Maxell, Ltd.

Patent Trials and Appeals Board

Feb 3, 2021

IPR2020-00202 (P.T.A.B. Feb. 3, 2021)

Trials@uspto.gov Paper 22
571-272-7822 Date: February 3, 2021
UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

APPLE INC.,
Petitioner,

v.

MAXELL, LTD.,
Patent Owner.
____________

IPR2020-00202
Patent 10,212,586 B2
____________

Before MICHAEL R. ZECHER, KEVIN C. TROCK, and
JOHN A. HUDALLA, Administrative Patent Judges.

TROCK, Administrative Patent Judge.

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

Apple Inc. (“Petitioner”) filed a Petition (Paper 1, “Pet.”) requesting
an inter partes review (“IPR”) of claims 1, 2, 6, 7, 9, 10, 13, 14, and 16–18
(“the challenged claims”) of U.S. Patent No. 10,212,586 B2 (Ex. 1001, “the
’586 patent”). Patent Owner, Maxell, Ltd. (“Patent Owner”), filed a
Preliminary Response (Paper 6, “Prelim. Resp.”). Petitioner also filed a
Reply (Paper 8, “Pet. Reply”) and Patent Owner filed a Sur-Reply (Paper 10,
IPR2020-00202
Patent 10,212,586 B2
2
“PO Sur-reply”) addressing whether we should exercise our discretion to
deny institution under 35 U.S.C. § 314(a).
On July 15, 2020, we entered a Decision on Institution (Paper 11,
“Decision” or “Dec.”) that instituted inter partes review on all claims and all
grounds presented in the Petition. As part of the Decision, we considered
Patent Owner’s arguments that we should exercise our discretion to deny
institution under 35 U.S.C. § 314(a) based on the duplicative nature and
advanced stage of the related case styled Maxell, Ltd. v. Apple Inc., No.
5:19-cv-00036 (E.D. Tex. Mar. 15, 2019) (“the underlying litigation”).
Dec. 9–21. We based our discretionary denial analysis on the Board’s
precedential decision in Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11
(PTAB Mar. 20, 2020) (precedential) (“Fintiv”). After weighing the factors
identified in Fintiv, we declined to exercise our discretion under 35 U.S.C.
§ 314(a) to deny inter partes review. Dec. 21.
Patent Owner filed a Request for Rehearing (Paper 13, “Req. Reh’g”)
seeking reconsideration of our analysis of the Fintiv factors and our decision
not to exercise discretion to deny institution.1 For the reasons stated below,
we deny the Request for Rehearing.

I. ANALYSIS
When reconsidering a decision on institution, we review the decision
for an abuse of discretion. See 37 C.F.R. § 42.71(c). An abuse of discretion

