HTC Corporationv.FlashPoint Technology, Inc.

Patent Trial and Appeal Board

Mar 10, 2015

09129140 (P.T.A.B. Mar. 10, 2015)

Trials@uspto.gov Paper No. 12
571-272-7822 Entered: March 10, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

HTC CORPORATION and HTC AMERICA, INC.,
Petitioner,

v.

FLASHPOINT TECHNOLOGY, INC.,
Patent Owner.
____________

Case IP2014-01249
Patent 6,362,850 B1
____________

Before JAMES T. MOORE, PATRICK R. SCANLON, and
STACEY G. WHITE, Administrative Patent Judges

MOORE, Administrative Patent Judge
DECISION ON REQUEST FOR REHEARING
37 C.F.R. § 42.71(d)

I. INTRODUCTION
HTC Corporation and HTC America, Inc. (collectively “Petitioner”)
filed a Petition to institute an inter partes review of claims 1–22, 24–30, and
32–35 of U.S. Patent No.6,362,850 (Ex. 1001, “the ’850 patent”). Paper 1
(“Pet.”). The Petition was granted, as to claims 1–7, 15–22, 24–30, and 32–
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35, but not as to claims 8–14. Nor was the Petition granted as to all grounds.
Decision on Institution, Paper 8 (“Dec.”) 4 and 23.
On February 23, 2015, Petitioner filed a Request for Rehearing (Paper
10, “Req. Reh’g.”) of the Decision on Institution.
Petitioner raises two principal grounds in its arguments soliciting
reconsideration. They are:
A. It is an abuse of discretion to refuse to institute an IPR
on Grounds 1 and 3 for Claims 8-14.
B. It is an abuse of discretion to refuse to institute an IPR
on grounds 2, 5, 7, and 9-11.

Req. Reh’g at i.
II. STANDARD OF REVIEW
In a request for rehearing, the dissatisfied party must identify,
specifically, all matters the party believes the Board misapprehended or
overlooked, and the place where each matter was addressed previously. 37
C.F.R. § 42.71(d). Upon a request for rehearing, the decision on a petition
will be reviewed for an abuse of discretion. 37 C.F.R. § 42.71(c).
III. ANALYSIS
A. Denial of Institution as to Claims 8-14 in Grounds 1 and 3
The Petitioner, in the Request for Rehearing, asserts that the Board
abused its discretion when it concluded that the Petitioner did not provide
sufficient description of the structure for the means-plus-function terms in
Claim 8 (and thus, Claims 9–14), as required by 35 U.S.C. § 112, ¶ 6. Req.
Reh’g 3, citing Paper 8, 7–9.
The gravamen of the assertion is that, in denying Grounds 1 and 3 for
Claims 8–14 in this Petition, the Board applied 37 C.F.R. § 42.104(b)(3) to
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impose an additional requirement – the sufficiency of the structure
identified, as part of the determination of whether a trial will be instituted for
a claim reciting a means-plus-function claim limitation. Req. Reh’g 4.
According to Petitioner, the additional requirement is not part of, and
is not required by, the rule. Id.
Moreover, the Petitioner asserts that they complied with the 37 C.F.R.
§ 42.104(b)(3) and did “identify the disclosure of the specification that
describes the structure, material, or acts corresponding to each claimed
function.” Thus, the reasoning goes, any defect in the ’850 patent that
renders a patent claim invalid under 35 U.S.C. § 112, ¶ 6 was created by a
defective patent filing by the Patent Owner. Therefore, they conclude that
Petitioners cannot be held responsible for Patent Owner’s failure. According
to Petitioner, mandating the Petition to contain sufficient support under
35 U.S.C. § 112, ¶ 6 is tantamount to requiring Petitioner to argue that a
claim containing a means-plus-function limitation is valid under 35 U.S.C.
§ 112 in order to have its invalidity challenge under 35 U.S.C. § 102 or
§ 103 considered. This application of 35 U.S.C. § 112 exceeds the statutory
authority of the Office under 35 U.S.C. § 312(a)(4) (“the petition provides
such other information as the Director may require by regulation”).
Req. Reh’g 5.
We disagree with Petitioner’s assertion, and reading of the rules and
statute. The appropriate rule, 37 C.F.R. § 42.104(b)(3), is not to be read in
isolation, but also in conjunction with other Board rules, including 37 C.F.R.
§ 42.1(b), which requires the rules to be interpreted for securing the just,
speedy, and inexpensive resolution of every proceeding.
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Requiring identification of the means, and sufficient means, avoids
institution of a trial where the scope of the means-plus-function claims
cannot be determined with precision. The trial potentially would be delayed
and ultimately potentially incapable of decision on the merits of the grounds.
Consequently, the panel has the discretion to determine if the trial might
stray into grounds outside of the statutory authority provided for inter partes
review proceedings.
We, therefore, also disagree with the Petitioner’s statutory arguments
found at pages 5–8 of the rehearing. Compare 35 U.S.C. § 311(b) with 35
U.S.C. § 321(b).

