Clear Imaging Research, LLC

Patent Trials and Appeals Board

Mar 4, 2021

IPR2020-01402 (P.T.A.B. Mar. 4, 2021)

Trials@uspto.gov Paper: 12
571-272-7822 Date: March 4, 2021

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

SAMSUNG ELECTRONICS CO., LTD. and
SAMSUNG ELECTRONICS AMERICA, INC.,
Petitioner,
v.
CLEAR IMAGING RESEARCH, LLC,
Patent Owner.
____________

IPR2020-01402
Patent 9,392,175 B2
____________

Before JONI Y. CHANG, MINN CHUNG, and JASON M. REPKO,
Administrative Patent Judges.

CHUNG, Administrative Patent Judge.

DECISION
Denying Institution of Inter Partes Review
35 U.S.C. § 314

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I. INTRODUCTION
Samsung Electronics Co., Ltd. and Samsung Electronics America,
Inc. (collectively, “Petitioner”) filed a Petition requesting an inter partes
review (“IPR”) of claims 1−30 (“the challenged claims”) of U.S. Patent
No. 9,392,175 B2 (Ex. 1001, “the ’175 patent”). Paper 2 (“Pet.”), 1. Clear
Imaging Research, LLC (“Patent Owner”) filed a Preliminary Response
(Paper 7, “Prelim. Resp.”). Pursuant to our authorization, Petitioner filed a
Reply (Paper 10, “Reply”) to address Patent Owner’s arguments about
discretionary denial under § 314(a) in the Preliminary Response, and Patent
Owner filed a Sur-reply (Paper 11, “Sur-reply”).
For the reasons stated below, we exercise our discretion under
§ 314(a) and deny institution of inter partes review in the instant proceeding.
A. Related Matter
The parties indicate that the ’175 patent is involved in Clear Imaging
Research, LLC v. Samsung Electronics Co. Ltd., No. 2:19-CV-326 (E.D.
Tex. 2019). Pet. 80; Paper 3, 3. Petitioner also filed a parallel Petition
challenging claims 1−30 of the ’175 patent in IPR2020-01552.
B. The ’175 Patent
The ’175 patent discloses a method and an apparatus to correct blur in
digital images by combining plurality of images. Ex. 1001, code (57).
According to an embodiment disclosed in the ’175 patent, the blurring of an
image is prevented as it is being captured. Id. at 9:48−50.
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Figure 10 of the ’175 patent is reproduced below.

Figure 10 above illustrates the effect of moving an imager while capturing
an image, resulting in multiple copies of the image being recorded over each
other, causing blur. Id. at 3:23−25.
If the imager is shaken or moved while the image is being captured,
the situation is equivalent to copies of the same image being captured
multiple times in an overlapping fashion with an offset. Id. at 9:58−61. The
result is a blurred image, especially if the shutter speed is relatively slow
compared to the motion of the camera. Id. at 9:61−63.
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Figure 11 of the ’175 patent is reproduced below.

Figure 11 above illustrates combining images taken at fast shutter speeds to
result in the equivalent of a final image taken at a slower shutter speed, but
with reduced blur. Id. at 3:26−28.
According to the Specification, when the shutter speed is sufficiently
fast compared to the motion of the imager, blur does not occur or is very
limited because the displacement of the imager is not large enough to cause
the light reflected from a point on the image to fall onto more than one point
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on the image sensor. Id. at 9:65−10:2. This embodiment takes advantage of
the ability of an imager to record multiple images using fast shutter speeds.
Id. at 10:2−6.
C. Illustrative Claims
Of the challenged claims, claims 1, 8, 15, and 23 are independent.
Claims 2−6 depend from claim 1; claims 9−14 depend from claim 8; claims
16–22 depend from claim 15; and claims 24−30 depend from claim 23.
Claims 1 and 8 are illustrative:
1. A method comprising:
displaying an image in a viewfinder;
designating, by a processor, a main subject in the image in the
viewfinder;
capturing a plurality of photographic images in a recording
medium, wherein the plurality of photographic images
include the designated main subject;
combining the plurality of photographic images selectively to
generate a corrected image, wherein a first part of the
corrected image is generated by combining a first set of
images from among the plurality of images, a second part of
the corrected image is generated by combining a second set
of images from among the plurality of images, and at least
one image in the first set of images is not included in the
second set of images; and
storing the corrected image in a memory.
Ex. 1001, 12:40–55.
8. A method comprising:
displaying an image in a viewfinder;
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receiving user input, by the viewfinder, designating a main
subject in the image;
capturing a plurality of photographic images at a recording
medium, wherein the plurality of photographic images
include the designated main subject;
combining the plurality of photographic images selectively to
generate a corrected image, wherein a first part of the
corrected image is generated by combining a first set of
images from among the plurality of images, a second part of
the corrected image is generated by combining a second set
of images from among the plurality of images, and at least
one image in the first set of images is not included in the
second set of images; and
storing the corrected image in a memory.
Id. at 13:6–21.
D. Prior Art Relied Upon
Petitioner relies upon the references listed below (Pet. 2−3, 62):
Reference Date Exhibit No.
Mann Issued Oct. 27, 1998 1005
Nonaka Published Aug. 21, 2003 1006
Noriyuki Published Feb. 22, 2002 1007
Suh Filed Oct. 7, 1998 1009
Hyodo Filed Oct. 30, 1998 1010
Manabe Filed July 22, 2003 10111

