Maxell, Ltd.

Patent Trials and Appeals Board

Feb 3, 2021

IPR2020-00200 (P.T.A.B. Feb. 3, 2021)

Trials@uspto.gov Paper 21
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.
____________

IPR2020-00200
Patent 10,084,991 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 1–5 and 8–12 (“the challenged
claims”) of U.S. Patent No. 10,084,991 B2 (Ex. 1001, “the ’991 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, “PO Sur-reply”)
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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. 10–25. 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. 25.
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. 3002. On October 27,
2020, POP denied Patent Owner’s request for review. Paper 19.
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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. 15–22.
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 16–17. 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 18–22. In weighing all of the Fintiv factors, we
determined that “the differences in the claims being considered in this
proceeding and the underlying litigation, as well as the differences in the
prior art being applied, counsels against exercising discretionary denial.” Id.
at 25. 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.
See Req. Reh’g 3–9. In particular, Patent Owner argues that we should have
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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. 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. 16. This is
consistent with the policy considerations underlying Factor 4 in Fintiv,
namely, “concerns of inefficiency and the possibility of conflicting
decisions.” Fintiv at 12.
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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 1–5 and 8–12,
Patent Owner was only asserting claim 4 in the underlying litigation. Dec.
17. The Decision also notes that “[i]n this proceeding, Petitioner is relying
on Asmussen, Bear, Marley, DeFazio, and Lindstrom, whereas in the
[underlying litigation], Petitioner is relying on Asmussen and Allen only.”
Dec. 18. 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, however, the differences in the claims being considered in
this proceeding and the underlying litigation, as well as the
differences in the prior art being applied, counsels against
exercising discretionary denial. Considered as a whole, the
differences between the two proceedings and Petitioner’s
relatively strong preliminary showing of unpatentability
outweigh these other factors.
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Dec. 25. Thus, the Decision considers the factors, as a whole, and does not
“place[] undue emphasis on Factor 4,” 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. 15–22. 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 is arguing that we should have weighed this
factor 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.
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
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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. 22 (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. 24 (citing
157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (statement of Senator Kyl)).
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.
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Id. 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. 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
around the same time or significantly after the statutory deadline, the
decision whether to institute will likely implicate other factors discussed
herein . . . .” Id. at 15 (emphasis added by Patent Owner). 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. 13–14. Moreover, in
our conclusion, we weighed these factors against each other. Id. at 25.
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.

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Patent 10,084,991 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.
IPR2020-00200
Patent 10,084,991 B2
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For PETITIONER:

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