Trials@uspto.gov Paper 13 571-272-7822 Entered: September 16, 2013 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD SONY CORPORATION OF AMERICA and HEWLETT-PACKARD CO. Petitioners v. NETWORK-1 SECURITY SOLUTIONS, INC. Patent Owner Case IPR2013-00495 Before JAMESON LEE, JONI Y. CHANG, and JUSTIN T. ARBES, Administrative Patent Judges. ARBES, Administrative Patent Judge. DECISION Petitioners Motion for Joinder 37 C.F.R. 42.122
Introduction Sony Corporation of America ( Sony ) and Hewlett-Packard Co. ( HP ) (collectively, Petitioners ) filed a Petition (Paper 3) ( Pet. ) to institute an inter partes review of claims 6 and 9 of (the 930 patent ) pursuant to 35 U.S.C. 311 et seq. and a motion for joinder with Case IPR2013-00071 (Paper 7) ( Mot. ). 1 Patent Owner Network-1 Security Solutions, Inc. ( Network-1 ) filed an opposition to Petitioners motion. IPR2013-00071, Paper 45 ( Network-1 Opp. ). Avaya Inc. ( Avaya ), the first petitioner in Case IPR2013-00071, also filed an opposition to Petitioners motion. IPR2013-00071, Paper 46 ( Avaya Opp. ). Dell Inc. ( Dell ), the second petitioner in Case IPR2013-00071, 2 did not file an opposition. For the reasons that follow, Petitioners motion for joinder is granted. 3 Analysis The America Invents Act (AIA) created new administrative trial proceedings, including inter partes review, as an efficient, streamlined, and cost-effective alternative to district court litigation. The AIA permits the joinder of like proceedings. The Board, acting on behalf of the Director, has 1 Petitioners appear to have filed two copies (Papers 6 and 7) of their motion for joinder in the Patent Review Processing System (PRPS). Paper 6 will be expunged. 2 Dell was joined as a party to Case IPR2013-00071 on July 29, 2013. See IPR2013-00385, Paper 17. 3 In a decision entered concurrently, the Petition is granted and a trial is instituted on the same grounds as in Case IPR2013-00071. 2
the discretion to join an inter partes review with another inter partes review. 35 U.S.C. 315. Section 315(c) provides (emphasis added): JOINDER. If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314. Thus, joinder may be authorized when warranted, but the decision to grant joinder is discretionary. See 35 U.S.C. 315(c); 37 C.F.R. 42.122. The Board will determine whether to grant joinder on a case-by-case basis, taking into account the particular facts of each case, substantive and procedural issues, and other considerations. See 157 CONG. REC. S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) (when determining whether and when to allow joinder, the Office may consider factors including the breadth or unusualness of the claim scope and claim construction issues). When exercising its discretion, the Board is mindful that patent trial regulations, including the rules for joinder, must be construed to secure the just, speedy, and inexpensive resolution of every proceeding. See 35 U.S.C. 316(b); 37 C.F.R. 42.1(b). A motion for joinder should: (1) set forth the reasons why joinder is appropriate; (2) identify any new grounds of unpatentability asserted in the petition; (3) explain what impact (if any) joinder would have on the trial schedule for the existing review; and (4) address specifically how briefing and discovery may be simplified. See IPR2013-00004, Paper 15 at 4; Frequently Asked Question ( FAQ ) H5 on the Board s website at http://www.uspto.gov/ip/boards/bpai/prps.jsp. 3
Timeliness of Petitioners Motion As an initial matter, Network-1 and Avaya both argue that joinder is prohibited by 37 C.F.R. 42.122(b), which specifies that [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. See Network-1 Opp. 1-3; Avaya Opp. 2-3. Specifically, the Board instituted an inter partes review in Case IPR2013-00071 on May 24, 2013, and Petitioners filed their motion in the instant proceeding on August 6, 2013. Petitioners contend that their motion for joinder is timely because it was filed within one month of July 29, 2013, the date on which an inter partes review was instituted in Case IPR2013-00385, which was joined with Case IPR2013-00071. Mot. 8-9. We agree with Network-1 and Avaya that Petitioners request for joinder was filed after the one-month period set forth in 37 C.F.R. 42.122(b). On July 29, 2013, the Board instituted a trial in Case IPR2013-00385 (the 385 proceeding ), joined the 385 proceeding with Case IPR2013-00071, and terminated the 385 proceeding under 37 C.F.R. 42.72. IPR2013-00385, Paper 17 at 10-11. Petitioners, however, still may seek joinder with pending Case IPR2013-00071. Under 37 C.F.R. 42.5(b), the Board may waive or suspend a requirement of [part 42 of the Board s rules] and may place conditions on the waiver or suspension. Petitioners argue that special circumstances exist justifying waiver of the one-month time period for requesting joinder with Case IPR2013-00071. Mot. 1-4. We turn now to whether such circumstances exist and whether the Board should exercise its discretion to join Petitioners, taking into account substantive, procedural, and other considerations. 4