1 Petitioner’s identification of Manabe as Exhibit 1005 in the table on page 3
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E. Asserted Grounds of Unpatentability
Petitioner asserts the following grounds of unpatentability (Pet. 1−2):2
Claims Challenged 35 U.S.C. § References
1A 1, 4–7, 15, 17, 19–22 103(a) Mann, Noriyuki
1B 3 103(a) Mann, Noriyuki, Suh
1C 2, 16 103(a) Mann, Noriyuki, Nonaka
1D 18 103(a) Mann, Noriyuki, Hyodo
1E 8–14, 23–25, 27–30 103(a) Mann, Suh
1F 26 103(a) Mann, Suh, Hyodo
2A 1, 4–7, 15, 17, 19–22 103(a) Mann, Noriyuki, Manabe
2B 3 103(a) Mann, Noriyuki, Manabe, Suh
2C 2, 16 103(a) Mann, Noriyuki, Manabe, Nonaka
2D 18 103(a) Mann, Noriyuki, Manabe, Hyodo

of the Petition appears to be a typographical error. The reference is stamped
with exhibit number 1011 (see Ex. 1011, 1) and the Petition refers to
Manabe as Exhibit 1011 in Petitioner’s substantive discussion of the
reference (see Pet. 62–70).
2 For purposes of this Decision, we assume the claims at issue have an
effective filing date prior to March 16, 2013, the effective date of the
Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011)
(“AIA”), and we apply the pre-AIA versions of 35 U.S.C. §§ 102 and 103.
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Claims Challenged 35 U.S.C. § References
2E 8–14, 23–25, 27–30 103(a) Mann, Suh, Manabe
2F 26 103(a) Mann, Suh, Manabe, Hyodo

