NEXRF Corp.

Patent Trials and Appeals Board

Dec 6, 2021

IPR2021-00952 (P.T.A.B. Dec. 6, 2021)

Trials@uspto.gov Paper 14
571-272-7822 Entered: November 6, 2021

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

PLAYTIKA LTD. and PLAYTIKA HOLDING CORP.,
Petitioner,
v.
NEXRF CORP.,
Patent Owner.

IPR2021-00952
Patent 8,506,406 B2

Before LYNNE H. BROWNE, TIMOTHY J. GOODSON, and
TIMOTHY G. MAJORS, Administrative Patent Judges.

GOODSON, Administrative Patent Judge.
DECISION
Denying Institution of Inter Partes Review
35 U.S.C. § 314

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I. INTRODUCTION
A. Background
Playtika Ltd. and Playtika Holding Corp. (“Petitioner”) filed a Petition
(Paper 1, “Pet.”) requesting inter partes review of U.S. Patent No. 8,506,406
(Ex. 1001, “the ’406 patent”). NexRF Corp. (“Patent Owner”) filed a
Preliminary Response. Paper 8 (“Prelim. Resp.”). After receiving our
authorization to do so (see Ex. 1019), the parties filed additional briefs to
address a collateral estoppel issue raised in the Preliminary Response. See
Paper 12 (“Prelim. Reply”); Paper 13 (“Prelim. Sur-Reply”).
Pursuant to 35 U.S.C. § 314 and 37 C.F.R. § 42.4(a), the Board has
authority to determine whether to institute inter partes review. Inter partes
review may not be instituted unless “there is a reasonable likelihood that the
petitioner would prevail with respect to at least 1 of the claims challenged in
the petition.” 35 U.S.C. § 314(a). Even when that standard is satisfied,
however, the Board has discretion to deny institution.1 For example, the
Board has explained that where a petition “suffers from a lack of
particularity that results in voluminous and excessive grounds,” the Board
may exercise its discretion to deny institution. Adaptics Limited v. Perfect
Co., IPR2018-01596, Paper 20, at 17–18 (PTAB Mar. 6, 2019)
(informative).

1 See Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016)
(“[T]he agency’s decision to deny a petition is a matter committed to the
Patent Office’s discretion.”); see also id. at 2153 (Alito, J., concurring in
part and dissenting in part) (“I agree that one can infer from the statutory
scheme that the Patent Office has discretion to deny inter partes review even
if a challenger satisfies the threshold requirements for review.”).
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As explained below, we determine that the Petition fails to identify
with particularity the grounds and evidence supporting them, which results
in voluminous and excessive grounds. Accordingly, we exercise discretion
to deny institution of inter partes review.
B. Real Parties-in-Interest
Petitioner lists the following real parties-in-interest: Playtika Ltd.,
Playtika Holding Corp., Caesars Interactive Entertainment LLC, 888
Atlantic Limited, 888 Holdings PLC, and Scientific Games Corporation.
Pet. 83.
Patent Owner identifies the following real parties-in-interest: NexRF
Corp., Michael Kerr, Marie Martin, David Stewart, Lars Perry, and Richard
Schultz. Paper 4, 2.
C. Related Matters
Petitioner states that Patent Owner has asserted the ’406 patent against
Petitioner in NexRF Corp. v. Playtika Ltd., No. 3:20-cv-603, in the United
States District Court for the District of Nevada. Pet. 84. Patent Owner
additionally lists two other district court proceedings as related matters:
NexRF Corp. v. DoubleU Games Co., No. 2:20-cv-01875, in the United
States District Court for the Western District of Washington; and NexRF
Corp. v. Aristocrat Int’l Pty Ltd., No. 2:21-cv-00798, in the United States
District Court for the Western District of Washington. Paper 4, 2.
D. Summary of the ’406 Patent
The ’406 patent describes gaming applications that can run on a
network access device. Ex. 1001, 1:17–22. The patent explains that in
online gaming, better methods are needed to identify a valid user, so as to
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prevent underage gambling. Id. at 1:64–2:34. The patent describes using a
biometric input to ensure that a user is a registered player. Id. at 4:21–23.
Figure 2 is reproduced below:

