Vivint, Inc. v. Alarm.com. Inc.
| Decision Date | 07 December 2018 |
| Docket Number | Case No. 2:15-cv-00392 |
| Citation | 351 F.Supp.3d 1341 |
| Parties | VIVINT, INC., Plaintiff, v. ALARM.COM INC., Defendant. |
| Court | U.S. District Court — District of Utah |
David R. Wright, Lannie Rex Sears, Michael A. Manookin, Maschoff Brennan Laycock Gilmore Israelsen & Wright PLLC, Salt Lake City, UT, Douglas W. McClellan, Justin L. Constant, Melissa L. Hotze, Weil Gotshal & Manges LLP, Houston, TX, Jeremy Jason Lang, Orrick Herrington & Sutcliffe, Menlo Park, CA, Robert S. Berezin, Weil Gotshal & Manges LLP, New York, NY, Charles J. Veverka, Kirk R. Harris, Maschoff Brennan, Park City, UT, for Plaintiff.
Andrei Harasymiak, Pro Hac Vice, Benjamin R. Osborn, Pro Hac Vice, Daniel A. Richards, Pro Hac Vice, David F. Lisner, Pro Hac Vice, David R. Marriott, Mark J. Khadpe, Pro Hac Vice, Max W. Abend, Pro Hac Vice, Michael J. Zaken, Pro Hac Vice, Rachel J. Lamorte, Pro Hac Vice, Richard J. Stark, Pro Hac Vice, Roger G. Brooks, Pro Hac Vice, Cravath Swaine & Moore, Teena-Ann V. Sankoorikal, Pro Hac Vice, Levine Lee LLP, New York, NY, Mark M. Bettilyon, Thorpe North & Western LLP, Salt Lake City, UT, for Defendant.
Before the court is Defendant Alarm.com Incorporated's Motion to Stay Pending Conclusion of Ex Parte Reexamination Proceedings, (ECF No. 235). On October 30, 2018, and November 5, 2018, the U.S. Patent and Trademark Office issued Final Office Actions in ex parte reexaminations rejecting nine of the seventeen claims asserted in this action as invalid under 35 U.S.C. § 103. Plaintiff Vivint, Inc. has stated that it intends to continue asserting these claims and will pursue appeals of the U.S. Patent and Trademark Office's decisions.
On November 9, 2018, Alarm.com filed its Motion to Stay. In its Motion, Alarm.com requested that the court grant a stay, either as to the entire case or as to the nine rejected claims. The court heard oral argument on the motion on November 28, 2018. As explained below, the court grants a temporary stay as to the nine rejected claims.
"[E]x parte reexamination is a curative proceeding meant to correct or eliminate erroneously granted patents." Fresenius USA, Inc. v. Baxter Int'l, Inc. , 721 F.3d 1330, 1338 (Fed. Cir. 2013). The "reexamination statute" is found at 35 U.S.C. §§ 301 – 307. "The reexamination statute" authorizes the United States Patent and Trademark Office (USPTO) to "reconsider patents of doubtful validity, and to cancel defectively examined and therefore erroneously granted patents." Fresenius , 721 F.3d at 1338 (internal quotation marks omitted) (citations omitted).
"When a claim is determined to be invalid in reexamination, the reexamination statute requires the Director of the PTO to cancel a claim that is ‘finally determined to be unpatentable.’ " Id. at 1339 (quoting 35 U.S.C. § 307(a) ). That statute provides:
In a reexamination proceeding under this chapter, when the time for appeal has expired or any appeal proceeding has terminated, the Director will issue and publish a certificate canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent any proposed amended or new claim determined to be patentable.
35 U.S.C. § 307(a). A patent owner may appeal the USPTO's rejection to the Patent Trial and Appeal Board (PTAB). See 35 U.S.C. § 134(b) (). If the PTAB upholds the USPTO's rejection, a patent owner may appeal to the Federal Circuit. See 35 U.S.C. § 141(b) ().
"In an" inter partes review (IPR), "a third party may seek cancellation of at least one claim based on [ 35 U.S.C. § 102 or 103 ] using only prior art patents or printed publications." Patent Case Management Judicial Guide, Third Edition § 14.2.5.6 (2016). "IPR may be requested by anyone who is not the patent owner, and who has not previously filed a declaratory judgment action challenging the validity of the patent." Id. "The USPTO will grant IPR if the petition shows a ‘reasonable likelihood’ that the petitioner would prevail on at least one claim being challenged." Id. Relevant here, "IPR is handled by the PTAB ... and appeals are taken directly to the Federal Circuit." Id.
