Paper No Entered: July 31, 2014 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD

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1 Paper No Entered: July 31, 2014 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD APPLE INC., Petitioner, v. RENSSELAER POLYTECHNIC INSTITUTE and DYNAMIC ADVANCES, LLC, Patent Owner. Case IPR Before JOSIAH C. COCKS, BRYAN F. MOORE, and MIRIAM L. QUINN, Administrative Patent Judges. MOORE, Administrative Patent Judge. DECISION Denying Request for Rehearing 37 C.F.R (d)

2 INTRODUCTION Apple Inc. ( Petitioner ) requests rehearing of the Board s Decision (Paper 12) ( Decision ) not to institute an inter partes review of U.S. Patent 7,177,798 (Ex. 1001) ( the 798 patent ). Paper 13 ( Rehearing Req. ). Rehearing Req. 1. For the reasons that follow, Petitioner s request for rehearing is denied. DISCUSSION The applicable standard for a request for rehearing is set forth in 37 C.F.R (d), which provides in relevant part: A party dissatisfied with a decision may file a request for rehearing, without prior authorization from the Board. 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, opposition, or a reply. Petitioner argues that the Decision misapprehends whether the dismissal of Dynamic Advances, LLC v. Apple Inc., No. 1:12-cv DNH-CFH (N.D.N.Y) (Dynamic I) was under Fed. R. Civ. P. 41(a) or Fed. R. Civ. P. 42. The arguments are unpersuasive. Petitioner points to the following language in the Decision as being in error: Petitioner has failed to show that we should treat a dismissal without prejudice pursuant to a consolidation under Fed. R. Civ. P. 42 in the same way as a dismissal without prejudice, without consolidation, under Fed. R. Civ. P. 41(a). Petitioner states that the stipulated voluntary dismissal of the first action was without prejudice pursuant to Rule 41(a)(1)(A)(ii), which is the only authority in the 2

3 Federal Rules that permits the parties to voluntarily dismiss an action without a court order. Rehearing Req. 3. Petitioner reads too much into the cited passage. The Decision states that a voluntary dismissal without prejudice as part of a consolidation, which immediately continues the cause of action, will not be treated as a nullity in this case. Decision 6-7. That is so, because it is not the same as a voluntary dismissal without prejudice, in which the cause of action is not immediately continued. Id. The Decision notes this is particularly so when the stipulation of dismissal indicates that the first cause of action proceed[s] into the second cause of action including the discovery and legal positions taken by the parties in the first action. Id. The Decision, therefore, does not rest on the Federal Rule of Civil Procedure under which the cause of action was dismissed. 1 In other words, whether or not the dismissal could occur under Fed. R. Civ. P. 42 would not change the result of the Decision. Petitioner also states that [t]he Board s decision to treat the consolidation of the pleadings in the two actions as a continuation of the voluntarily dismissed, first action is unsupported by any legal 1 Petitioner suggests that the analogous authority cited in the Decision was inapplicable because it related to a court ordered dismissal. Rehearing Req. 3. We disagree. The general rule regarding treating such dismissed actions as a nullity applies to both court ordered and voluntary dismissals in the statute of limitations context. [T]his principle applies with equal force when the court dismisses a case without prejudice on its own initiative. Norman v. Ark. Dep't. of Educ., 79 F.3d 748, 751 (8th Cir.1996). James W. Moore, Moore's Federal Practice 41.40[9] [b] (3d ed.1999) ( A voluntary dismissal under Rule 41(a)(2) [i.e., court ordered] renders the proceedings a nullity and leaves the parties as if the action had never been brought. ). 3

4 authority. The Board and Patent Owner do not cite, nor can Petitioner find, a single case that supports this proposition. Rehearing Req. 6. We note that the immediate continuation of the case is the relevant fact regarding the consolidation. Additionally, to the extent Petitioner suggests such supporting cases do not exist, we disagree. The Board notes that there are several cases that do not treat the complaint in a first case as a nullity when the first case is voluntarily dismissed without prejudice and the cause of action is continued into a co-pending second case prior to dismissal of the first case. In Gutierrez, plaintiffs initiated an action one day before expiration of the limitations period and filed a second pro se complaint (while the first complaint was still pending) in the same court two months later. Gutierrez v. Vergari, 499 F.Supp. 1040, (S.D.N.Y.1980); but see, In re IndyMac Mortgage Backed Secs. Litig., 718 F.Supp.2d 495, (S.D.N.Y.2010) (declining to follow Gutierrez absent unique facts of Gutierrez case). For the convenience of the court and the parties, it was agreed the first complaint would be dismissed. At the time, neither the court nor the pro se plaintiffs realized that the dismissal would create a statute of limitations problem. The court recognized these unusual circumstances in tolling the statute of limitations, distinguishing the case before it from the usual case where there was an actual interval after the expiration of the limitations period during which no action was pending and defendants may have relied justifiably on the repose provided by the statute of limitations. Id. 4

