Patent Owner Ordered To Produce Infringement Contentions

by | Jul 13, 2022 | Discovery, District Court, PTAB News

By Connor Scholes,* Evan Jones, and Matt Johnson –

On May 3, 2022, a panel of three PTAB administrative patent judges granted a motion for additional discovery in TCL Industries Holdings Co., Ltd. v. Parkervision, Inc., IPR2021-00985, (PTAB 2022), in which the PTAB deemed the Final Infringement Contentions from the district court litigation between the parties discoverable for purposes of the IPR proceeding.

Petitioners TCL Industries Holdings Co., Ltd. and subsidiaries, Hisense Co., Ltd. and subsidiaries, and LG Electronics, Inc. brought inter partes review challenging the validity of U.S. Patent No. 7,292,835 (“the ’835 Patent”) owned by ParkerVision, Inc. (“Patent Owner”). The ’835 patent relates to the conversion of high-frequency signals to low-frequency signals through a process called “down-conversion,” which has applications in the electronics industry. Petitioners sought cancellation of nine claims directed to cable modem applications of down conversion, arguing that the nine challenged claims were obvious over U.S. Patent Nos. 5,734,683, 4,682,117, and 5,339,459 because, like the ’835 Patent, the prior art patents contained two down-conversion modules, a local oscillator, and a phase-shifter.

Patent Owner also asserted the ’835 patent, among others, against Petitioners in the Western District of Texas. See ParkerVision, Inc. v. TCL Industries Holdings Co., Ltd., No. 6:20-cv-00945, (W.D. Tex.); ParkerVision Inc. v. Hisense Co., Ltd. 6:20-cv-00870 (W.D. Tex,); ParkerVision, Inc. v. LG Electronics, No. 6:21-cv-00520 (W.D. Tex.). In those proceedings, Patent Owner accused the petitioners of infringement through the manufacture, importation, and sale of televisions that contain or use Patent Owner’s patents.

In the IPR proceeding, Petitioners moved for an order from the PTAB that Patent Owner produce their Final Infringement Contentions from the district court proceedings  Petitioners reasoned the Final Infringement Contentions were relevant because Patent Owner’s position on the construction of two contested claims in district court was inconsistent with its position in the IPR proceeding.  According to Petitioners, Patent Owner asserted in district court that the Final Infringement Contentions should be confidential because there was a nondisclosure agreement between Patent Owner and a third party that produced circuit diagrams depicted in the infringement contentions. The circuit diagrams were obtained by the third party’s reverse engineering of smart TVs, which allegedly contained infringing Wi-Fi chips.

In support of their discovery motion, Petitioners argued that the Final Infringement Contentions were “routine” discovery under 37 C.F.R. § 42.51(b)(2)(iii), and, separately, should be produced “in the interest of justice” under 37 C.F.R. § 42.51(b)(2)(i).  See IPR2021-00985, Paper 18.  In opposition, Patent Owner argued that Petitioners’ arguments were raised as “improper efforts to bolster its petition through discovery,” that Patent Owner’s positions were, in fact, consistent, and that Petitioners did not meet the “high burden” to prove requested discovery is necessary in the interest of justice.  See IPR2021-00985, Paper 20.

The PTAB agreed with Petitioners and ordered production of the infringement contentions. In doing so, the PTAB assessed Petitioners’ need for additional discovery in the interest of justice under the Cuozzo factors.  See IPR2021-00985, Paper 23 (citing Garmin International, Inc. v. Cuozzo Speed Technologies LLC, IPR2021-00001 (PTAB 2013)).  First, the PTAB found that there was more than a possibility and mere allegation that the requested discovery would provide useful information: specifically, it would provide insight into how Patent Owner understood the application of its patent.  Second, the PTAB noted that the requested discovery was already in Petitioners’ possession and did not constitute privileged information about future litigation positions.  Third, the PTAB found that Petitioners would not be able to obtain comparable evidence of Patent Owner’s inconsistent positions through other means, and the infringement contentions would be easily produced with simple instructions.  Finally, the PTAB explained that Patent Owner clearly understood what documents were being requested, and would therefore no be overly burdensome to answer.

In addition to its Cuozzo factor assessment, the PTAB addressed Patent Owner’s argument that the infringement contentions were not relevant to any analysis that Petitioners had made.  The PTAB found this argument premature, as Petitioners had not yet filed any reply for the PTAB to assess.  The PTAB also addressed Petitioners’ concern that the infringement contentions should not have been designated confidential, directing Petitioner to file the infringement contentions under seal to afford Patent Owner an opportunity to establish good cause for maintaining their confidentiality.

Having found cause to allow discovery in the interest of justice, the PTAB did not reach Petitioners’ routine-discovery argument.  Patent Owner was ordered to produce the Contentions within three days, but has since challenged Petitioners’ arguments as improper—which Petitioners have denied.

In district court, the plaintiff Patent Owner complained that the defendants (Petitioners in IPR2021-00985) violated a protective order by using the infringement contentions in front of the PTAB.  On May 24, 2022, Magistrate Judge Gilliland issued an order finding that Defendants did not violate the court’s protective order.  In doing so, he observed that the PTAB only ordered the production of the infringement contentions, and therefore, Defendants would not be obligated to actually use the contentions in their filings.  Magistrate Judge Gilliland nonetheless prohibited the defendants from using the infringement contentions in any related IPR proceedings.

Takeaway:

The PTAB is often hesitant to grant additional discovery.  But this case illustrates how a narrowly tailored request can meet the “interest of justice” standard.

* Connor is a summer associate in Jones Day’s Boston Office.

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Matthew Johnson

Partner at Jones Day
Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Currently co-chairing the Firm's PTAB subpractice and involved in proceedings at the Board since the first day of their availability in September 2012, Matt regularly represents clients as both petitioners and patent owners at the Board. He further works as an advocate for clients in appeals from Board proceedings at the Federal Circuit.