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Case3:10-cv-04017-JSW Document55
Filed09/30/11 Page1 of 30
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Edward Kmett (CA Bar No. 204374) ekmett@fchs.com FITZPATRICK, CELLA, HARPER & SCINTO 650 Town Center Drive Suite 1600 Costa Mesa, CA 92626 Telephone: (714) 540-8700 Facsimile: (714) 540-9823 Anthony M. Zupcic (Pro Hac Vice) azupcic@fchs.com Robert H. Fischer (Pro Hac Vice) rfischer@fchs.com Douglas Sharrott (Pro Hac Vice) dsharrott@fchs.com FITZPATRICK, CELLA, HARPER & SCINTO 1290 Avenue of the Americas New York, New York 10112 Telephone: (212) 218-2100 Facsimile: (212) 218-2200 Kenneth R. Adamo (Pro Hac Vice) kradamo@kirkland.com KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654 Telephone: (312) 862-2000 Facsimile: (312) 579-2200 Attorneys For Plaintiff International Business Machines Corporation UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ) ) ) ) ) ) ) ) ) ) ) Case No. C 10-0417 JSW PLAINTIFF IBMS NOTICE OF CROSS MOTION AND MEMORANDUM IN SUPPORT OF IBMS CROSS MOTION FOR SUMMARY JUDGMENT AND IN OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT Date: December 2, 2011 Place & Time: Courtroom 11, 9:00 a.m. Judge: Hon. Jeffrey S. White
INTERNATIONAL BUSINESS MACHINES CORPORATION, Plaintiff, v. RAMBUS INC, Defendant.
CV 10-04017 IBMS CROSS MOTION FOR SUMMARY JUDGMENT AND OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT
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TABLE OF CONTENTS TABLE OF AUTHORITIES ......................................................................................................... iii SUMMARY OF ARGUMENT ...................................................................................................... v NOTICE OF CROSS MOTION ..................................................................................................... 1 STATEMENT OF RELIEF REQUESTED .................................................................................... 1 PRELIMINARY STATEMENT..................................................................................................... 2 STATEMENT OF FACTS ............................................................................................................. 5 A. B. C. D. PTO Procedures for Commencing and Conducting Interferences .......................... 5 How Multiple Patents Claiming the Same Invention Can Arise............................. 7 PTO Treatment of Requests to Add Patents to an Interference .............................. 7 The Background of the Present Proceeding .......................................................... 10
ARGUMENT ................................................................................................................................ 12 I. II. The Standards Governing Summary Judgment ................................................................ 12 The Administrative Procedure Act Governs Whether to Vacate the Board Decision Refusing to Hear IBMs Motions to Add Rambuss Other Interfering Patents and Applications to the Interference..................................................................... 12 The Board Decision Refusing to Hear IBMs Motions to Add Rambuss Other Interfering Patents and Applications to the Interference Should be Vacated Under the Administrative Procedure Act.......................................................................... 13 A. B. The Boards Conclusions Are Unsupported by Substantial Evidence.................. 13 Rambuss Assertions that the Board Acted within its Discretion Are Baseless ................................................................................................................. 15 The Board Refusal to Hear IBMs Motions was an Abuse of Discretion............. 17 1. 2. 3. The Decision Failed to Follow the Controlling Federal Regulation. ................................................................................................ 17 The Decision Was Arbitrary. .................................................................... 18 The Decision Failed to Consider the Harm to IBM. ................................. 19
CV 10-04017 IBMS CROSS MOTION FOR SUMMARY JUDGMENT AND OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT i
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4. 5. 6.
The Decision Failed to Consider the Absence of Harm to Rambus...................................................................................................... 20 The Decision Failed to Consider the Harm to the Public.......................... 21 The Decision Failed to Consider the Harm to the Adjudicative Process. ..................................................................................................... 21
CONCLUSION ............................................................................................................................. 23
CV 10-04017 IBMS CROSS MOTION FOR SUMMARY JUDGMENT AND OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT ii
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TABLE OF AUTHORITIES
Abrutyn v. Giovanniello, 15 F.3d 1048 (Fed. Cir. 1994)..................................................................................... 13, 15 Chevron U.S.A. Inc. v. Mobil Producing Texas & New Mexico, 281 F.3d 1249, 1253 (Fed. Cir. 2002)............................................................................... 12 Heat & Control v. Hester Industries Inc., 785 F.2d 1017 (Fed. Cir. 1986)......................................................................................... 13 IBM v. Rambus Inc., No. C 10-03736 JSW (N.D. Cal. Jan. 12, 2011) ............................................................... 12 In re Sullivan, 362 F.3d 1324 (Fed. Cir. 2004)......................................................................................... 17 Johnson v. Ryan, et al., Interference No. 105,522 (filed Nov. 17, 2009).................................................................. 8 Louis v. Okada, 57 U.S.P.Q.2d 1430 (BPAI 2000)..................................................................................... 22 Rambus v. IBM, Civil Action No. C 10-0417 JSW ....................................................................................... 2 Santarsiero, et al. v. DeLucas, et al., Interference No. 105,403 (filed Feb. 22, 2007)................................................................... 8 Thomas Jefferson University v. Shalala, 512 U.S. 504 (1994) .......................................................................................................... 16 Winters v. Fujita, 53 U.S.P.Q.2d 1478 (BPAI 2000)..................................................................................... 22 Rules & Statutes 35 U.S.C. 120 ......................................................................................................................... 7, 18 35 U.S.C. 135(a) .............................................................................................. v, 2, 15, 16, 17, 22 35 U.S.C. 146 ..................................................................................................................... v, 2, 17 35 U.S.C. 251 ............................................................................................................................. 10 CV 10-04017 IBMS CROSS MOTION FOR SUMMARY JUDGMENT AND OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT iii
