DTN, LLC v. Farms Technology, LLC

Trials@uspto.gov 	Paper 21
571.272.7822 	Entered: June 14, 2019
UNITED STATES PATENT AND TRADEMARK OFFICE
____________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________
DTN, LLC,
Petitioner,
v.
FARMS TECHNOLOGY, LLC,
Patent Owner.
____________
Case IPR2018-01412 (Patent 7,991,685 B2)
Case IPR2018-01525 (Patent 7,742,979 B2)
____________
Before SCOTT C. WEIDENFELLER, Vice Chief Administrative Patent
Judge, GEORGE R. HOSKINS, and FRANCES L. IPPOLITO,
Administrative Patent Judges.
HOSKINS, Administrative Patent Judge.
DECISION
Denying Joint Requests to Expunge Collateral Agreements,
Granting Joint Requests to Treat Agreements as Confidential, and
Granting Joint Motions to Terminate Proceedings
35 U.S.C. § 317; 37 C.F.R. §§ 42.72, 42.74

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I. 	Introduction and Procedural Background
In each of these two proceedings, the parties have filed a Joint Motion
to Terminate the proceeding on the basis of a settlement reached by the
parties. See 35 U.S.C. § 317(a); 1412 IPR, Paper 17; 1525 IPR, Paper 17.
Pursuant to 35 U.S.C. § 317(b):
Any agreement or understanding between the patent owner and
a petitioner, including any collateral agreements referred to in
such agreement or understanding, made in connection with, or
in contemplation of, the termination of an inter partes review
under this section shall be in writing and a true copy of such
agreement or understanding shall be filed in the Office before
the termination of the inter partes review as between the parties.
Id. Pursuant to that statute, in connection with the Joint Motions to
Terminate, the parties also filed a copy of their written settlement agreement
(Exhibit 1012 in both proceedings, hereafter “Settlement Agreement”), and
Joint Requests that the Settlement Agreement be treated as business
confidential information.1 1412 IPR, Paper 18; 1525 IPR, Paper 16.
Upon review of the foregoing, on May 1, 2019, we sent an e-mail
communication to counsel of record in both proceedings, in which we
informed counsel that “the Board has some inquiries concerning other
agreements that are referenced in the Settlement Agreement, and the filing
requirements of 35 U.S.C. § 317(b) and 37 C.F.R. § 42.74(b).” A telephone
conference was scheduled for May 9, 2019 to discuss those inquiries.
1 In an e-mail communication dated April 29, 2019, we noted that the
parties did not seek (and therefore were not granted) prior authorization
before filing the Papers submitted on April 23, 2019. See 37 C.F.R.
§ 42.20(b). Our e-mail waived the requirement for prior authorization for
those Papers, and further granted authorization to file further Papers. The
further Papers were thereafter submitted on April 29, 2019.

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During the May 9 telephone conference, Judges Weidenfeller,
Hoskins, and Ippolito participated on behalf of the Board. David Cabello,
James Hall, and Dan Morris appeared on behalf of Petitioner. Joshua Larsen
and Todd Vare appeared on behalf of Patent Owner. The Board explained
that the Settlement Agreement refers to two other agreements (hereafter
“Collateral Agreements”), which may be subject to the mandatory filing
requirement of § 317(b). Counsel for both parties argued that the two
Collateral Agreements are not subject to the mandatory filing requirement of
§ 317(b). We took this issue under advisement at the end of the telephone
conference.
On May 10, 2019, we sent another e-mail communication to counsel
of record in both proceedings, indicating “that based upon the facts
presented here, the two [Collateral Agreements] referenced in the Settlement
Agreement must be filed before the proceedings may be terminated via
settlement under 35 U.S.C. § 317.” We also scheduled another telephone
conference on May 15, 2019.
During the May 15 telephone conference, Judges Weidenfeller,
Hoskins, and Ippolito participated on behalf of the Board. David Cabello
and James Hall appeared on behalf of Petitioner. Joshua Larsen appeared on
behalf of Patent Owner. We briefly explained the reasoning behind the
conclusion stated in our May 10 e-mail. Counsel continued to maintain that
the two Collateral Agreements are not subject to the mandatory filing
requirement of § 317(b). However, counsel proposed that they would file
the Collateral Agreements for the Board’s consideration in that regard, along
with Requests to treat the Collateral Agreements as business confidential
information, and Motions to Expunge the Collateral Agreements. Counsel

