Luv N’ Care, Ltd. v. McGinley

Trials@uspto.gov 	Paper 13
571-272-7822 	Entered: September 18, 2017
UNITED STATES PATENT AND TRADEMARK OFFICE
__________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
__________
LUV’N CARE, LTD.,
Petitioner
v.
MICHAEL L. MCGINLEY,
Patent Owner
__________
Case IPR2017-01216
Patent 8,636,178 B2
Before LYNNE H. BROWNE, SUSAN L. C. MITCHELL, and
JAMES J. MAYBERRY, Administrative Patent Judges.
BROWNE, Administrative Patent Judge.
DECISION
Denying Institution of Inter Partes Review
37 C.F.R. §§ 42.71 and 42.108
Designated: January 10, 2018

IPR2017-01216
Patent 8,636,178 B2
2
On March 30, 2017, Luv N’ Care, Ltd. (“Petitioner”) attempted to file a
petition for inter partes review of U.S. Patent No. 8,636,178, but payment was not
received by the Office on that date. See Paper 3, 2; Ex. 1011 ¶¶ 3, 6. After
discovering that payment had not been received by the Office, Petitioner
successfully filed a Petition for Inter Partes Review of U.S. Patent No.
8,636,178 B2 (“Petition”) on April 11, 2017, and was accorded that filing date.
Papers 1, 6. On that same day, Petitioner filed a Motion to Assign a Filing Date
(“Motion”) with the Affidavit of Kyle Phillip Bailey (“Affidavit”) in support
thereof to have the Petition accorded a filing date of March 30, 2017, when the first
attempt was made to file the Petition. Paper 3, 3; Exhibit 1011 ¶ 3.
On June 22, 2017 we issued an Order to Show Cause granting Petitioner five
business days from the date of the order to show cause why its Motion to Assign
Filing Date should not be denied. Paper 7, 4. Petitioner did not respond to the
Order to Show Cause. On July 26, 2017, Michael L. McGinley (“Patent Owner”)
filed a Preliminary Response to the Petition. Paper 8.
The Board institutes an inter partes review on behalf of the Director.
37 C.F.R. § 42.4(a). One threshold consideration in our institution decision is
whether a petition is timely filed. See 35 U.S.C § 315(b). Accordingly, we must
first rule on Petitioner’s Motion to determine the proper filing date for the Petition
before deciding if we should institute trial. The patent statute sets forth
requirements that must be satisfied for an inter partes review petition to be
considered, such as inclusion of certain documents, payment of fees, and providing
copies of documents to the designated representative of the patent owner. See 35
U.S.C. § 312(a). The applicable regulations clarify that a petition will not be
accorded a filing date until the petition satisfies the following: (1) the content of
the petition complies with 37 C.F.R. § 42.104, (2) the fee to institute has been paid,
see 37 C.F.R. §§ 42.15(a), 42.103(b), and (3) the petition and relevant documents

IPR2017-01216
Patent 8,636,178 B2
3
have been served on the patent owner. 37 C.F.R. § 42.105(a). The question before
us is whether these conditions have been met. In particular, whether the fee for
institution has been timely paid.
The Petitioner, as the moving party, has the burden of proof to establish that
it is entitled to the requested relief. 37 C.F.R. § 42.20(c). As explained below,
Petitioner has not met this burden. Accordingly, we deny the Motion.
Based on the April 11, 2017, filing date, the Petition is barred under
35 U.S.C. § 315(b). Accordingly, we also deny institution of an inter partes
review.
I. 	BACKGROUND
On March 30, 2017, Petitioner successfully uploaded the Petition and related
exhibits using the PTAB E2E filing system. Motion 2 (citing Bailey Aff. ¶ 3;
Ex. 1011). Mr. Bailey states that the Petition and exhibits were filed on March 30,
2017. See id. Mr. Bailey states that a payment of $23,000.00 was submitted using
Deposit Account No. 505393 and that this deposit account was sufficiently funded.
Id. at ¶ 4. Mr. Bailey states that he received a receipt dated March 30, 2017,
indicating that payment was in process. Id. at ¶ 5.
According to PTO records, an attempt to pay the filing fee was made on
March 30, 2017, and that payment was made on April 11, 2017. Exhibit 3001.
The record of Petitioner’s deposit account 505393 for March 2017 (Exhibit 3002)
indicates that at the time the first attempt was made to pay the filing fee,
Petitioner’s account held insufficient funds to cover the filing fee. This record
further indicates that on March 31, 2017, sufficient funds were added to
Petitioner’s deposit account; however, no attempt was made at that time to pay the
filing fee.
Petitioner’s Motion and declarations detail Petitioner’s payment attempt and
subsequent successful payment. However, Petitioner’s statements with respect to

