
`
`No. 6:21-cv-00371 (W.D. Tex.), filed Apr. 16, 2021;
`
`DynaEnergetics Europe GmbHv. Horizontal Wireline Servs.,
`
`LLC, No. 6:21-cv-00349 (W.D. Tex.), filed Apr. 8, 2021;
`
`Dynaknergetics Europe GmbH v. Bear Mfg., LLC, No. 3:21-cv-
`
`00185 (N.D. Tex.), filed Jan. 28, 2021;
`
`DynaEnergetics Europe GmbH v. Oso Perforating, LLC, No.
`
`3:21-cv-00188 (N.D. Tex.), filed Jan. 28, 2021;
`
`1
`
`Petitioner listed this litigation, but under the case number“3:20-cv-
`00376.” Pet. 101. This appears to be a typographicalerror.
`2 Both the W.D. Tex. Litigation and the S.D. Tex. Litigation involve
`Petitioner and Patent Owner.
`
`
`
`PGR2021-00078
`Patent 10,844,697 B2
`
`e DynaEnergetics Europe GmbH v. SWM Int'l, LLC, No. 3:21-
`
`cv-00192 (N.D.Tex.), filed Jan. 28, 2021;
`e DynaEnergetics Europe GmbHv. Nexus Perforating LLC, No.
`4:21-cv-00280 (S.D. Tex.), filed Jan 28, 2021;
`
`e DynaEnergetics Europe GmbH v. Vigor USA, LLC, No. 4:21-
`
`cv-00283 (S.D. Tex.), filed Jan. 28, 2021 (stipulation of
`
`dismissal filed July 27, 2021);
`
`e DynaEnergetics Europe GmbH v. Rock Completion Tools, No.
`
`6:21-cv-00084 (W.D. Tex.), filed Jan. 28, 2021;
`
`e DynakEnergetics Europe GmbH v. GR Energy Servs. Operating
`
`GP LLC, No. 6:21-cv-00085 (W.D. Tex.), filed Jan. 28, 2021;
`
`e Dynaknergetics Europe GmbH v. NexTier Completion Sols.
`
`Inc., No. 6:20-cv-01201 (W.D. Tex.), filed Dec. 30, 2020
`
`(amended complaint filed Apr. 30, 2021);
`
`e PerfX Wireline Servs., LLC v. DynaEnergetics Europe GmbH,
`No.1:20-cv-03665 (D. Colo.), filed Dec. 15, 2020°; and
`
`e SWMInt'l, LLC and NexTier Completion Solns. LLC v.
`
`DynaEnergetics Europe GmbH, PGR2021-00097 (PTAB).
`
`Pet. 99-101; Paper 6 (Patent Owner’s Supplemental Mandatory Notices) at
`
`2-3. Petitioner also lists several applications “in the ’697 Patent family.”
`
`See Pet. 101.
`
`3 Petitionerlisted this litigation, but under the case number“6:20-cv-
`01201.” Pet. 101. This appears to be a typographicalerror.
`
`4
`
`
`
`PGR2021-00078
`Patent 10,844,697 B2
`
`B. The ’697 Patent
`
`The *697 patent relates to perforation gun componentsfor use in well
`
`bore perforating in the oil and natural gas industries. Ex. 1001, code (57),
`
`1:24-36. According to the ’697 patent, “[a] typical perforation gun system
`
`consists of an outer gun carrier arrangedin the interior of which there are
`
`perforators—usually hollow or projectile charges—that shootradially
`
`outwardsthrough the gun carrier after detonation.” Jd. at 1:37-40.
`
`
`
`
`
`
`
`Figure 32 is a “detailed side view of a tandem seal adapter and
`
`detonator.” Ex. 1001, 4:57-58. The embodiment shownin Figure 32
`
`includes, among other components: outer perforation gun carrier 12; shaped
`
`charge 18; detonator assembly 26; tandem seal adapter 48; sealing means 60;
`
`pressure bulkhead 124; and contact pins 126A and 126Blinkedto coil
`
`springs 128A, 128B. Id. at 5:42—46, 7:60-63, 8:31-36. Describing
`
`Figure 32 (and Figure 35B below), the °697 patent discloses that the “dual
`
`spring pin connector assembly including the bulkhead 124 and coil springs
`
`=!