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37 C.F.R. 41.1(b) ................................................................................................................. 16, 22 37 C.F.R. 41.202(a)................................................................................................................ 8, 17 37 C.F.R. 41.203(d) ................................................................................................... v, 3, 4, 8, 17 5 U.S.C. 706 ....................................................................................................................... v, 4, 12 5 U.S.C. 706(2)(A)......................................................................................... v, 13, 18, 20, 21, 22 5 U.S.C. 706(2)(E) ..................................................................................................... v, 13, 15, 22 Fed. R. Civ. Pro. 56......................................................................................................................... 1
CV 10-04017 IBMS CROSS MOTION FOR SUMMARY JUDGMENT AND OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT iv
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SUMMARY OF ARGUMENT In the interference conducted below pursuant to 35 U.S.C. 135(a) between plaintiff, International Business Machines Corporation (IBM), and defendant, Rambus Inc. (Rambus), the Board of Patent Appeals and Interferences (Board) found IBM first to invent the subject matter there at issue. However, in an effort to retain patents for that subject matter in the event it lost the interference, Rambus filed related patent applications in the United States Patent and Trademark Office (PTO). IBM sought to bring motions to add to the interference all those related Rambus patent applications and patents (some had already issued), so that the right to the invention in dispute could be efficiently determined in one proceeding. But the Board refused to permit IBM even to bring those motions, and Rambus eventually obtained 16 related patents. In order for IBM to obtain full relief from the four year long interference below, IBM brought this action pursuant to 35 U.S.C. 146. IBM has now moved for summary judgment on the grounds that the order of the Board refusing to permit IBM to bring its motions, as a matter of law, must be set aside pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 706. IBM also opposes Rambuss summary judgment motion. As a matter of law, there was no substantial evidence, as required by 5 U.S.C. 706(2)(E), to support the Boards refusal to hear IBMs motions, and the Boards refusal constituted an abuse of discretion under 5 U.S.C. 706(2)(A). In particular, the Board failed to follow the governing regulation expressly authorizing IBM to bring the motions at issue, 37 C.F.R. 41.203(d). The Boards refusal to permit IBMs motions was also arbitrary, and failed to consider the harm to IBM, to the public at large and to the adjudicative process resulting from its refusal. The Board further failed to consider the absence of any harm to Rambus if the motions were permitted. For these reasons, and as explained more fully below, summary judgment in favor of IBM should be granted. CV 10-04017 IBMS CROSS MOTION FOR SUMMARY JUDGMENT AND OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT v
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NOTICE OF CROSS MOTION PLEASE TAKE NOTICE, that on December 2, 2011, at 9:00 am, or as soon thereafter as counsel may be heard, in Courtroom 11, 19th floor, 450 Golden Gate Avenue, San Francisco, CA, IBM will cross move before the Hon. Jeffrey S. White, United States District Court Judge, for an order granting summary judgment against Rambus. IBM submits this Memorandum of Points and Authorities (Memorandum) in support of its Cross Motion, and in opposition to the Memorandum of Points and Authorities of Rambus filed in support of its Motion for Summary Judgment (Motion). This Memorandum is supported by the Declaration of Andrew Metz (Metz Decl.), formerly a member of the Board, and the previous submissions and orders issued herein (referenced by docket entry number, where applicable). A Proposed Order also accompanies this Memorandum.
STATEMENT OF RELIEF REQUESTED IBM seeks summary judgment pursuant to Fed. R. Civ. Pro. 56 and the Civil Minute Order of this Court dated Jan. 18, 2011, as extended per the Stipulated Order of this Court dated June 15, 2011. IBM specifically seeks that this Court reverse the Order of the Board dated October 11, 2006 (Metz Decl. Exh. L), denying the request of IBMs Drehmel to file its proposed Preliminary Motions 1-10 and 12-17, and remand the case to the Board to re-open Interference No. 105,467 (Interference) for the purpose of hearing those motions, and otherwise according full relief to IBM, as set forth in the attached Proposed Order.
CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 1
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PRELIMINARY STATEMENT This is an action filed by IBM under Section 146 of the Patent Act, 35 U.S.C. 146, seeking review of a Board decision made in the Interference. Under the Patent Act, the PTO is authorized to issue a patent for an invention only to one party. When two or more parties claim the same patentable invention1, and at least one of the parties has a pending patent application, a patent interference is declared in the PTO to determine which party was the first to invent the common invention. 35 U.S.C. 135(a). Contrary to Rambuss statement (Motion at 1-2), the decision to declare an interference is not in the discretion of the PTO, if the result is to award a patent for the same patentable invention to more than one party exactly the situation presented by the present case. The Interference below determined who first invented the subject matter of the claims of IBM reissue Application No.11/203,652 (652 Application), and Rambuss U.S. Patent No. 6,502,161 (161 patent). The PTO Board awarded judgment to IBM as the first inventor, and Rambus commenced an action in this Court under 35 U.S.C. 146 seeking review of that judgment. Rambus v. IBM, Civil Action No. C 10-0417 JSW. On Aug. 25, 2011, Rambus dropped its action and this Court entered a Stipulated Order of Dismissal. (Dkt. no. 74). It is now undisputed that IBM was first to invent the subject matter involved in the Interference. This action by IBM continues because there still are up to sixteen other Rambus patents claiming the same subject matter that IBM invented. All are related to the original 161 patent as either continuations (meaning their disclosures are word-for-word identical) or continuations-in-part (meaning they disclose common subject matter). While the Interference was
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going through the PTO adjudicative process, and in an effort to retain patent claims to that invention even if Rambus lost the Interference, Rambus continued to prosecute and file patent applications related to the 161 patent. Those Rambus patent applications claimed the same or substantially the same subject matter as was involved in the Interference. The PTO patent examiner continued to issue to Rambus related patents. As of now, there is yet another related Rambus patent application pending. (Metz Decl. 38, 46, 52). The Code of Federal Regulations pertinent to interferences expressly provides that a party to an interference can suggest adding to the interference applications and patents not already involved. See 37 C.F.R. 41.203(d). Upon addition of the applications and patents to the interference, all of their claims that are directed to the same invention as the count will be designated to correspond to the count (a count is a claim or claim alternative that defines the interfering subject matter as to which priority which party invented first is determined). The designated claims will then be subject to the interference judgment, and cancelled, in the event their owner loses on priority. (Metz Decl. 16-17). At the start of the Interference IBM asked the Board, in accordance with its usual practice, for permission to bring motions to add to the Interference all of the other related Rambus patents and patent applications. Although the Board did not dispute the possibility that the PTO had issued multiple claims for a single invention in a number of Rambus patents, or that it might be issuing even more of them for that invention, it refused even to permit IBM to file motions explaining its basis for adding the other Rambus patents and patent applications. (Metz Decl. 51 & id. Exh. L). The Board decision refusing to hear IBMs motion was based entirely upon a conclusory assertion unsupported by any analysis. Rambus refers especially to a remark that an Administrative Patent Judge (APJ) assigned to the Interference made in passing during a CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 3