B. Statutory Authority for the Board’s discretionary action
In the Decision on Institution, the Board granted Petitioner’s request
to institute an inter partes review of the appropriately challenged claims of
the ‘850 patent on four grounds. In rendering the Decision on Institution,
the Board exercised its discretion in declining to institute six other asserted
grounds. Dec. 23. To us, it is evident that if we were to institute all eleven
of these asserted grounds, even though some of these grounds —to some
extent— may overlap, it would serve to add expense to the parties in
briefing, and temporal delay to the Board rendering a decision. We
exercised our discretion in allowing certain grounds to proceed by
controlling scope of the proceeding and instituting review of five grounds,
while addressing all of the challenged claims.
Petitioner focuses its arguments on the language of 35 U.S.C. § 314(a)
and concludes that as our discretion is not recited explicitly therein, error
exists, and as a consequence we abused our discretion. Req. Reh’g 8–9. On
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page 9 of its Request, Petitioner specifically points us to 35 U.S.C.
§ 316(a)(2) as laying the foundation for setting standards for sufficient
grounds, but not supporting our discretion.
First, it is a long-standing part of jurisprudence that the tribunal has
discretion in the conduct of its proceedings. The language of § 314 provides
us with discretion in that it expressly states that review “may not” be
authorized in certain situations, but it does not require that a review “shall”
be instituted in any situation. 35 U.S.C. § 314(a). In addition, we direct
Petitioner’s attention to 35 U.S.C. § 316(b), which provides our rules are to
take into account the “regulation on the economy, the integrity of the patent
system, the efficient administration of the Office, and the ability of the
Office to timely complete proceedings.”
Board trial rule 108 provides that the Board may “deny some or all
grounds for unpatentability for some or all of the challenged claims.” 37
C.F.R. § 42.108(b).
Petitioner’s position does not consider that the Board is charged with
securing the just, speedy, and inexpensive resolution of every proceeding.
37 C.F.R. § 42.1(b). Trials are no exception; 37 C.F.R. § 42.100(c) requires
us to administer proceedings such that the final written determination in an
inter partes review be issued one year after the date of institution, except
that the review may be extended by not more than six months for good cause
shown. Our decision to proceed on a streamlined grouping of grounds, as
opposed to all eleven, yet encompassing all claims, is a meaningful exercise
of that discretion in administering the proceeding. Thus, we are not
persuaded of error or an abuse of discretion in our decision not to institute
those additional grounds.
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C. Regulatory Authority for the Board’s Discretionary Action
Petitioner states that “[t]he application of the rule to the circumstances
of this petition is an abuse of discretion. There is no statutory authority that
supports an interpretation of 37 C.F.R. § 42.108 that would allow the Board
to arbitrarily deny additional grounds of rejection, without substantive
analysis, if a trial has been instituted on all challenged claims on one ground
of rejection presented in the same petition.” Req. Reh’g 10.
We respectfully disagree. The Board may exercise its sound
discretion in administering its trial proceedings, and as noted above, our
rules were promulgated with the statutory framework in mind of completion
within a year. There was no arbitrary denial; the Board carefully reviewed
each proposed ground and elected to proceed on those which addressed all
the claims efficiently. To be required to address every overlapping grounds
in every petition without the exercise of judicial use of discretion would
impact not only the ability of the Board to accomplish the directive of
rendering a final decision in one year, but also the overall costs of the
proceedings for the parties, including patent owners, seriously.
D. Estoppel Concerns
Petitioner notes that there may be estoppel under 35 U.S.C.
§ 315(e)(2) and as such, those grounds not instituted deprive Petitioner of
the opportunity to raise those grounds in federal court once a final written