`
`
`
`
`
`
`
`Figure 32 is reproduced below:
`
`
` 4812 124199 44 "2 14
`
`
`SSNSI,eSAISSYAIR
`
`foOJ|La]
`fo
`Newz)LSSRyanCAL.Lppacedbaaclite
`
`
`
`RyTiYs
`
`LIZZZLSSRN
`GYCONaNa
`rdESS7DPANanWeYsVAceca
`NhAZZ
`KG
`INNANkGASSS
`Styx.rT
`
`Ln.
`QOA,
`
`
`1263-7
`1288
`~60~topq
`126A
`100
`FIG. 32
`
`
`
`PGR2021-00078
`Patent 10,844,697 B2
`
`128A, 128Bis positioned within the tandem seal adapter 48 extending from
`a conductor slug 130 to the bulkhead connector element.” Id. at 8:36-42.*
`
`Figure 35B is reproduced below:
`
`
`
`
`Bal LY |
`
`
`
`
`
`
`
`
`
`FIG. 35B
`
`
`
`
`
`THROUGH WIRE
`
`Figure 35B is an “electrical schematic view[] of a detonator and of
`
`wiring within a perforated gun system.” Ex. 1001, 4:65-67. Describing
`
`Figure 35B (and Figure 32 above), the ’697 patent discloses that “[t]he dual
`
`spring pin connector assembly is connected to the through wire 106 of the
`
`detonator assembly 26.” Id. at 8:36—42.
`
`Figure 28 is reproduced below:
`
`FIG. 28
`
`0
`
`In this Decision, we omit emphasis on reference numerals and claim
`4
`numbersin quotations from the ’697 patent andprior art references.
`
`6
`
`
`
`PGR2021-00078
`Patent 10,844,697 B2
`
`Figure 28 is a detailed perspective view of a detonator. Ex. 1001,
`
`4:47-S0. Detonator assembly 26 shown in Figure 28 includes detonator
`
`head 100, detonator body 102, and detonator wires 104. Jd. at 8:9-13. The
`
`°697 patent discloses that depicted
`
`detonator head 100 further includes a through wire connector
`element 112 connected to the through wire 106 (not shown), a
`ground contact element 114 for connecting the ground wire 110
`to the tandem seal adapter (also not shown), through ground 20
`springs 116, and a bulkhead connector element 118 for
`connecting the signal-in wire 108 to the bulkhead assembly 58
`(also not shown).
`
`Ex. 1001, 8:15—22.
`
`C. Challenged Claims
`
`Petitioner challenges claims 1—21, of which claims 1 and 14 are
`
`independent. Claims 2—13 depend from claim 1, and claims 15—21 depend
`
`from claim 14. Independent claim 1 is reproduced below, with bracketed
`
`text added to identify certain language:
`
`[1 Preamble] An electrical connection assembly for
`1.
`establishing an electrical connectioninatoolstring,the electrical
`connection assembly comprising:
`
`{1.a] a tandem seal adapter having a first end, a second end
`and a bore that extends from the first end to the second end and
`entirely through the tandem seal adapter;
`
`[1.b] a perforation gun system comprisinga first outer gun
`carrier, a Shaped charge, andafirst detonator, wherein the shaped
`charge andthefirst detonator are positioned within the first outer
`gun carrier, wherein the first outer gun carrier is connectedto the
`first end of the tandem seal adapter; and
`
`[1.c] a pressure bulkhead having an outer surface,a first
`end and a second end,the outer surface of the pressure bulkhead
`is sealingly received in the bore of the tandem seal adapter, [1.d]
`the pressure bulkhead also having a pin connector assembly
`
`
`
`PGR2021-00078
`Patent 10,844,697 B2
`
`extending through the pressure bulkhead from a first pin
`connector end to a second pin connector end, and configured to
`relay an electrical signal from the first end of the pressure
`bulkhead to the second end ofthe pressure bulkhead, wherein the
`first pin connector end extends beyond the first end of the
`pressure bulkhead and the second pin connector end extends
`beyond the second end of the pressure bulkhead, wherein
`[1.e] the first detonatoris in electrical communication with
`the pin connector assembly,
`[1.f] wherein the tandem seal
`adapter and the pressure bulkhead are configured to provide a
`seal betweenthe detonator and an environmenton the second end
`of the tandem seal adapter.