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conference call, that adding the other Rambus claims to the Interference really bogs down the proceeding (Motion at 2, 4, 11, 14 and elsewhere). But there was no substantial evidence to establish the correctness of that conclusory comment, or the other similar conclusory statements that the APJ made. Rambuss Motion itself is devoid of any analysis to support the Boards refusal. It ignores the regulation, 37 C.F.R. 41.203(d), authorizing IBMs motions. Its entire argument for denial of the relief that IBM seeks amounts to this: having filed no less than sixteen related patent applications in an effort to side-step the interference process, it now asks this Court to reward its actions by pointing to the supposed complexity Rambus itself deliberately created (500 claims; see Motion at 1, 2, 5, 6, 11, 12, 13, 14, and elsewhere), to justify the Boards refusal even to hear IBMs motions. In point of fact, and contrary to Rambuss assertions, the number of claims involved in the interference has no bearing on the complexity of an interference priority determination. The issue of priority of invention is determined based not upon the claims, but upon who was the first to invent the subject matter of the count. The number of patents and applications added to the interference, and the number of their claims, does not affect the priority determination. That determination is based solely upon the count, not any of the claims. (Metz Decl. 66). Review of the Boards decision is subject to the APA, 5 U.S.C. 706. As a matter of law, there was no substantial evidence to support the Boards refusal to hear IBMs motions, and not to follow the governing regulation, 37 C.F.R. 41.203(d). IBMs motions would have been heard only once, and deciding those motions involved simply applying the patentability standards well known to the PTO that lie at the core of its mission. Adding the additional Rambus patents and
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claims would have had no impact on subsequent proceedings. Deciding them would not bog down the proceedings. Even apart from the lack of evidentiary basis, as a matter of law the Boards refusal to hear IBMs motions constituted an abuse of discretion. The Board specifically failed to consider the arbitrary nature of its contention that there were too many patents and too many claims to consider; failed to consider the resultant harm to IBM; failed to consider the absence of any harm to Rambus; failed to consider the harm to the public; and failed to consider the harm to the interference process in permitting Rambus to capitalize upon its multiple patent filings so as to render the Interference outcome an empty exercise. As a matter of law, in accordance with the APA, it is submitted that the decision of the Board refusing to hear IBMs motions was not based upon substantial evidence and was an abuse of discretion, such that it should be reversed.
STATEMENT OF FACTS A. PTO Procedures for Commencing and Conducting Interferences Copying the claims of another patent or patent application into a pending application is the most common means by which interference proceedings are started. (Metz Decl. 13). In this case, IBM copied the claims of a number of Rambus patents and applications which, in IBMs view, all claimed the same subject matter. Once an interference presents itself, it is the examiners primary responsibility to set up the parameters of the interference. The examiner must select an appropriate count. The examiner also must designate which claims of the parties correspond to the count. A claim is designated to correspond to the count if it is directed to the same invention as the subject matter of the count, or to an obvious variation of the count. The consequence of designating claims to correspond to a count is CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 5
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important, because when priority is awarded to one party, the losing partys claims previously designated to correspond to the count are subject to the judgment and are cancelled. (Metz Decl. 16-17). The process by which an interference comes about may include the examiner seeking assistance from an APJ regarding how to set up the proceeding. (Metz Decl. 18). In this case, the examiner clearly did. (See Motion at 4 and fn. 3 below). An interference proceeding is an adversarial proceeding decided by a panel of three APJs who are members of the Board. Each party has a right to representation by counsel. The interference is conducted in two phases. In the first phase, the Board hears motions the parties may have been authorized to bring which may affect the scope of the interference. Next there is a second, priority phase, in which the Board receives evidence on the issue of which party invented the contested subject matter first. The Board then makes a determination of priority of invention, and enters judgment in favor of the party determined to be the first inventor. All claims designated to correspond to the count are subject to the priority determination and judgment. (Metz Decl. 17, 21). The parties may seek to make a variety of motions in the motions phase2. Motions can assume critical importance to an interference, and oftentimes will be dispositive of the entire interference. Prior to 2004, the ability to bring motions was a matter of right. However, under current practice, before any party may file any motion, the party first must file a motions list, and
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For example, motions to designate additional claims, un-designate other claims, motions for benefit of the filing dates of other patent applications, motions for judgment of unpatentability of certain claims, based either on the prior art, an alleged lack of descriptive support, or other grounds, or motions to add additional patents and/or patent applications to the interferences, as IBM sought in the interference below. (Metz Decl. 25). CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 6
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the parties then participate in a conference with an APJ assigned to the interference to hear and comment upon the APJs decisions on all proposed motions. (Metz Decl. 25). Just as prevailing on a preliminary motion may critically affect the outcome of an interference, an APJs decision on what motions he or she will allow the parties to file may critically affect the outcome of an interference by providing or denying a party a meaningful opportunity to present its case. (Metz Decl. 26, 32). B. How Multiple Patents Claiming the Same Invention Can Arise Relative to the number of patent applications that are filed each year, it is not common for two patent applications (or one application and one patent) to claim the same subject matter. However, one aspect of patent prosecution practice, referred to as continuation practice (35 U.S.C. 120), has the potential to generate multiple patent applications containing claims to the same basic invention. An applicant is permitted to file multiple continuation applications during the pendency of the original application, each having the same disclosure as the original application, subject only to a statutory restriction not pertinent here. (Metz Decl. 35-36). It is possible then, to end up with multiple patents claiming in different words the same or substantially the same invention, limited only by the imagination of the patent drafter and the financial resources of the patent owner. This is exactly what happened in the case of the Rambus patents at issue here. C. PTO Treatment of Requests to Add Patents to an Interference PTO interference proceedings are not limited by statute or rule to any particular number of parties, nor to any particular number of applications and patents on which the parties are involved. Further, there is no internal PTO practice limiting the number of patent applications and patents that can be involved in an interference. (Metz Decl. 55). The only requirement for declaring an interference is the presence of interfering subject matter in two or more applications, or CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 7
