Amicus Curiae Brief — Thryv, Inc., fka Dex Media, Inc., Petitioner v. Click-To-Call Technologies, LP, et al.

No. 18-916

In the

Supreme Court of the United States

THRYV, INC., FORMERLY KNOWN AS DEX MEDIA, INC.,

Petitioner,

V.

CLICK-TO-CALL TECHNOLOGIES, LP, ET AL.,

Respondents.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR POWER INTEGRATIONS, INC., AS

AMICUS CURIAE SUPPORTING RESPONDENT

CLICK-TO-CALL TECHNOLOGIES, LP

FRANK E. SCHERKENBACH

FISH & RICHARDSON P.C.

One Marina Park Drive

Boston, MA 02110-1876

(617) 542-5070

HOWARD G. POLLACK

MICHAEL R. HEADLEY

FISH & RICHARDSON P.C.

500 Arguello Street

Suite 500

Redwood City, CA 94063

(605) 839-5070

ALEXANDRA A.E. SHAPIRO

Counsel of Record

FABIEN M. THAYAMBALLI

SHAPIRO ARATO BACH LLP

500 Fifth Avenue

New York, NY 10110

(212) 257-4880

ashapiro@shapiroarato.com

JOHN W. THORNBURGH

FISH & RICHARDSON P.C.

12390 El Camino Real

San Diego, CA 92130

(858) 678-5070

Counsel for Amicus Curiae

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...................................... ii

INTEREST OF AMICUS CURIAE ............................1

SUMMARY OF ARGUMENT.....................................3

ARGUMENT ...............................................................4

I. Judicial Review Of The PTAB’s TimeBar Rulings Helps To Advance

Congress’s Objectives And Prevent The

Harassment Of Patent Owners .....................4

A. Enforcing Congress’s Limits On

The IPR Process Will Encourage

Innovation, Not Stifle It ...........................4

B. The Power Integrations Litigation

Demonstrates The Need For Judicial

Review Of Time-Bar Rulings ...................7

C. The Availability Of Ex Parte

Reexamination Does Not Render

The Time Bar Irrelevant ...........................12

CONCLUSION ..........................................................14

ii

TABLE OF AUTHORITIES

Page(s)

Cases

Arthrex, Inc. v. Smith & Nephew, Inc.,

No. 2018-2140, --- F.3d ----,

2019 WL 5616010 (Fed. Cir. Oct. 31, 2019) ......... 6

Cuozzo Speed Techs., LLC v. Lee,

136 S. Ct. 2131 (2016) ........................................... 4

Oil States Energy Servs., LLC v. Greene’s

Energy Grp., LLC,

138 S. Ct. 1365 (2018) ....................................... 5, 6

Power Integrations, Inc. v. Fairchild

Semiconductor Int’l, Inc.,

711 F.3d 1348 (Fed. Cir. 2013). ............................ 1

Power Integrations, Inc. v. Semiconductor

Components Industries, LLC,

926 F.3d 1306 (Fed. Cir. 2019) ..................... 2, 8, 9

SAS Institute, Inc. v. Iancu,

138 S. Ct. 1348 (2018) ................................... 12, 13

Constitution and Statutes

U.S. Const. art. I § 8, cl. 8. ......................................... 4

35 U.S.C. § 315(b)....................................................... 2

iii

Other Authorities

H.R. Rep. No. 112-98, pt. 1 (2011) ................... 6, 7, 11

INTEREST OF AMICUS CURIAE1

Power Integrations, Inc. (“PI”) is a semiconductor

company based in San Jose, California. For the last

30 years, PI has been the leading developer and

supplier of the chips that make modern power

supplies—used to charge cell phones, laptop

computers, and other products—small, light, and

energy efficient. This is PI’s entire business. For the

last 15 years, PI has also been in litigation with ON

Semiconductor (“ON”) and its predecessors, including

Fairchild Semiconductor. Fairchild has been found

guilty of copying and willfully infringing multiple PI

patents in three of these cases, and has been found to

have infringed a total of seven PI patents. The

Federal Circuit noted that Fairchild had a “corporate

culture of copying” in affirming the findings in one of

these cases. Power Integrations, Inc. v. Fairchild

Semiconductor Int’l, Inc., 711 F.3d 1348, 1369 (Fed.

Cir. 2013).

After ON entered into a contract to acquire

Fairchild in 2015, it launched twelve inter partes

reviews (“IPRs”) in an attempt to invalidate the

patents that Fairchild had been found to infringe.