1 Patent Owner also requested rehearing by the Precedential Opinion Panel
(“POP”) to “clarify the date from which Fintiv Factor 4 should be analyzed,
namely, the Petition’s filing date.” Req. Reh’g 1; Ex. 3001. On October 27,
2020, POP denied Patent Owner’s request for review. Paper 19.
IPR2020-00202
Patent 10,212,586 B2
3
may be determined if a decision is based on an erroneous interpretation of
law, if a factual finding is not supported by substantial evidence, or if the
decision represents an unreasonable judgment in weighing relevant factors.
See Star Fruits S.N.C. v. United States, 393 F.3d 1277, 1281 (Fed. Cir.
2005); Arnold P’ship v. Dudas, 362 F.3d 1338, 1340 (Fed. Cir. 2004); In re
Gartside, 203 F.3d 1305, 1315–16 (Fed. Cir. 2000). The party requesting
rehearing has the burden of showing the decision should be modified, which
includes specifically identifying all matters the party believes were
misapprehended or overlooked. See 37 C.F.R. § 42.71(d).
In our Decision on Institution, we found that Fintiv Factor 4, i.e.,
overlap between issues raised in the Petition and in the underlying litigation,
weighed against exercising our discretion to deny institution. Dec. 14–18.
Specifically, we considered the parties’ efforts to narrow the issues at trial
and determined that there was a material distinction between the claims
being asserted at trial and the claims being challenged in this proceeding. Id.
at 15–16. We also determined that there were significant differences
between the references being asserted at trial and the references being relied
on in this proceeding. Id. at 17–18. In weighing all of the Fintiv factors, we
determined that “the difference in the claims being considered in this
proceeding and the underlying litigation, the difference in the prior art being
applied, as well as the strong preliminary showing of unpatentability,”
outweighed other factors being considered. Id. at 21. Thus, we declined to
exercise our discretion under 35 U.S.C. § 314(a) to deny inter partes review.
Id.
Patent Owner contends our weighing of the Fintiv factors—
particularly with regard to Factor 4—represents an unreasonable judgment.
IPR2020-00202
Patent 10,212,586 B2
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See Req. Reh’g 3–9, 12–15. In particular, Patent Owner argues that we
should have considered the overlap only at the time the Petition was filed
and that we should not have considered any developments affecting the
overlap arising thereafter. Id. at 3–9. Patent Owner argues that there was
complete overlap with the underlying litigation at the time the Petition was
filed. Id. at 4, 7. According to Patent Owner, our consideration of post-
filing developments “necessarily leads to gamesmanship, allowing
petitioners to assert positions in the district court and the petition and then
switch positions when it suits their purpose.” Id. at 1.
We do not agree with Patent Owner that our analysis of Fintiv
Factor 4 must be constrained to the facts as they existed when the Petition
was filed. For example, in the Board’s informative decision in Sand
Revolution II, LLC v. Continental Intermodal Grp.—Trucking LLC,
IPR2019-01393, Paper 24 (PTAB June 16, 2020) (informative) (“Sand
Revolution”), the panel considered and gave weight to Petitioner’s
stipulation to withdraw certain prior art references from a related litigation if
inter partes review was instituted. Sand Revolution at 11–12. Importantly,
the stipulation in Sand Revolution arose long after the Petition was filed.
Compare IPR2019-01393, Paper 1, 88 (petition with July 25, 2019, filing
date), with IPR2019-01393, Ex. 1015 (stipulation to withdraw prior art dated
April 13, 2020).
Here, we also considered the parties’ more recent efforts in the
underlying litigation to narrow the issues at trial, which reduced concerns of
duplicative efforts between the District Court and the Board and minimized
the potential for conflicting decisions. See, e.g., Dec. 15–16. This is
consistent with the policy considerations underlying Factor 4 in Fintiv,
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namely, “concerns of inefficiency and the possibility of conflicting
decisions.” Fintiv at 12.
Patent Owner also contends that “the Board failed to weigh Factor 4
properly,” and that “far too much emphasis was placed on Factor 4.” Req.
Reh’g 4–5. Patent Owner argues that “[t]he Board required complete
overlap in claims and prior art in its analysis of Factor 4, leading to an
unreasonable balancing of the Fintiv factors.” Id. at 5, see also id. at 12
(arguing the same). The Decision, however, does not state, imply, or use a
“complete overlap” standard in its analysis of Factor 4 as Patent Owner
argues. Rather, the Decision’s analysis considers the claims and prior art
that would overlap, as well as the claims and prior art that would not, in
determining what weight to give Factor 4. For example, the Decision notes
that, while the Petition challenges the patentability of claims 1, 2, 6, 7, 9, 10,
13, 14, and 16–18, Patent Owner was asserting only claims 7, 16, and 17 in
the underlying litigation. Dec. 16. The Decision also notes that in this
proceeding, Petitioner is relying on the prior art reference Kirkup alone or
the combination of Kirkup and Huerga, whereas in the underlying litigation,
Petitioner is relying on Schiffer alone or the combination of Schiffer and
Kirkup. Dec. 17. Thus, the Decision considers and weighs the similarities,
as well as the differences, in the claims and the prior art between the two
proceedings, and does not require “complete overlap” as Patent Owner
contends.
As to the weight afforded Factor 4, the Decision makes clear that:
A few of the Fintiv factors weigh in favor of exercising our
discretion to deny institution, including the court’s current trial
date, and the investment in the underlying litigation, including
the court’s completion of claim construction. Against this, the
difference in the claims being considered in this proceeding and
IPR2020-00202
Patent 10,212,586 B2
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the underlying litigation, the difference in the prior art being
applied, as well as the strong preliminary showing of
unpatentability outweigh these other factors.
Dec. 21. Thus, the Decision considers the factors, as a whole, and does not
use “an unreasonable judgment in weighing the factors,” as Patent Owner
contends. Req. Reh’g 9.
With respect to Factor 4, Patent Owner also contends that we