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one application and at least one patent. Interferences have involved multiple patents and multiple patent applications, such as Johnson v. Ryan, et al., Interference No. 105,522 (filed Nov. 17, 2009), which involved five patents and one application (totaling over 189 claims) and Santarsiero, et al. v. DeLucas, et al., Interference No. 105,403 (filed Feb. 22, 2007), which involved six patents and one application (totaling over 447 claims). (Berschadsky Decl. 32-34; Dkt. no. 33). For purposes of economy and efficiency, it is critically important to add to an interference all interfering patents and patent applications of a party. Their claims that are directed to the same patentable invention as the count can then be designated to correspond to the count and, in the event their owner is found not to be the first inventor, those claims will be subject to the judgment of the Board and cancelled. If the additional patents and patent applications are not added to the interference, then their claims will not be subject to the judgment and will still be outstanding after judgment, even though they claim the same patentable invention as was awarded to the other party in the interference. The PTO has recognized the possibility that an interference proceeding, as initially declared, might not embrace all of the patents and applications claiming the interfering subject matter. To avoid the waste in time and money in having to conduct multiple interference proceedings involving the same subject matter, 37 C.F.R. 41.203(d) provides a party with the opportunity to suggest the addition of one or more patents or applications to the interference by filing a suggestion that complies with 37 C.F.R. 41.202(a). Determining whether or not to add additional patents or applications to an interference is a matter well within the training and responsibilities of the PTO generally and Board APJs specifically. The determination simply involves assessing whether the additional patents or applications claim subject matter that interferes with any patent claim of the adverse party to the CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 8
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interference, and which of the claims proposed to be added to the interference are directed to the same subject matter as the count. These determinations are identical to the procedures utilized in setting up an interference in the first place, and are also essentially identical to the patentability determinations that the PTO conducts as a matter of routine in determining whether to allow the claims of a pending application to issue as a patent. (Metz Decl. 65). Further, the number of claims involved in an interference has no bearing on its complexity. Determining priority of invention the central determination of an interference is decided based solely upon who was first to invent the subject matter of the count, not the claims. In the case of patents and applications that interfere, claims directed to the same patentable invention as the count are added in the interference designated to correspond to the count so that they are subject to the judgment, not because they are involved in the priority determination. Once it is determined to add the claims of additional applications or patents to an ongoing interference, the interference proceeds in exactly the same manner as before. The number of patents added to the interference, and the number of their claims designated as corresponding to the count, does not affect the priority determination. (Metz Decl. 66). As a matter of practice, the Board would decline to add an application or a patent to an interference only when some circumstance suggested that doing so would prejudice one or more of the parties. But the fact that an application or patent contained a large number of claims was never a valid reason for not adding additional applications or patents to an ongoing interference. (Metz Decl. 68). This is hardly surprising, given the potential waste in both time and money arising from multiple interference proceedings concerning the same interfering subject matter, in the event of a refusal to add the additional patents and applications to the interference.
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D.
The Background of the Present Proceeding On December 30, 2003, IBM filed United States Patent Application No. 10/747,820, a
reissue application under 35 U.S.C. 251, which included both the original claims 1-10 of the IBMs U.S. Patent No. 6,526,469 and claims 11-59 that were copied from the claims of the Perego 161 Patent. (Metz Decl. 40). After IBM put the copied claims in a divisional patent application (the 652 Application), on April 13, 2006 IBM filed a Request for Declaration of Interference. That Request asked the examiner to involve in the proposed interference, in addition to the Rambus 161 Patent, all the other Rambus patents and patent applications at that time claiming benefit from the 161 Patent. By the time the Interference was declared, Rambus had already filed over fifteen patent applications claiming benefit of priority directly or indirectly from the applications on which the 161 Patent issued, some of which had issued as patents. (See Metz Decl. 42, 46). The Board issued a Declaration of Interference on August 15, 2006 and commenced the Interference between Rambuss 161 Patent and IBMs 652 Application using one single count. (Metz Decl. 40, 66). However, in the Declaration of Interference, the Board did not include the other Rambus patents and patent applications, so none of their claims was involved in the interference. (Metz Decl. 42). To remedy this omission, on October 3, 2006 IBM submitted in the Interference a motions list of eighteen motions which it sought Board authorization to file (Metz Decl. 47): Proposed Preliminary Motion 1. This motion requested issuance of an order requiring Rambus to show cause why any of its patents and applications related to the 161 patent should not be added to the Interference. This motion also sought to require Rambus to show cause why all of the claims of each of those patents and applications should not be designated as corresponding to the Count, given the facts at hand. CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 10
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Proposed Preliminary Motion 2. This motion requested that the Board order the suspension of prosecution in each related Rambus patent application, as well as in any other patent applications claiming benefit directly or indirectly of the patent application that matured into the 161 Patent, unless and until Rambus established separate patentability over the Count of all claims in each such application.