`
`Ex. 1001, 11:18-47.°
`
`D. Asserted Grounds of Unpatentability
`
`Petitioner challenges claims 1—21 on the following grounds:
`
`
`
`
`
`
`
`
`
`Pima[toma|Rosman
`
`
`
`5 Weadopt Petitioner’s designations for the elements of the challenged
`claims. See Pet. xii-xvi (showing numerical designations for the language in
`the challenged claims). We apply these designations below.
`6 US 10,077,641 B2, issued September 18, 2018 (Ex. 1005, the
`“RogmanPatent”). Petitioner asserts that the Rogman Patentis priorart to
`the 697 patent under 35 U.S.C. § 102(a)(2) via 35 U.S.C. § 102(d)(2)
`“becauseit has an effective priority date of December 4, 2012, via
`PCT/US13/73094(filed December 4, 2013) [Ex. 1006] and U.S. Provisional
`Application No. 61/733,129 (filed December4, 2012) (“Rogman
`Provisional’) [Ex. 1007].” See Pet. 9.
`
`
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`PGR2021-00078
`Patent 10,844,697 B2
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`
`
`
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`
`
`re
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`Petitioner supports its challenges with a declaration from Mr. Robert
`
`Borgfeld
`
`A. Parrott. Ex. 1015 (“Parrott Decl.”). Patent Ownerrelies on the
`Declaration of Dr. John Rodgers, Ph.D. Ex. 2001 (“the Rodgers
`
`Declaration” or “Rodgers Decl.”).
`
`If. DISCUSSION
`
`A. Eligibilityfor Post-Grant Review
`
`1. Legal Framework
`
`Asa threshold matter, we must determine whetherthe ’697 patentis
`
`eligible for post-grant review. The post-grant review provisions in
`section 6(d) of the Leahy-Smith AmericaInvents Act, Pub. L. No. 112-29,
`
`125 Stat. 284 (September 16, 2011) (“AIA”) apply only to patents that
`
`“contain[] or contained at any time ... . a claim to a claimed invention that
`
`7 US 2013/0153205 A1, published June 20, 2013 (Ex. 1009,
`“Borgfeld’’).
`8 US 2013/0008669 A1, published January 10, 2013 (Ex. 1008,
`‘Deere”).
`? US 2013/0126237 A1, published May 23, 2013 (Ex. 1004, “Burton”).
`
`9
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`
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`PGR2021-00078
`Patent 10,844,697 B2
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`has an effective filing date .. . that is on or after [March 16, 2013].” ATA
`
`§§ 3(n)(1), 6(d), 6(f)(2)(A), 125 Stat. 284, 293, 305-312 (2011).
`
`Each petitioner for post-grant review mustcertify that the challenged
`
`patentis available for post-grant review. 37 C.F.R. § 42.204(a). In addition,
`
`“Ta] petition for a post-grant review mayonly befiled not later than the date
`
`that is 9 monthsafter the date of the grant of the patent or of the issuance of
`
`a reissue patent (as the case may be).” 35 U.S.C. § 321(c). Petitioner has
`
`the burden to demonstrate eligibility for post-grant review. See Mylan
`
`Pharms. Inc. v. Yeda Res. & Dev. Co., PGR2016-00010, Paper 9 at 10
`
`(PTAB Aug.15, 2016).
`
`2. Analysis
`
`Petitioner states that the °697 patentis eligible for post-grant review
`
`because “[t]he earliest possible effective priority date to which the °697
`
`[p]atent is July 18, 2013 based uponthe chain ofearlier applications to
`
`Canadian Patent No. 2,821,506.” Pet. 1-2. Petitioner also states that the
`
`Petition is being filed within nine monthsofthe date the patent issued.
`
`Pet. 2. Patent Ownerdoes not dispute post-grant review eligibility.