II. ANALYSIS
A. Discretionary Denial Under 35 U.S.C. § 314(a)
Institution of an inter partes review is discretionary. Section 314(a)
of title 35 of the United States Code provides that “[t]he Director may not
authorize an inter partes review to be instituted unless the Director
determines that the information presented in the petition . . . and any
response . . . shows that there is a reasonable likelihood that the petitioner
would prevail with respect to at least 1 of the claims challenged in the
petition.” The U.S. Supreme Court has explained that because § 314
includes no mandate to institute review, “the agency’s decision to deny a
petition is a matter committed to the Patent Office’s discretion.” Cuozzo
Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016); see also Harmonic
Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1367 (Fed. Cir. 2016) (explaining
that under § 314(a), “the PTO is permitted, but never compelled, to institute
an IPR proceeding”). The Director has delegated this authority under
§ 314(a) to the Board. 37 C.F.R. § 42.4(a) (“The Board institutes the trial on
behalf of the Director.”).
In this proceeding, Patent Owner argues that we should exercise
discretion to deny institution under § 314(a) “because the trial in the
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co-pending District Court proceeding will take place almost one year prior
to any Final Written Decision that could arise from this proceeding.”
Prelim. Resp. 1. Patent Owner contends that each of the factors identified in
Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020)
(precedential) (“Fintiv”), weighs in favor of denying review. Prelim. Resp.
14.
In Fintiv, the Board ordered supplemental briefing on a nonexclusive
list of factors for consideration in analyzing whether the circumstances of a
parallel district court action are a basis for discretionary denial of trial
institution under NHK Spring Co. v. Intri-Plex Techs., Inc., IPR2018-00752,
Paper 8 (PTAB Sept. 12, 2018) (precedential). Fintiv, Paper 11 at 5−16.
Those factors include:
1. whether the court granted a stay or evidence exists that one
may be granted if a proceeding is instituted;
2. proximity of the court’s trial date to the Board’s projected
statutory deadline for a final written decision;
3. investment in the parallel proceeding by the court and the
parties;
4. overlap between issues raised in the petition and in the parallel
proceeding;
5. whether the petitioner and the defendant in the parallel
proceeding are the same party; and
6. other circumstances that impact the Board’s exercise of
discretion, including the merits.
Id. at 5−6. Here, we consider these factors to determine whether we should
exercise discretion to deny institution. In evaluating the factors, we take a
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holistic view of whether efficiency and integrity of the system are best
served by denying or instituting review. Id. at 6.
Factor 1: whether the court granted a stay or evidence exists
that one may be granted if a proceeding is instituted
Petitioner argues that it will move to stay the parallel litigation, and
institution of a review will increase the likelihood that the District Court will
grant a stay. Pet. 76. Patent Owner counters that “the district court is
unlikely to grant a stay even if the PTAB were to institute review” because
the “Eastern District of Texas, and Judge Gilstrap in particular, heavily
disfavor stays pending IPRs.” Prelim. Resp. 13−21.
In its Reply, Petitioner argues that “Judge Gilstrap has recently stayed
litigation after IPR institution in a case with similar timing where Fintiv
arguments were raised by Patent Owner” even though the jury selection was
less than six weeks away. Reply 1 (citing Ex. 1028, 1−2 (Order staying the
severed action in Seven Networks, LLC v. Apple Inc., 2:19-CV-00115-JRG
(E.D. Tex.)). Petitioner also argues that although Petitioner’s “motion to
stay has been denied, the denial was without prejudice and ‘Samsung
remains free to re-urge its request should the PTAB issue a decision on
institution.’” Id. (citing Ex. 1029, 1−4 (District Court Order denying
Petitioner’s motion to stay)).
In its Sur-reply, Patent Owner argues that the circumstances in Seven
Networks relied upon by Petitioner were different than those in the present
case. Sur-reply 1. Patent Owner points out that, in the parallel litigation
here, “Judge Gilstrap specifically noted that a stay would unduly prejudice
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the Patent Owner and that ‘[t]he late stage of the current case also disfavors
a stay’ because ‘[Petitioner] waited ten months after this case was initiated
to file its IPRs and seek a stay from the Court.’” Id. (citing Ex. 2014, 3).
Patent Owner also argues that “the schedule of the district court has
accelerated.” Id. at 1−2; Ex. 2015 (moving the Pretrial Conference forward
by three weeks).
We agree with Patent Owner and are not persuaded by Petitioner’s
arguments. At the outset, Petitioner’s reliance on the partial stay in Seven
Networks is misplaced. Reply 1 (citing Ex. 1028, 1−2). As the Board has
explained, “[a] judge determines whether to grant a stay based on the facts
of each specific case as presented in the briefs by the parties.” See Apple
Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15, 12 (PTAB May 13, 2020)
(informative) (“Fintiv DDI”). “We decline to infer, based on actions taken
in different cases with different facts, how the District Court would rule
should a stay be requested by the parties in the parallel case here.” Id.
Therefore, Petitioner’s reliance on the partial stay in Seven Networks is
misplaced.
As the Board explained in Fintiv, “[i]n some cases, there is no stay,
but the district court has denied a motion for stay without prejudice and
