Trials@uspto.gov
`571-272-7822
`
`
`
`
`
` Paper 27
`Entered: May 17, 2013
`
`
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`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`BLOOMBERG INC.; BLOOMBERG L.P.; BLOOMBERG FINANCE L.P.;
`THE CHARLES SCHWAB CORPORATION;
`CHARLES SCHWAB & CO., INC.;
`E*TRADE FINANCIAL CORPORATION; E*TRADE SECURITIES LLC;
`E*TRADE CLEARING LLC; OPTIONSXPRESS HOLDINGS INC.;
`OPTIONSXPRESS, INC.; TD AMERITRADE HOLDING CORP.;
`TD AMERITRADE, INC.; TD AMERITRADE IP COMPANY, INC.; and
`THINKORSWIM GROUP INC.
`Petitioner,
`
`v.
`
`MARKETS-ALERT PTY LTD.
`Patent Owner.
`____________
`
`Case CBM2013-00005 (JYC)
`Patent 7,941,357
`____________
`
`
`
`Before JAMESON LEE, SALLY C. MEDLEY, JONI Y. CHANG, Administrative
`Patent Judges.
`
`CHANG, Administrative Patent Judge.
`
`
`
`ORDER
`Authorizing Motion for Additional Discovery
`37 C.F.R. § 42.224
`
`
`571-272-7822
`
`
`
`
`
` Paper 27
`Entered: May 17, 2013
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`BLOOMBERG INC.; BLOOMBERG L.P.; BLOOMBERG FINANCE L.P.;
`THE CHARLES SCHWAB CORPORATION;
`CHARLES SCHWAB & CO., INC.;
`E*TRADE FINANCIAL CORPORATION; E*TRADE SECURITIES LLC;
`E*TRADE CLEARING LLC; OPTIONSXPRESS HOLDINGS INC.;
`OPTIONSXPRESS, INC.; TD AMERITRADE HOLDING CORP.;
`TD AMERITRADE, INC.; TD AMERITRADE IP COMPANY, INC.; and
`THINKORSWIM GROUP INC.
`Petitioner,
`
`v.
`
`MARKETS-ALERT PTY LTD.
`Patent Owner.
`____________
`
`Case CBM2013-00005 (JYC)
`Patent 7,941,357
`____________
`
`
`
`Before JAMESON LEE, SALLY C. MEDLEY, JONI Y. CHANG, Administrative
`Patent Judges.
`
`CHANG, Administrative Patent Judge.
`
`
`
`ORDER
`Authorizing Motion for Additional Discovery
`37 C.F.R. § 42.224
`
`
`
`Case CBM2013-00005
`Patent 7,941,357
`
`
`On May 15, 2013, a telephone conference call was held between respective
`
`counsel for the parties and Judges Lee, Medley, and Chang. The subject matter of
`
`discussion was Markets-Alert’s request for authorization to file a motion for
`
`discovery. In particular, Markets-Alert requested the Board’s authorization to file
`
`a request for routine discovery, a request for mandatory initial disclosures, and a
`
`motion for additional discovery.
`
`Expunging Papers
`
`Prior to the conference call, Markets-Alert filed two papers and four exhibits
`
`as a request for authorization to file a motion for discovery. (Papers 25 and 26;
`
`Ex. 2017 through 2020.) Upon brief review of the papers and exhibits, the Board
`
`determined that those papers and exhibits were essentially a motion for discovery
`
`filed without a prior authorization. 37 C.F.R. § 42.20. Accordingly, they have
`
`been expunged from the record of this trial. 37 C.F.R. § 42.7(a).
`
`Routine Discovery
`
`The Board directed the parties’ attention to 37 C.F.R. § 42.51(b)(1), which
`
`provides (emphasis added):
`
`Routine discovery. Except as the Board may otherwise order:
`
` *
`
` * * *
`(iii) Unless previously served, a party must serve relevant
`information that is inconsistent with a position advanced by the party
`during the proceeding concurrent with the filing of the documents or
`things that contains the inconsistency. This requirement does not
`make discoverable anything otherwise protected by legally recognized
`privileges such as attorney-client or attorney work product. This
`requirement extends to inventors, corporate officers, and persons
`involved in the preparation or filing of the documents or things.
`
`
`
`
`2
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`Case CBM2013-00005
`Patent 7,941,357
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`
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`Routine discovery does not require any action on the part of Markets-Alert
`
`as the rule places the burden upon Bloomberg to come forward and serve
`
`information inconsistent with a position advanced. During the conference call,
`
`each party confirmed that it has produced all information covered by 37 C.F.R.
`
`§ 42.51(b)(1)(iii) as routine discovery. As a result, Markets-Alert withdrew its
`
`request for routine discovery.
`
`Mandatory Initial Disclosures
`
`
`
`Pursuant to 37 C.F.R. § 42.51(a), parties may agree to mandatory discovery
`
`requiring the initial disclosures set forth in the Office Patent Trial Practice Guide.
`
`Where the parties fail to agree to the mandatory discovery, however, a party may
`
`seek such discovery by motion pursuant to 37 C.F.R. § 42.51(b)(2) and 37 C.F.R.