`
`On this record, we determine that the °697 patentis eligible for post-
`
`grant review. Specifically, the record supports Petitioner’s assertion that the
`
`earlier potential priority date is July 18, 2013. Ex. 1001, code (30). That
`
`date falls after March 16, 2013. Also, the Petition was filed on May 10,
`
`2021, which is within nine monthsof the issuance date of the °697 patent:
`
`November24, 2020. Id. at code (45); Pet. 2.
`
`B. Discretion Under 35 U.S.C. § 324(a) Based on Overall Efficiency
`
`Patent Ownerargues that we should exercise our discretion to deny
`
`the Petition for overall efficiency reasons. See Prelim. Resp. 35—42; id. at 37
`
`10
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`PGR2021-00078
`Patent 10,844,697 B2
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`(stating that “Board decisions post-SAS have routinely considered the
`
`numberof claims and grounds that meet the more likely than not standard
`
`and whetherinstitution would ‘be an efficient use of the Board’s time and
`
`resources’”(citing RetailMeNot, Inc. v. Honey Sci. Corp., PGR2019-00060,
`
`Paper 17 at 35-36 (PTAB Mar.10, 2020) (citing Deeper, UAB v. Vexilar,
`
`Inc., IPR2018-01310, Paper 7 at 41-43 (PTAB Jan. 24, 2019) (informative);
`
`Chevron Oronite Co. v. Infineum USA L.P., IPR2018-00923, Paper 9 at 10-
`
`11 (PTAB Nov.7, 2018) (informative)). Specifically, Patent Owner argues
`
`that we should exercise our discretion to deny under § 324(a) becauseall of
`
`the grounds based on prior art—six ofthe eight grounds asserted—
`
`improperly rely on “Rogman,” which, according to Patent Owner,is not
`
`actually prior art. Prelim. Resp. 37-42; see id. at 38 (“Here, each ofthe
`
`Petition’s six prior art grounds rely uponthe collective ‘Rogman’ as the
`
`primary reference. So without ‘Rogman’ availableas priorart, only three of
`
`the Petition’s twenty-one challenged claims and twoofthe Petition’s eight
`
`grounds remain.”). Patent Ownerasserts that “the Rogman Patent as a
`
`wholeis not prior art” and that “(t]he only available priorart is the
`
`disclosure of subject matter in the RogmanPatent that is supported by the
`
`RogmanProvisional.” Jd. at 38 (citing 35 U.S.C. § 102(d)(2)); see also
`
`Prelim. Sur-reply 5 (arguing that “only the specific subject matter in the
`
`RogmanPatent that is also described in the Provisional may qualify as prior
`art under Section 102(d)(2)”).
`|
`
`Petitioner more generally states that the Rogman Patent“is priorart
`
`becauseit has an effective priority date of Dec. 4, 2012 via... U.S.
`
`Provisional Application No. 61/733,129 (filed Dec. 4, 2012) (“Rogman
`
`Provisional’) [Ex. 1007] that describes the subject matter.” Pet. 9.
`
`11
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`PGR2021-00078
`Patent 10,844,697 B2
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`Petitioner also argues that the RogmanPatent can berelied on as priorart
`
`“for all that it discloses.” Prelim. Reply 2 (omitting capitalization and
`
`emphasis in heading).
`
`Weagree with Patent Owner’s narrowerstatementof Petitioner’s
`
`ability to rely on disclosures in the RogmanPatent, but we do notexercise
`
`our discretion to deny the Petition as proposed by Patent Owner. Here, the
`
`RogmanPatentis entitled to claim the benefit of an earlier filing date under
`
`35 U.S.C. § 120 based on the RogmanProvisional. See MPEP § 2154.01(b)
`
`(“Determining When Subject Matter Was Effectively Filed Under AIA
`
`35 U.S.C. [§] 102(d)”). In that situation, section 102(d)(2) provides that
`
`“(flor purposes of determining whethera patent,” such as the Rogman
`
`Patent, “‘is prior art to a claimed invention under subsection (a)(2), such
`
`patent .
`
`.
`
`. shall be considered to have been effectively filed, with respect to
`
`any subject matter described in the patent or application .