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expressed the view that the Board could use the Motions to Expunge as a
vehicle to reach a final decision concerning whether the Collateral
Agreements are subject to the mandatory filing requirement of § 317(b), and
then grant the Motions to Terminate regardless of whether the Collateral
Agreements are expunged. The Board granted authorization for the parties
to make the proposed filings, and set a five page limit on the Motions to
Expunge.
Accordingly, on May 21, 2019, the parties filed the two Collateral
Agreements (Exhibits 2008 and 2009 in both proceedings). The parties also
filed Joint Requests that the Collateral Agreements be treated as business
confidential information. 1412 IPR, Paper 19; 1525 IPR, Paper 18. The
parties further filed Joint Motions to Expunge the Collateral Agreements.
1412 IPR, Paper 20; 1525 IPR, Paper 19.
II. 	Joint Motions to Expunge the Collateral Agreements
The parties filed the same Joint Motion to Expunge the two Collateral
Agreements in both proceedings. 1412 IPR, Paper 20; 1525 IPR, Paper 19.
We will hereafter cite only to the 1412 IPR filing for convenience. The
parties contend the Collateral Agreements “do not fall within the scope of
35 U.S.C. § 317 and 37 C.F.R. § 42.74” for two reasons, which we consider
in turn. 1412 IPR, Paper 20, 1–2.
A. 	Agreement “between the patent owner and a petitioner”
First, the parties contend § 317(b) does not require the filing of the
Collateral Agreements because the agreements are not “between the patent
owner and a petitioner” (35 U.S.C. § 317(b)) or “between the parties”
(37 C.F.R. § 42.74(b)). 1412 IPR, Paper 20, 1–2. The parties interpret

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§ 317(b) to require the filing only of collateral agreements that are between
the patent owner and a petitioner, and cite the use of the term “including”
before “any collateral agreements” in the statute as supporting that
interpretation. Id. at 2–3. Construing the statute to include collateral
agreements that are not between the patent owner and a petitioner would, in
the parties’ view, improperly replace the term “including” with the term
“and.” Id. at 3. The parties further rely on the statutory construction
principle that “a general statutory term should be understood in light of the
specific terms that surround it” as indicating, when applied to § 317(b), that
“the general term ‘any collateral agreements’ should not be read to broaden
the more specific term ‘agreement or understanding between the patent
owner and a petitioner.’” Id. (citing Hughey v. U.S., 495 U.S. 411, 418–19
(1990)). The parties moreover contend 37 C.F.R. § 42.74(b) interprets the
statute as being limited to agreements “between the parties,” that is, between
the patent owner and a petitioner. Id. at 3–4 (emphasis in original). The
parties, finally, point out that neither of the two Collateral Agreements is
between the patent owner and a petitioner in these two proceedings, because
the patent owner (Farms Technology, LLC) is not a party to either
agreement. Id. at 4.
In consideration of the foregoing, 35 U.S.C. § 317(b) pertinently
requires the filing of “[a]ny agreement or understanding between the patent
owner and a petitioner, including any collateral agreements referred to in
such agreement or understanding . . . .” In this case, the Settlement
Agreement (Ex. 1012) is between patent owner Farms Technology, LLC and
petitioner DTN, LLC. See, e.g., 1412 IPR, Paper 18, 2 (referring to the
Settlement Agreement as being “between the parties”). The Settlement

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Agreement, thus, is an “agreement or understanding between the patent
owner and a petitioner” as specified in 35 U.S.C. § 317(b).
It is, further, undisputed that the Settlement Agreement refers to the
two Collateral Agreements. See Ex. 1012, 1–2 (Clauses #10 and #11 of
twelve “WHEREAS” Clauses). In requiring the filing of the Settlement
Agreement “including any collateral agreements referred to” in the
Settlement Agreement, the statute does not require any more than that.
35 U.S.C. § 317(b) (emphasis added).
In particular, the statutory language of § 317(b) does not limit the
“collateral agreements” to agreements that are between the patent owner and
a petitioner. We conclude, instead, that the term “any” means “any,” so the
collateral agreements need not be between the patent owner and a petitioner
to fall under the ambit of the statute. It is sufficient for a collateral
agreement (here, the two Collateral Agreements) to be referred to in an
agreement between the patent owner and a petitioner (here, the Settlement
Agreement). By referring to the two Collateral Agreements, the Settlement
Agreement includes the Collateral Agreements, as required by § 317(b),
regardless of whether patent owner Farms Technology, LLC, and petitioner
DTN, LLC, are both parties to the Collateral Agreements. Thus, while the
parties are correct that patent owner Farms Technology, LLC is not a party
to either one of the two Collateral Agreements, that fact does not exempt the
two Collateral Agreements from the filing requirement of § 317(b).
37 C.F.R. § 42.74(b) is not contrary to the foregoing understanding of
35 U.S.C. § 317(b). The regulation pertinently refers only to “[a]ny
agreement or understanding between the parties . . . .” 37 C.F.R. § 42.74(b)
(emphasis added). That is, the regulation does not refer to the “collateral

