PTAB To Review Packet Intelligence IP That Netted Jury Win

By Britain Eakin
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Law360 (September 11, 2020, 5:45 PM EDT) -- The Patent Trial and Appeal Board will review four Packet Intelligence LLC data network monitoring patents, some of which drew a $6 million jury win in 2017 that was later trimmed, shooting down the company's request for the board to use its discretion to deny the petitions.

Packet pointed to two pending trials in parallel district court cases before the same judge in California involving challengers Palo Alto Networks Inc. and Juniper Networks Inc. set to begin next August and September over the computer network traffic processing and monitoring patents as a reason to deny institution. But the board said in a series of five decisions Wednesday and Thursday that institution is warranted, in part because the trials are likely to be delayed because of the COVID-19 pandemic.

While the PTAB is currently fully operational and adhering to the one-year statutory deadline to issue final written decisions, the board noted that the district court has already rescheduled the first trial amid the pandemic and isn't bound by a similar deadline when considering further schedule changes.

"Although the first trial is currently scheduled to begin days before a final written decision is due, we find that it is more likely that the district court will incur delays due to the COVID-19 pandemic than the board," the decisions said.

The proximity of a trial date in parallel litigation is one of six factors the board relies on to determine when a parallel district court proceeding warrants not reviewing a patent, which in these cases the board said weighs in favor of instituting inter partes review.

Another factor that weighs against discretionary denial, the board determined, is the likelihood that the district court would grant a stay in the parallel proceedings. The decisions noted that the district court had said it would grant a stay if the PTAB instituted review of a fifth Packet patent Juniper and Palo Alto had challenged.

The board acknowledged that the district court's statements were not directed to these specific proceedings, but said they nonetheless "provide some evidence that it may grant a stay upon institution considering all circumstances at the time the motion is filed."

In a notice filed Thursday in Packet's district court case against Juniper about the board's institution decisions, Juniper said it intends to ask the court by Sept. 25 to pause the parallel litigation pending the PTAB's review of the patents.

Three of the patents at issue initially netted Packet a nearly $6 million Texas federal jury verdict against NetScout Systems Inc. in 2017, though the Federal Circuit later trimmed $3.5 million in presuit damages from the award. That left NetScout stuck with $2.25 million in post-suit damages plus $2.8 million in enhanced damages, as well as an ongoing 1.55% ongoing royalty rate for future infringement.

Packet then sued Juniper for infringing those patents, along with two others, in August 2019, including the four at issue in the PTAB's decisions Wednesday and Thursday. Juniper lodged challenges to all five of the patents at the PTAB in February, with the board declining last month to institute two Juniper petitions challenging the fifth patent.

In July, Juniper got an expert witness for Packet disqualified from the district court case because he had previously worked for Juniper, with the court determining that allowing him to testify would "pose a risk to Juniper" and "create an appearance of impropriety." Juniper had likewise moved to disqualify the expert from the PTAB proceedings, but withdrew the motion on August 26 after Packet agreed not to rely on him, according to PTAB filings.

Palo Alto meanwhile sued in May 2019 seeking a declaration that it does not infringe the same five patents that Packet accused Juniper of infringing. Packet shot back with counterclaims that July saying Palo Alto also infringes all five patents, with Palo Alto in turn joining Juniper in challenging the patents at the PTAB.

Counsel for Juniper declined to comment. Counsel for Palo Alto and Packet did not return a request for comment.

The patents-in-suit are U.S. Patent Nos. 6,954,789 B2; 6,771,646 B1; 6,665,725 B1; and 6,839,751 B1.

Juniper is represented by Joseph F. Edell and Adam A. Allgood of Fisch Sigler LLP.

Palo Alto is represented by Scott A. McKeown, Mark D. Rowland and James R. Batchelder of Ropes & Gray LLP.

Packet is represented by R. Allan Bullwinkel and Michael F. Heim of Heim Payne & Chorush LLP.

The cases are Juniper Networks Inc. et al. v. Packet Intelligence LLC, case numbers IPR2020-00338, IPR2020-00486, IPR2020-00339, IPR2020-00337 and IPR2020-00336, before the Patent Trial and Appeal Board.

--Additional reporting by Tiffany Hu and Cara Salvatore.

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