Rackspace US, Inc.v.PersonalWeb Technologies, LLC

Patent Trials and Appeals Board

Oct 28, 2014

11980687 - (D) (P.T.A.B. Oct. 28, 2014)

Trials@uspto.gov
571-272-7822 Entered: October 28, 2014

UNITED STATES PATENT AND TRADEMARK OFFICE
____________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

RACKSPACE US, INC. and RACKSPACE HOSTING, INC.,
Petitioners,

v.

PERSONALWEB TECHNOLOGIES, LLC and
LEVEL 3 COMMUNICATIONS,
Patent Owners.
____________

Cases IPR2014-00057 (Patent 5,978,791)
IPR2014-00058 (Patent 8,099,420)
IPR2014-00059 (Patent 6,415,280)
IPR2014-00062 (Patent 7,802,310)
IPR2014-00066 (Patent 6,928,442)
1

____________

Before KEVIN F. TURNER, JONI Y. CHANG, and
MICHAEL R. ZECHER, Administrative Patent Judges.

CHANG, Administrative Patent Judge.

JUDGMENT
Termination of Proceeding after Institution
37 C.F.R. § 42.73

1
This Judgment is entered in each of the above-identified proceedings.
IPR2014-00057 (Patent 5,978,791), IPR2014-00058 (Patent 8,099,420),
IPR2014-00059 (Patent 6,415,280), IPR2014-00062 (Patent 7,802,310),
IPR2014-00066 (Patent 6,928,442)
2

On October 16, 2014, Petitioners Rackspace US, Inc. and Rackspace
Hosting, Inc. (collectively, “Rackspace”) and Patent Owner PersonalWeb
Technologies, LLC and Level 3 Communications (collectively,
PersonalWeb) filed a Joint Motion to Terminate in each of the above-
identified inter partes reviews (“the Rackspace inter partes reviews”).
Paper 34, “Mot.”
2
The parties also filed a true copy of their Written
Settlement Agreement, made in connection with the termination of the
Rackspace inter partes reviews, in accordance with 35 U.S.C. § 317(b) and
37 C.F.R. § 42.74(b). Ex. 1014. Additionally, the parties submitted a Joint
Request to have their Written Settlement Agreement treated as confidential
business information under 35 U.S.C. § 317(b) and 37 C.F.R. § 42.74(c).
Paper 33. For the reasons set forth below, the Joint Motions to Terminate
and the Requests to have their Written Settlement Agreement treated as
confidential business information are granted.
The Rackspace inter partes reviews were instituted on April 15, 2014.
Paper 9. After institution, PersonalWeb filed a Patent Owner Response in
each review. Paper 24. However, Rackspace has not filed a Reply to the
Patent Owner Response. Nor has a Final Hearing been held.
In their Joint Motions to Terminate, the parties urge us to terminate
the Rackspace inter partes reviews with respect to both parties, because the
record in each review is incomplete and we have not yet decided the merits
of each review. Mot. 2. The parties also argue that proceeding to a Final

2
For the purpose of clarity and expediency, we treat IPR2014-00057 as
representative, and all citations are to IPR2014-00057 unless otherwise
noted.
IPR2014-00057 (Patent 5,978,791), IPR2014-00058 (Patent 8,099,420),
IPR2014-00059 (Patent 6,415,280), IPR2014-00062 (Patent 7,802,310),
IPR2014-00066 (Patent 6,928,442)
3

Written Decision would not be appropriate in light of the facts before us. Id.
at 2–3.
In particular, the parties note that, because Rackspace has not filed a
Reply or Reply declarations, Rackspace has not addressed the arguments and
evidence from the Patent Owner Response. Id. at 2. PersonalWeb also has
not yet deposed any reply witnesses and has not yet filed a Motion for
Observations on Cross-examination. Id. Neither party has filed, or
responded to, a Motion to Exclude Evidence. Id. Rackspace informs us that
it will no longer participate in the Rackspace inter partes reviews in any
respect before the Board. Id. at 4. Specifically, it will not file a Reply, will
not attend any oral hearing, and will not oppose any Motions to Exclude
Evidence. Id. In fact, Rackspace did not file a Reply to the Patent Owner
Response within the required time period—before or on Due Date 2,
October 17, 2014 (Paper 30).
The parties identify other related inter partes reviews and district
court proceedings involving PersonalWeb and third parties. Mot. 6–7.
However, except for EMC Corporation and VMWare, Inc. (collectively
“EMC”) and Apple, Inc. (“Apple”), none of the third parties elected to file a
Petition for inter partes review within the one-year statutory period under 35
U.S.C. § 315(b). Id. at 7. We note that the termination of the Rackspace
inter partes reviews would not affect the inter partes reviews that involve
EMC and Apple. We are cognizant that Google, Inc. and YouTube, LLC
(collectively “Google”) filed four Petitions—IPR2014-00977, IPR2014-
00978, IPR2014-00979, and IPR2014-00980—and Motions for Joinder with
four of the Rackspace inter partes reviews. See, e.g., IPR2014-00977, Paper
IPR2014-00057 (Patent 5,978,791), IPR2014-00058 (Patent 8,099,420),
IPR2014-00059 (Patent 6,415,280), IPR2014-00062 (Patent 7,802,310),
IPR2014-00066 (Patent 6,928,442)
4