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agreements” described in the statute at all, much less specify that the
collateral agreements must be between the patent owner and a petitioner.
The regulation, therefore, is not particularly pertinent to the statutory
construction presented here. Further, our review of the commentary
accompanying the regulation does not shed any light on the applicability of
the regulation to the “collateral agreements” referenced in the statute. See
Rules of Practice for Trials Before the Patent Trial and Appeal Board and
Judicial Review of Patent Trial and Appeal Board Decisions, 77 Fed. Reg.
48,612, 48,625 & 48,649–50 (Aug. 14, 2012). Absent a clear indication to
the contrary, which we do not find in either the regulatory text or in the
accompanying commentary, we do not agree with the parties’ interpretation
of 37 C.F.R. § 42.74(b) as setting forth Office policy on the correct
interpretation of the “collateral agreements” clause in 35 U.S.C. § 317(b).
The decision in Hughey v. U.S., 495 U.S. 411 (1990), also does not
support the parties’ position here. In the Hughey decision, the Court
considered a criminal statute that provided:
The court, in determining whether to order restitution under
[18 U.S.C. § 3579] and the amount of such restitution, shall
consider the amount of the loss sustained by any victim as a
result of the offense, the financial resources of the defendant,
the financial needs and earning ability of the defendant and the
defendant’s dependents, and such other factors as the court
deems appropriate.
Hughey, 495 U.S. at 416–417 (emphasis added). The United States
Government argued that the statute’s final, “catchall phrase . . . authorizes
courts to include in their restitution calculus losses resulting from offenses
other than the offense of conviction.” Id. at 417. The Court rejected the
Government’s argument in pertinent part on the basis that “the . . . remaining

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considerations preceding the catchall phrase are designed to limit, rather
than to expand, the scope of any order of restitution.” Id. at 418–19. By
contrast, in the case presented here, the surrounding terms in § 317(b) are
expansive rather than restrictive in nature, in referring to “[a]ny agreement
or understanding between the patent owner and a petitioner, including any
collateral agreements referred to in such agreement or understanding”
(emphases added). Moreover, the statutory language at issue here
(“including any collateral agreements referred to . . . ”) is not sufficiently
akin to the general or catchall language at issue in Hughey (“and such other
factors as the court deems appropriate”) to require application of the same
canon of statutory construction.
Finally, interpreting § 317(b) in the manner proposed by the parties
here would allow parties to IPR proceedings to circumvent the statute’s
filing requirement easily, thereby frustrating the purpose of the statute. The
parties to an IPR proceeding could enter into a very short agreement
between themselves, referring to a separate agreement between one or more
related but different corporate entities than the parties to the IPR proceeding,
either controlling or controlled by the parties to the proceeding. That
separate agreement, which the parties here contend would be exempt from
§ 317(b), would contain all the terms the parties desire to insulate from
review by “Federal Government agencies on written request” or “any person
on a showing of good cause.” 35 U.S.C. § 317(b).
Thus, we conclude the two Collateral Agreements fall under the scope
of 35 U.S.C. § 317(b), despite that patent owner Farms Technology, LLC is
not a party to either one of the two Collateral Agreements.

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B. 	Agreement “made in connection with, or in contemplation of,
the termination of” IPR Proceedings
Second, the parties contend the two Collateral Agreements are not
required to be filed because they were not “made in connection with, or in
contemplation of, the termination of” these two IPR proceedings. 1412 IPR,
Paper 20, 1–2, 4–5 (quoting 35 U.S.C. § 317(b) and 37 C.F.R. § 42.74(b)).
In support, the parties point out that one Collateral Agreement (Ex. 2008)
does not mention either of these two proceedings. Id. at 5. The parties point
out that the other Collateral Agreement (Ex. 2009) refers to these two
proceedings in introductory “WHEREAS” clauses, yet “none of the
obligations undertaken . . . requires or depends upon the termination of
either [IPR proceeding] in any way.” Id. The parties maintain “the
termination (or non-termination) of these IPRs will have no effect on the
[two] Collateral Agreements.” Id.
The problem with the foregoing arguments is that § 317(b) does not
require the Collateral Agreements to have been “made in connection with, or
in contemplation of, the termination” of the IPR proceedings. The statute
requires the “agreement or understanding between the patent owner and a
petitioner” (i.e., the Settlement Agreement here) to be “made in connection
with, or in contemplation of, the termination of an inter partes review under
this section.” 35 U.S.C. § 317(b). Our regulation likewise requires that only
the “agreement or understanding between the parties” (again, the Settlement
Agreement here) be “made in connection with, or in contemplation of, the
termination of a proceeding.” 37 C.F.R. § 42.74(b). The Collateral
Agreements need only be “referred to” in the Settlement Agreement to
qualify under § 317(b), which they undisputedly are.

