Sunoco Partners Marketing & Terminals L.P

Patent Trials and Appeals Board

Dec 17, 2020

IPR2020-00728 (P.T.A.B. Dec. 17, 2020)

Trials@uspto.gov Paper No. 13
571-272-7822 Date: December 17, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

U.S. VENTURE, INC.,
Petitioner,
v.
SUNOCO PARTNERS MARKETING & TERMINALS L.P.,
Patent Owner.

IPR2020-00728
Patent 9,207,686 B2

Before BARRY L. GROSSMAN, JON B. TORNQUIST, and
BRENT M. DOUGAL, Administrative Patent Judges.
DOUGAL, Administrative Patent Judge.
DECISION
Denying Petitioner’s Request for Rehearing of
Decision Denying Institution of Inter Partes Review
37 C.F.R. § 42.71(d)

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I. INTRODUCTION
On October 1, 2020, we issued a Decision Denying Institution of Inter
Partes review of claims 16–17 (the “challenged claims”) of U.S. Patent No.
9,207,686 B2 (“the ’686 patent”). Paper 10 (“Decision” or “Dec.”). In the
Decision, we considered the relevant circumstances of the case, including
the merits and the advanced state of a parallel district court proceeding, and
ultimately exercised our discretion to deny institution under 35 U.S.C.
§ 314(a). Dec. 7–14; see also Apple Inc. v. Fintiv, Inc., IPR2020-00019,
Paper 11 at 5 (PTAB Mar. 20, 2020) (precedential) (“Fintiv”).
On November 2, 2020, U.S. Venture, Inc. (“Petitioner”) filed a
Request for Rehearing of our Decision. Paper 11 (“Rehearing Request” or
“Reh. Req.”). Petitioner seeks reconsideration of our Decision for the
following reasons:
(1) the Board misapprehended the anticipated trial date for the
court proceeding;
(2) the Board overlooked the fact that similar denials the Board
has made were based on trials of parallel litigations with
expected dates that did not actually take place on those dates or,
in some cases, still have not taken place;
(3) the merits are not a close call; and
(4) the Fintiv rule adopted by the PTAB is unlawful and invalid.
Id. at 1 (paragraphing added).
For the reasons explained below, Petitioner’s Rehearing Request is
denied.

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II. LEGAL STANDARD
When rehearing a decision on institution, the Board reviews the
decision for an abuse of discretion. 37 C.F.R. § 42.71(c). An abuse of
discretion may arise if the decision is based on an erroneous interpretation of
law, if a factual finding is not supported by substantial evidence, or if an
unreasonable judgment is made in weighing relevant factors. Star Fruits
S.N.C. v. U.S., 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 burdens and requirements of a request for rehearing are stated in
37 C.F.R. § 42.71(d):
The burden of showing a decision should be modified lies with
the party challenging the decision. The request must specifically
identify all matters the party believes the Board misapprehended
or overlooked, and the place where each matter was previously
addressed in a motion, an opposition, or a reply.
Thus, a request for rehearing is not an opportunity to present new arguments
or evidence or merely to disagree with the panel’s assessment of the
arguments or weighing of the evidence.