indicated to the parties that it will consider a renewed motion or reconsider a
motion to stay if a PTAB trial is instituted.” Fintiv, Paper 11 at 6−7. “Such
guidance from the district court, if made of record, suggests the district court
may be willing to avoid duplicative efforts and await the PTAB’s final
resolution of the patentability issues raised in the petition before proceeding
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with the parallel litigation.” Id. at 7. “This fact has usually weighed against
exercising authority to deny institution under NHK,” but “proximity of the
court’s trial date and investment of time are relevant to how much weight to
give to the court’s willingness to reconsider a stay.” Id. at 7−8 (footnotes
omitted). “If a court has denied a defendants’ motion for a stay pending
resolution of a PTAB proceeding, and has not indicated to the parties that it
will consider a renewed motion or reconsider a motion to stay if a PTAB
trial is instituted, this fact has sometimes weighed in favor of exercising
authority to deny institution under NHK.” Id.
Here, the Order denying Petitioner’s motion to stay does not set forth
any guidance indicating that the District Court may be willing to avoid
duplicative efforts and await the Board’s final resolution of the patentability
issues raised in the petition before proceeding with the parallel litigation.
Ex. 1029. Rather, in the Order, Judge Gilstrap specifically stated that a stay
will unduly prejudice Patent Owner, and “[t]he late stage of the current case
also disfavors a stay.” Id. at 2−4. In particular, Judge Gilstrap indicated that
Patent Owner “would certainly be prejudiced by a delay in its ability to
vindicate its patent rights caused [by] a stay” and that “both parties have
already expended significant time and resources into discovery, claim
construction, and motion practice over the nearly fifteen months this case
has been pending.” Id. at 2−3. Judge Gilstrap also explained that “[t]he IPR
proceedings at the PTAB are currently in their infancy (having been
requested almost a year after the filing of the present action), and therefore
granting a stay would require both [Petitioner] and [Patent Owner] to
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conduct the entire inter partes review proceeding from its initial stages,” and
that “[b]y contrast, the present case is less than four months from jury
selection, and the parties have behind them the expenses of discovery, claim
construction, motion practice, and much of their work with fact witnesses
and experts.” Id. at 3 n.2. Contrary to Petitioner’s assertion in its Reply, the
District Court did not invite Samsung to “re-urge” its motion to stay. See
Reply 1 (citing Ex. 1029, 1–4). Instead, the District Court stated “Samsung
remains free to re-urge its [requested relief of expedited briefing] should the
PTAB issue a decision on institution or a final determination as to the
validity of the asserted claims.” Ex. 1029, 4 n.3.
Weighing the facts in this particular case, we find that factor 1 weighs
slightly in favor of exercising our discretion to deny institution under
§ 314(a).
Factor 2: proximity of the court’s trial date to the Board’s
projected statutory deadline for a final written decision
It is undisputed that the parallel trial is scheduled to begin on
April 5, 2021, about eleven months before a Final Written Decision would
be due in this IPR proceeding. Pet. 77; Reply 1−2; Prelim. Resp. 22;
Ex. 1026 (Second Amended Docket Control Order, Dec. 8, 2020).
Nevertheless, Petitioner argues that “[t]he District Court is one of the
country’s busiest patent courts” and that “[s]cheduling issues cannot be ruled
out, as experts have professed that COVID-19 outbreaks are likely to arise
and Texas is facing new outbreaks.” Pet. 76−77 (citing Ex. 1017, 1 (noting
that Dr. “Fauci says second wave of coronavirus is ‘inevitable’”); Ex. 1018,
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1 (noting that “Texas puts reopening on hold in face of new Covid-19
outbreak”). Petitioner also argues that “due to the fast District Court
schedule, time did not permit Petitioner to file a petition in time for the Final
Written Decision (‘FWD’) to be rendered before the scheduled trial date”
and that “[t]he FWD’s issuance after the scheduled trial date, therefore, is
due to Patent Owner’s forum selection.” Pet. 77.
Patent Owner counters that “while the parties in the district court
proceedings have agreed to minor modifications of interim deadlines in the
procedural schedule, the trial date has never changed.” Prelim. Resp. 23 n.4
(comparing Ex. 2005 (DKT. 36) with Ex. 2004 (DKT. 99)). Patent Owner
also argues that “[t]he statutory deadline for the Board to issue a Final
Written Decision would not be until late March 2022, over 11 months after
trial in the district court,” and that “[t]he Board has repeatedly found that
even shorter lengths of time between the trial date and the statutory deadline
favor denying institution.” Id. at 22 (citing Cisco Sys., Inc. v. Ramot at Tel
Aviv Univ. Ltd., IPR2020-00122, Paper 15 at 7−8 (PTAB May 15, 2020)
(6 months); Intel Corp. v. VLSI Tech. LLC, IPR2020-00141, Paper 16
at 9−11 (PTAB June 4, 2020) (6−7 months); Apple Inc. v. Maxell, Ltd.,
IPR2020-00203, Paper 12 at 9−10 (PTAB July 6, 2020) (“Maxell”)
(8 months); Google LLC v. Personalized Media Commc’ns, LLC, IPR2020-
00720, Paper 16 at 6−7 (PTAB Aug. 31, 2020) (10 months)). Patent Owner
contends that “even if the trial were delayed, it is extraordinarily unlikely
that it would be delayed by over 11 months.” Id. at 23. Patent Owner
further avers that Petitioner “did not file its Petition until nearly 11 months
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after being served with the district court complaint, nearly 8 months after
receiving [Patent Owner’s] infringement contentions, and over 5 months