Proposed Preliminary Motion 3-17. These fifteen motions requested that the Board add to the Interference each of the then pending and issued related patents and patent applications of Rambus (one motion per Rambus patent filing), and to designate all of their claims as corresponding to the Count. Following a conference with APJ Medley, on October 11, 2006 the Board issued an
Order declining to authorize IBM to file any of its proposed Preliminary Motions 1-17 (Drehmel is not authorized to file motions to add the fifteen [proposed motions 3-17] various Perego patents and applications to the interference). During the conference preceding the Order, APJ Medley allowed that if IBM (Drehmel) were awarded priority, the Board might be willing to place Rambus under an order to show cause why judgment should not be entered against the other related Rambus patents and application as well. (Metz Decl. 51). But the APJ declined to take any corrective action at the inception of the interference, and declined to permit IBM to file its proposed motions. Because the Board did not authorize IBM to file proposed Motion 2 to suspend, during the course of the Interference Rambus continued to prosecute its related patent applications; in fact, it filed three more. Two of these three have issued as patents, and the third is still pending today. Rambus eventually obtained a total of sixteen related patents. (Metz Decl. 52). On June 24, 2010, the Board entered a judgment on priority in favor of IBM (Senior Party Drehmel) and against Rambus (Junior Party Perego), and cancelled all of the claims of the 161 CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 11
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Patent. (Metz Decl. Exh. P). Rambuss sixteen other related patents remain in force and unaffected by the judgment. Following this, on July 8, 2010 a telephone conference was held with the presiding APJ Lee (prior APJ Medley was no longer assigned to the Interference). Given that IBM (Drehmel) had been awarded priority, counsel for IBM raised the prior APJs suggestion that the Board could take remedial action following IBM prevailing, and asked the Board to place Rambus under an order to show cause why judgment should not be entered against the other related Rambus patents and application as well. But APJ Lee declined, saying I only got the one case and the case is already over.3 (Metz Decl. Exh. Q).
ARGUMENT I. The Standards Governing Summary Judgment IBM concurs with the standards for summary judgment that are set forth in Rambuss Motions (Motion at 7-8); the standards for evaluating a motion for summary judgment are not changed when the parties bring cross-motions, as is the case here. See Chevron U.S.A. Inc. v. Mobil Producing Texas & New Mexico, 281 F.3d 1249, 1253 (Fed. Cir. 2002). II. The Administrative Procedure Act Governs Whether to Vacate the Board Decision Refusing to Hear IBMs Motions to Add Rambuss Other Interfering Patents and Applications to the Interference This Court has previously held that the APA will apply to review by this Court of the decisions of the Board in the interference proceedings below. IBM v. Rambus Inc., No. C 10-04017 JSW, Order Denying Defendants Motion to Dismiss Complaint, at 4 (N.D. Cal. Jan. 12, 2011).
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It is not the case that the Board considered IBMs request on three separate occasions. (Motion at 3-5, 14). Rather, all that the record reflects is that it was considered by APJ Medley once, in setting up the interference, and that she did not later change her mind when IBM submitted its motions list. (See Motion at 4). CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 12
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Under the APA, this court must to set aside findings and conclusions of the Board which are unsupported by substantial evidence. 5 U.S.C. 706(2)(E). Likewise, this court must set aside actions of the Board which are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Id. 706(2)(A). An abuse of discretion has been defined as a decision (1) which is clearly unreasonable, arbitrary or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact findings; or (4) involves a record that contains no evidence on which the Board could rationally base its decision. Abrutyn v. Giovanniello, 15 F.3d 1048, 1050-51 (Fed. Cir. 1994), citing Heat & Control v. Hester Industries Inc., 785 F.2d 1017, 1022 (Fed. Cir. 1986). III. The Board Decision Refusing to Hear IBMs Motions to Add Rambuss Other Interfering Patents and Applications to the Interference Should be Vacated Under the Administrative Procedure Act Rambuss Motion at 8 cites the APA, but fails to apply its standards to the decision of the Board at issue here. When applied, the Boards factual findings are as a matter of law unsupported by any evidence, and the Boards decision refusing to permit IBMs motions to be heard constitutes an abuse of discretion. A. The Boards Conclusions Are Unsupported by Substantial Evidence To justify denying IBM leave to have its motions heard, the Order of the Board states that Adding over five hundred claims to the interference would be unreasonable and unnecessary for a determination of priority of invention. (Metz Decl. Exh. L at 4). Rambus in turn repeatedly relies upon the APJs comment during a conference call that adding the claims to the interference as IBM sought really bogs down the proceeding (Motion at 2, 4, 11, 14 and elsewhere), as well as other passing comments by the APJ, (Motion at 11: unmanageable; complicate things far too much). As a matter of law, there was and is no substantial evidence within the meaning of the APA to support these conclusions. To resolve IBMs motions, all the Board needed to determine was CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 13
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whether or not each of the Rambus patents and applications contained a claim that interfered with a claim of IBMs 652 Application, and if so, which of the Rambus claims were directed to the same subject matter as the count in interference. Those claims would then have been designated to correspond to the count, which would then render them subject to the priority determination and judgment. These determinations which would be done but once in the course of the proceeding are identical to the procedures utilized in setting up the interference, and in deciding other motions rendered during the interference. They are also identical to the patentability determinations that the PTO conducts as a matter of routine in determining whether to allow pending applications to issue as patents. (Metz Decl. 65). As simply another determination of whether an invention is patentable over the prior art, it is a task that is at the core of the PTOs role. (See id.). Once it was determined which claims of the related Rambus applications and patents to designate as corresponding to the count, the Interference would have proceeded in exactly the same manner as before. Determining priority of invention is based solely upon who was first to invent the subject matter of the count, not the number of involved patents and applications, and not the number of corresponding claims. The number of Rambus patents and applications added to the interference, and the number of their claims designated as corresponding to the count whether they number 50, or 500 would have had absolutely no impact on the speed or complexity of the priority determination, which would have remained based on the one single count in the Interference. (See Metz Decl. 66, 76, 84). Thus, as a matter of law, there is no substantial evidence to support the unreasonable conclusion set forth in the Order of the Board, or the really bogs down remark of the APJ upon which Rambus so heavily relies or the other passing comments (unmanageable; complicate things far too much) to which Rambus refers. CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 14