Fairchild would have been precluded from filing these

IPRs because of its long history of litigation with PI,

including multiple reexaminations initiated by

1 Pursuant to Rule 37.6, amicus affirms that no counsel for a

party authored this brief in whole or in part, and that no party,

counsel for a party, or any person other than amicus and its

counsel made a monetary contribution intended to fund the

preparation or submission of the brief. All parties have

consented in writing to the filing of this brief. Petitioner and the

private respondent have filed notices of blanket consent, and the

federal respondent has consented by letter as well.

2

Fairchild and a jury verdict in district court, all of

which affirmed the validity of PI’s patents. And

because ON was acting as Fairchild’s proxy and was

in privity with Fairchild, and Fairchild was a real

party in interest, PI argued that the IPRs were timebarred under 35 U.S.C. § 315(b).2

Over PI’s objection, the Patent Trial and Appeal

Board (“PTAB”) instituted all of ON’s IPRs. And

despite numerous procedural irregularities (such as

the denial of PI’s requests for discovery concerning

ON’s relationship with Fairchild) and the substantive

weakness of ON’s case (including prior art that was

cumulative

of

art

previously

rejected

in

reexamination and trial), the PTAB decided the IPRs

in ON’s favor.

PI appealed to the Federal Circuit, which vacated

the PTAB’s decisions. Without reaching the merits—

which PI had also appealed—the Court ordered that

the IPRs be dismissed as time-barred under 35 U.S.C.

§ 315(b).

See Power Integrations, Inc. v.

Semiconductor Components Indus., LLC, 926 F.3d

1306, 1308, 1318-19 (Fed. Cir. 2019). Petitioner cites

this case several times in its brief (Brief for Petitioner

18, 27, 39), and ON argues against the decision in its

amicus brief.

After ON filed its amicus brief in this case, PI and

ON settled, agreeing that ON’s IPRs should be

dismissed and that ON should pay $175 million to PI.

However, as a patent owner, PI retains an interest in

2 “An inter partes review may not be instituted if the petition

requesting the proceeding is filed more than 1 year after the date

on which the petitioner, real party in interest, or privy of the

petitioner is served with a complaint alleging infringement of

the patent.” 35 U.S.C. § 315(b).

3

the present case, which represents a threat to hardwon property rights that are at the heart of small,

innovative companies like PI. The § 315(b) time bar

is an essential defense against harassment by patent

infringers, and PTAB decisions applying that time

bar should be subject to judicial review to ensure that

it serves that crucial purpose.

SUMMARY OF ARGUMENT

Respondent Click-to-Call Technologies, LP has

provided compelling reasons to believe that the limits

on judicial review in 35 U.S.C. § 314(d) do not apply

to PTAB decisions that an IPR is not time-barred

under § 315(b).

These textual arguments are

dispositive, and the Federal Circuit’s decision should

be affirmed on those grounds.

Nevertheless, ON and other amici supporting

petitioner suggest that this Court should reverse the

Federal Circuit because judicial review would impede

the IPR process, preventing the PTAB from

invalidating bad patents. These policy arguments

lack merit, both because IPRs are not an unmitigated

good, and because enforcing the § 315(b) time bar

(including through judicial review) helps to prevent

serial challenges to valid patents.

The Federal Circuit’s decision in Power

Integrations illustrates these points.

Far from

allowing the enforcement of invalid patents, as ON

asserts, the Federal Circuit permitted PI to assert its

industry-making patent against a party that had been

adjudicated a willful infringer and had failed in three

previous attempts to invalidate the very same patent.

Instead of imposing “wasteful burdens on the

patent system,” as ON asserts, judicial review

4

prevented waste and will help prevent it in the future.

The IPR process was meant as an expedited

alternative to litigation, not an opportunity to re-fight

battles that had already been the subject of decadeslong litigation and prior PTO proceedings. Enforcing

the procedural limits on IPRs helps to ensure that

they are used only for appropriate purposes.

Elsewhere in its brief, ON changes tack, arguing

that judicial review of time-bar decisions is futile

because the PTO can simply reinstate the result of the

IPR by instituting an ex parte reexamination and

invalidating the patent. But as this Court has

previously indicated, agencies do not have carte

blanche to engage in “shenanigans” of this sort, and

the Court cannot ignore statutory commands simply

because the PTO may find a way to evade them.3

ARGUMENT

Judicial Review Of The PTAB’s Time-Bar

Rulings Helps To Advance Congress’s

Objectives And Prevent The Harassment

Of Patent Owners

I.

A.