III. ANALYSIS
A. Anticipated trial date for the parallel court proceeding
Petitioner argues that “[t]he Board abused [its] discretion by
misapprehending the anticipated trial date” of the parallel District Court
proceeding. Reh. Req. 2.
In our Decision, we determined that “[t]hough the exact date of trial
[of the parallel District Court proceeding] is not set,” the evidence of record
both showed that even with the Coronavirus pandemic, “the proceeding has
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not been sidelined or halted, and continues to move towards trial” and that
the evidence laid out an approximate time frame for when the trial would
likely be held. Dec. 9 (citing Ex. 2003); see also id. at 8–9 (citing PO Resp.
35; Ex. 1026) (Discussing the Court’s Procedures and timeline for trial after
the docket call). Thus, we determined that this factor favored denying
institution under our analysis of the factors under Fintiv. Id. at 9.
Petitioner argues that “[t]he Board misapprehended the anticipated
trial date by: making assumptions about the court’s availability to conduct a
trial of the parallel case (especially in light of backlog of trials caused by the
coronavirus).” Reh. Req. 4. In support, Petitioner cites a Seventh
Supplemental Order regarding the COVID-19 pandemic from the Southern
District of Texas dated September 17, 2020 (Ex. 1042). The order gives
some guidelines for how the District Court will conduct jury trials “to
minimize the risk of COVID-19 exposure” (id. at 1) and Petitioner argues
that based on the provisions therein “it is unclear when the parallel court trial
will take place” (Reh. Req. 4).
It is unclear how we could have misapprehended or overlooked this
evidence which was available, but not of record, when we issued our
Decision. The Supplemental Order from the Southern District of Texas
issued approximately two weeks before our Decision. Petitioner does not
explain why it did not attempt to enter this evidence into the record until
after the mailing of our Decision.
Further, though Petitioner argues that we made improper assumptions,
Petitioner’s argument is based on assumptions which are not supported by
record evidence, including the Supplemental Order. Petitioner would have us
make “assumptions about the court’s availability to conduct a trial of the
parallel case.” Reh. Req. 4. Petitioner also would have us make assumptions
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about the presence of a “backlog of trials caused by the coronavirus” and
about the District Court’s ability to proceed with its docket. Id. However, as
noted above, at the time of the Decision, we determined that the evidence
showed that even with the Coronavirus pandemic, “the proceeding has not
been sidelined or halted, and continues to move towards trial” and that the
evidence laid out an approximate time frame for when the trial would likely
be held. Dec. 9. Petitioner’s untimely evidence does not change those
determinations.
Petitioner also cites a newly issued revised scheduling order to show
that we misapprehended the trial date. For example, the deadline for all
“Dispositive and Non-Dispositive Motions” has been moved from February
19, 2021 to March 26, 2021. Compare Ex. 2003, 2 (Date #25) with Ex.
1046, 2 (Date # 25). However, this evidence continues to show that “the
proceeding has not been sidelined or halted, and continues to move towards
trial.” Dec. 9.
Petitioner also argues that “[t]he Board misapprehended the
anticipated trial date by: . . . making assumptions about the availability of
counsel and the witnesses.” Reh. Req. 4. Though Petitioner did previously
state that the District Court trial date would be set at a time that would
“accommodate the schedules of counsel and witnesses,” (Pet. 71) Petitioner
does not identify what it is that we misapprehended or overlooked in this
regard. It is natural that some assumptions will have to be made when
considering the timeline of a parallel proceeding. However, Petitioner does
not identify any evidence of record or argument previously made showing
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what we misapprehended or overlooked concerning the availability of
counsel and the witnesses.1
B. Similar denials
Petitioner next argues that we “overlooked the fact that many of the
institution denials the Board has made were based on trials of parallel
litigations with expected dates that did not actually take place on those dates
or, in some cases, still have not taken place.” Reh. Req. 4. This argument
was not previously presented and thus this argument by Petitioner does not
identify an issue that we misapprehended or overlooked in the Decision. See
37 C.F.R. § 42.71(d).
C. The Merits
In our Decision, we determined that the merits were a close call based
on the preliminary record and that this combined with the other factors
favored denying institution. Dec. 12–14. Petitioner disagrees.
We previously determined that Patent Owner presented a credible
argument concerning the construction of the term “in-line blending.” Id. at
13.
Petitioner argues that “[i]n order for the Board to adopt Patent
Owner’s proposed claim construction, it would have to find the preamble
limiting.” Reh. Req. 7. Though not stated, Petitioner is presumably taking
the position that the preamble, including the term “in-line blending” is a
non-limiting aspect of the claim. Though our Decision did not make an
initial determination on whether the preamble is limiting, we note that the