5 Similarly, in this IPR, there was no interval during which no action was pending. Additionally, in this case the circumstances cited in the Decision include that the discovery and legal positions taken by the parties were continued into the second action. Decision 7. Indeed, we note that the Decision stated that the circumstances of the instant case weigh in favor of close scrutiny of the effect of the dismissal of Dynamic I, because that cause of action, although dismissed, was continued immediately in Dynamic II. Decision 6. Furthermore, the rationale in Gutierrez is consistent with the rationale from the analogous cases cited in the Decision, i.e. [a]n order merely dismissing a complaint without prejudice could result in a significant period of delay prior to the bringing of a new action... [but with a conditional dismissal, t]he conditions specified in the order prevent a plaintiff from indefinitely extending the limitations period. Decision 6 (citation omitted). Additionally, in Cumberland, another Court found that the statute of limitations was tolled when the second action was a new proceeding only in a formal sense, actions were substantively identical in respect to claims against town and the first complaint was dismissed voluntarily only after the second action was filed. Cumberland V.H.A. v. Inh. of Town of Cumberland, 605 F.Supp. 269 (D.Me.1985); see also Marcoux v. Shell Oil Prods. Co., 524 F.3d 33, (1st Cir. 2008) (Marcoux) (affirming district court's decision to permit a newly filed action to relate back to a prior action where the dismissal of the previous action did not occur until after the new pleading was filed). Finally, we note that the Court in Bonneville recognized that an agency has substantial discretion in determining how to treat a voluntarily 5

6 dismissal without prejudice. Bonneville Associates, Ltd. Partnership v. Baram, 165 F.3d 1360, 1364 (Fed. Cir. 1999) ( The Board has substantial discretion to determine whether to reinstate an appeal voluntarily dismissed without prejudice and it did not abuse that discretion here in denying reinstatement. ). Accordingly, we did not misapprehend the effect of the voluntarily dismissal without prejudice of Dynamic I. Petitioners also argue that consolidation is a procedural device that cannot create one merged case and cannot be relied on for relation back to the service date of the first complaint. Rehearing Req We note that courts have allowed relation back when a newly filed action is filed before the dismissal of the previous action, as is the case in a consolidation. See Marcoux, 524 F.3d at Nonetheless, the Board did not rely on the concept of one merged case, but rather determined that, under the facts presented here, the first case could not be considered a nullity for the purpose of establishing a date when Petitioner was first served a complaint. The existence of one merged case is not required for the bar to run under 35 U.S.C. 315(b), rather it is required that the first case have been filed more than a year ago, and not be considered a nullity for the purpose of the 315(b) bar. See IPR , Paper 2-3 (PTAB 2013) (finding that earliest case of two possible cases is the relevant case for determining a 315(b) bar). Petitioner argues, for the first time on rehearing, that the exclusive licensee date of service of the Dynamic I complaint cannot be relied on for the purpose of the 315(b) bar because section 315(b) is entitled Patent Owner s Action and because an exclusive licensee has no right to sue at law in his own name for an infringement. Rehearing Req (internal citations omitted). We note that, in fact, there are situations in which the 6

7 exclusive licensee can sue in its own name for patent infringement. IPR , Paper 27, 3 (PTAB 2013); See, e.g., Sicom Sys. Ltd. v. Agilent Techs., Inc., 427 F.3d 971 (Fed. Cir. 2005); Prima Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372 (Fed. Cir. 2000). Nonetheless, Petitioner did not raise this issue in its Petition. Accordingly, we did not misapprehend or overlook Petitioner s arguments because they previously were not presented. A request for rehearing is not an opportunity to submit new arguments. For the above reasons, we are not persuaded by Petitioner s new arguments regarding standing. Having fully considered Petitioner's arguments, Petitioner's sought-after relief is denied. Accordingly, it is ORDER ORDERED that Petitioner s Request for Rehearing is DENIED. 7

8 For PETITIONER: Jeffrey Kushan For PATENT OWNER: Tarek Fahmi Donald E. Tiller 8

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