CommScope Techs. LLC v. Dali Wireless, Inc.

Director PTABDecision Review@uspto.gov 	Paper 23
571-272-7822 	Date: February 27, 2023
UNITED STATES PATENT AND TRADEMARK OFFICE
BEFORE THE OFFICE OF THE UNDER SECRETARY OF COMMERCE
FOR INTELLECTUAL PROPERTY AND DIRECTOR OF THE UNITED
STATES PATENT AND TRADEMARK OFFICE
COMMSCOPE TECHNOLOGIES LLC,
Petitioner,
v.
DALI WIRELESS, INC.,
Patent Owner.
IPR2022-01242
Patent 11,026,232 B2
Before KATHERINE K. VIDAL, Under Secretary of Commerce for
Intellectual Property and Director of the United States Patent and
Trademark Office.
DECISION
Ordering Rehearing, Vacating the Decision on Institution, and Remanding to
the Patent Trial and Appeal Board Panel for Further Proceedings

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I. 	INTRODUCTION
On February 7, 2023, the Patent Trial and Appeal Board (“PTAB” or
“Board”) issued a Decision Granting Institution of Inter Partes Review.
Paper 21 (“Decision” or “Dec.”). As is relevant to this Order, the Board
declined to exercise its discretion to deny institution under 35 U.S.C.
§ 314(a), in view of Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11
(PTAB Mar. 20, 2020) (precedential) (“Fintiv”) and the USPTO
Memorandum, Interim Procedure for Discretionary Denials in AIA Post-
Grant Proceedings with Parallel District Court Litigation (“Guidance
Memo”) (June 21, 2022).1 Dec. 49–50. In its Decision, the Board explained
that it declined to exercise its delegated discretion under 35 U.S.C. § 314(a)
because Petitioner presented compelling unpatentability challenges. Id.
(citing Guidance Memo 4; OpenSky Indus., LLC v. VLSI Tech. LLC,
IPR2021-01064, Paper 102, 49–50 (PTAB Oct. 4, 2022) (precedential)
(“OpenSky”)).
I have considered the Board’s Decision and I initiate sua sponte
Director review of that Decision to address the Board’s conclusion that the
Petition presented a compelling, meritorious challenge. See Interim process
for Director review §§ 13, 22 (providing for sua sponte Director review and
explaining that “the parties to the proceeding will be given notice” if
Director review is initiated sua sponte).2
1 Available at https://www.uspto.gov/sites/default/files/documents/
interim_proc_discretionary_denials_aia_parallel_district_court_litigation_
memo_20220621_.pdf.
2 Available at https://www.uspto.gov/patents/patent-trial-and-appeal-
board/interim-process-director-review.

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II. 	DISCUSSION
As explained in the Guidance Memo, the AIA’s post-grant
proceedings “improve and ensure patent quality by providing ‘quick and
cost-effective alternatives to litigation’ for challenging issued patents.”
Guidance Memo 3. To achieve this goal, the Guidance Memo makes clear
that where the Board “determines that the information presented at the
institution stage presents a compelling unpatentability challenge, that
determination alone demonstrates that the PTAB should not discretionarily
deny institution under Fintiv.” Guidance Memo at 4–5; see Fintiv at 5–6
(articulating nonexclusive factors the PTAB considers in determining
whether to institute an AIA proceeding when there is parallel district court
litigation). As such, when determining whether there is a compelling
unpatentability challenge, the Board evaluates whether the Petition presents
challenges “in which the evidence, if unrebutted in trial, would plainly lead
to a conclusion that one or more claims are unpatentable by a preponderance
of the evidence.” Guidance Memo at 4.
As the Guidance Memo and my precedential decision in OpenSky
make clear, the compelling merits standard is a higher standard than the
standard for institution set by statute.3 Id. at 4–5; OpenSky at 49. As I stated
in OpenSky, “[a] challenge can only ‘plainly lead to a conclusion that one or
3 See 35 U.S.C. § 314(a) (2018) (authorizing institution of an IPR only when
“the information presented in the petition . . . and any response . . . shows
that there is a reasonable likelihood that the petitioner would prevail with
respect to at least 1 of the claims challenged in the petition”); § 324(a)
(authorizing institution of a PGR, including a CBM, only when “the
information presented in the petition . . . , if such information is not rebutted,
would demonstrate that it is more likely than not that at least 1 of the claims
challenged in the petition is unpatentable”).