Substantive Issues Petitioners argue that joinder with Case IPR2013-00071 will not impact the Board s ability to complete the proceeding in one year because Petitioners do not raise any issues that are not already before the Board. Mot. 4-5, 11-13. We agree. Petitioners in their Petition assert the same grounds of unpatentability as those on which a trial was instituted in Case IPR2013-00071. See Pet. 10-11; IPR2013-00071, Paper 18 at 29. Petitioners arguments regarding the asserted prior art references are identical to the arguments made by Avaya and Dell in their petitions. Compare Pet. 21-40, with IPR2013-00071, Paper 1 at 17-26, 36-45, and IPR2013-00385, Paper 2 at 17-35. Further, Petitioners submit the same declaration of Dr. George A. Zimmerman that Dell submitted in support of its petition, which itself was largely a copy of the declaration of Dr. Zimmerman submitted by Avaya. See Ex. 1011; IPR2013-00071, Ex. 1011; IPR2013-00385, Ex. 1011. Thus, the Petition raises no new issues beyond those already before the Board in the existing proceeding, which weighs in favor of joinder. See 157 CONG. REC. S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) ( The Office anticipates that joinder will be allowed as of right if an inter partes review is instituted on the basis of a petition, for example, a party that files an identical petition will be joined to that proceeding, and thus allowed to file its own briefs and make its own arguments. ) (emphasis added). Procedural Issues Petitioners argue that joinder would not require any change to the trial schedule in Case IPR2013-00071 because Petitioners raise the same grounds 5
of unpatentability and agree to an understudy role if joined. Mot. 4-5, 11-13. Specifically, Petitioners agree to the following role if joined to the existing proceeding: As long as both Avaya and Dell remain in the joined IPRs, Petitioners agree to remain in a circumscribed role without a separate opportunity to actively participate. Thus, Petitioners will not file additional written submissions, nor will they pose questions at depositions or argue at oral hearing without the prior permission of Avaya or Dell. Only in the event that at least one party settles will Petitioners seek to become active in the joined IPRs. If either Dell or Avaya settle, Petitioners can assume the second chair role, with its role dictated according to the same rules that govern Dell s current second chair role. (If Avaya were to settle, Dell would then assume the first chair position.) If both Avaya and Dell settle, then Petitioners would together assume the first chair position. Id. at 4-5. Petitioners further contend that joinder would not impose any additional burden or costs on the existing parties because of Petitioners limited understudy role. Id. at 4, 14-15. For example, the existing petitioners (Avaya and Dell) would not need to coordinate with Petitioners regarding any filings or depositions. Id. at 14-15. Network-1 and Avaya do not dispute these assertions by Petitioners. Given the fact that joinder would require no change to the existing trial schedule and the fact that Petitioners agree to have only a limited understudy role if joined, the procedural impact of joinder on the existing proceeding would be minimal. This weighs in favor of joinder. Other Considerations Petitioners argue that special circumstances exist for granting the motion outside the one-month time period because Petitioners, unlike any 6
other party in [the] related proceedings, have tried multiple times to participate in an inter partes review of the 930 patent. Mot. 2. Sony, Axis Communications AB, and Axis Communications Inc. filed a petition seeking inter partes review on December 19, 2012, which the Board denied on May 24, 2013. See IPR2013-00092, Papers 8, 21. Sony, HP, Axis Communications AB, and Axis Communications Inc. then filed another petition and motion for joinder on June 24, 2013, which the Board denied on July 29, 2013. See IPR2013-00386, Papers 1, 15, 16. Sony and HP then filed their Petition and motion in the instant proceeding on August 6, 2013. The fact that Petitioners attempted previously within the one-month time period to be joined to Case IPR2013-00071 weighs in favor of considering Petitioners request outside the one-month time period. Network-1 and Avaya argue that permitting joinder would discourage settlement between the existing parties because, even if the existing parties settle, Petitioners would still be a part of the proceeding and the proceeding could not be terminated under 35 U.S.C. 317. See Network-1 Opp. 9-10; Avaya Opp. 6-7, 9-10. According to Network-1 and Avaya, joining additional parties is against the strong public policy in favor of settlement for the same reason. See id. Avaya further argues that permitting joinder in this proceeding would encourage a possible infinite string of follow-on IPR petitions by third parties, as well as petitions and motions for joinder with complete disregard for the promulgated time periods for doing so. Avaya Opp. 6-7. While we are mindful of Network-1 and Avaya s concerns regarding settlement and encouraging early joinder requests, every request for joinder has its own factual circumstances. For each request, the Board analyzes the 7