`
`§ 42.224 in a covered business method patent review. Therefore, 37 C.F.R.
`
`§ 42.51(a) is not a separate mechanism for filing a discovery motion in addition to
`
`that available under 37 C.F.R. § 42.51(b)(2).
`
`The Board explained that Markets-Alert’s request for mandatory initial
`
`disclosures is in essence a request for additional discovery and must be presented
`
`in the form of a motion in compliance with 37 C.F.R. §§ 42.20, 42.51(b)(2) and
`
`42.224. Markets-Alert agreed to present its request for production of information
`
`in the form of a motion for additional discovery.
`
`
`
`
`
`3
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`Case CBM2013-00005
`Patent 7,941,357
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`
`Additional Discovery
`
`The Board further directed the parties’ attention to 37 C.F.R. § 42.224,
`
`which provides:
`
`Notwithstanding the discovery provisions of [§ 42.51(b)(2)]:
`
`(a) Requests for additional discovery may be granted upon a
`showing of good cause as to why the discovery is needed; and
`
`(b) Discovery is limited to evidence directly related to factual
`assertions advanced by either party in the proceeding.
`
`The Office promulgated that rule pursuant to 35 U.S.C. § 326. See e.g.,
`
`35 U.S.C. § 326(a) (“The Director shall prescribe regulations–– (5) setting forth
`
`standards and procedures for discovery of relevant evidence, including that such
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`discovery shall be limited to evidence directly related to factual assertions
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`advanced by either party in the proceeding;”) and 35 U.S.C. § 326(b) (“In
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`prescribing regulations under this section, the Director shall consider the effect of
`
`any such regulation on the economy, the integrity of the patent system, the efficient
`
`administration of the Office, and the ability of the Office to timely complete
`
`proceedings instituted under this chapter.”). That is significantly different from the
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`scope of discovery generally available under the Federal Rules of Civil Procedure.
`
`In a covered business method patent review, discovery is limited as
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`compared to that available in district court patent litigation. Limited discovery
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`lowers the cost, minimizes the complexity, and shortens the period required for
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`dispute resolution. Given the one-year deadline for completion of a review, the
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`Board will be conservative in granting additional discovery. See 154 Cong. Rec.
`
`S9988-89 (daily ed. Sept. 27, 2008)(statement of Sen. Kyl).
`
`Upon considerations of the parties’ arguments, the Board determined that
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`briefing on the matter is warranted. Therefore, Markets-Alert is authorized to file a
`
`
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`4
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`Case CBM2013-00005
`Patent 7,941,357
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`motion for additional discovery, and Bloomberg is permitted to file an opposition
`
`to the motion.
`
`The Board indicated that Martets-Alert should prepare its motion for
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`additional discovery with the statutory and regulatory considerations in mind.
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`Markets-Alert’s motion should explain specifically what discovery is being
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`requested and include a showing of good cause as to why each item is needed. The
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`Board further advised Markets-Alert that its discovery request should be tailored
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`narrowly and therefore Markets-Alert should not expect the Board to sort through a
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`broad request to find items that meet the statutory and regulatory standard. For
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`instance, the motion must specifically identify the information sought and address
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`the relevance of that information, including identifying the nexus between the
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`information sought and any allegation of commercial success. A discovery request
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`will not be granted if the discovery request is unduly broad and encompasses
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`numerous documents that are irrelevant to the instituted grounds of unpatentability.
`
`For further guidance, the Board pointed out two decisions on additional
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`discovery. In CBM2012-00001 (Paper 24 at 3-5), a discovery request for specific
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`documents that were not burdensome for the petitioner to produce was granted.
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`The factors set forth in the “Decision on Motion for Additional Discovery” entered
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`in IPR2012-00001 (Paper 26 at 6-7) are helpful in determining whether a discovery
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`request meets the statutory and regulatory standard. Notably, the mere possibility
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`of finding something useful, and mere allegation that something useful will be
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`found, are insufficient (Factor 1), and the request must not be overly burdensome
`
`to answer (Factor 5).
`
`It is
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`
`
`ORDERED that Markets-Alert is authorized to file a motion for additional
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`discovery under 37 C.F.R. § 42.51(b)(2) by May 20, 2013, limited to 10 pages;
`
`
`
`5
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`
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`Case CBM2013-00005
`Patent 7,941,357
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`Bloomberg is authorized to file an opposition by May 24, 2013, also limited to
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`10 pages; and no reply is authorized; and
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`FURTHER ORDERED that no other request or motion for production of
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`documents is authorized.
`
`
`
`
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`
`
`PETITIONER:
`
`Michael T. Rosato
`Brian D. Range
`WILSON SONSINI GOODRICH & ROSATI
`Email: mrosato@wsgr.com
`Email: brange@wsgr.com
`
`
`PATENT OWNER:
`
`Andrew Choung
`GLASER WEIL FINK JACOBS HOWARD
`AVCHEN & SHAPIRO LLP
`Email: achoung@glaserweil.com
`
`William Fitzpatrick
`F. ROBBE INTERNATIONAL
`Email: bill@frobbeintl.com
`
`
`
`
`
`
`6
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`
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