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more claims are unpatentable’ if it is highly likely that the petitioner would
prevail with respect to at least one challenged claim.” OpenSky at 49 (also
recognizing that a determination of compelling merits does not dictate the
ultimate conclusion after trial, during which additional evidence may be
adduced). Importantly, I also instructed that “the Board shall provide its
reasoning in determining whether the merits are compelling.” Id. at 50
(emphasis added).
The compelling merits test seeks to strike a balance among the
competing concerns of avoiding potentially conflicting outcomes, avoiding
wasteful parallel proceedings, protecting against patent owner harassment,
and strengthening the patent system by allowing the review of patents
challenged with a sufficiently strong initial merits showing of
unpatentability. The patent system and the public benefit from instituting
challenges where there is a showing of unpatentability by compelling merits,
but it is only a finding under this higher standard that would compel the
Board to review claims for the public benefit when other considerations
favor discretionary denial.
In this case, the Board assessed compelling merits without first
determining that the other Fintiv factors favor discretionary denial. My
Guidance Memo (Guidance Memo at 5) states that “the PTAB will not deny
institution based on Fintiv if there is compelling evidence of
unpatentability.” Although I now recognize that this instruction could be
read to allow for a compelling merits determination as a substitute for a
Fintiv analysis, that was not my intent. By that instruction, I intended for
PTAB panels to only consider compelling merits if they first determined that
Fintiv factors 1–5 favored a discretionary denial. Thus, in circumstances

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where the Board determines that the other Fintiv factors 1–5 do not favor
discretionary denial, the Board shall decline to discretionarily deny under
Fintiv without reaching the compelling merits analysis. In circumstances
where, however, the Board’s analysis of Fintiv factors 1–5 favors denial of
institution, the Board shall then assess compelling merits. In doing so, the
Board must provide reasoning sufficient to allow the parties to challenge that
finding and sufficient to allow for review of the Board’s decision.
As to the Board’s compelling merits reasoning, I determine that the
Board did not provide sufficient reasoning to support its conclusion that the
merits are compelling. The Board concludes that “Petitioner presents
compelling unpatentability challenges,” and points to its analysis under the
lower § 314 institution standard. Dec. 49 (citing §§ II and III); see also id. at
7–48 (Sections II and III, discussing level of skill in the art, claim
construction, and the merits of the obviousness grounds presented in the
Petition without reference to the higher standard required for compelling
merits); id. at 2 (“We have authority to institute an inter partes review under
35 U.S.C. § 314 if ‘there is a reasonable likelihood that the petitioner would
prevail with respect to at least 1 of the claims challenged in the petition.’”).
Although the Board finds “that the evidence, if unrebutted in trial,
demonstrates that ‘it is highly likely that the [P]etitioner would prevail with
respect to at least one challenged claim,’” the Board does not provide
sufficient analysis explaining why or how it reached this conclusion. Id. at
49 (citing §§ II and III). Merely pointing to its analysis under the lower
institution standard is insufficient to demonstrate that the Petition presents a
compelling unpatentability challenge. As I note above, to find compelling
merits, the Board must provide reasoning to explain and support its

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determination as to compelling merits sufficient to allow the parties to
challenge that finding and sufficient to allow for review of that decision.
See, e.g., OpenSky Indus., LLC v. VLSI Tech. LLC, IPR2021-01064,
Paper 107 at 4–11 (PTAB Oct. 14, 2022) (providing a compelling merits
analysis with sufficient reasoning); Patent Quality Assurance, LLC v. VLSI
Tech., IPR2021-01229, Paper 102 at 59–63 (Decision of Director) (Dec. 22,
2022) (same).
Accordingly, I vacate the Board’s Decision and remand this
proceeding to the Board to revisit its Fintiv analysis in view of this Decision.
The Board should first assess Fintiv factors 1–5; if that analysis supports
discretionary denial, the Board should engage the compelling merits
question. If the Board reaches the compelling merits analysis and finds
compelling merits, it shall provide reasoning to explain its determination.
By issuing this Order, I express no opinion on whether the Board need reach
the compelling merits analysis, nor whether the record as it existed before
institution meets the compelling merits standard; I leave these case-specific
issues to the sound discretion of the Board.
No additional briefing from the parties is authorized. See Interim
process for Director review § 13 (explaining that the Director may give the
parties an opportunity for briefing if Director review is initiated sua sponte).
III. 	ORDER
Accordingly, based on the foregoing, it is:
ORDERED that sua sponte Director review of the Board’s Decision
Granting Institution is initiated;
FURTHER ORDERED that the Decision Granting Institution of Inter
Partes Review (Paper 21) is vacated; and

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FURTHER ORDERED that the case is remanded to the panel for
further proceedings consistent with this Decision within 3 weeks.

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FOR PETITIONER:
Philip P. Caspers
Samuel A. Hamer
CARLSON CASPERS VANDENBURGH & LINDQUIST
pcaspers@carlsoncaspers.com
shamer@carlsoncaspers.com
FOR PATENT OWNER:
David D. Schumann
Palani P. Rathinasamy
Moses Xie
Timothy Dewberry
FOLIO LAW GROUP PLLC
david.schumann@foliolaw.com
palani@foliolaw.com
moses.xie@foliolaw.com
timothy.dewberry@foliolaw.com