facts presented and determines whether to exercise its discretion to join, taking into account all of the particular facts and circumstances and the need to complete proceedings in a just, speedy, and inexpensive manner. See 35 U.S.C. 316(b); 37 C.F.R. 42.1(b); 157 CONG. REC. S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) ( The Director is given discretion... over whether to allow joinder. This safety valve will allow the Office to avoid being overwhelmed if there happens to be a deluge of joinder petitions in a particular case. ). Joinder is not automatic, and the fact that joinder is permitted in one case under one set of facts does not mean it will be allowed in another case under a different set of facts. In the instant proceeding, the possible chilling effect that joinder may have on settlement discussions between Network-1, Avaya, and Dell must be weighed with all of the other facts. Finally, Avaya argues that Petitioners are attempting to engage in improper party substitution, which is not permitted by the AIA. Avaya Opp. 8-9. Avaya cites the following commentary to the Board s rules: Comment 88: One comment requested clarification on the timing for requesting joinder of parties or replacement of a consenting petitioner, and suggested that the Office permit joinder and replacement until the time of a final written decision under appropriate circumstances. The comment further suggested a list of factors that the Office might consider in determining whether to permit voluntary joinder or replacement (e.g., the impact on the Scheduling Order). Another comment requested guidance as to when joinder might occur. Response: Joinder may be requested by filing a motion within one month of the date that the trial is instituted. When the Office determines whether to grant a motion for joinder, the Office will consider the particular facts of each case including how the consolidation of the reviews impacts the Office s 8
ability to complete reviews timely. In view of this comment, the Office modified 42.122 and 42.222 to provide expressly for the time period for filing a request for joinder. The AIA, however, does not provide for the replacement of a party. A petitioner may settle with the patent owner and upon entering the joint request, the review will terminate with respect to the petitioner. 35 U.S.C. 317, as amended, and 35 U.S.C. 327. Changes to Implement Inter Partes Review Proceedings, Post-Grant Review Proceedings, and Transitional Program for Covered Business Method Patents; Final Rule, 77 Fed. Reg. 48680, 48707 (Aug. 14, 2012); see Mot. 8-9. Petitioners, however, are not seeking to replace an existing petitioner that settled with Patent Owner, whereby the review would terminate with respect to that petitioner only under 35 U.S.C. 317, but rather to join the existing proceeding before such settlement occurs. Given the unique circumstances presented here namely, that Petitioners asserted grounds and arguments are identical to those already at issue in the existing proceeding, joinder would require no change to the trial schedule, joinder would impose no added burden on the existing parties because Petitioners are willing to have only a limited understudy role, and Petitioners attempted previously within the one-month time period to be joined we exercise our discretion to waive the one-month requirement under 37 C.F.R. 42.122(b). We further conclude that Petitioners have demonstrated that joinder is warranted under the circumstances. Petitioners will be joined to Case IPR2013-00071 in a limited role. If at some point Case IPR2013-00071 is terminated with respect to either of the existing parties Avaya and Dell (or both), the role of any remaining party or parties in the proceeding will be reevaluated. 9
Order In consideration of the foregoing, it is hereby: ORDERED that Petitioners motion for joinder with Case IPR2013-00071 is granted; FURTHER ORDERED that this proceeding is joined with Case IPR2013-00071; FURTHER ORDERED that the grounds on which a trial was instituted in Case IPR2013-00071 are unchanged; FURTHER ORDERED that the Revised Scheduling Order entered in Case IPR2013-00071 (Paper 39) shall govern the schedule of the joined proceedings; FURTHER ORDERED that Case IPR2013-00495 is instituted, joined, and terminated under 37 C.F.R. 42.72 and all further filings in the joined proceedings shall be made in Case IPR2013-00071; FURTHER ORDERED that unless given prior authorization by the Board, Petitioners are not permitted to file papers, engage in discovery, or participate in any deposition or oral argument in Case IPR2013-00071. Petitioners are, however, permitted to appear in Case IPR2013-00071 4 so that they receive notification of filings and may attend depositions and oral argument. Should Petitioners believe it necessary to take any further action, Petitioners should request a conference call to obtain authorization from the Board; 4 Counsel for Avaya, Dell, Sony, and HP should refer to the Board s website, in particular FAQs C3, D5, and G8, for information regarding filings in PRPS. See http://www.uspto.gov/ip/boards/bpai/prps.jsp. 10
FURTHER ORDERED that the role of Avaya and Dell in the joined proceedings, as specified in IPR2013-00385, Paper 17, remains unchanged; FURTHER ORDERED that the case caption in Case IPR2013-00071 shall be changed to reflect the joinder with this proceeding in accordance with the attached example; FURTHER ORDERED that a copy of this Decision be entered into the file of Case IPR2013-00071; and FURTHER ORDERED that Paper 6 (a duplicate copy of Paper 7) is expunged from the record of the instant proceeding. 11
PETITIONERS: Lionel M. Lavenue Erika Arner FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP lionel.lavenue@finnegan.com erika.arner@finnegan.com Robert J. Walters Charles J. Hawkins McDERMOTT WILL & EMERY LLP rwalters@mwe.com chawkins@mwe.com PATENT OWNER: Charles F. Wieland III Robert G. Mukai BUCHANAN, INGERSOLL & ROONEY P.C. Charles.Wieland@BIPC.com Robert.Mukai@BIPC.com 12
UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD AVAYA INC., DELL INC., SONY CORPORATION OF AMERICA, and HEWLETT-PACKARD CO. Petitioners v. NETWORK-1 SECURITY SOLUTIONS, INC. Patent Owner Case IPR2013-00071 15 15 Cases IPR2013-00385 and IPR2013-00495 have been joined with this proceeding.