`
`.
`
`. as ofthe filing
`
`date of the earliest such application that describes the subject matter.”
`
`35 U.S.C. § 102(d)(2) (emphasis added); see also Prelim. Reply 3-4
`
`(discussing this statutory provision). Thus, Patent Owneraccurately states
`
`that the disclosures in the RogmanPatentare available as prior art to the
`
`’697 patentto the extent described in the earlier-filed Rogman Provisional.
`
`See Prelim. Resp. 38.
`
`For the reasons discussed below, however, we determineat this stage
`
`of the proceeding that Petitioner has adequately shownforinstitution that the
`
`subject matter of claim 1 of the ’697 patentis disclosed in both the Rogman
`
`Provisional and the Rogman Patent. See infra § II.I.2.a. Because we
`
`concludethat Petitioner has madea sufficient threshold showing with
`
`respectto the asserted prior art grounds, we do not exercise our discretion to
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`12
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`Patent 10,844,697 B2
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`deny under § 324(a). See Deeper, Paper 7 at 41-43; Chevron Oronite, Paper
`
`9 at 10-11.
`
`C. Discretion Under 35 U.S.C. § 324(a) Based on Parallel Litigation
`
`I. Legal Framework
`
`Section 324(a) of Title 35 of the United States Codestates that:
`
`[t]he Director may not authorize a post-grant review to be
`instituted unless the Director determines that the information
`presented in the petition filed under section 321,
`if such
`information is not rebutted, would demonstrate that it is more
`likely than not that at least 1 of the claims challenged in the
`petition is unpatentable.
`
`The portion of the statute reading “[t]he Director may not authorize...
`
`unless” mirrors the language of 35 U.S.C. § 314(a), which concerns inter
`
`partes review. This language of sections 314(a) and 324(a) provides the
`
`Director with discretion to denyinstitution of a petition. See 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.”);
`
`Consolidated Trial Practice Guide 55 (Nov. 2019), https://www.uspto.gov/
`
`TrialPracticeGuideConsolidated (“TPG”).
`
`In exercising the Director’s discretion under 35 U.S.C. §§ 314(a) and
`
`324(a), the Board may consider “events in other proceedings related to the
`
`samepatent, either at the Office, in district courts, or the ITC.” TPG 58.
`
`The Board’s precedential NHK Spring decision explains that the Board may
`
`consider the advancedstate of a related district court proceeding, among
`
`other considerations, as a “factor that weighs in favor of denying the Petition
`
`under § 314(a).” NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752,
`
`Paper8 at 20 (PTAB Sept. 12, 2018) (precedential).
`
`13
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`Patent 10,844,697 B2
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`In addition, the precedential order in Apple Inc. v. Fintiv, Inc.,
`
`IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020), identifies factors to
`
`consider whena patent ownerraises an argumentfor discretionary denial
`
`due to the advancedstate of a parallel proceeding:
`
`whetherthe court granted a stay or evidenceexists that one
`1.
`maybe granted if a proceedingis instituted;
`
`proximity of the court’s trial date to the Board’s projected
`2..
`statutory deadline for a final written decision;
`
`investmentin the parallel proceeding by the court and the
`3.
`parties;
`
`overlap between issues raised in the petition and in the
`4.
`parallel proceeding;
`
`whether the petitioner and the defendant in the parallel
`5.
`proceeding are the sameparty; and
`
`other circumstances that impact the Board’s exercise of
`6.
`discretion, including the merits.
`
`Fintiv, Paper 11 at 5-6. “These factors relate to whetherefficiency,
`
`fairness, and the merits support the exercise of authority to denyinstitution
`
`in view ofan earlier trial date in the parallel proceeding.” Jd. at 6. There is
`
`some overlap among these factors and some facts may be relevant to more
`
`than one factor. Jd. In evaluating the factors, the Board takes a holistic view
`
`of whetherefficiency and integrity of the system are best served by denying
`
`or instituting review. Id.
`
`2. Analysis
`
`Patent Ownerargues that we should exercise our discretion to deny
`
`institution based on the W.D. Tex. Litigation and the S.D. Tex. Litigation.