1 We also note that under Fintiv, when considering whether to exercise
discretion to deny institution under 35 U.S.C. § 314(a), the trial date is only
one of the six factors considered under a holistic view of the relevant
circumstances of the proceeding. No one factor is controlling.
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Petition proceeds as if the preamble is limiting. See Pet. 33–34; Prelim.
Resp. 10 n.4. Thus, as this argument was not previously presented, Petitioner
does not identify an issue that we misapprehended or overlooked in the
Decision.
Petitioner also argues that the ’686 patent Specification does not
support Patent Owner’s construction of the term “in-line blending.” Reh.
Req. 7–8. Petitioner identifies a paragraph from the Specification that uses
the term “in-line blending” and distinguishes it from Patent Owner’s
construction. Id. at 8. Not only is this a new argument, but it also does not
reduce the credibility of Patent Owner’s position. We previously noted that
Patent Owner cited multiple locations in the Specification that support its
claim construction and that
Patent Owner provide[s] in-depth analysis of the present claim
limitation (“in-line blending”) to the facts of the Federal Circuit’s
opinion in SciMed Life Sys., Inc. v. Advanced Cardiovascular
Sys., Inc., 242 F.3d 1337 (Fed. Cir. 2001), where the Court
limited the claims to a particular embodiment disclosed in the
Specification where the claims could have been read to cover
other embodiments. Prelim. Resp. 12–13.
Dec. 13. Petitioner’s argument both does not address these findings and does
not show that we misapprehended or overlooked any issue in this regard.
We also previously determined that Patent Owner presented credible
arguments that the Petition does not include sufficient reasoning to combine
the references or further modify them to obtain all of the limitations of the
claims. Id.
In particular, we noted and found credible that
Patent Owner points to a lack of sufficient evidence to support
Petitioner’s position that a person of skill in the art would modify
Feld and Hoffman’s teachings to use unblended flow rates in the
calculations necessary for the compensation process. Id. at 19,
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21–22. Patent Owner identifies that Hoffman teaches that the
flow rates are “affect[ed] to a considerable extent” “during
blending.” Id. at 21–22 (quoting Ex. 1024, 3:74–4:3).
Dec. 13.
Petitioner argues that “Patent Owner’s arguments are not relevant” to
the proposed combination. Reh. Req. 9. We disagree.
Petitioner acknowledges that the proposed combination of the
references relies on “us[ing] the cumulative totals of the flow rates of the
unblended components in the Hoffman compensation process” (id.),
however Patent Owner identifies that Hoffman appears to teach away from
using the flow rates of the unblended components in its calculations because
of the uncertainty in the flow rate of the blended line. Prelim. Resp. 19, 21–
22.
Contrary to Petitioner’s position, it is not Patent Owner’s burden to
show why “a person of ordinary skill in the art would be discouraged from
measuring flow rates upstream for use in the Hoffman compensation
process” (Reh. Req. 9), but rather, Petitioner bears the burden to show why a
person of ordinary skill in the art would measure flow rates upstream for use
in the Hoffman compensation process in view of the all of the teachings of
the references (35 U.S.C. § 314(a) (Institution only authorized if “the
information presented in the petition . . . shows that there is a reasonable
likelihood that the petitioner would prevail with respect to at least 1 of the
claims challenged in the petition.”)).
Petitioner’s arguments do not show that we misapprehended or
overlooked any issue concerning the merits. In sum, Petitioner’s argument
merely reflects a difference of opinion as to how to interpret the evidence or
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the weight to accord certain evidence, none of which demonstrates that we
misapprehended an argument or overlooked evidence.
D. The Fintiv Factors
Petitioner argues that the analysis outlined in Fintiv “is unlawful and
invalid for multiple reasons.” Reh. Req. 9. Before addressing Petitioner’s
particular arguments, we review the Director’s authority to institute or deny
institution of inter partes reviews, which has been delegated to the Board.
The America Invents Act of 2011 (“AIA”), Pub L. No. 112-29, 125
Stat. 28 (Sept. 16, 2011), commits the decision of whether to institute inter
partes review to the Director’s unreviewable discretion, even if the merits of
the petition warrant institution. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct.
2131, 2140 (2016) (explaining that the statute contains “no mandate to
institute review”); see also SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1356
(2018) and Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC,
138 S. Ct. 1365, 1371 (2018) (interpreting § 314(a) as committing the
decision whether to institute inter partes review to the Director’s discretion).
The Director has delegated the authority to institute to the Board. See 37
C.F.R. § 42.4(a) (the “Board institutes the trial on behalf of the Director”);
see also Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023, 1031–
1033 (Fed. Cir. 2016) (determining that the Director has authority to
