Continental Intermodal Group - Trucking LLC

Patent Trials and Appeals Board

Jul 9, 2020

IPR2019-01393 (P.T.A.B. Jul. 9, 2020)

Trials@uspto.gov Paper 31
571.272.7822 Date: July 9, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

SAND REVOLUTION II, LLC,
Petitioner,

v.

CONTINENTAL INTERMODAL GROUP – TRUCKING LLC,
Patent Owner.
____________

IPR2019-01393
Patent 8,944,740 B2
____________

Before SCOTT C. WEIDENFELLER, Vice Chief Administrative Patent
Judge, SCOTT C. MOORE, and RYAN H. FLAX, Administrative Patent
Judges.

FLAX, Administrative Patent Judge.

DECISION
Denying Patent Owner’s Request for Rehearing
37 C.F.R. § 42.71(d)

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Patent 8,944,740 B2

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I. INTRODUCTION
Sand Revolution II, LLC (“Petitioner”) filed a Petition for an inter
partes review of claims 1, 2, 4, 6–14, and 16–20 of U.S. Patent
8,944,740 B2 (“the ’740 patent,” Ex. 1001). Paper 7 (“Pet.”). Continental
Intermodal Group-Trucking LLC (“Patent Owner”) timely filed a
Preliminary Response. Paper 8 (“Prelim. Resp.”). In a divided decision, the
Board denied institution pursuant to 35 U.S.C. § 314(a), reasoning that this
case, as evidenced by the preliminary record, was controlled by the Board’s
precedential decision in NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc.,
IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018) (precedential). Paper 12
(“Denial Decision”).
Petitioner filed a Request for Rehearing of the Denial Decision. Paper
15 (“Pet. Req. Reh’g” or “Petitioner’s Request for Rehearing”).
Concurrently therewith, Petitioner requested that the Board’s Precedential
Opinion Panel (“POP”) reconsider the Denial Decision. Paper 17; Ex. 3002
(“Petitioner’s POP Request”). The POP declined to review the issue raised
in Petitioner’s POP Request. Paper 18. We proceeded to the rehearing on
Petitioner’s Request and determined that further briefing was warranted as a
result of the Board’s intervening precedential opinion in Apple Inc. v. Fintiv,
Inc., IPR2020-00019, Paper 11 (March 20, 2020) (precedential) (“Fintiv”).
Paper 19. Among other things, Fintiv clarified that discretionary denial
when there is an earlier trial date in a parallel proceeding in a district court
was never compelled but, rather, is based on a holistic assessment of
multiple factors. Id. at 6. Each of the parties filed supplemental briefing to
address the Fintiv factors. Papers 20, 22.
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We concluded that, in light of new evidence of record submitted by
the parties with the aforementioned supplemental briefing, the circumstances
of this proceeding are distinguishable from those in NHK and that the
application of discretion to deny under 35 U.S.C. § 314(a) was not warranted
when we applied the factors set forth in Fintiv. We, therefore, granted
Petitioner’s Request for Rehearing. Paper 24 (“Institution Decision”). After
reviewing the parties’ submissions, we also concluded that on the
preliminary record Petitioner demonstrates a reasonable likelihood that it
would prevail in showing that certain claims of the ’740 patent are
unpatentable under at least one ground and instituted inter partes review of
all challenged claims (1, 2, 4, 6–14, and 16–20) on Grounds 1 and 2 raised in
the Petition, pursuant to 35 U.S.C. § 314. Id.
Patent Owner has now requested rehearing of our Institution Decision
granting Petitioner’s Request for Rehearing. Paper 27 (“PO Req. Reh’g” or
“Patent Owner’s Request for Rehearing”). Concurrently therewith, Patent
Owner requested that the POP reconsider the Institution Decision in its grant
of Petitioner’s Request for Rehearing. Paper 29; Ex. 3004 (“Patent Owner’s
POP Request”). The POP declined to review the issues raised in Patent
Owner’s POP Request. Paper 30.
Thus, we consider Patent Owner’s Request for Rehearing. We deny
the request.
II. STANDARD OF REVIEW
A party requesting rehearing of a Board decision has the burden to
show that the decision should be modified. Pursuant to 37 C.F.R.
§ 42.71(d), the rehearing request must identify, specifically, all matters the
party believes the Board misapprehended or overlooked and the place where
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each matter was previously addressed in a motion, an opposition, or a reply.
When rehearing a decision on a petition, we review the decision for an abuse
of discretion. 37 C.F.R. § 42.71(c) (2019). An abuse of discretion may arise
if a decision is based on an erroneous interpretation of law, if a factual
finding is not supported by substantial evidence, or if an unreasonable
judgment is made in weighing relevant factors. In re Gartside, 203 F.3d
1305, 1315–16 (Fed. Cir. 2000).
We review Patent Owner’s Request for Rehearing in view of these
standards of law and the evidence of record.
III. DISCUSSION
Patent Owner asserts that the Board granted the Petitioner’s Rehearing
Request,
not based on any error or oversight in its Decision denying
institution (Paper 12, “Denial Decision”), . . . but rather based on
a reassessment of the very same discretionary denial factors it
had explicitly addressed in its Denial Decision, and consideration
of new evidence that came into existence solely through the
passage of time and in direct response to its Denial Decision.
PO Req. Reh’g 1. Therefore, Patent Owner argues, “[t]he Board thus
disregarded, and failed to apply, the applicable abuse of discretion standard
under 37 C.F.R. § 42.71, and in doing so erred.” Id.
The Board did not disregard the applicable standard of review. As is