after serving its invalidity contentions relying on much of the same prior art
as the Petition.” Id. at 24.
In its Reply, Petitioner argues that “Judge Gilstrap recently delayed all
patent trials scheduled in the months (December through February)
immediately before the original April 5, 2021 trial date because of the
COVID pandemic.” Reply 1 (citing Ex. 1030, 1−4; Ex. 1035, 1).
According to Petitioner, “[t]his will impact the current schedule because
COVID conditions have not improved since November and, if anything,
have gotten worse.” Id. (citing Ex. 1031, 1−2; Ex. 1032, 1−5). Petitioner
asserts that “although the original April 5, 2021 trial date has not yet
changed, it is likely to change and current conditions make it impossible to
guess when trial will actually occur.” Id. at 2. Petitioner contends that
“[g]iven the uncertainty in trial date, Factor 2 favors institution.” Id.
In its Sur-reply, Patent Owner argues that “despite the impact of the
COVID pandemic, the current trial date has not shifted since being
originally set more than a year ago.” Sur-reply 2 (citing Ex. 2005). Patent
Owner notes that the District Court “recently issued an Order moving the
Pretrial Conference forward by three weeks,” and that “even if the trial were
delayed, it is extraordinarily unlikely that it would be delayed by over 10
months.” Id. (citing Ex. 2015).
We agree with Patent Owner, and we are not persuaded by
Petitioner’s arguments. As the Board explained in Fintiv, “[i]f the court’s
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trial date is earlier than the projected statutory deadline, the Board generally
has weighed this fact in favor of exercising authority to deny institution
under NHK.” Fintiv, Paper 11 at 9 (emphasis added). Here, the parallel trial
in the District Court is scheduled to begin on April 5, 2021, about eleven
months before a Final Written Decision would be due in this IPR
proceeding. Pet. 77; Prelim. Resp. 22; Ex. 1026.
Although we acknowledge the possibility of a Covid-19 related delay,
we generally take courts’ trial schedules at face value absent some strong
evidence to the contrary. Fintiv DDI, Paper 15 at 12−13. Here, even
accounting for the possibility of a Covid-19 related delay, given the close
proximity of the trial date to this Decision and the amount of time between
the trial date and our Final Written Decision (i.e., eleven months), we are
unpersuaded that any such delay should materially alter our weighing of this
factor. Notably, even if we were to assume that there may be a four-month
delay, this factor would still weigh in favor of exercising our discretion to
deny institution because the parallel trial in the District Court would begin
about seven months before a Final Written Decision would be due in this
proceeding. See NHK, Paper 8 at 20 (finding that “the advanced state of the
district court proceeding . . . weighs in favor of denying the Petition under
§ 314(a)” because the district court trial was set to begin six months before
the IPR proceeding concluded); see also Fintiv DDI, Paper 15 at 13 (finding
that “[b]ecause the currently scheduled District Court trial is scheduled to
begin two months before our deadline to reach a final decision, this factor
weighs somewhat in favor of discretionary denial in this case”).
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For the foregoing reasons, we find that factor 2 weighs strongly in
favor of exercising our discretion to deny institution under § 314(a).
Factor 3: investment in the parallel proceeding by the court
and the parties
Petitioner argues that “[d]istrict court proceedings are still at an early
phase,” and that Petitioner “diligently worked to prepare nine Petitions.”
Pet. 77−78; Reply 3. Petitioner also argues that Petitioner’s substantial
investment in these petitions should counterbalance and outweigh the
resources invested in the parallel litigation given the speed with which it
filed petitions on 163 claims across six patents. Pet. 78; Reply 3.
Patent Owner counters that this factor is “investment in the parallel
proceeding by the court and the parties,” not investment in the IPR
proceedings. Prelim. Resp. 25 (emphasis added). Patent Owner also argues
that “by the time of the Board’s initial decision, the parties will have
invested significantly more resources in the district court litigation than in
the IPR proceedings.” Id. at 29.
We agree with Patent Owner, and we are not persuaded by
Petitioner’s arguments. For this factor, we consider “the amount and type of
work already completed in the parallel litigation by the court and the parties
at the time of the institution decision.” Fintiv, Paper 11 at 9 (emphasis
added). “Specifically, if, at the time of the institution decision, the district
court has issued substantive orders related to the patent at issue in the
petition, this fact favors denial.” Id. at 9−10. “Likewise, district court claim
construction orders may indicate that the court and parties have invested
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sufficient time in the parallel proceeding to favor denial.” Id. at 10. “This
investment factor is related to the trial date factor, in that more work
completed by the parties and court in the parallel proceeding tends to
support the argument[] that the parallel proceeding is more advanced, a stay
may be less likely, and instituting would lead to duplicative costs.” Id.
Petitioner’s timing in filing the Petition is also relevant to this factor.
If the petitioner, “faced with the prospect of a looming trial date, waits until
the district court trial has progressed significantly before filing a petition,”
that decision “may impose unfair costs to a patent owner.” Fintiv, Paper 11
at 11. On the other hand, “[i]f the evidence shows that the petitioner filed