IPR2017-01216
Patent 8,636,178 B2
4
the sufficiency of funds available in Petitioner’s deposit account and the receipt
received after the payment attempt is not fully supported by the information
presented in Exhibits 1011, 3001, and 3002. 1
Petitioner’s attempted payment occurred on March 30, 2017. Ex. 1011.
Petitioner states that a receipt for payment of $23,000.00 was received on that date.
Motion 2 (citing Bailey Aff. ¶ 3; Ex. 1011). Exhibit 1011 shows the proffered
receipt for that payment attempt. The first page of the Exhibit specifically states,
in bold: “Your Payment Has Not Been Cleared for AIA Review IPR2017-
01216! Please call system administrator with any questions[.]” Ex. 1011, 1.
Petitioner does not address this warning.
Petitioner states that it was informed that the payment was not processed by
the PTAB E2E system due to an internal computer issue. Motion 2 (citing Bailey
Aff. ¶ 6; Ex. 1011). Petitioner further states that payment was reinitiated and a
filing date of April 11, 2017, was granted. Motion 3. Petitioner does not explain
the more than 10 day delay in submitting payment.
As the above payment attempt reflects, Petitioner attempted a deposit
account payment greater than funds available in the deposit account, did not
address the explicit warning message indicating that the payment had not cleared,
and waited approximately 10 days to make payment.
II. DISCUSSION
The statute, rules, and applicable PTO guidance concerning the requirements
for filing a petition are clear and consistent – before a filing date is assigned to a
petition seeking an IPR, the petition must be complete, which includes the PTO
1 Ex. 3001 is an audit trail showing Petitioner’s attempt to make payment at 48:16:5
and successful payment at 15:41:9. 	Ex 3002 is a screen shot showing the activity
in Petitioner’s deposit account during March and April of 2017.

IPR2017-01216
Patent 8,636,178 B2
5
receiving the required fee. In accordance with the patent statute a petition for IPR
“may be considered only if the petition is accompanied by payment of the fee
established by the Director under section 311.” 35 U.S.C. § 312(a)(1). This statute
is not jurisdictional. See Lumentum Holdings, Inc. v. Capella Photonics, Inc., case
IPR2015–00739, slip op. at 4–5 (PTAB Mar. 4, 2016) (Paper 38) (precedential).
However, absent a showing of good cause, as discussed further infra, and in
accordance with our rules also discussed infra, we will not waive the fee
requirement in this case.
Our rules follow the statutory requirement and establish that the full
payment must be received, not merely tendered, in order to be considered as
“accompanying” the petition. Rule 42.103 states that “[n]o filing date will be
accorded to the petition until full payment is received.” 37 C.F.R. § 42.103(b).
Rule 42.106, titled “Filing date,” states that a petition to institute an IPR “will not
be accorded a filing date” until the petition satisfies the requirement that the
petition “[i]s accompanied by the fee to institute required in § 42.15(a).” 37 C.F.R.
§ 42.106(a)(3). Rule 42.106 also states that “[w]here a party files an incomplete
petition, no filing date will be accorded . . . .” 37 C.F.R. § 42.106(b).
The PTO website provides extensive, consistent guidance stating that
payment of the filing fee is required to obtain a filing date for an IPR petition.
E.g., Ex. 2003, 2 (“It is important to note that a petition will not be accorded a
filing date unless it is accompanied by a payment of the appropriate fees . . . .”); id.
at 8 (“[N]o filing date will be accorded if a statutory requirement is not satisfied.
For example, for fee deficiencies, the Office will accord the later submission date
when all appropriate fees have been paid because the fees are required by statute.
See, e.g., 35 U.S.C. § 312(a)(1).”); id. (a filing date requires the “[a]ppropriate fee
successfully paid”).

IPR2017-01216
Patent 8,636,178 B2
6
The evidence of record does not demonstrate that good cause exists to waive
the fee requirement of § 312(a)(1). The evidence of record shows that Petitioner’s
deposit account was not fully funded at the time that the first attempt was made to
pay the filing fee for the Petition. Ex. 3002. When a deposit account has
insufficient funds to cover the amount of a payment, the system properly processes
the tendered payment by not accepting the payment. There is no persuasive
evidence of record that there was an internal computer error by the PTAB E2E fee
processing system that prevented payment of the filing fee on March 30, 2017.
Further, Petitioner failed to respond to our Show Cause Order of June 22, 2017,
where we gave Petitioner the opportunity to provide additional evidence in support
of its Motion. Petitioner’s failure to respond to our Show Cause Order provides
additional support for our finding that good cause has not been shown in this
instance.
III. CONCLUSION RE FILING DATE
Based on the evidence and the totality of circumstances, we determine that
Petitioner has not met its burden of establishing that it is entitled to have the filing
date changed in this proceeding. Accordingly, Petitioner’s Motion is denied. The
filing date for the Petition remains as April 11, 2017.
IV. STATUTORY BAR TO INTER PARTES REVIEW
Whether Petitioner is barred from pursuing an inter partes review
under 35 U.S.C. § 315(b) is a threshold issue. Section 315(b) of Title 35 of
the United States Code provides:
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.
Petitioner states that “[a] complaint alleging infringement of the ‘178 patent
was filed on March 30, 2016. Service of the complaint alleging patent

IPR2017-01216
Patent 8,636,178 B2
7
infringement was effected on March 31, 2016, less than one year ago.” Pet. 1.
Thus, in the absence of a March 31, 2017 filing date, this IPR will be considered
“untimely” under 35 U.S.C. § 315(b). The filing date of the Petition is April 11,
2017, more than one year after service. Accordingly, the Petition is barred under
35 U.S.C. § 315(b).
V. ORDER
In consideration of the foregoing, it is hereby:
ORDERED that Petitioner’s Motion is denied; and
FURTHER ORDERED that institution of an inter partes review of any
challenged claim of Patent No. 8,636,178 B2 is denied under 35 U.S.C. § 315(b).

IPR2017-01216
Patent 8,636,178 B2
8
PETITIONER:
Robert M. Chiaviello, Jr.
NUBYLAW
bobc@nuby.com
PATENT OWNER:
James J. Kernell
ERICKSON KERNELL IP, LLC
jjk@kcpatentlaw.com