Figure 2 shows “a high level block diagram of a gaming system 30 in
communication with a plurality of network access devices coupled to a
network 32.” Ex. 1001, 6:59–61. Gaming system 30 includes verification
system 34, which verifies that a user operating a network access device is a
registered player, broadband gaming system 36, which generates the game
and broadcasts the results to the network access devices, and transactional
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system 38, which tracks transactions and conducts electronic fund transfers.
Id. at 6:62–7:4.
Verification system 34 communicates with a biometric input module
to generate user identification information, such as “media access control
(MAC) identification and confirmation of the user Internet Protocol (IP)
address,” which verification server 42 compares to information in
registration database 40. Ex. 1001, 7:7–17. “If an acceptable match is made
between the user identification information and the information in the
registration database, the user is designated as a player. The player then has
access to either the broadband gaming system 36 or the transactional system
38.” Id. at 7:17–21.
E. Challenged Claims
Petitioner challenges claims 1–4, 6–8, and 17–19 of the ’406 patent.
Pet. 1. Of these, only claims 1 and 17 are independent claims. See
Ex. 1001, 15:5–16:58. Claim 1 is reproduced below, along with bracketed
labels added by Petitioner for convenient reference:
1. [1p] A system to run a gaming application on a network
access device, comprising:
[1a] the network access device; and
[1b] a remote gaming system including a verification
system;
[1c] the network access device configured to transmit user
identification information and security information to the
verification system;
[1d] the network access device configured to receive an
acknowledgement from the verification system indicating that
the user identification information and security information are
valid;
[1e] the network access device configured to receive a
game input from a user of the network access device and transmit
the game input to the remote gaming system;
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[1f] the remote gaming system configured to receive the
game input and generate a random game output, the remote
gaming system further configured to associate an image ID with
the random game output and select one or more images
associated with the image ID for encoding and broadcasting to
the network access device;
[1g] the network access device configured to receive a
plurality of broadcast images generated by the remote gaming
system.
Id. at 15:5–27; Pet. 31–55 (adding bracketed labels).
F. Cited References and Asserted Grounds
The Petition relies on the following references for its asserted grounds
of unpatentability:
Name Description Exhibit
Joshi US 7,470,196 B1, issued Dec. 30, 2008, filed Oct.
16, 2000.
1005
Agasse EP 0 934 765 A1, published Nov. 8, 1999, filed
Sept. 2, 1998.
1006
Muir WO 98/40140, published Sept. 17, 1998, filed
Mar. 10, 1997.
1007
Walker US 6,234,896 B1, issued May 22, 2001, filed Apr.
11, 1997.
1008
Nguyen US 7,127,069 B2, issued Oct. 24, 2006, filed Dec.
7, 2000.
1009
Bezick US 5,746,656, issued May 5, 1998, filed Apr. 23,
1996.
1010
Dobner US 6,874,084, issued Mar. 29, 2005, filed May 2,
2000.
1014
Menashe US 5,586,937, issued Dec. 24, 1996, filed May 19,
1994.
1016
See Pet. 11.
The Petition asserts 96 grounds of unpatentability, which it
summarizes as follows:
The Joshi Grounds (1–16) render obvious claims 1–3, 6,
7, and 17–19 based on the following combinations: (1) Joshi;
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(2) Joshi and Muir; (3) Joshi and Walker[;] (4) Joshi and Agasse;
(5) Joshi and Nguyen; (6) Joshi, Muir, and Walker; (7) Joshi[,]
Muir, Walker, and Agasse; (8) Joshi, Muir, Walker, and Nguyen;
(9) Joshi, Muir, Walker, Agasse, and Nguyen; (10) Joshi, Muir,
and Agasse; (11) Joshi, Muir, Agasse, and Nguyen; (12) Joshi,
Muir, and Nguyen; (13) Joshi, Walker, and Agasse; (14) Joshi,
Walker, and Nguyen; (15) Joshi, Walker, Agasse, and Nguyen;
and (16) Joshi, Agasse, and Nguyen.
The Joshi Menashe Grounds (17–32) render obvious
claims 1–4, 6, 7, and 17–19 based on adding Menashe to grounds
1–16 above, respectively.
The Joshi Dobner Grounds (33–64) render obvious claim
3 based on adding Dobner to grounds 1–32 above, respectively.
