First Data Corporationv.Cardsoft (Assignment for the Benefit of Creditors), LLC

Patent Trial and Appeal Board

Oct 18, 2014

09381143 (P.T.A.B. Oct. 18, 2014)

Trials@uspto.gov Paper 12
571-272-7822 Date: 8 December 2014

UNITED STATES PATENT AND TRADEMARK OFFICE
_____________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

FIRST DATA CORPORATION,
Petitioner,

v.

CARDSOFT (ASSIGNMENT FOR THE
BENEFIT OF CREDITORS), LLC,
Patent Owner.
____________

Case IPR2014-00715
Patent 6,934,945 B1
____________

Before SALLY C. MEDLEY, MEREDITH C. PETRAVICK, and
JAMES P. CALVE, Administrative Patent Judges.

CALVE, Administrative Patent Judge.

DECISION
Denial of Rehearing Request
37 C.F.R. § 42.71(d)

IPR2014-00715
Patent 6,934,945 B1

2

Petitioner filed a Petition seeking an inter partes review of claims 1–
17 of U.S. Patent No. 6,934,945 B1 (Ex. 1001; “the ’945 patent”). Paper 1.
Petitioner filed a Corrected Petition (“Petition”) on May 20, 2014. Paper 5.
We denied institution of an inter partes review (IPR) on any claims of the
’945 patent because the Petition did not identify all real parties-in-interest
(RPIs), as required by 35 U.S.C. § 312(a) and was not filed within the time
imposed by 35 U.S.C. § 315(b). Paper 9 (“Decision”). Petitioner requests a
rehearing on the grounds that the Decision overlooked various matters. See
Paper 11 (“Req. Reh’g”) 2–11.
The Decision held that VeriFone was a real party-in-interest (RPI) to
this IPR because VeriFone controlled or had the opportunity to control filing
of the Petition in material respects. Decision 9. We reached our Decision
based on our analysis of many factors including VeriFone’s desire that an
IPR be filed against the ’945 patent, VeriFone’s funding of all attorney’s
fees and costs for this IPR, VeriFone’s indemnity obligations to Petitioner in
the 2013 Litigation for claims of infringement of the ’945 patent, VeriFone’s
opportunity and right to control the Petition for this IPR under an indemnity
agreement, VeriFone’s communications with Petitioner regarding prior art to
assert in the IPR, and VeriFone’s inability to initiate an IPR in its own right
due to a bar under 35 U.S.C. § 315(b). Id. at 7–10.
Petitioner’s arguments that the panel overlooked various matters fall
into two main categories. Petitioner argues that the panel considered factors
that are irrelevant to deciding whether VeriFone is a real party-in-interest.
For example, Petitioner asserts that any control by VeriFone of the district
court litigation is not pertinent to determining the RPI in this IPR. See Req.
Reh’g 5. This argument does not persuade us that we overlooked any matter
IPR2014-00715
Patent 6,934,945 B1

3

because the Decision did not rely on VeriFone’s control of the 2013
Litigation to find that VeriFone is a RPI to this IPR. See Decision 7–10.
Petitioner also asserts that each of the various factors is insufficient,
by itself, to make VeriFone a RPI to this IPR. See Req. Reh’g 6–9. For
example, Petitioner contends that funding of an IPR, by itself, does not make
a party a RPI. Id. at 6–8. Petitioner also argues that the existence of an
indemnity agreement, which inherently includes funding, is insufficient to
make a party a RPI. Id. at 8–9. These arguments do not persuade us that we
overlooked any matters because the Decision was based on our analysis of
many factors in combination, and not one factor in isolation. Decision 7–10.
Our analysis of these factors led us to conclude that VeriFone either
controlled the filing of the IPR or had the opportunity to do so. Id. That
VeriFone’s indemnity obligation may not cover all accused products in the
2013 Litigation as Petitioner asserts (Req. Reh’g. 9) does not negate the fact
that VeriFone is obligated to indemnify Petitioner for claims of infringement
of the ’945 patent by some accused products in the 2013 Litigation. That
indemnity obligation was one factor, among several others, that led to the
conclusion that VeriFone had the opportunity to control all aspects of
preparing the Petition prior to April 28, 2014, just two days before the filing
of the Petition for this IPR. Decision 9.
Petitioner also asserts that a decision on the RPI is premature. Req.
Reh’g 2. Petitioner argues that there is no requirement that a Petitioner
anticipate and disprove suppositions and presumptions raised by a Patent
Owner’s Preliminary Response. Id. at 2–4. Petitioner also contends that a
patent owner may seek discovery on this issue and file a motion to terminate
proceedings based on facts discovered, and a petitioner can respond to that
IPR2014-00715
Patent 6,934,945 B1

4

motion. Id. at 3–5. These arguments do not persuade us that we overlooked
any matters. A petition must identify all of the RPIs. 35 U.S.C. § 312(a)(2).
Failure to do so precludes consideration of the petition. Id. Petitioner chose
to devote five pages of the Petition to arguing that VeriFone is not a RPI.
Pet. 1–5. Petitioner also submitted evidence such as a Letter Addendum
(Ex. 1011) and papers from the 2013 Litigation (Exs. 1006, 1007) in support
of its contentions that VeriFone is not a RPI and that “the sole and exclusive
control over this petition rests entirely with First Data.” Pet. 1. Petitioner,
therefore, had an opportunity to present arguments and evidence, and did
present arguments and evidence, to explain why VeriFone is not a RPI. We
considered that evidence with all the other factors discussed in the Decision
and determined that VeriFone was a RPI to this IPR.
Petitioner now argues, for the first time, that VeriFone relinquished its
right and opportunity to control the IPR pursuant to an oral agreement made
between a senior litigation counsel of First Data and counsel for VeriFone.
See Req. Reh’g. 10–11. Petitioner relies on the Declaration of Christopher
P. Demetriades, which is attached to the request for rehearing, in support of
this new argument. Id. at 14. A request for rehearing is not an opportunity
to submit a new argument or new evidence that could have been presented in
the Petition. See 37 C.F.R. § 42.71(d); Office Patent Trial Practice Guide,
77 Fed. Reg. 48,756, 48,768 (Aug. 14, 2012). Rather, the “request must
specifically identify all matters the party believes the Board misapprehended
or overlooked, and the place where each matter was previously addressed in
a motion, an opposition, or a reply.” 37 C.F.R. § 42.71(d). Petitioner has
not presented any facts to explain why it could not have presented this new
evidence in its original Petition. The panel could not have overlooked or
IPR2014-00715
Patent 6,934,945 B1

5

misapprehended evidence that was not presented in the Petition. Moreover,
Petitioner did not seek authorization to file the new declaration in a reply to
the Patent Owner’s Preliminary Response. Nor has Petitioner shown good
cause for us to consider this new evidence, which is submitted by Petitioner
for the first time with a request for rehearing. See 37 C.F.R. § 42.5(c)(3).
For the reasons discussed above, we are not persuaded that we have
overlooked or misapprehended any matter. Accordingly, Petitioner’s
request for rehearing is denied.

IPR2014-00715
Patent 6,934,945 B1

6

For PETITIONER:
Paul C. Haughey
Darin J. Gibby
Kilpatrick Townsend & Stockton LLP
phaughey@kilpatricktownsend.com
dgibby@kilpatricktownsend.com

For PATENT OWNER

Mark R. Buscher
D. Richard Anderson
George S. Dolina
Birch, Stewart, Kolasch & Birch, LLP
mrb@buscherlaw.com
dra@bskb.com