`
`Prelim. Resp. 47-53; Prelim. Sur-reply 1-3. Petitioner opposes. See
`
`Pet. 26-30; Prelim. Reply 1-2. For the reasons below, weare not persuaded
`
`14
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`PGR2021-00078
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`that we should exercise discretion to deny institution under 35 U.S.C.
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`§ 324(a) based onthat litigation. We discuss each Fintiv factor in turn
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`below.
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`a. Factor 1: whether the court granted a stay or
`evidence exists that one may be granted ifa
`proceedingis instituted
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`Thefirst Fintiv factor requires consideration of whetherthe district
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`court has stayed or may stay the proceeding pending post-grant review. “A
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`district court stay of the litigation pending resolution of the PTAB trial
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`allays concerns aboutinefficiency and duplication of efforts.” See Fintiv,
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`Paper 11 at 6.
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`Petitionerasserts that, in the W.D. Tex. Litigation, no trial date has
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`been set, no discovery has taken place, and there is no scheduling order.
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`Pet. 26-27. Accordingto Petitioner, “the lack of substantial progress in
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`th[at] action[] would support the possibility of a stay”but, “as suchastay is
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`currently speculative, this factor would generally be neutral.” Pet. 27 (citing
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`Sand Revolution II, LLC v. Cont’l Intermodal Grp.—Trucking LLC,
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`IPR2019-01393, Paper 24 at 7 (PTAB June 16, 2020) (informative)).
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`Patent Ownerrespondsthat Petitioner has not moved for a stay and
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`that “even if Petitioner requested a stay now,it is very unlikely that the
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`particular judge presiding over the WDTX Case, Judge Albright, would
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`grant such a request.” Prelim. Resp. 48 (citing Multimedia Content Mgmt.
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`LLC v. Dish Network LLC, No. 6:18-CV-00207-ADA, 2019 WL 11706231,
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`at *3 (W.D. Tex. May 30, 2019)). Patent Ownerasserts that this factor
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`favors denial. Id. at 49.
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`The District Court has not granted a stay in the W.D.Tex. Litigation
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`and no party has requested a stay. Here, Patent Owner doesnot provide any
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`Patent 10,844,697 B2
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`“specific evidence” to support that a stay requested by Petitioner would be
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`denied. Sand Revolution II, Paper 24 at 7. We will not attempt to predict
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`how the District Court would rule should a stay be requested. See id. (“In
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`the absence of specific evidence, we will not attempt to predict how the
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`district court in the related district court litigation will proceed because the
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`court may determine whetheror not to stay any individualcase, including
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`the related one, based on a variety of circumstances and facts beyond our
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`control and to which the Boardis not privy.”’); Apple Inc. v. Fintiv, Inc.,
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`IPR2020-00019, Paper 15 at 12 (PTAB May 13, 2020) (informative) (“A
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`judge determines whetherto grant a stay based on the facts of each specific
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`case as presented in the briefs by the parties. We decline to infer, based on
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`actions taken in different cases with different facts, how the District Court
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`would rule should a stay be requested bythe parties in the parallel case
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`here.”). We view this factor as neutral. See Sand Revolution II, Paper 24
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`at 7; Fintiv, Paper 15 at 12.
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`b. Factor 2: proximity ofthe court’s trial date to the
`Board's projected statutory deadlinefor a final
`written decision
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`Petitioner states this factor is neutral because notrial date has been set
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`in the W.D.Tex. Litigation. Pet. 27. Patent Owner respondsthat this factor
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`favors denial because, in the proposed scheduling order in the W.D. Tex.
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`Litigation,trial is “estimated to begin January 3, 2023.” Prelim. Resp. 49.
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`Wedo not agree with Patent Owner’s assessmentasto this factor. No
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`trial date has been set in the W.D. Tex. Litigation. Moreover, even
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`assuming the “estimated”trial date is adopted, the trial would be roughly
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`two monthsafter the due date for any final written decision here. Prelim.
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`Resp. 49 (citing Ex. 2010 (proposed scheduling order in the W.D.Tex.
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`Litigation)). On the record here, we look to other factors in the analysis.
