International Business Machines Corporation

Patent Trials and Appeals Board

Dec 17, 2021

IPR2021-01198 (P.T.A.B. Dec. 17, 2021)

Trials@uspto.gov Paper 10
571-272-7822 Date: December 17, 2021

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

CHEWY, INC.,
Petitioner,

v.

INTERNATIONAL BUSINESS MACHINES CORP.,
Patent Owner.
____________

IPR2021-01198
Patent 6,704,034 B1
____________

Before KEN B. BARRETT, KEVIN W. CHERRY, and
ARTHUR M. PESLAK, Administrative Patent Judges.

BARRETT, Administrative Patent Judge.

DECISION
Dismissal Prior to Institution of Trial
35 U.S.C. § 314

IPR2021-01198
Patent 6,704,034 B1

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I. INTRODUCTION
A. Background and Summary
Chewy, Inc. (“Petitioner”) filed a Petition requesting inter partes
review of U.S. Patent No. 6,704,034 B1 (“the ’034 patent,” Ex. 1001).
Paper 1 (“Pet.”). International Business Machines Corp. (“Patent Owner”)
waived filing a preliminary response. Paper 6. Petitioner requested
permission to “file a Motion to Terminate this IPR with prejudice,” Patent
Owner requested permission to file an opposition, and we authorized the
filing of those papers. Ex. 3001. Subsequently, Petitioner filed the Motion
to Terminate (Paper 7, “Mot. or “Motion”) and Patent Owner filed an
Opposition (Paper 8, “Opp.” or “Opposition”). The Motion requests that we
dismiss the Petition and terminate this case. Mot. 1. Petitioner also requests
that the termination of this inter partes review be with prejudice. Id. at 5.
Patent Owner opposes, arguing, inter alia, that the “Motion should be denied
because granting the Motion would directly contradict the AIA’s goals of
efficiency and ‘limit[ing] unnecessary and counterproductive litigation
costs.’” Opp. 1 (quoting 77 Fed. Reg. 48680–01 (Aug. 14, 2012)). For the
reasons that follow, grant the Motion.
As it currently stands and as we understand the situation,
validity/patentability challenges are being made both in the District Court
and at the Board, and infringement issues are before the District Court. See
Mot. 2; Opp. 4 (Patent Owner referring to Petitioner’s invalidity contentions
in the District Court action). According to Petitioner, its invalidity
contentions and its expert report on invalidity will have been served on
Patent Owner by now. See Mot. 5 (stating that the expert report was
scheduled to be served by November 22, 2021). In June 2021, Petitioner
filed in the District Court a stipulation stating that, if the Board institutes a
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Patent 6,704,034 B1

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review, Petitioner would not pursue the specific grounds asserted in this
inter partes review or any other ground that could have been raised.
Ex. 1007. Petitioner states that the District Court denied a motion to stay the
case in view of an instituted inter partes review of a different patent.
Mot. 2–3. Petitioner also states that the District Court case will be ready for
trial on February 7, 2022, which is less than three months from now. See
Mot. 2–3; see also Opp. 1 (Patent Owner indicating that the trial is
scheduled for early 2022).
Petitioner argues that “[t]ermination [of this case] would preserve the
Board’s and the parties’ resources and would expeditiously resolve the
validity issues concerning the ’034 patent, consistent with the goal of
achieving a ‘just, speedy, and inexpensive resolution of every proceeding.’”
Mot. 4 (quoting 37 C.F.R. § 42.1(b)). Petitioner further argues that this IPR
is an early stage—prior to a decision on institution—in contrast to the
District Court case, which is in its later stages and is scheduled to be ready
for trial in less than four months. Id. Petitioner also notes that Patent Owner
did not file a Preliminary Response. Id. Petitioner further argues that it will
be prejudiced if we institute “as its prior art invalidity defenses would
effectively be rendered moot” because, due to the stipulation and the
advance stage of the District Court case, “any finding of the Board that the
’034 patent claims are invalid would come too late to be useful in the
District Court case and thus cause Petitioner to effectively lose its prior art
invalidity defense.” Id. at 4–5. Petitioner contends that Patent Owner will
not be prejudiced by the dismissal of the Petition because “Patent Owner
will be able to defend the validity of the ’034 patent [in the District Court] in
a just and speedy manner.” Id. at 5.
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Patent 6,704,034 B1