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Likewise the Boards written conclusion that adding the claims to the interference as IBM sought would be unnecessary for a determination of priority of invention (Motion at 4-5) is beside the point and cannot support the Boards refusal. What parties ultimately obtain from the PTO are patent claims. It is patent claims which define their rights, it is patent claims which are enforced against others, and as the real world consequence of an interference it is patent claims that are cancelled when a party loses the priority determination. (Metz Decl. Exh. P at 2). Further, the PTO cannot issue IBMs reissue application as a patent, insofar as there are any patent claims to the same invention, or to obvious variations of that invention, in the other Rambus patents. Nothing could be more necessary to making the interference proceeding relevant than applying its priority determination to all claims directed to the subject matter of the interference. As a matter of law, the Boards conclusions in support of refusing to hear IBMs motions are unsupported by substantial evidence as required by the APA, 5 U.S.C. 706(2)(E). For this reason alone, the Boards refusal must be set aside. See also Abrutyn v. Giovanniello, 15 F.3d 1048, 1050-51 (Fed. Cir. 1994). B. Rambuss Assertions that the Board Acted within its Discretion Are Baseless Absent any factual support for the underlying conclusion that adding the claims to the interference would bog down the proceeding, Rambus resorts in its Motion to a rehash of the arguments it made in its Motion to Dismiss. Rambus incorrectly suggests that Section 135(a) of the Patent Act, 35 U.S.C. 135(a) (Motion at 8), in reciting that the Director of the PTO may declare an interference between a patent and a pending application, confers upon the Board discretion not to adjudicate all interfering patents and applications. To the contrary, the PTO cannot issue patents to multiple parties covering the same invention. The only question is whether the requisite subject matter jurisdiction exists a pending application claiming the same invention as another application or issued patent. See 35 U.S.C. CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 15
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135(a). If it does, and there is no outstanding basis for rejecting the pending application, the PTO must resolve the matter by interference. Such was and is the case here. Rambus tries to portray the Boards procedural requirement for a motions list as granting the Board unfettered discretion to permit or deny motions. (Motion at 8). That is incorrect; the Boards Standing Order itself states that the motions list is merely intended as a tool for planning. (Metz Decl. Exh. C 204). Contrary to Rambuss statement (Motion at 8), the recital in the Boards Standing Order that the motions list provides the Board general assistance to determine whether a proposed motion is necessary and sufficient to resolve the issues raised, itself suggests that the Board should have heard IBMs motions: Here; IBM won the interference and is undisputedly the first inventor of the interfering subject matter, the count, yet the PTO still cannot issue the pending IBM reissue application, since the related Rambus patents that were not added to the interference continue to claim the same invention. (See Metz Decl. 83). Rambus is also incorrect in characterizing the present action as one involving an executive agencys interpretation of its own regulations. (Motion at 9, 10). Thomas Jefferson University v. Shalala, 512 U.S. 504 (1994), cited by Rambus, concerned the interpretation that the Dept. of Health & Human Services accorded a regulation dealing with what constituted an unreimbursable redistribution of costs under the Social Security Act. Denying IBM leave to bring motions is an adjudicative act, not an interpretation of a federal regulation. 37 C.F.R. 41.1(b), mandating that all of the other rules regulating practice before the Board are to be construed to secure the just, speedy, and inexpensive resolution of every proceeding, holds true generally for the administration of the laws of Congress by the Board, the PTO and every other executive agency, whether or not reduced to a rule. It not an independent source of Board discretion.
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4
The action of the Board in denying IBM leave to bring its motions is not immunized from review under the APA.4 C. The Board Refusal to Hear IBMs Motions was an Abuse of Discretion Absent substantial evidence to support it, as a matter of law the action of the Board in refusing to hear IBMs motions constitutes an abuse of discretion. Yet even apart from this, an evaluation of the Boards action demonstrates that as a matter of law that action was clearly unreasonable and arbitrary, requiring reversal under the guidelines of the APA. 1. The Decision Failed to Follow the Controlling Federal Regulation.
37 C.F.R. 41.203(d) expressly provides that a party may suggest the addition of a patent or application to the interference or the declaration of an additional interference. IBMs proposed motions to add the additional Rambus patents and applications were squarely authorized by this rule. (Metz Decl. 60). The only prerequisite provided by the rule is that the suggestion include the supporting information set forth in 37 C.F.R. 41.202(a), such as the identification of the claims believed to interfere and other supporting information. Notably, there is no limitation in the supporting information requirement of 37 C.F.R. 41.202(a) as to the number of claims that can be raised. There is also no limitation in either 41.203(d) or 41.202(a) that the suggestion is authorized only if the Board is willing to hear it. Yet the Board failed to follow this authority, or explain why it was that its too many claims conclusion would trump the express regulatory authorization of IBMs motions. It was
In re Sullivan, 362 F.3d 1324 (Fed. Cir. 2004), contended by Rambus to hold broadly that upon determining priority, the Board has discretion to terminate the interference without more, (Motion at 12), only concerned the Board not being required to make a patentability determination after determining priority, as the governing statute (35 U.S.C. 135 (a)) indicates on its face. It has nothing to do with the case at hand, and does not divest this Court of the jurisdiction conferred upon it by 35 U.S.C. 146 to review the decision of the Board at issue here. CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 17
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therefore an abuse of discretion for the Board not to have permitted IBMs motions and must be set aside under 5 U.S.C. 706(2)(A). 2. The Decision Was Arbitrary.