Enforcing Congress’s Limits On The

IPR

Process

Will

Encourage

Innovation, Not Stifle It

The purpose of granting patents is “[t]o promote

the [p]rogress of [s]cience” and technological

innovation. U.S. Const. art. I, § 8, cl. 8. Companies

in R&D-intensive industries such as PI have little

incentive to make long-term investments in the

Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2142

(2016).

3

5

exploration and creation of new technologies unless

they can be sure that the resulting patents, which

enable them to recoup and profit from these

investments, are protected, stable property rights.

The cancellation of issued patents, through the IPR

process or otherwise, invariably lowers the economic

value of these intellectual property rights and slows

the pace of innovation.

ON and the other amici supporting petitioner

place great emphasis on the social cost of invalid

patents and the expense of patent litigation,

portraying IPRs as an efficient means of invalidating

patents that should never have been granted. But

while IPRs certainly make it easier to challenge

patents, they are easily abused, and the evidence does

not support ON’s unwarranted assumption that

PTAB invalidity rulings are necessarily fair or

correct.

This Court upheld the constitutionality of IPRs in

Oil States Energy Services, LLC v. Greene’s Energy

Group, LLC, 138 S. Ct. 1365 (2018); however, the

briefing in that case catalogued the flaws in the IPR

procedure and the ways in which it stacks the deck

against patent owners. See, e.g., Petition for a Writ of

Certiorari, Oil States, No. 16-712, at 3, 19-26, 32-34;

Brief for InterDigital, Inc., et al. as Amici Curiae, Oil

States, at 5-27. Moreover, it is a mistake to believe

that IPRs are always neutral assessments of patent

validity. As two Justices explained:

The Director of the Patent Office [(“PTO”)] is a

political appointee who serves at the pleasure

of the President. He supervises and pays the

[PTAB] members responsible for deciding

patent disputes. The Director is allowed to

6

select which of these members, and how many

of them, will hear any particular patent

challenge. If they (somehow) reach a result he

does not like, the Director can add more

members to the panel—including himself—and

order the case reheard. Nor has the Director

proven bashful about asserting these statutory

powers to secure the “‘policy judgments’” he

seeks.

Oil States, 138 S. Ct. at 1380-81 (Gorsuch, J.,

dissenting) (citations omitted).4

Thus, the central argument advanced by ON and

several other amici—that the PTAB’s invalidation of

a patent should be upheld at all costs, even when the

IPR was procedurally barred—is misguided.

Enforcing Congress’s limits on IPRs will not stifle

innovation or result in the parade of horribles they

identify because IPRs are by no means as socially

beneficial as they claim.

Indeed, Congress has emphasized the importance

of procedural safeguards on IPRs, such as the § 315(b)

time bar, to protect patent rights. In assessing the

America Invents Act, the House Committee on the

Judiciary “recognize[d] the importance of quiet title to

patent owners to ensure continued investment

resources” and observed that the AIA’s procedures

“[we]re not to be used as tools for harassment or a

means to prevent market entry through repeated

litigation and administrative attacks on the validity

of a patent.” H.R. Rep. No. 112-98, pt. 1, at 48 (2011).

4 See also Arthrex, Inc. v. Smith & Nephew, Inc., No. 20182140, --- F.3d ----, 2019 WL 5616010, at *4-8 (Fed. Cir. Oct. 31,

2019) (discussing the Director’s broad powers but disagreeing

that he can unilaterally order rehearing).

7

“Doing so would frustrate the purpose of the section

as providing quick and cost effective alternatives to

litigation,” and “divert resources from the research

and development of inventions.” Id.

The Committee encouraged the PTO to “address

potential abuses and current inefficiencies under its

expanded procedural authority.” Id. And, as the

government recognizes, Congress included § 315(b) in

the Act “to manage the burden on patent owners and

minimize the wasted resources that duplicative

judicial and administrative proceedings might

entail.” Brief for Federal Respondent 36; accord Brief

for PTAB Bar Association as Amicus Curiae 5.

Enforcing § 315(b) in the courts is the only way to

ensure the PTAB strikes the balance that Congress

intended.

B.

The Power Integrations Litigation

Demonstrates The Need For Judicial

Review Of Time-Bar Rulings

The litigation culminating in the Federal Circuit’s

decision in Power Integrations serves as a powerful

case study for the importance of § 315(b) and the need

for judicial review of PTAB decision-making.

The IPR reviewed by the Federal Circuit in Power

Integrations was the fourth attempt by ON/Fairchild

to invalidate PI’s U.S. Patent 6,212,079, which a jury

had found that Fairchild had willfully infringed. The

first two challenges to the ’079 patent were ex parte

reexaminations filed by Fairchild and its predecessor.