The Joshi Bezick Grounds (65–96) render obvious claim
8 based on adding Bezick to grounds 1–32 above, respectively.
Pet. 11–12. In support of its proposed grounds, Petitioner relies on the
Declaration of Stacy A. Friedman. See Ex. 1003.
II. LEVEL OF ORDINARY SKILL IN THE ART
Petitioner proposes that a person of ordinary skill in the art “would
have a bachelor’s degree in computer science, electrical engineering,
computer engineering, or a related engineering discipline and two or more
years of industry experience in the field of gaming devices and online
gaming systems and development thereof, or equivalent experience,
education, or both.” Pet. 9 (citing Ex. 1003 ¶ 37). Patent Owner does not
respond to Petitioner’s proposal or provide its own definition of the level of
ordinary skill in the art. See Prelim. Resp. 1–21. Based on our review of the
record at this preliminary stage, we adopt Petitioner’s proposed definition of
the level of ordinary skill in the art as summarized above.
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III. CLAIM CONSTRUCTION
“In an inter partes review proceeding, a claim of a patent . . . shall be
construed using the same claim construction standard that would be used to
construe the claim in a civil action under 35 U.S.C. 282(b).” 37 C.F.R.
§ 42.100(b) (2020). That standard “includ[es] construing the claim in
accordance with the ordinary and customary meaning of such claim as
understood by one of ordinary skill in the art and the prosecution history
pertaining to the patent.” Id.; see also Phillips v. AWH Corp., 415 F.3d 1303
(Fed. Cir. 2005) (en banc).
Petitioner asserts that “[n]o claim terms need to be construed by the
Board at this time.” Pet. 9. Patent Owner does not propose any claim
constructions in its Preliminary Response. Prelim. Resp. 1–21. For
purposes of this decision, we determine that no claim term requires express
construction. See Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795,
803 (Fed. Cir. 1999) (holding that only claim terms that are in controversy
need to be construed and “only to the extent necessary to resolve the
controversy”); see also Nidec Motor Corp. v. Zhongshan Broad Ocean
Motor Co., 868 F.3d 1013, 1017 (Fed. Cir. 2017) (applying Vivid Techs. in
the context of an inter partes review).
IV. DISCRETIONARY DENIAL
By statute, petitions for inter partes review are required to identify
“with particularity, each claim challenged, the grounds on which the
challenge to each claim is based, and the evidence that supports the grounds
for the challenge to each claim.” 35 U.S.C. § 312(a)(3); see also 37 C.F.R.
§ 42.104(b) (specifying necessary elements of a petition). Consistent with
those requirements, the Board’s Trial Practice Guide advises that petitioners
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should “avoid submitting a repository of all the information that a judge
could possibly consider, and instead focus on concise, well-organized, easy-
to-follow arguments supported by readily identifiable evidence of record.”
Consolidated Trial Practice Guide, at 39 (Nov. 2019).2
This requirement is “of the utmost importance,” as the Federal Circuit
has explained, because a detailed and clear explanation of the challenge at
the outset is necessary so that the parties and the Board can complete the
trial within the statutorily prescribed timeframe:
Unlike district court litigation—where parties have greater
freedom to revise and develop their arguments over time and in
response to newly discovered material—the expedited nature of
IPRs bring with it an obligation for petitioners to make their case
in their petition to institute. While the Board’s requirements are
strict ones, they are requirements of which petitioners are aware
when they seek to institute an IPR.
Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359,
1369 (Fed. Cir. 2016).
Moreover, in Adaptics, the Board explained that the “all-or-nothing”
nature of institution decisions following SAS Institute Inc. v. Iancu, 138 S.
Ct. 1348 (2018),3 gives heightened importance to the statutory requirement
for particularity in an IPR petition:
Because the Board’s practice, in light of SAS, is to institute on all
grounds asserted in a petition, the Board may consider whether a
lack of particularly as to one or more of the asserted grounds
justifies denial of an entire petition. For example, where a