The Rambus patents and applications at issue here are related. All claim benefit of the same original patent application, which issued as the Perego 161 patent in interference. This means that Rambus believes that they disclose common subject matter. Further, twelve of these Rambus patent applications (out of the seventeen that issued as patents or are still pending) were continuations of the application that issued as the Perego 161 patent. By statute (35 U.S.C. 120) this means that their disclosures were word-for-word identical to the disclosure of the Perego 161 patent and any claim in the continuing application had to find support in the disclosure of the 161 patent. While it may be that a single application for patent could disclose 17 patentably separate inventions, that is highly unlikely especially where the 161 patent is itself only 18 columns long.5 But the Board entirely failed to address these factors in its ruling denying IBM permission to file its motions. The fact is that if Rambus had placed some or all of its claims of its related applications in one application, the Board would necessarily have considered whether those claims were to be added to the interference6. (Metz Decl. 84). Hence, the present situation arose simply as a consequence of Rambuss calculated election to put its claims in multiple patent applications, rather than one, in an effort to shield those claims from judgment in the Interference.
5
A number of the Rambus patents were rejected during their prosecution for double-patenting in view of the 161 patent meaning that the PTO believed that Rambus was trying to patent an obvious variation of the same basic invention as in the 161 patent claims. The PTO will allow this if a terminal disclaimer is filed in the later application, which insures that the later filed patent will expire not later than the earlier filed patent, and is not separately assigned. Rambus did not contest these rejections, but rather merely filed terminal disclaimers. Given that the PTO had already concluded that these Rambus patents (which contain over 100 claims; see Berschadsky Decl. 17; Dkt. no. 33) were claiming the same invention as in the Interference, the Boards refusal to hear IBMs motions as to them is inexplicable. (Metz Decl. 85-87).
6
The PTO has undisputedly issued patents with 500 or more claims. CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 18
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It was therefore entirely arbitrary for the Board not to have permitted IBMs motions, and therefore an abuse of discretion. See also Abrutyn v. Giovanniello, 15 F.3d 1048, 1050-51 (Fed. Cir. 1994). 3. The Decision Failed to Consider the Harm to IBM.
The purpose of adding additional applications or patents to the ongoing Interference is to avoid piecemeal determination of the question of priority. Yet the Board refusal to hear IBMs motions, if allowed to stand, forces IBM to seek additional interferences to determine who invented the subject matter already awarded to IBM in the proceeding below, with no clear date of final determination in sight. This would subject IBM (and the PTO generally) to additional time and expense burdens which could have been avoided by hearing and deciding IBMs motions. Contrary to Rambuss contentions, there are no real alternative paths that give IBM satisfactory resolution (Motion at 11); the fact that IBM is seeking to preserve its legal rights to pursue, if it must, further interferences does not change matters (Motion at 5). Without the relief requested here, IBM will be compelled to seek additional interferences concerning the same claimed subject matter that IBM has undisputedly invented first, rather than obtaining full resolution in the initial Interference which, with this 146 action, has now extended over a five year time period 7. Yet even those interferences cannot proceed, because, as Rambus admits, the PTO has suspended prosecution of the IBM applications in which the Rambus patent claims were copied. Rambuss assertion that the suspension will be lifted merely at IBMs request (Motion at 11) is without basis. And it is not the case that the PTO will grant a patent on IBMs involved
7
Rambus states that IBM is availing itself of the opportunity to seek one or more interferences involving the Rambus patent claims that it tried to have included in the Interference, and that IBM has a copending application containing claims copied from the other Rambus patents presumably with the intent to provoke additional interferences. (Motion at 3, 5). These efforts to preserve whatever rights IBM can salvage are no substitute for the speedy, inexpensive and just outcome that IBM seeks, and is entitled to by law, in its action here. CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 19
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application, as Rambus contends (Motion at 11) the PTO cannot grant IBM the patent, if there are still claims in the other Rambus patents directed to the same patentable invention. In any event, removal of the suspension without subjecting Rambuss other patents to the interference judgment would simply start in motion a process having no clear ending. Once the prosecution of the IBM applications are permitted to resume, it is possible that the Board will simply institute one interference at a time (as Rambus has argued), each involving one Rambus patent, plus the IBM application in which the Rambus claims were copied. Each interference might involve motions to determine which claims correspond to the count, as well as a new priority determination, if the count differs from that utilized in the interference below. Given the number of involved Rambus patents, a full resolution could take years, and it may be that the patents will expire before all the interferences could be resolved. (Metz Decl. 89). Of course Rambus is contending here that the PTO process should be allowed to run its course (Motion at 3) because if it does, Rambus will have been able to retain claims to the technology IBM invented first. The Boards failure to consider the harm to IBM by refusing to hear IBMs motions was clearly unreasonable, arbitrary and not in compliance with 5 U.S.C. 706(2)(A). 4. The Decision Failed to Consider the Absence of Harm to Rambus.
Nowhere in its Motion has Rambus identified any legitimate prejudice that it would be caused if the Board were to hear IBMs motions. The reason is because there would be none. The sound practice of the Board has been to add a patent or application to an interference, except when some circumstance indicates that there would be prejudice to one of the parties. (Metz Decl. 67). Rambus has identified no such prejudice in its Motion. The Board was clearly unreasonable in departing from this practice under the facts at hand. CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 20
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5.