See Power Integrations, No. 2018-1607 (Fed. Cir.),

ECF No. 54 at Appx1490/321-22. The PTO considered

over 175 different prior art references during those

reexaminations, and it reaffirmed the patent’s

8

validity—including the validity of all claims that ON

later challenged in its IPRs. Id. at Appx1042/228586.

Fairchild asserted its next challenge to the

validity of the ’079 patent in litigation in the Northern

District of California. At trial, Fairchild raised only

one piece of prior art, and the jury rejected its

argument, finding that the patent was not invalid and

that Fairchild had infringed. Id. at Appx1035,

Appx1042-1043/2286-88. ON—which had acquired

Fairchild by that time—did not even bother to appeal

the validity verdict.

Undeterred, ON launched multiple IPRs against

PI’s patent, believing that it might fare better in its

fourth bite at the apple. Even though (1) ON had

entered into a contract to acquire Fairchild before

filing its IPRs, (2) ON’s acquisition of Fairchild

formally closed before the PTAB decided whether to

institute the IPRs, and (3) ON relied on the same

types of prior art that had previously been rejected,

the PTAB permitted ON’s IPR challenge to the ’079

patent to go forward. Id. at Appx103, Appx111-15,

Appx143-44, Appx281-82.

After the PTAB ruled in ON’s favor, PI appealed

to the Federal Circuit, defending the validity of its

patent on the merits and, separately, arguing that the

IPR was time-barred under § 315(b) because of the

relationship between Fairchild and ON. The Court

vacated the IPRs as time-barred, holding that the

PTAB had given § 315(b) an erroneously narrow

construction. See Power Integrations, 926 F.3d at

9

1308, 1313-19.5 While ON characterizes this decision

as immunizing from review the “invalid claims of a

patent that never should have issued,” Brief for ON et

al. as Amici Curiae 20, the Federal Circuit did not

agree that the patent was invalid. The Court simply

did not reach the merits, and ON provides no reason

to believe it would have affirmed the PTAB’s decision.

The stakes of this litigation were immense. The

reason that ON/Fairchild was so persistent in

challenging the validity of the ’079 patent—and the

reason that PI strenuously defended it—is that the

’079 patent describes and claims an extremely

valuable technology that had radically transformed

the power supply industry. The ’079 invention grew

out of recognition that millions of power supplies

connected to wall outlets 24 hours a day were wasting

a significant amount of power; indeed, at that time it

was estimated that 5% of energy usage in the U.S.

was wasted by power supplies connected to devices

not in use. See Power Integrations, ECF No. 54 at

Appx1308-1309.

In 1997, the ’079 patent’s lead inventor, Mr. Balu

Balakrishnan, met with noted researcher Dr. Alan

Meier at the Lawrence Berkeley National Laboratory

to discuss ways in which standby power consumption

in electronic devices could be reduced.

Id. at

Appx1309-10, Appx1479-1480/278-80.

Dr. Meier

subsequently published his seminal paper “One Watt

Initiative: a Global Effort to Reduce Leaking

Electricity” in 1999. Id. at Appx1329. Dr. Meier’s

5 Specifically, while the PTAB considered only whether

Fairchild was a “real party in interest” at the time ON filed its

IPRs, the Federal Circuit held that the determinative question

was Fairchild’s status at the time the IPRs were instituted.

10

one-watt initiative took off after Mr. Balakrishnan

met with President Bush in 2001 to discuss the

energy crisis in California. Id. at Appx1483/293-95,

Appx1342-45. A month later, President Bush issued

an executive order requiring that all government

purchases of electronic products meet the one-watt

standby requirement. Id. at Appx1310, Appx1337,

Appx1483-1484/295-96. As it turned out, this had a

dramatic effect on demand for all electronics, not just

those purchased by the federal government. Id. at

Appx1484/296-98. The one-watt requirement also

became part of the Energy Star program, further

cementing its hold on the industry.

Id. at

Appx1484/298-99.

The ’079 patent defined a new market for

commercially acceptable one-watt products and drove

demand for both PI’s embodying products and

Fairchild’s infringing products. Indeed, in the district

court case, the jury specifically found that “the ’079

patented feature create[d] the basis for customer

demand for the infringing Fairchild products.” Id. at

Appx1039.6 As a result, two different juries awarded

damages greater than $100 million. Id. at Appx1035;

Appx1039. While the Federal Circuit required a

retrial due to changes in damages law, the district

court had just scheduled a final damages trial when

the parties settled, for $175 million.

6 ON complains of “supracompetitive pricing,” Brief for ON

8, but unlawful competition is exactly what the patent system is

intended to prevent. Fairchild copied PI’s patented products,

charged rock-bottom prices—because it did not have to finance

research and development—and took PI’s customers. ON’s brief

ignores all of this.