decision is issued. Req. Reh’g 10–11.
The question of estoppel is premature at this point. Petitioner has not
established the underlying conditions precedent with any persuasive
evidence or argument that the Petitioner will be estopped ultimately.
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Presently, the trial is moving forward on all claims with the Petitioner
having carried the initial burden on institution. Moreover, estoppel is but
one of the many issues to be considered in litigation strategy, and we do not
presume to make one factor so heavily weighted so as intrude into the
province of counsel in making decisions as to how to proceed.
Petitioner makes a final argument sounding in constitutional law.
Petitioner urges that “[t]he Board’s decision to deny substantive
consideration of Grounds 2, 5, 7 and 9-11 violates Petitioners’ due process
rights to have full consideration of all grounds presented in their petition.”
Req. Reh’g 11. We are not pointed to any jurisprudence on this conclusory
statement.
We disagree with the conclusion that Petitioner is being deprived of
due process rights. Placing reasonable limits upon the trial in order to have
the proceedings move forward less expensively and more efficiently does
not equate to a denial of a due process right. Indeed, in its current posture,
Petitioner could obtain almost the complete relief it seeks.
E. Requirement to Evaluate Multiple Proposed Grounds
Petitioner urges that “under 35 U.S.C. § 315(d), Petitioners could have
filed multiple inter partes review petitions, with each petition containing one
ground of rejection, to have caused the Board to evaluate the substance of all
proposed grounds of rejection.” Req. Reh’g 12. Therefore, it concludes
that “it is an abuse of discretion for the Board not to substantively consider
all grounds of rejection presented by Petitioners, merely because Petitioners
could efficiently present these grounds in a single petition.” Id. 12–13.
Petitioner misapprehends the scope of 35 U.S.C. § 315(d). This
statute permits the Director to exercise discretion in a proceeding where
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there are multiple proceedings, taking any appropriate action to manage this
multiplicity of proceedings, up to and including “termination of any such
matter or proceeding.” The rules and statues work together to promote
efficiency. There is no requirement that we address the patentability of the
same claims multiple times. This is especially true in this situation where
we have determined that it would be inefficient to go forward with all of the
grounds advocated in the Petition.
F. Non Instituted Grounds 2, 5, 7, and 9-11
The Petitioner urges us not to conclude that grounds 2, 5, 7, and 9–11
are redundant or duplicative at this stage in the proceeding. Req. Reh’g 13.
Petitioner urges that there may be a different technical teaching, which may
become important. Id. at 14. Accordingly, Petitioner again urges that
refusing to consider all grounds is a deprivation of due process rights and an
injury to Petitioner.
We offer no opinion as to whether the grounds are redundant or
duplicative, or whether any future estoppel will attach.
While we understand Petitioner’s point of view, it made a litigation
choice to file an inter partes review petition. Our rules, as promulgated,
indicate that there is no requirement that all grounds be instituted, and our
earlier decisions relying on those rules had been published before the
Petition was filed in June of 2014.
We weigh the public interest in providing speedy resolution of the
proceedings before the Board more heavily than the presently presented
conclusory argument that the Petitioner potentially could be deprived of due
process, especially under the facts and posture of the present proceeding.

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IV. CONCLUSION
Petitioner has not demonstrated that the panel overlooked or
misapprehended any issues or facts in its Decision to Institute. Accordingly,
the Request for Rehearing is denied.
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PETITIONER:

Bing Ai
John Schnurer
Kevin Patariu
PERKINS COIE LLP
Ai-ptab@perkinscoie.com
JSchnurer@perkinscoie.com
KPatariu@perkinscoie.com

PATENT OWNER:

Glenn E. Forbis
Matthew L. Cutler
HARNESS, DICKEY & PIERCE, PLC
gforbis@hdp.com
mcutler@hdp.com