Vivint filed this case on June 2, 2015. (ECF No. 2.) On June 10, 2015, Vivint filed an Amended Complaint. (ECF No. 15.) In its Amended Complaint, Vivint alleged that Alarm.com infringed six patents—[1] the '123 Patent (Am. Compl. ¶ 26, ECF No. 15 at 5); [2] the '513 Patent (Am. Compl. ¶ 33, ECF No. 15 at 8); [3] the '654 Patent (Am. Compl. ¶ 39, ECF No. 15 at 10); [4] the '601 Patent (Am. Compl. ¶ 46, ECF No. 15 at 12); [5] the '727 Patent (Am. Compl. ¶ 53, ECF No. 15 at 14); and [6] the '713 Patent (Am. Compl. ¶ 60, ECF No. 15 at 15). The '601, '654, '123, and '513 patents belong to a family of patents known as the "Sandelman" patents. (See ECF No. 108 at 2.) The '727 patent and the '713 Patent are unrelated to the Sandelman patents. (See ECF No. 108 at 2.)
"Between September 24, 2015, and September 30, 2015, Alarm.com filed eight petitions for inter partes review ("IPR") with the PTAB ...." (ECF No. 40 at 3; see also ECF No. 67 at 13.) Among these, Alarm.com filed a petition for IPR review regarding Patent '513 on September 28, 2015. This petition was designated IPR2015-01997. In this petition, Alarm.com contended that claims 8–21 of the '513 patent were "unpatentable under 35 U.S.C. § 103(a) over the combination of" two prior patents—"Scadaware and Garton." (IPR2015-01997 Dkt. 13 at 33.)
On October 1, 2015, Alarm.com filed, in this court, its first Motion to Stay Pending Inter Partes Review. (ECF No. 40.)
Between October 30, 2015 and November 9, 2015, Alarm.com filed five more petitions for inter partes review with the PTAB. (See ECF No. 67 at 13.) Among these, Alarm.com filed a petition for IPR review regarding Patent '513 on November 2, 2015. This petition was designated IPR2016-00129. In this petition, Alarm.com contended that claims 10–12, 14, 17, and 18 of the '513 patent were unpatentable under 35 U.S.C. § 103(a), arguing that they were "rendered obvious over" two prior patents—"Johnson and Joao." (IPR2016-0129 Dkt. 13 at 33.)
On December 15, 2015, Magistrate Judge Wells entered an Order Denying Alarm.com's first Motion to Stay. (ECF No. 53.) Magistrate Judge Wells denied Alarm.com's Motion because, at that time, "it [was] unknown if the PTAB [would] grant [Alarm.com's] IPR petitions for review." (ECF No. 53 at 5; see also ECF No. 67 () ).)
On April 7, 2016, the PTAB entered a Decision Denying Institution of Inter Partes Review in IPR2015-01997. (See IPR2015-01997 Dkt. 14.) The PTAB concluded that Alarm.com had "not demonstrated a reasonable likelihood that it would prevail in showing that independent claims 8, 15, and 19–21, or dependent claims 9–14 and 16–18, would have been obvious over the combination of Scadaware and Garton." (IPR2015-01997 Dkt. 14 at 34.)
On May 3, 2016, the PTAB entered a Decision Denying Institution of Inter Partes Review in IPR2016-00129. (IPR2016-00129 Dkt. 13.) The PTAB concluded, in part, that Alarm.com had "not demonstrated a reasonable likelihood that it would prevail in showing the unpatentability ... of any of the challenged claims 10–12, 14, 17, and 18 as rendered obvious over Johnson and Joao." (IPR2016-00129 Dkt. 13 at 17.)
According to Alarm.com, "as of May 12, 2016, the PTAB [had] initiated IPR proceedings against five of the [then] six patents-in-suit before this Court ...." (ECF No. 60 at 6.) On May 23, 2016, Alarm.com filed, in this court, a Renewed Motion to Stay Pending Inter Partes Review. (ECF No. 60.)
One day later, on May 24, 2016, Alarm.com filed a third petition for IPR review with the PTAB regarding Patent '513. This petition was designated IPR2016-001091. In this petition, Alarm.com contended that claims 1–13, and 15–21 were unpatentable under 35 U.S.C. § 103(a), arguing that they were "rendered obvious by Shetty in view of the knowledge of a [person of ordinary skill in the art] and Joao." (See IPR2016-001091 Dkt. 1 at 19.) In this petition, Alarm.com argued:
Shetty taught that users could remotely access and configure a message profile, and it would have been obvious to do so over the Internet. However, Shetty did not explicitly disclose the use of the Internet or a website. Joao, however, disclosed the use of a website in the same field of remote equipment monitoring as Shetty. As Joao taught the use of a website to provide control over its apparatus and to configure notifications, it would have been obvious to use the website of Joao in the system of Shetty, which provided identical remote monitoring functionality. Doing so would have provided the benefit of a user interface that could be accessed from any computing deviceable to access the world-wide web, and would have involved well known web programming techniques.
(IPR2016-001091 Dkt. 1 at 36.) Alarm.com also argued that "claims 8–13 and 15–21 were rendered obvious in view of the knowledge of a POSITA, Shetty, Joao, and Garton." (IPR2016-001091 Dkt. 1 at 64.)
On September 12, 2016, Magistrate Judge Wells entered an Order granting Alarm.com's Renewed Motion to Stay Pending Inter Partes Revie...
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