11

As explained above, in enacting § 315(b), Congress

expressly sought to prevent the type of serial validity

challenges that the PTAB permitted in Power

Integrations. See H.R. Rep. No. 112-98, pt. 1, at 48

(2011)

(criticizing

“repeated

litigation

and

administrative attacks on the validity of a patent”).

These serial challenges required PI to expend

considerable resources defending itself and created

uncertainty about the future value of PI’s patent. And

by rolling the dice four times, ON/Fairchild were able

to obtain the (erroneous) result they were seeking

after repeated failures.

This was not a case in which an accused infringer

sought refuge in the IPR process because of the

daunting costs of litigation—Fairchild had already

litigated the issue, and it was found to have willfully

infringed a valid patent. This was gamesmanship

and an abuse of the IPR process, which the PTAB

enabled by misconstruing the § 315(b) time bar.

Judicial review was necessary to cease the

harassment of PI’s property rights, prevent the

further waste of resources, and bring long-overdue

closure to the parties’ dispute. Furthermore, by

clarifying the scope of § 315(b), judicial review has

reduced the need for future litigation and has erected

a much-needed barrier to vexatious IPRs against

other patent owners.

In short, the Power Integrations case provides

additional context for why the Federal Circuit’s

decision in the present case was correct, comports

with Congress’s intent, and should be affirmed.

12

C.

The Availability Of Ex Parte

Reexamination Does Not Render The

Time Bar Irrelevant

In its amicus brief, ON makes the remarkable

argument that judicial review of the PTAB’s time-bar

rulings is futile because the PTO “remain[s] free, on

[its] own initiative, to institute an ex parte

reexamination

and

reinstate

the

invalidity

determination [from the vacated IPR] on the same

ground.” Brief for ON 16. But this Court rejected a

similar argument in SAS Institute, Inc. v. Iancu, 138

S. Ct. 1348 (2018), which held that if the PTO

exercises its discretion to review an IPR petition, it

must review all of the petition’s claims, and not

merely a subset:

[The dissent] suggests the [PTO] Director

might yet avoid this command by refusing to

review a petition he thinks too broad while

signaling his willingness to entertain one more

tailored to his sympathies. Post, at 1360

(dissenting opinion). We have no occasion

today to consider whether this stratagem is

consistent with the statute’s demands.

See Cuozzo Speed Technologies, LLC v. Lee, 579

U.S. ––––, ––––, 136 S. Ct. 2131, 2141, 195

L.Ed.2d 423 (2016) (noting that courts may

invalidate “‘shenanigans’” by the Director that

are “outside [his] statutory limits”); CAB v.

Delta Air Lines, Inc., 367 U.S. 316, 328, 81 S.

Ct. 1611, 6 L.Ed.2d 869 (1961) (questioning an

agency’s “power to do indirectly what it cannot

do directly”). But even assuming (without

granting) the law would tolerate this tactic, it

would show only that a lawful means exists for

13

the Director to achieve his policy aims—not

that he “should be allowed to improvise on the

powers granted by Congress” by devising an

extralegal path to the same goal. Id., at 330, 81

S. Ct. 1611.

Id. at n.*.

Similarly, here, the PTO’s purported ability to

achieve by ex parte reexamination what it cannot

achieve by IPR is questionable, and it provides no

reason to relax the safeguards on the IPR process.

Indeed, ON’s argument proves far too much: it would

allow the PTO to ignore every IPR procedure

mandated by statute simply because it could ignore

those procedures in a hypothetical future ex parte

reexamination. That cannot be the law.

14

CONCLUSION

The judgment should be affirmed.

Respectfully submitted,

FRANK E. SCHERKENBACH

FISH & RICHARDSON P.C.

One Marina Park Drive

Boston, MA 02110-1876

(617) 542-5070

HOWARD G. POLLACK

MICHAEL R. HEADLEY

FISH & RICHARDSON P.C.

500 Arguello Street

Suite 500

Redwood City, CA 94063

(605) 839-5070

ALEXANDRA A.E. SHAPIRO

Counsel of Record

FABIEN M. THAYAMBALLI

SHAPIRO ARATO BACH LLP

500 Fifth Avenue

New York, NY 10110

(212) 257-4880

ashapiro@shapiroarato.com

JOHN W. THORNBURGH

FISH & RICHARDSON P.C.

12390 El Camino Real

San Diego, CA 92130

(858) 678-5070

Counsel for Amicus Curiae

November 4, 2019