“overlooked Apple’s reservation of rights in the [underlying litigation] in its
final election of prior art.” Id. at 14. The Decision’s analysis of Factor 4,
however, thoroughly considered Patent Owner’s assertion that the prior art
relied upon in the Petition is the same, or substantially the same, as the prior
art at issue in the underlying litigation. See Dec. 17–18. Petitioner’s
boilerplate “reservation of rights” regarding asserted prior art in the
underlying litigation (see Ex. 1047, 2) has no impact on our analysis.
Patent Owner also contends that we erred in our analysis of other
Fintiv factors. With respect to Factor 3, Patent Owner argues that, “even
though the Board found Factor 3 ‘slightly’ favored denial, [the Board]
significantly discounted the time and effort the Court and the Parties have
invested in the underlying litigation and clearly did not weigh the factor
properly.” Req. Reh’g 10. Patent Owner argues that the Board “should
have weighed Factor 3 to favor denial, not merely ‘slightly’ favor denial.”
Id. at 10–11. Patent Owner’s arguments in this regard are predicated on the
notion that we should have weighed Factor 3 differently; however, mere
disagreement with how we weighed this factor is not a proper basis for
rehearing. Nor does Patent Owner present any persuasive evidence that we
exercised unreasonable judgment in weighing this factor.
IPR2020-00202
Patent 10,212,586 B2
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Regarding Factor 5, Patent Owner contends that we “improperly
weighed Factor 5 in light of other factors by holding that it ‘does not weigh
against’ exercising discretion. Id. at 12. We disagree. We quoted language
from Fintiv: “If a petitioner is unrelated to a defendant in an earlier court
proceeding, the Board has weighed this fact against exercising discretion.”
Dec. 18 (quoting Fintiv at 13–14). We noted that the parties are the same in
this proceeding as in the underlying litigation, so we found that Factor 5
does not weigh against exercising discretionary denial. Id. This is not
inconsistent with other Board decisions viewing Factor 5 as favoring denial
when issues overlap with the related district court litigation. See, e.g., Apple
Inc. v. Maxell, Ltd., IPR2020-00203, Paper 12 at 16 (PTAB July 6, 2020)
(determining that Factor 5 favors the exercise of discretionary denial when
“the trial court may reach the overlapping issues before the Board would in a
final written decision”).
Patent Owner also argues that we “improperly discounted
[Petitioner’s] extreme delay in filing its Petition.” Req. Reh’g 15.
According to Patent Owner, Petitioner had already drafted invalidity
contentions for all the claims asserted here four months before the filing date
of the Petition. Id. (citing Ex. 2003).
Fintiv, however, recognizes “that it is often reasonable for a petitioner
to wait to file its petition until it learns which claims are being asserted
against it in the parallel proceeding.” Fintiv at 11. As stated in our
Decision, this is consistent with the Leahy-Smith America Invent Act’s
legislative history as to the one-year statutory bar under § 315(b),
particularly with respect to a complex underlying litigation. Dec. 20 (citing
157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (statement of Senator Kyl)).
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Patent 10,212,586 B2
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Our Decision credited Petitioner’s arguments about Patent Owner’s initial
assertion of 10 different patents and 132 claims in the underlying litigation
as a reason why it took nine months for Petitioner to file its Petition here.
Id. at 19. We also noted that Petitioner filed its Petition only one month
after Patent Owner made a preliminary election of asserted claims in the
underlying litigation. Id. at 20. In light of this, and considering the multiple
patents and numerous claims in the underlying litigation, we did not find
Petitioner’s filing to be untimely. Id. Thus, we did not render an
unreasonable judgment regarding the timing of Petitioner’s filing.
Patent Owner also disputes the manner in which we collectively
weighed the Fintiv factors. See Req. Reh’g 4 (“the Board should reweigh
the Fintiv factors because far too much emphasis was placed on Factor 4”).
Patent Owner contends we should have weighed Factor 2 more than others
based on the following statement from Fintiv: “[I]f the court date is at [or]
around the same time or significantly after the [projected] statutory deadline,
the decision whether to institute will likely implicate other factors
discussed herein . . . .” Id. at 15 (emphasis added by Patent Owner) (quoting
Fintiv at 9). However, we do not interpret the quote from Fintiv as
suggesting that Factor 2 should be given more weight. Rather, it recognizes
how other Fintiv factors likely come into play when a trial in related
litigation is on a similar or faster timeline. And we credited the trial date in
the underlying litigation as supporting the exercise of discretionary denial.
Dec. 12–13. Moreover, in our conclusion, we weighed these factors against
each other. Id. at 21. Given that we reasonably accounted for the various
factors, we do not agree with Patent Owner that we failed to conduct a
balanced assessment of all relevant circumstances.
IPR2020-00202
Patent 10,212,586 B2
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II. CONCLUSION
For the reasons stated above, we conclude that Patent Owner has not
met its burden of showing that we abused our discretion in evaluating and
weighing the Fintiv factors as part of our decision not to exercise discretion
under 35 U.S.C. § 314(a) to deny inter partes review. Therefore, we deny
Patent Owner’s requests to reweigh the Fintiv factors and to use our
discretion to deny institution in this proceeding.

III. ORDER
Accordingly, it is
ORDERED that Patent Owner’s Request for Rehearing is denied.
IPR2020-00202
Patent 10,212,586 B2
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For PETITIONER:

Adam Seitz
Paul Hart
Jennifer Bailey
Robin Snader
ERISE IP, P.A.
adam.seitz@eriseip.com
paul.hart@eriseip.com
jennifer.bailey@eriseip.com
robin.snader@eriseip.com

For PATENT OWNER:

Robert Pluta
Amanda Bonner
Luiz Miranda
James Fussell
William Barrow
Saqib Siddiqui
MAYER BROWN LLP
rpluta@mayerbrown.com
asbonner@mayerbrown.com
lmiranda@mayerbrown.com
wbarrow@mayerbrown.com
jfussell@mayerbrown.com
ssiddiqui@mayerbrown.com