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Patent Owner opposes the requested termination, arguing that it will
be prejudiced by the grant of the Motion because Patent Owner “invested
significant resources in analyzing and identifying deficiencies in Chewy’s
Petition,” and granting this Motion “would greatly expand the invalidity
disputes” from those at the Board to those in the District Court, and “would
demand even larger expenditures by requiring the parties to litigate the
validity of the ’034 patent in the District Court proceeding.” Opp. 1, 4.
As to Patent Owner’s representation that it has invested significant
resources in analyzing Petitioner’s challenges, we note that Patent Owner
did not file a Preliminary Response, thus saving at least the expense of
articulating to us that analysis. Also, to the extent that it contends its
analysis constitutes wasted effort absent an institution of a trial here, Patent
Owner does not explain why the results of any effort expended in evaluating
patentability challenges at the Board will not apply equally to the validity
challenges in the District Court.
As to the allegation that granting the motion would expand the
invalidity disputes and increase expenditures by “requiring the parties to
litigate the validity of the ’034 patent in the District Court proceeding”
(Opp. 1), it appears that the parties already are litigating the referenced
validity disputes in the District Court, and granting the motion would not
expand those disputes and would not be the Board “requiring” the parties to
begin litigating issues already being litigated. We also note that, as we
understand the timeline, Patent Owner filed, in the District Court, its
counterclaim asserting validity (filed in response to Petitioner’s complaint
for declaratory judgment of non-infringement) prior to the filing of the
Petition at the Board. See Mot. 2 (Representing that Patent Owner’s
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counterclaim was filed April 19, 2021); Paper 3 (Notice that the Petition has
been accorded a filing date of June 29, 2021). We acknowledge Patent’s
Owner’s argument (Opp. 3) that Petitioner will not be prejudiced by
addressing patentability in Petitioner’s chosen forum (the PTAB), but
determine that Patent Owner does not explain adequately how it will be
prejudiced by addressing validity issues in Patent Owner’s chosen forum
(the District Court).
Patent Owner also argues that Petitioner has engaged in
“gamesmanship” (Opp. 2) and, if we were to grant the motion, “it would
provide a roadmap to future petitioners for how to abuse the IPR process and
unfairly prejudice patent owners” (id. at 5). Patent Owner contends that,
For example, a petitioner could assert the same invalidity
defense in district court litigation and an IPR, file a
disingenuous Sotera-type stipulation, and then terminate the
IPR before institution but after a patent owner has revealed its
validity defenses in a POPR to avoid institution in favor of
litigating the exact same validity issues in district court with the
new information while avoiding the ramifications of its own
stipulation.
Opp. 5. This hypothetical situation—involving alleged prejudice to other
patent owners—is not before us at least because Patent Owner did not file a
Preliminary Response in this case and, therefore, did not suffer any prejudice
by “reveal[ing] its validity defenses in a POPR.”
Both parties’ allegations of prejudice relate to Petitioner’s stipulation
filed in the District Court. That stipulation is contingent upon the Board
instituting an inter partes review. See Ex. 1007 (“to the extent that the . . . .
Board institutes the IPR . . . .”). Petitioner’s allegation of prejudice is based
on the assumption that we will institute a review, thus satisfying the
condition precedent for the stipulation. See Mot. 1–2. Patent Owner’s
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assertion of prejudice may be based on the assumption that, if the motion is
denied as Patent Owner desires, we would institute a review and that, upon
institution, all litigation regarding validity issues in the District Court would
cease. See Opp. 1 (Parent Owner arguing that granting of the motion would
“require[e] the parties to litigate the validity of the ’034 patent in the District
Court proceeding.”). We have not determined, yet, whether it is appropriate
to institute an inter partes review. Thus, occurrence of the contingency
upon which the stipulation turns is speculative at this point. Further, how
the District Court will treat that stipulation and whether any validity issues
would remain in that forum should we institute also is speculative based on
the record before us. Thus, to the extent that the parties’ asserted prejudice
turns on these events, that prejudice also is speculative at this time.
As mentioned, this matter is in a preliminary stage and the Board has
not yet determined whether to grant institution. The District Court case,
however, is at a more advanced stage and approaching the status of being
ready for trial, apparently on both infringement and validity issues. Thus,
considerations of efficient and expeditious resolution of the parties’ disputes
favors termination of the case at the Board. Also, we do not find persuasive
Patent Owner’s implied argument that, should we institute a review,
maintaining actions in two forums will be more efficient or result in lower
litigation costs. Additionally, as Petitioner requests that the termination be
with prejudice, grant of the motion will end Petitioner’s challenges to the
’034 patent in this forum.
We determine, based on the facts before us, that dismissing the
Petition and terminating this case at this early juncture will promote
efficiency and minimize unnecessary costs.
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Patent 6,704,034 B1

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ORDER
It is
ORDERED that the Petitioner’s motion to terminate IPR2021-01198
and dismiss the petition is granted;
FURTHER ORDERED that IPR2021-01198 is terminated with
prejudice; and
FURTHER ORDERED that the Petition is dismissed.

IPR2021-01198
Patent 6,704,034 B1

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PETITIONER:

Joshua Raskin
Heath Briggs
Vimal Kapadia
GREENBERG TRAURIG, LLP
raskinj@gtlaw.com
briggsh@gtlaw.com
kapadiav@gtlaw.com

PATENT OWNER:

Christopher O'Brien
Theodoros Konstantakopoulos
Yung-Hoon Ha
DESMARAIS LLP
cobrien@desmaraisllp.com
tkonstantakopoulos@desmaraisllp.com
yha@desmaraisllp.com