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`See Fintiv, Paper 11 at 9 (“If the court’s trial date is at or around the same
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`time as the projected statutory deadline or even significantly after the
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`projected statutory deadline, the decision whetherto institute will likely
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`implicate other factors.”). We view this factor as weighing against
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`discretionary denial, however, given that the final written decision here will
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`precede anytrial that takes place.
`
`c. Factor 3: investmentin the parallel proceeding by the
`court and the parties
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`Thethird Fintiv factor considers “the amountand type of work
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`already completedin the parallel litigation by the [district] court and the
`
`parties at the time ofthe institution decision. Specifically, if at the time of
`the institution decision,the district court has issued substantive orders
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`related to the patentat issue in the petition, this fact favors denial.” See
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`Fintiv, Paper 11 at 9-10. Thus, the more advancedthe parallel proceeding,
`
`the less likely we are to institute a post-grant review. Jd. at 10.
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`Petitioner states that, in the W.D. Tex. Litigation, “except for venue,
`
`jurisdiction, and claim construction, all other discovery is stayed until after
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`the claim construction hearing underthe local rules.” Pet. 27 (citing
`
`Ex. 1021 at 3). Petitioner also notes that there has been no claim
`
`construction, no invalidity expert reports, and no dispositive motions in
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`either the W.D. Tex. Litigation or the S.D. Tex. Litigation. Pet. 27-28.
`
`Patent Ownerrespondsthat, based on the proposed schedule in the
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`W.D.Tex. Litigation, by the issuance of this Institution Decision, “Petitioner
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`will have submitted invalidity contentions, the parties will have made
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`numerousclaim construction exchanges, each party will have each prepared
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`and submitted claim construction briefing and begun preparationsfor the
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`Markman hearing proposed for December 20, 2021.” Prelim. Resp. 49-50
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`(citing Ex. 2010). Patent Ownerstates that, in the S.D. Tex. Litigation, “the
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`parties have fully briefed Patent Owner’s motion to dismiss and exchanged
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`infringement and invalidity contentions” and claim construction briefingis
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`“well underway,” with “a claim construction hearing .
`
`.
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`. set for October 21,
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`2021.” Id. at 50 (citing Ex. 2008 (Declaration of Preston Heard) { 7;
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`Ex. 2012).
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`On the current record, we are not persuaded that the level and type of
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`investment by the Texas District Courts and the parties in the W.D.Tex.
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`Litigation and the S.D. Tex. Litigation at this point in time support
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`exercising discretion to deny institution. As an initial matter, we note that
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`Patent Owner frames the argument under § 324(a) overall as related solely to
`
`the W.D. Tex. Litigation (see Prelim. Resp. 47, § C, first sentence), but then
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`addresses the S.D. Tex. Litigation only as to certain factors, when beneficial.
`
`Turning to the merits, although the parties have invested some time in
`
`the two Litigations, this must be considered in context of the substantial
`
`investment required in thefuture. As to efforts by the District Courts, in the
`
`W.D.Tex. Litigation, the District Court has issued an order denying a
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`motion to dismiss for improper venue and granting in part a motionto
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`transfer as to another defendant(i.e., not Petitioner), but that order does not
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`substantively address the 697 patentat all. See Ex. 2009; see also Fintiv,
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`Paper 11 at 10 (“Tf, at the time of the institution decision, the district court
`
`has not issued ordersrelated to the patent at issue in the petition,this fact
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`weighsagainst exercising discretion to deny institution under NHK.”).
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`Patent Owneralso has not identified any orders substantively addressing the
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`’697 patent in the S.D. Tex. Litigation.
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`18
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`Asto the efforts by the parties, in both Litigations, initial invalidity
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`contentions have been provided and claim construction hearings have
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`recently occurred or will soon occur. We view the Litigations as less
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`developed than that in Sand Revolution II, in which the panel found this
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`factor weighed “only marginally,if at all, in favor of exercising discretion”
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`when(1) a two-page claim construction order had issued and (2) the
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`defendant had providedinvalidity contentions. Sand Revolution I, Paper 24
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`at 10-11. Moreover, before anytrials in the Litigations, the parties must
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`exchangetheir final contentions, finish fact discovery, exchange expert
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`reports, take expert depositions, complete briefing on case-dispositive issues,
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`and preparefor trial. See, e.g, Ex. 2010 (proposed scheduling orderin the
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`W.D.Tex. Litigation). In addition, the District Courts would have to issue a
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`claim construction order, decide any case-dispositive issues, coordinate
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`pretrial conferences, and preparefortrial. Jd.