3. However, Google’s Petitions were not filed timely in accordance with
35 U.S.C. § 315(b) (“[a]n inter partes review may not be instituted if the
petition requesting the proceeding is filed more than 1 year after the date on
which the petitioner . . . is served with a complaint alleging infringement of
the patent.”).
3
Google could have, but did not, file a petition for inter partes
review with the one-year time period. More significantly, Google’s Motions
for Joinder were not filed timely in accordance with 37 C.F.R. § 42.122(b)
(“[a]ny request for joinder must be filed, as a motion under § 42.22, no later
than one month after the institution date of any inter partes review for which
joinder is requested.”).
4
Google fails to provide sufficient reasons as to why
we should exercise our discretion under 37 C.F.R. § 42.5(b) to waive the
one-month time limit for filing a Motion for Joinder.
5

The parties further argue that maintaining the Rackspace inter partes
reviews, after the parties have settled their disputes, would be contrary to
public policy and would discourage future settlements by removing a
significant motivation for settlement. Mot. 5. In view of the circumstances,
we agree. Indeed, there are strong public policy reasons to favor settlement
between the parties to a proceeding. Office Patent Trial Practice Guide, 77
Fed. Reg. 48,756, 48,768 (Aug. 14, 2012). Generally, the Board expects that

3
Google filed its Petitions on June 8, 2014, which is more than a year after
Google was served with a complaint alleging infringement of PersonalWeb’s
patents on December 12, 2011. See, e.g., IPR2014-00977, Ex. 2001, Pet. 3.
4
Rackspace inter partes reviews were instituted on April 15, 2014. Paper 9.
Google, however, did not file its Motions for Joinder until June 8, 2014.
See, e.g., IPR2014-00977, Paper 3.
5
We will issue decisions on the Motions for Joinder in due course.
IPR2014-00057 (Patent 5,978,791), IPR2014-00058 (Patent 8,099,420),
IPR2014-00059 (Patent 6,415,280), IPR2014-00062 (Patent 7,802,310),
IPR2014-00066 (Patent 6,928,442)
5

a proceeding will terminate after the filing of a settlement agreement, unless
the Board already has decided the merits of the proceedings. Id.
In their Joint Motions to Terminate, the parties indicate that they have
settled all of their disputes involving the Rackspace inter partes reviews, as
well as the related district court proceeding styled PersonalWeb Tech. LLC
v. Rackspace US, Inc., No. 6-12-cv-00659 (E.D. Tex.). Mot. 1, 4. The
parties also indicate that they concurrently filed their Stipulation of
Dismissal, as to only the Rackspace Defendants with prejudice, in that
related district court proceeding. Id.; Ex. 2019. More importantly, the
parties expressly state that “no other disputes between the parties remain,”
and “[t]here is no other litigation or dispute in any court or forum involving
[Rackspace and PersonalWeb].” Id. at 4.
Upon consideration of the facts before us, we determine that it is
appropriate to terminate the Rackspace inter partes reviews as to both
parties, and enter judgment.
For the foregoing reasons, it is:
ORDERED that the Joint Motions to Terminate the Rackspace inter
partes reviews are granted;
FURTHER ORDERED that the Rackspace inter partes reviews are
terminated as to all parties; and
FURTHER ORDERED that the parties’ Joint Request that their
Written Settlement Agreement be treated as business confidential
information kept separate from the patent file, and made available only to
Federal Government agencies on written request, or to any person on a
IPR2014-00057 (Patent 5,978,791), IPR2014-00058 (Patent 8,099,420),
IPR2014-00059 (Patent 6,415,280), IPR2014-00062 (Patent 7,802,310),
IPR2014-00066 (Patent 6,928,442)
6

showing of good cause, pursuant to 35 U.S.C. § 317(b) and 37 C.F.R.
§ 42.74(c), is granted.

For PETITIONERS:

David W. O’Brien
J. Andrew Lowes
John Russell Emerson
HAYNES AND BOONE, LLP
david.obrien.ipr@haynesboone.com
andrew.lowes.ipr@haynesboone.com
russell.emerson.ipr@haynesboone.com

Paul V. Storm
GARDERE, WYNNE, SEWELL LLP
pvstorm@gardere.com

For PATENT OWNERS:
Joseph A. Rhoa
Updeep S. Gill
NIXON & VANDERHYE P.C.
jar@nixonvan.com
usg@nixonvan.com