the petition expeditiously, such as promptly after becoming aware of the
claims being asserted, this fact has weighed against exercising the authority
to deny institution.” Id.
Here, the parallel District Court case is about one month away from
jury selection. Ex. 1026. As Judge Gilstrap noted in his Order denying
Petitioner’s motion to stay, Petitioner “waited ten months after this case was
initiated to file its IPRs and to seek a stay from the Court,” and both parties
have already expended significant time and resources into discovery, claim
construction, motion practice, and fact witnesses and expert discovery.
Ex. 1029, 2−3, 3 n.2; Ex. 1026. Moreover, “a Markman hearing has taken
place and a Claim Construction Order has issued.” Ex. 1029, 4. Upon
considering the foregoing, we find that the parties have invested significant
resources in the parallel litigation, with some of the work relevant to patent
validity, including claim construction, fact discovery, and expert discovery.
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Therefore, weighing the facts in this particular case, including the
time invested by the parties and the District Court in the parallel litigation,
the extent to which the investment in the District Court proceeding relates to
issues of patent validity, and the timing of the filing of the Petition, we find
that factor 3 weighs strongly in favor of exercising our discretion to deny
institution under § 314(a).
Factor 4: overlap between issues raised in the petition and in
the parallel proceeding
Petitioner argues that it “has eliminated any risk of duplicated effort
by voluntarily stipulating to counsel for Patent Owner that, if the Board
institutes the pending Petition, [Petitioner] will not pursue district court
invalidity challenges based on the pending Petition’s asserted grounds” and
that “the Petition addresses claims that will not be addressed in District
Court.” Pet. 78−79 (citing Ex. 1022).
Patent Owner counters that Petitioner’s stipulation is “extraordinarily
narrow” because it applies only to the “exact same grounds.” Prelim. Resp.
29–30. Patent Owner argues that the stipulation has little to no practical
effect because, in Petitioner’s election of prior art for trial in the District
Court, “it is asserting different grounds, additional references and
combinations not asserted in the Petition, and has reserved the right to
broaden its contentions if needed.” Id. at 30 (citing Ex. 2013 (Samsung’s
Notice Regarding Prior Art Reduction filed in the District Court)). Patent
Owner further contends that “[e]ven if the Board instituted an IPR and
[Petitioner] withdrew the specific instituted combinations, [Petitioner] would
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still be asserting the same pieces of prior art in different combinations in the
district court,” and that “both the Board and the district court would be
analyzing and interpreting the same pieces of prior art, duplicating effort and
potentially reaching inconsistent results.” Id. at 31 (citing Ex. 1022). In
addition, Patent Owner avers that “by the time the Board issues its institution
decision, most of the effort involved with each invalidity ground in the
district court will already have been expended” because “[e]xpert reports
will have been written, discovery will have closed, and any Daubert motions
and motions for summary judgment will have been filed.” Id. at 30.
In its Reply, Petitioner asserts that the Petition raises unique issues
that will not be resolved in the District Court. Reply 3−5. Petitioner argues
that it “has eliminated any risk of duplicated effort by stipulating that, if the
Board institutes review, [Petitioner] will not pursue district court invalidity
challenges based on the petition’s asserted grounds or grounds sharing the
same primary reference.” Id. at 3 (citing Ex. 1022, 1; Ex. 1037, 1−3).
Petitioner also contends that, by reducing prior art for consideration at
trial, there is “minimal overlap between the petition and underlying
litigation” and that “[o]f the six references relied upon in the petition, only
one reference, Nonaka, would remain at issue in the litigation upon
institution.” Id. at 3−4 (citing Ex. 1033; Ex. 1037). Petitioner further asserts
that “Nonaka is used quite differently in the petition than in the litigation”
because “in the petition, Nonaka is used as a secondary reference to Mann
for features of two claims (2 and 16) no longer asserted [in the litigation],”
whereas, “in the litigation, Nonaka would be used as a secondary reference
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to support Onuki and Kawahara—two references not relied upon in the
petition.” Id. at 4. Petitioner argues that “[w]ith minimal overlap, risk of
inefficiency and inconsistent results is greatly diminished.” Id.
Petitioner further argues that “the petition addresses many more
claims than the litigation” because “the petition challenges 26 claims that are
not involved in the litigation.” Id. (citing Ex. 1034, 1). According to
Petitioner, “[c]laims 1–14, 16–18, 21, 22, and 24–30 are no longer asserted
[in the District Court litigation], and are instead challenged in the pending
[P]etition,” and Petitioner “will continue to create innovative new products,
and desires Board review of these claims, so as to prevent their future
assertion by [Patent Owner] in potential serial litigation.” Id. at 4 n.1.
In its Sur-reply, Patent Owner argues that “[t]he fact that disparate
prior art combinations are now being presented in the district court and to
the PTAB was a problem of [Petitioner’s] making.” Sur-reply 3−4.
We are not persuaded by Petitioner’s arguments. At the outset, the
mere existence of non-overlapping claims does not support Petitioner’s
position that this factor favors institution. See Pet. 78−79; Reply 4−5.