delegate inter partes review institution decisions to the Board). Fintiv is a
precedential decision that is binding in Board proceedings, and should be
considered when determining whether to exercise discretion to deny
institution under 35 U.S.C. § 314(a).
1. Petitioner’s Arguments
Petitioner provides three reasons why Fintiv is improper. First,
Petitioner argues that “the AIA . . . explicitly provides for one year to file a
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petition for IPR after service of a patent infringement complaint.” Reh. Req.
10 (citing 35 U.S.C. § 315(b)). Second, Petitioner argues that Fintiv
“requires the Board to engage in speculation as to the likely course of
parallel district court litigation.” Id. And third, Petitioner argues that this
type of rule must be promulgated “through notice-and-comment
rulemaking.” Id. at 11. We address each argument below.
Petitioner argues that “the AIA . . . explicitly provides for one year to
file a petition for [inter partes review] after service of a patent infringement
complaint.” Reh. Req. 10 (citing 35 U.S.C. § 315(b)). Thus, Petitioner states
that Fintiv “is unlawful and invalid because it is a final agency action ‘in
excess of statutory jurisdiction, authority, or limitations or short of statutory
right.’” Id. (quoting 5 U.S.C. § 706(2)(C)).
35 U.S.C. § 315(b) states that “[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.” Though the statute provides a limit on
institution, it does not require institution of a inter partes review as argued
by Petitioner. Rather, the Courts have previously determined that there is no
requirement that the Director institute an inter partes review. Cuozzo, 136 S.
Ct. at 2140 (explaining that the statute contains “no mandate to institute
review”); Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1367 (Fed. Cir.
2016) (“[T]he PTO is permitted, but never compelled, to institute an IPR
proceeding.”); see also Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15
at 11‒12 (PTAB May 13, 2020) (informative) (decision denying institution
addressing the same policy arguments).
Next, Petitioner argues that Fintiv “requires the Board to engage in
speculation as to the likely course of parallel district court litigation.” Reh.
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Req. 10. Thus, Petitioner states that Fintiv “is a final agency action that is
‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law.’” Id. (quoting 5 U.S.C. § 706 (2)(A)). Petitioner further argues that
Fintiv
requires the Board to engage in speculation as to the likely course
of parallel district court litigation, the factors are vague and
malleable, and it produces irrational, unpredictable, and unfair
outcomes. For example, the outcome is often determined by the
speed of the particular court and, more recently, could be
determined by the speed and capacity of the particular court to
resume trials and catch up given the backlog of trials during the
coronavirus pandemic.
Id.
Though Petitioner argues that Fintiv “requires the Board to engage in
speculation,” Petitioner does not actually address the underlying facts of the
case, or explain why reliance on the approximate timeline provided in the
District Court’s scheduling order is improper speculation. See above § III.A.
As noted above, at the time of the Decision, we determined that the evidence
showed that even with the Coronavirus pandemic, “the proceeding has not
been sidelined or halted, and continues to move towards trial” and that the
evidence laid out an approximate time frame for when the trial would likely
be held. Dec. 9. Petitioner does not address why this amounts to improper
speculation or why it is “vague and malleable” or “irrational, unpredictable,
and unfair” so as to be “not in accordance with law.” Reh. Req. 10.
Petitioner also argues that the rule in Fintiv must be promulgated
“through notice-and-comment rulemaking.” Id. at 11. This is “because it is a
substantive rule that alters the rights and interests of [inter partes review]
petitioners by permitting the Board to deny institution of [inter partes
review] based on parallel litigation.” Id. However, as already addressed, the
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Courts have already determined that there is no requirement that the Director
institute an inter partes review. Cuozzo, 136 S. Ct. at 2140 (explaining that
the statute contains “no mandate to institute review”); Harmonic, 815 F.3d at
1367 (“[T]he PTO is permitted, but never compelled, to institute an IPR
proceeding.”). Thus, Petitioner does not establish what right or interest is
violated by Fintiv’s setting forth guidelines the Board considers when
determining whether to exercise discretion to deny institution under 35
U.S.C. § 314(a).
Thus, for all of these reasons we are not convinced that Petitioner has
provided sufficient reason for us to reconsider our denial of institution.

IV. CONCLUSION
For the forgoing reasons, Petitioner has not shown that we abused our
discretion in denying the Petition. Accordingly, the Request for Rehearing
is denied.

V. ORDER
It is hereby:
ORDERED that Petitioner’s Request for Rehearing is denied.
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For PETITIONER:
Jeffrey Costakos
Kimberly Dodd
FOLEY & LARDNER LLP
jcostakos@foley.com
kdodd@foley.com

For PATENT OWNER:
John Keville
Michelle Replogle
WINSTON & STRAWN LLP
jkeville@winston.com
mreplogle@winston.com