expressly set forth at the Institution Decision’s relevant portion on
Petitioner’s Request for Rehearing, and as set forth above, the consideration
of matters either misapprehended or overlooked and whether such amounts
to an abuse of discretion, for example, where a factual finding is not
supported by substantial evidence, was the standard of review under which
we reviewed Petitioner’s Request. Institution Decision, 4; see also supra
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Standard of Review Section. This is the standard of review we also apply
here in considering Patent Owner’s Request for Rehearing.
Patent Owner takes issue with the Board’s basis for granting
Petitioner’s Request for Rehearing being in facts not available as of our
Denial Decision, for example, the continuously changing schedule of the
related district court litigation’s trial date and Petitioner’s stipulation. PO
Req. Reh’g 5–9, 11–14. Patent Owner also takes issue with the similarities
between our rationale for granting Petitioner’s Request for Rehearing and
the dissent to our Denial Decision. Id. at 7–8, 11–12; see also Denial
Decision, 19–24 (dissent).
Here, a new and relevant Board decision in Fintiv was entered
subsequent to our Denial Decision and during the course of the Board’s
consideration of the Petitioner’s Request for Rehearing; a decision that has
been designated precedential and is now controlling. Fintiv, Paper 11. The
Board has regularly considered intervening case law in reconsidering a
decision on institution. See Shenzhen Zhiyi Tech. Co. Ltd. v. iRobot Corp.,
IPR2017-02061, Paper 11 (PTAB May 1, 2018) (granting a request
rehearing when considering the intervening Supreme Court decision in SAS
Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018)); Comcast Cable Comm., LLC v.
Realtime Adaptive Streaming LLC, IPR2019-00760, Paper 45 (PTAB Jan.
17, 2020) (granting-in-part patent owner’s motion to terminate an instituted
inter partes review in view of the intervening precedential decision in
GoPro, Inc. v. 360Heros, Inc., IPR2018-01754, Paper 38 (PTAB Aug. 23,
2019) (precedential)). Foundationally, “administrative agencies possess
inherent authority to reconsider their decisions, subject to certain limitations,
regardless of whether they possess explicit statutory authority to do so.”
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GTNX, Inc. v. INTTRA, Inc., 789 F.3d 1309, 1313 (Fed. Cir. 2015) (quoting
Tokyo Kikai Seisakusho, Ltd. v. United States, 529 F.3d 1352, 1360 (Fed.
Cir. 2008)).
The relevant factors identified as important by Fintiv are not identical
to the relevant facts of NHK, which warranted authorization of additional
briefing and evidence. See Paper 19. The new evidence resulting therefrom
very clearly illustrated, inter alia, the uncertain nature of the related district
court litigation’s schedule (changed at the requests of the parties and because
of circumstances beyond the control of the district court), which established
that our Denial Decision was premised on facts that were not supported by
substantial evidence. See Denial Decision, 15–16; compare Ex. 2004 with
Ex. 1012, and Ex. 2009, and Ex. 3003.
We understand the currently scheduled trial date of the related district
court litigation is set for “February 8, 2021 (or as available).” Ex. 3003; see
also Institution Decision, 9. Had the Board declined to exercise discretion
under 35 U.S.C. § 314(a) and instituted trial in its initial decision in this
proceeding on February 5, 2020, as then urged in the dissent, this current
(tentative) district court trial date would fall after what our statutory deadline
for a final written decision would have been. See Denial Decision, 19–24.
This supports that the dissent to our Denial Decision, at least in its ultimate
conclusion, was correct and the majority’s decision to exercise discretion
under § 314(a) to deny institution was error.
Patent Owner also asserts that the Board’s grant of Petitioner’s
Request for Rehearing “incentivizes gamesmanship” because it invites
withholding evidence or arguments at the petition stage and the filing of
request for rehearing. PO Req. Reh’g, 14–15. As an initial matter, there is
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no evidence of gamesmanship here. We do not share Patent Owner’s
concerns nor are they germane to our decision granting Patent Owner’s
Request for Rehearing based on indisputable facts that distinguish this case
from NHK.
Thus, we are unpersuaded by Patent Owner’s arguments. Patent
Owner has not identified any issues the Board misapprehended or
overlooked and we find no abuse of discretion in our conclusions in the
Institution Decision.
IV. CONCLUSION
For the reasons discussed above, we deny Patent Owner’s Request for
Rehearing.

ORDER
Accordingly, it is hereby:
ORDERED that, Patent Owner’s Request for Rehearing is denied; and
FURTHER ORDERED that this proceeding shall adhere to the
schedule set forth in the Scheduling Order (Paper 25).

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Patent 8,944,740 B2

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For PETITIONER:

James D. Stein
LEE & HAYES P.C.
James.stein@leehayes.com

Armon B. Shahdadi
Ben D. Bailey
Brannon C. McKay
Leonard J. Weinstein
CLAYTON, MCKAY & BAILEY, PC
armon@cmblaw.com
ben@cmblaw.com
brannon@cmblaw.com
leonard@cmblaw.com

For PATENT OWNER:

Anna Quinn
Wm. Tucker Griffith
Travis W. McCallon
A. Justin Poplin
LATHROP GAGE LLP
AQuinn@lathropgage.com
TMcCallon@lathropgage.com
JPoplin@lathropgage.com
tucker.griffith@lathropgage.com