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`Patent Ownerdoesnot allege any delay by Petitionerin filing the
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`Petition. See Fintiv, Paper 11 at 11 (“If the evidence showsthat the
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`petitionerfiled the petition expeditiously, such as promptly after becoming
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`awareofthe claims being asserted, this fact has weighed against exercising
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`the authority to deny institution under NHK.”). For these reasons, we
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`determinethat the third Fintiv factor weighs against exercising discretion to
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`denyinstitution.
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`d. Factor 4: overlap betweenissues raised in the petition
`and in the parallel proceeding
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`The fourth Fintiv factor requires consideration of “inefficiency and
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`the possibility of conflicting decisions.” See Fintiv, Paper 11 at 12.
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`Therefore,“if the petition includes the sameor substantially the same
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`claims, grounds, arguments, and evidence, as presented in the parallel
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`Patent 10,844,697 B2
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`proceeding, this fact has favored denial.” Jd. The Fintiv panel stated that
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`“the degree of overlap is highly fact dependent” and encouragedthe parties
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`“to indicate whetherall or some of the claims challenged in the petition are
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`also at issue in the district court.” Jd. at 13.
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`Wefirst address the degree of overlap in issues based on the claims at
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`issue in each proceeding. See Fintiv, Paper 11 at 13 (“The existence of non-
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`overlapping claim challenges will weigh for or against exercising discretion
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`to deny institution under NHK depending onthe similarity of the claims
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`challenged in the petition to those at issue in the district court.”).
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`Petitioner notes that, in both Litigations, Patent Ownerhas alleged
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`infringementof only claims 1, 2, 8-10, and 13, but that Petitioner challenges
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`all twenty-one claimsin the Petition. See Pet. 28. Patent Owner responds
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`that, in both Litigations, Petitioner asserts invalidity of all twenty-one
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`claims. See Prelim. Resp. 51 (citing Ex. 2013 (Answerin the W.D. Tex.
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`Litigation) at 8, 11; Ex. 2014 (Answerin the S.D. Tex. Litigation)).
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`Petitioner counters that, in both Litigations, it alleges invalidity of only the
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`claims asserted by Patent Owner—i.e., claims 1, 2, 8-10, and 13, and that,
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`therefore, “Petitioner challenges fifteen of twenty-one claimsin this
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`proceedingthat are not at issue in” the Litigations. Prelim. Reply 1—2.
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`Weagree with Petitioner’s position as to the preliminary invalidity
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`contentionsin the Litigations, in which Petitioner asserts invalidity as to
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`only the claims asserted. See, e.g., Ex. 2015 at 3 (stating that “Defendants
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`contendthat each ofthe claims of [the ’697 patent] asserted” and that
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`“Defendants do not provide any invalidity contentions regarding any claims
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`not asserted against them”); Ex. 1038 at 3 (stating that Petitioner “contends
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`that each of the claims of [the ’697 patent] asserted”). Thus, the degree of
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`PGR2021-00078
`Patent 10,844,697 B2
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`overlap in the claims at issue betweenthe Litigations and this proceeding is
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`quite low, with only six of twenty-one claims overlapping. Moreover, the
`entirety of the subject matter of independent claim 14 andits dependent
`claims 15-21 is not at issue in the Litigations.
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`We turn nowto the degree of overlap in issues based on the prior art
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`at issue in each proceeding. See Fintiv, Paper 11 at 12—13 (discussing how,
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`“if the petition includes materially different grounds, arguments, and/or
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`evidence than those presented in the district court, this fact has tended to
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`weigh against exercising discretion to denyinstitution”). Although the
`preliminary invalidity contentions in both Litigations include the Rogman
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`Patent, Borgfeld, and Burton,
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