Rather, “[t]he existence of non-overlapping claim challenges will weigh for
or against exercising discretion to deny institution under NHK depending on
the similarity of the claims challenged in the petition to those at issue in the
district court.” Fintiv, Paper 11 at 13 & 13 n.25 (citing Next Caller, Inc. v.
TRUSTID, Inc., IPR2019-00961, Paper 10 at 14 (PTAB Oct. 16, 2019)
(denying institution, even though the petitions jointly involve all 52 claims
of the patent and the district court parallel proceeding involves only 7
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claims, because the claims all are directed to the same subject matter and
petitioner does not argue that the non-overlapping claims differ significantly
in some way or argue that it would be harmed if institution of the
non-overlapping claims is denied)) (emphasis added).
Here, Petitioner challenges the patentability of claims 1−30 in its
Petition, but only claims 15, 19, 20, and 23 in the parallel litigation. Reply
4; Ex. 1034, 1. Although Petitioner argues that it “will continue to create
innovative new products, and desires Board review of these claims, so as to
prevent their future assertion by [Patent Owner] in potential serial
litigation,” (Reply 4 n.1), Petitioner does not show that the non-overlapping
claims differ significantly in some way. See Pet. 78−79; Reply 3−5.
Rather, both sets of claims recite similar subject matter. For example,
independent claim 1, which is not asserted in the parallel litigation, recites a
method with steps similar to the functions performed by the apparatus
recited in claim 15, which is asserted. Compare Ex. 1001, 12:40−55
(independent claim 1), with id. at 13:40−56 (independent claim 15).
Similarly, independent claim 8, which is not asserted in the parallel
litigation, recites a method with steps similar to the functions performed by
the apparatus recited in claim 23, which is asserted. Compare id. at 13:6−21
(independent claim 8), with id. at 14:19−36 (independent claim 23). In
addition, non-asserted claims 11 and 12, which depend from claim 8, recite
additional steps similar to the additional functions recited in asserted claims
19 and 20, respectively, which depend from claim 15. Compare id. at
13:28−34 (dependent claims 11, 12), with id. at 14:7−14 (dependent claims
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19, 20). So, although the non-overlapping claims are challenged here, those
claims are sufficiently similar to those at issue in the parallel proceeding.
Thus, this factor does not weigh against exercising our discretion to deny
institution under § 314(a). Fintiv, Paper 11 at 13.
In addition, this fourth factor involves consideration of inefficiency
concerns and the possibility of conflicting decisions when substantially
identical prior art is submitted in both the district court and the inter partes
review proceedings. Fintiv, Paper 11 at 12. “[I]f the petition includes the
same or substantially the same claims, grounds, arguments, and evidence as
presented in the parallel proceeding, this fact has favored denial.” Id.
Here, as discussed above, claims 15, 19, 20, and 23 challenged in the
parallel District Court proceeding recite similar subject matter as claims 1,
11, 12, and 8 challenged in the Petition. More significantly, Petitioner’s
stipulation does not mitigate the “concerns of inefficiency and the possibility
of conflicting decisions,” nor does it ensure that an inter partes review is a
“true alternative” to the parallel District Court proceeding. Fintiv, Paper 11
at 12. In particular, Petitioner’s stipulation is narrow, not a broad stipulation
that includes “any ground raised, or that could have been reasonably
raised.” See Sotera Wireless, Inc. v. Masimo Corp., IPR2020-01019, Paper
12, 19 (PTAB Dec. 1, 2020) (precedential) (noting that “Petitioner broadly
stipulates to not pursue ‘any ground raised or that could have been
reasonably raised’”) (second emphasis added); see also Sand Revolution II,
LLC v. Intermodal Group-Trucking LLC, IPR2019-01393, Paper 24, 12 n.5
(PTAB June 16, 2020)(informative) (noting that a broad stipulation better
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addresses concerns of duplicative efforts and potentially conflicting
decisions in a much more substantial way).
Moreover, although Petitioner asserts that “[o]f the six references
relied upon in the petition, only one reference, Nonaka, would remain at
issue in the litigation upon institution” (Reply 3−4 (citing Ex. 1033;
Ex. 1037)), Petitioner’s stipulation states that “[i]f the PTAB institutes
review of the petition filed in IPR2020-01552,” which challenges the same
claims of the same patent challenged in the Petition (compare Pet. 1, with
IPR2020-01552, Paper 3, 1), Petitioner will rely on Mann and Nonaka in the
District Court litigation. Ex. 1037, 2. In addition, although Petitioner argues
that “in the petition, Nonaka is used as a secondary reference to Mann for
features of two claims (2 and 16) no longer asserted [in the litigation],”
whereas, “in the litigation, Nonaka would be used as a secondary reference
to support Onuki and Kawahara—two references not relied upon in the
petition” (Reply 4), Petitioner does explain meaningfully how that would
eliminate any risk of duplicated effort. See Pet. 78−79; Reply 3−5.
Tellingly, Petitioner does not assert that the same prior art disclosures
would not be relied upon in both proceedings. As Patent Owner points out,
“both the Board and the district court would be analyzing and interpreting
the same pieces of prior art, duplicating effort and potentially reaching
inconsistent results.” Prelim. Resp. 31. Therefore, we find the assertion of
Mann and Nonaka in both proceedings may result in duplication of work and
create the potential for inconsistent decisions. See Maxell, IPR2020-00203,