2 Available at www.uspto.gov/sites/default/files/documents/tpgnov.pdf.
3 See id. at 1355 (holding that under § 314, the Board has “a binary choice—
either institute review or don’t”); see also Consolidated Trial Practice Guide,
at 64 (“In instituting a trial, the Board will either (1) institute as to all claims
challenged in the petition and on all grounds in the petition, or (2) institute
on no claims and deny institution.”).
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petition contains voluminous or excessive grounds, Office
guidance indicates “[t]he panel will evaluate the challenges and
determine whether, in the interests of efficient administration of
the Office and integrity of the patent system (see 35 USC
§ 316(b)), the entire petition should be denied under 35 USC
§ 314(a).”
Adaptics, Paper 20 at 17–18 (quoting SAS Q&As (June 5, 2018), at Part D,
Question D2).4
The petition at issue in Adaptics asserted ten prior art references
against nine patent claims in five grounds, two of which were for
anticipation and three for obviousness. Id. at 2, 6, 8–9. However, the
obviousness grounds relied on “up to ten references connected by the
conjunction ‘and/or,’” which made the challenge unclear and resulted in “a
multiplicity of grounds” that were “voluminous and excessive.” Id. at
18–21. The Board found that “[t]he number of asserted grounds and
references is disproportionately large when compared with the number of
distinct challenged claims, which indicates that the Petition imposes an
undue burden on Patent Owner and the Board.” Id. at 21–22.
Following Adaptics, the Board has continued to deny petitions that
asserted inordinately large numbers of ambiguous grounds. In
EnergySource Minerals, LLC v. TerraLithium LLC, IPR2019-01607,
Paper 10 (PTAB May 4, 2020), the Board found that the Petition’s use of
“and/or” in listing the references applied in its obviousness grounds led to
voluminous, excessive, and ambiguous grounds. Id. at 12, 14. The Board
explained that it was “sensitive to Patent Owner’s concern that the sheer
volume of prior art combinations asserted in the Petition places an undue