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C. 	Conclusion on Joint Motions to Expunge the Collateral Agreements
For the foregoing reasons, we conclude the two Collateral Agreements
fall under the ambit of 35 U.S.C. § 317(b) as agreements that must be filed
in the Office before these two proceedings may be terminated. We,
therefore, deny the Joint Motions to Expunge the Collateral Agreements.
III. 	Joint Requests to Treat the Settlement Agreement, and the Two
Collateral Agreements, as Business Confidential Information
The parties have filed Joint Requests to treat the Settlement
Agreement, and the two Collateral Agreements, as business confidential
information pursuant to 35 U.S.C. § 317(b). 1412 IPR, Papers 18 & 19;
1525 IPR, Papers 16 & 18. These Requests are granted, and the Settlement
Agreement (Ex. 1012) as well as the two Collateral Agreements (Exs. 2008
& 2009) will be treated as business confidential information under 35 U.S.C.
§ 317(b) and 37 C.F.R. § 42.74(c).
IV. 	Joint Motions to Terminate the Proceedings
The parties have filed Joint Motions to Terminate each proceeding
pursuant to 35 U.S.C. § 317(a), on the basis of a settlement reached by the
parties. 1412 IPR, Paper 17; 1525 IPR, Paper 17. The parties indicate they
have settled their underlying disputes and have executed the Settlement
Agreement (Ex. 1012) to terminate these two proceedings, as well as the
District Court litigation involving the ’685 patent and the ’979 patent:
Civil Action No. 2:18-cv-02495, in the District of Kansas. 1412 IPR,
Paper 17, 3; 1525 IPR, Paper 17, 3. The parties further indicate they have
filed or shortly will file dismissal papers in that litigation, and they have

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agreed to settle and dismiss all other litigation between them. 1412 IPR,
Paper 17, 3; 1525 IPR, Paper 17, 3.
Generally, the Board expects that a proceeding will terminate after the
filing of a settlement agreement. See 35 U.S.C. § 317(a) (“An inter partes
review instituted under this chapter shall be terminated with respect to any
petitioner upon the joint request of the petitioner and the patent owner,
unless the Office has decided the merits of the proceeding before the request
for termination is filed.”); 37 C.F.R. § 42.72 (“The Board may terminate a
trial without rendering a final written decision, where appropriate,
including . . . pursuant to a joint request under 35 U.S.C. 317(a)”); see also
Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,768 (Aug. 14,
2012) (“The Board expects that a proceeding will terminate after the filing
of a settlement agreement, unless the Board has already decided the merits
of the proceeding.”). Here, the proceeding is at a relatively early stage and a
final written decision has not been reached or entered. Accordingly, we are
persuaded that, under these circumstances, termination of this proceeding is
appropriate, and we grant the Joint Motions to Terminate the proceedings.
This Decision does not constitute a final written decision pursuant to
35 U.S.C. § 318(a).
V. 	Order
In consideration of the foregoing, it is hereby:
ORDERED that the Joint Motions to Expunge the two Collateral
Agreements (1412 IPR, Paper 20; 1525 IPR, Paper 19) are each denied;
FURTHER ORDERED that the Joint Requests (1412 IPR, Papers 18
& 19; 1525 IPR, Papers 16 & 18) to treat the Settlement Agreement

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(Exhibit 1012) and the two Collateral Agreements (Exs. 2008 & 2009) as
business confidential information are each granted, and those agreements
shall be kept separate from the files of U.S. Patent No. 7,991,685 B2 and
U.S. Patent No. 7,742,979 B2, and made available only to Federal
Government agencies on written request, or to any person on a showing of
good cause, under 35 U.S.C. § 317(b) and 37 C.F.R. § 42.74(c); and
FURTHER ORDERED that the Joint Motions to Terminate these
proceedings (1412 IPR, Paper 17; 1525 IPR, Paper 17) are each granted, and
the proceedings are hereby terminated under 35 U.S.C. § 317(a) and
37 C.F.R. § 42.72.

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PETITIONER:
David Cabello
James Hall
Stephen Zinda
BLANK ROME LLP
DCabello@BlankRome.com
JHall@BlankRome.com
SZinda@BlankRome.com
PATENT OWNER:
Joshua P. Larsen
Yoojin Jung
Todd G. Vare
Deborah Pollack-Milgate
BARNES & THORNBURG LLP
Joshua.Larsen@btlaw.com
Kate.Jung@btlaw.com
Todd.Vare@btlaw.com
Deborah.PollackMilgate@btlaw.com