The Decision Failed to Consider the Harm to the Public.
The refusal of the Board to hear IBMs motions leaves up to sixteen other Rambus patents in force that may contain claims to the same invention as the IBM reissue application, which prevailed over the Rambus 161 patent. In consequence, the public at large must take into account the presence of two parties claiming the same patented invention. The Boards refusal to hear IBMs motions has the potential to inhibit use of the patented subject matter, as well as render uncertain any licensing that a third party may wish to consider. Here too then, the Boards failure to consider the harm to the public by refusing to hear IBMs motions was clearly unreasonable, arbitrary and not in compliance with 5 U.S.C. 706(2)(A). 6. The Decision Failed to Consider the Harm to the Adjudicative Process.
Rambus in its Motion does not offer any explanation as to why it filed eighteen different patent applications over the course of nine years claiming priority from the 161 patent. The reason for its silence is apparent, because it was done in large measure to preserve for itself the subject matter in interference, in the event of an adverse decision; to claim the same invention, over and over, in a variety of permutations, in the hope that the PTO would myopically deal with the applications, one at a time, and ultimately allow at least some of them indeed, as turns out, virtually all of them to issue. In its Motion, Rambus repeatedly points with pride to the over 500 claims that it filed (Motion at 1, 2, 5, 6, 11, 12, 13, 14, and elsewhere), and seeks to rely here on the supposed complexity Rambus itself created, to justify the Boards refusal to hear IBMs motions. IBMs motions were occasioned by Rambus conduct of filing a number of related applications all asserting priority benefit from the same patent involved in this interference (coupled with the same PTO examiner allowing the claims of those applications, despite a specific PTO practice not to do so once CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 21
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an interference was declared; see Metz Decl. 84). The Boards failure to hear IBMs motions provides incentive for other parties to side-step the interference process. Given the foregoing factors, Rambuss reliance on the Board ruling in Louis v. Okada, 57 USPQ2d 1430 (BPAI 2000), is misplaced. That Board ruling involved a patent patent application interference, in which the Board declined to add patents8 on the side of the application, on the basis it would be divested of subject matter jurisdiction under 35 U.S.C. 135(a). As an alternative ground, the Board declined to add the patents to keep this interference simple. Here however, the multiple labyrinth-like procedures extending over the course of years, which may result from the Boards decision in this instance, hardly keeps things speedy, inexpensive or simple. The corruption to the integrity of the process occasioned by Rambuss maneuverings, and the failure of the Interference to fully and conclusively determine all claims to the interfering subject matter, is not just. The rule of construction in 37 C.F.R. 41.1(b), and the Board decision in Louis v. Okada, provide no support for the refusal of the Board to hear IBMs motions to add Rambuss related patents and applications to the Interference. The Boards failure to consider the harm to the adjudicative processs by refusing to hear IBMs motions was clearly unreasonable, arbitrary and not in compliance with 5 U.S.C. 706(2)(A). As a matter of law, the Boards decision was not in accord with the APA: it was not based upon substantial evidence, as required by 5 U.S.C. 706(2)(E), and it constituted an abuse of discretion, in contravention of 5 U.S.C. 706(2)(A).
23 24
Winters v. Fujita, 53 U.S.P.Q.2d 1478 (BPAI 2000), another Board ruling that Rambus relies upon (Motion at 2, 9), did not involve a motion to add patents or patent applications to an interference. CV 10-04017 IBMS OPPOSITION TO RAMBUSS MOTION FOR SUMMARY JUDGMENT AND CROSS MOTION FOR SUMMARY JUDGMENT 22
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Dated: September 30, 2011
CONCLUSION The decision of the Board declining to hear IBMs motions was, as a matter of law, not based upon substantial evidence, was an abuse of discretion, and should be reversed.
Respectfully submitted, By: s/ Edward Kmett Edward Kmett (Pro Hac Vice) FITZPATRICK, CELLA, HARPER & SCINTO 650 Town Center Drive Suite 1600 Costa Mesa, CA 92626 Telephone: (714) 540-8700 Facsimile: (714) 540-9823 Anthony M. Zupcic (Pro Hac Vice) Robert H. Fischer (Pro Hac Vice) Douglas Sharrott (Pro Hac Vice) FITZPATRICK, CELLA, HARPER & SCINTO 1290 Avenue of the Americas New York, New York 10104-3800 Telephone: (212) 218-2100 Facsimile: (212) 218-2200 Kenneth R. Adamo (Pro Hac Vice) KIRKLAND& ELLIS LLP 300 North LaSalle Chicago, IL 60654 Telephone: (312) 862-2000 Facsimile: (312) 579-2200 Attorneys for Plaintiff International Business Machines Corporation
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 below:
CERTIFICATE OF SERVICE I hereby certify, under penalty of perjury, that on September 30, 2011 a true and correct copy of the foregoing was filed electronically via the Courts ECF system, pursuant to Civil L.R. 5-4, and served electronically, pursuant to Civil L.R. 5-5(b) and this Courts General Order No. 45(IX), on all counsel of record, including: Counsel for Plaintiff, Rambus Inc. Tina E. Hulse tina.hulse@finnegan.com A courtesy copy of the foregoing was also served by e-mail on counsel for Plaintiff listed Barbara Clarke McCurdy barbara.mccurdy@finnegan.com Naveen Modi naveen.modi@finnegan.com Date: September 30, 2011 /s/_Edward A. Kmett__________

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Case3:10-cv-04017-JSW Document55

INTERNATIONAL BUSINESS MACHINES CORPORATION, Plaintiff, v. RAMBUS INC, Defendant.

The Decision Failed to Consider the Harm to the Public.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Dated: September 30, 2011

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