4 Available at
www.uspto.gov/sites/default/files/documents/sas_qas_20180605.pdf.
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burden on Patent Owner and undercuts its ability to effectively respond to
the challenge within the confines of our administrative process.” Id.
In Sinjimoru v. Geneze Innovation Inc., IPR2021-00493, Paper 8
(PTAB July 28, 2021), the petition purported to present 32 grounds, but the
Board found that because many of those grounds asserted multiple statutory
bases and multiple combinations of references, the petition actually
advanced 205 different grounds. Id. at 10. The Board detailed many
shortcomings in the petition that rendered the analysis therein deficient and
unclear. See id. at 11–21. Ultimately, the Board found that the petition was
“deficient for failure to identify with particularity the evidence supporting
many, if not all, the challenges.” Id. at 22. Moreover, the Board pointed out
that the petition
does not explain why so many grounds are necessary under the
circumstances or why the Board should impose on Patent Owner
the burden of defending against so many challenges. . . . An inter
partes review of 20 patent claims based on 204 grounds,
supported by analysis so lacking in particularity, would burden
Patent Owner unduly and make inefficient use of the Board’s
resources.
Id. at 23.
Here, Petitioner challenges ten claims by combining eight references
in various permutations to arrive at 96 grounds. See Pet. 11–12. As an
initial point, the sheer number of grounds at issue here is exceptional,
especially compared to the modest number of challenged claims. See
Adaptics, Paper 20 at 21–22 (explaining that a disproportionately large
number of asserted grounds compared to the number of challenged claims is
an indication that the petition is unduly burdensome to the patent owner and
the Board). Petitioner does not explain why so many grounds are necessary.
See Sinjimoru, Paper 8 at 23. For example, Petitioner does not argue that
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different possible claim constructions or priority date determinations
necessitate the multiplicity of challenges presented. To the contrary,
Petitioner contends that the Board need not construe any claim terms nor
determine any priority issues to resolve Petitioner’s challenges. See Pet. 9,
11. In our view, the large number of grounds is far out of proportion with
the number of claims and the complexity of the issues involved. This
excessiveness indicates that it would impose an undue burden for Patent
Owner to respond to and for the Board to resolve all of the grounds asserted
in the Petition.
More importantly, Petitioner’s grounds are unclear. Petitioner does
not separately discuss each individual ground, but instead lumps together the
discussion of large numbers of grounds under a single heading. Specifically,
Grounds 1–16 are discussed collectively in one section (see id. at 12–62);
Grounds 17–32 are treated in a second section (see id. at 63–72); Grounds
33–64 are covered in a third section (see id. at 73–76); and a fourth section,
which totals four paragraphs in length, addresses Grounds 65–96 (see id. at
76–79). This grouping together of multiple grounds obscures the specific
arguments advanced and the claims challenged in each individual ground.
For example, Petitioner’s treatment of claim 1 in the section
addressing Grounds 1–16 asserts that one or more of five references —
namely, Joshi, Muir, Nguyen, Walker, and Agasse — discloses each of the
limitations or sub-limitations of claim 1. See Pet. 31–55. In general,
references other than Joshi are relied upon as backup (or secondary backup)
positions if other references are found deficient for particular limitations.
See, e.g., id. at 44 (“If the Patent Owner argues that Joshi or Muir does not
expressly disclose this element, Nguyen discloses it.”). But, as Patent
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Owner points out, Petitioner only addresses motivation to combine Joshi
with other individual references, and provides no explanation of
combinations including more than two of those five references, as Petitioner
apparently proposes in Grounds 6–16. See id. at 11–12; Prelim. Resp. 3–4,
7.
We agree with Patent Owner that Petitioner does not adequately
explain these multiple-reference combinations, or why ordinarily skilled
artisans would be motivated to combine them in the manner recited in claim
1 as a whole. This same deficiency is present for the other asserted grounds,
which add further references to the combinations in Grounds 1–16 but
provide inadequate explication of these many-reference combinations. See,
e.g., Pet. 63 n.3 (“The Joshi Grounds (1–16) analyzed above apply equally to
the Joshi Menashe Grounds (17–32) except for element [1p] and claim 4.”);
id. at 73 n.4 (similar statement for Grounds 33–64); id. at 76 n.5 (similar
statement for Grounds 65–96).
Petitioner’s grouping of grounds also makes it unclear which claims
are challenged in each individual ground. Petitioner states that Grounds
1–16 render obvious claims 1–3, 6, 7, and 17–19. Pet. 11. The Petition does
not include a ground-specific listing of the challenged claims (see id. at
11–13), which suggests that each of the grounds in the first grouping
challenge all of claims 1–3, 6, 7, and 17–19. However, as Patent Owner
points out, Petitioner’s challenges to some claims include references that are
included in only some of the grounds in this first grouping. See Prelim.
Resp. 5–7. Specifically, Petitioner’s analysis of claims 3, 7, 18, and 19
appear to rely on Agasse, but Grounds 1–3, 5, 6, 8, 12, and 14 do not include
Agasse. See Pet. 11–12, 57–62.
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This same lack of clarity applies equally to Petitioner’s second
grouping of grounds, which challenge claims 1–4, 6, 7, and 17–19 by adding
Menashe to the references asserted in Grounds 1–16. Id. at 12, 63.
Petitioner states that “[t]he Joshi Grounds (1–16) analyzed above apply
equally to the Joshi Menashe Grounds (17–32), except for element [1p] and
claim 4.” Id. at 63 n.3. Thus, the same issue repeats itself for this second
grouping, in that Petitioner’s analysis of claims 3 and 19 rely on Agasse, but
Grounds 17–19, 21, 22, 24, 28, and 30 do not include Agasse. See id. at
71–72. As Patent Owner points out, Petitioner does not even address any of
claims 2, 6, 7 or 18 in its section discussing Grounds 17–32. See id. at
63–72; Prelim. Resp. 8–9.
In these circumstances, we determine that discretionary denial is
appropriate because the Petition asserts voluminous and excessive grounds
and fails to identify them with the requisite particularity. As discussed
above, it is the petitioner’s job to distill its case to a reasonable number of
well-defined theories and present them with particularity. Here, Petitioner
has sketched out myriad paths and invited Patent Owner and the Board to
choose their own adventure to arrive at the challenged claims. That is not
the Board’s role, nor is it fair to Patent Owner to have to defend against such
ill-defined and multifarious challenges. See Microsoft Corp. v. FG SRC,
LLC, 860 Fed.Appx. 708, 713 (Fed. Cir. 2021) (“It is not the Board’s job to
cobble together assertions from different sections of a petition or citations of
various exhibits in order to infer every possible permutation of a petitioner’s
arguments. Arguments in a petition must be made with particularity, not
opacity . . . .”).

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Accordingly, we exercise our discretion under § 314(a) to deny
institution.
V. ORDER
For the reasons given, it is:
ORDERED that the Petition is denied and no inter partes review is
instituted.

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FOR PETITIONER:
Cory Bell
Gerson Panitch
Forrest Jones
Christian Ji-Hye Yang
FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER LLP
cory.bell@finnegan.com
gerson.panitch@finnegan.com
forrest.jones@finnegan.com
christina.yang@finnegan.com

FOR PATENT OWNER:

Eugene LeDonne
Biran Murphy
Jonathan Herstoff
Christopher Gosselin
HAUG PARTNERS LLP
eledonne@haugpartners.com
bmurphy@haugpartners.com
jherstoff@fhlaw.com
cgosselin@haugpartners.com

Adam Yowell
Alastair Warr
FISHERBROYLES
adam.yowell@fisherbroyles.com
alastair.warr@fisherbroyles.com