Paper 12 at 14 (“[A]lthough the obviousness ground asserted here is not
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identical to either ground in Petitioner’s final invalidity contentions, . . . the
assertion of Waldroup and Nakayama in both proceedings may result in
duplication of work and create the potential for inconsistent decisions.”).
In short, notwithstanding the stipulation, there will likely be overlap
between the issues raised in the Petition and the parallel litigation. Because
overlapping claims are challenged based on the same prior art in both the
Petition and in the parallel litigation, we find that factor 4 weighs slightly in
favor of exercising our discretion to deny institution under § 314(a).
Factor 5: whether the petitioner and the defendant in the
parallel proceeding are the same party
It is undisputed that Petitioner is a co-defendant in the parallel
litigation. Pet. 80; Prelim. Resp. 31. Petitioner argues that this factor should
be neutral given that the Petition is potentially helpful to future defendants.
Pet. 79; Reply 5. Patent Owner counters that Petitioner’s argument is
speculative and that Petitioner’s efforts to protect “future defendants” has no
bearing on the present case. Prelim. Resp. 32; Sur-reply 5.
As the Board explained in Fintiv, “[i]f a petitioner is unrelated to a
defendant in an earlier court proceeding, the Board has weighed this fact
against exercising discretion to deny institution under NHK.” Fintiv,
Paper 11 at 13–14 (emphasis added). The Board determined in Sand
Revolution that “[a]lthough it is far from an unusual circumstance that a
petitioner in inter partes review and a defendant in a parallel district court
proceeding are the same, or where a district court is scheduled to go to trial
before the Board’s final decision would be due in a related inter partes
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review, this factor weighs in favor of discretionary denial.” Sand
Revolution, Paper 24 at 12−13. In Fintiv DDI, the Board determined that
“[b]ecause the petitioner and the defendant in the parallel proceeding are the
same party, this factor weighs in favor of discretionary denial.” Fintiv DDI,
Paper 15 at 15.
Here, it is undisputed that Petitioner is a co-defendant in the parallel
litigation. Pet. 80; Prelim. Resp. 31. Therefore, we find that factor 5 weighs
in favor of exercising our discretion to deny institution under § 314(a).
Factor 6: other circumstances that impact the Board’s exercise
of discretion, including the merits.
Petitioner argues that “[a]s explained in the Petition (and Dr. Farid’s
testimony), institution would result in invalidation of the Challenged
Claims” and that the merits are particularly strong. Pet. 79–80; Reply 5.
Patent Owner counters that Petitioner “does nothing more than ‘use
the challenged patent as a roadmap to reconstruct the claimed invention
using disparate elements from the prior art—i.e., the impermissible ex post
reasoning and hindsight bias that KSR warned against.’” Prelim. Resp. 32
(quoting TQ Delta, LLC v. Cisco Sys., Inc., 942 F.3d 1352, 1361 (Fed. Cir.
2019)); Sur-reply 5.
The final Fintiv factor is a catch-all that takes into account any other
relevant circumstances. The decision whether to exercise discretion to deny
institution under § 314(a) is based on “a balanced assessment of all relevant
circumstances in the case, including the merits.” Consolidated Trial Practice
Guide 58, available at https://www.uspto.gov/TrialPracticeGuide
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Consolidated. A full merits analysis is not necessary as part of deciding
whether to exercise discretion not to institute, but rather the parties may
point out, as part of the factor-based analysis, particular “strengths or
weaknesses” to aid the Board in deciding whether the merits tip the balance
one way or another. See Fintiv, Paper 11 at 15−16.
Here, as discussed above, factors 1 and 4 weigh slightly in favor of
denying institution; factors 2 and 3 weigh strongly in favor of denying
institution; and factor 5 weighs in favor of denying institution. We have
reviewed Petitioner’s unpatentability arguments and supporting evidence in
the Petition and Reply, and Patent Owner’s arguments and supporting
evidence in the Preliminary Response and Sur-reply. Based on the limited
record before us, we find that the merits do not outweigh the other Fintiv
factors.
Conclusion on Discretionary Denial Under § 314(a)
As noted in Fintiv, we consider the above six factors when taking “a
holistic view of whether efficiency and integrity of the system are best
served by denying or instituting review.” Fintiv, Paper 11 at 6. As
discussed above, factors 1 and 4 weigh slightly in favor of denying
institution; factors 2 and 3 weigh strongly in favor of denying institution;
and factor 5 weighs in favor of denying institution. For factor 6, we find that
the merits do not outweigh the other Fintiv factors.
Accordingly, we exercise our discretion under § 314(a) to deny
institution of review in the instant proceeding.
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III. CONCLUSION
For the foregoing reasons, based on a balanced assessment of the
circumstances of this case, we exercise our discretion under § 314(a) and
deny the instant Petition requesting institution of inter partes review of the
’175 patent.
IV. ORDER
For the foregoing reasons, it is hereby
ORDERED that the Petition is denied as to all challenged claims and
no trial is instituted.

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PETITIONER:

W. Karl Renner
Jeremy J. Monaldo
Karan Jhurani
FISH & RICHARDSON P.C.
axf-ptab@fr.com
monaldo@fr.com
jhurani@fr.com

FOR PATENT OWNER:
Brett Cooper
Kevin Schubert
Christopher P. McNett
Scott Hejny
MCKOOL SMITH, P.C.
bcooper@mckoolsmith.com
kschubert@mckoolsmith.com
cmcnett@mckoolsmith.com
shejny@mckoolsmith.com