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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.
`Petitioners,
`
`v.
`
`MARKETS-ALERT PTY LTD.
`Patent Owner.
`____________
`
`Case CBM2013-00005 (JYC)
`Patent 7,941,357
`____________
`
`
` Before JAMESON LEE, SALLY C. MEDLEY, and JONI Y. CHANG,
`Administrative Patent Judges.
`
`
`
`PATENT OWNER MARKETS-ALERT
`MOTION FOR AND TO COMPEL DISCOVERY
`
`
`
`
`
`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
`
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`Pursuant to the May 17, 2013 Order Authorizing Motion for Additional
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`Discovery 37 C.F.R. §42.224 (D27) (“Order”) by the Patent Trial and Appeal
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`Board (“Board”) and 37 C.F.R. §§42.51 and 42.52, Patent Owner Markets-Alert
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`Pty. Ltd. (“Markets-Alert”) hereby moves for and to compel additional discovery.
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`I.
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`
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`INTRODUCTION
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`Although discovery is limited in a CBM Review, the Board may upon
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`motion by a party for good cause authorize additional discovery of evidence
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`directly related to factual assertions advanced in the proceeding. 37 C.F.R.
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`§42.51(b)(2) and §42.224. At the parties’ May 15, 2013 teleconference with the
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`Board, the Board referred the parties to the five factor test applied in Garmin
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`International, Inc. et al. v. Cuozzo Speed Technologies LLC, Case IPR2012-00001:
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`(i) more than a possibility and mere allegation; (ii) litigation positions and
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`underlying basis; (iii) ability to generate equivalent information by other means;
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`(iv) easily understandable instructions; and (v) requests not overly burdensome to
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`answer. Garmin at 6-7. Markets-Alert notes that Garmin is an inter partes review,
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`which is subject to the interests of justice standard, while CBM review is subject to
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`the more liberal standard of good cause. 77 Fed. Reg. 48612, 48622. However,
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`pursuant to the Board’s guidance, Markets-Alert applies the Garmin factors.
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`
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`1
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
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`
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`Unlike the discovery requests in Garmin, the discovery sought by Markets-
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`Alert is neither exorbitant nor unduly broad. Specifically, Markets-Alert requests
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`limited discovery on the following topics:
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`(1)
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`Prior art to U.S. Patent No. 7,941,357 (“‘357 Patent”) known to a
`Petitioner that was not submitted in the Petition For Post Grant
`Review Of A Covered Business Method Under 25 U.S.C. § 321 and §
`18 filed by Petitioners (“Petition”).
`
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`(2) Documents and things reviewed or considered by a Petitioner in
`conjunction with preparation of the Petition.
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`(3) Documents and things reviewed or considered by Steven R. Kursh
`(“Kursh”) in conjunction with preparation of his Declaration of
`Steven R. Kursh, Exhibit 1002 to the Petition (“Declaration”).
`
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`(4) Documents and things relating to any communication, discussion,
`evaluation, consideration or decision regarding licensing from
`Markets-Alert or commercial implementation or adoption of any
`specific embodiment of the ‘357 Patent in the 2000 to 2011 time
`frame.
`
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`(5) Documents and things relating to any commercial or technical review,
`analysis or decision regarding licensing or commercial
`implementation or adoption of any technology similar to the invention
`of the ‘357 Patent in the 2000 to 2011 time frame.
`
`
`See Exhibit 2021.1
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`Each of Markets-Alert’s requests is tailored narrowly to specific evidence,
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`which is highly relevant to the instituted grounds and issues under review and
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`genuinely necessary to prepare its Response and Amendment to the ‘357 Patent.
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`1 In an effort to narrow the discovery issues before the Board, Markets-Alert has elected not to
`move for its discovery requests directed to the Mandatory Initial Disclosures at this time.
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`2
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
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`77 Fed. Reg. 48756, 48761. Each request is easily understandable and the
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`evidence sought by Markets-alert is “uniquely in the possession” of Petitioners. 77
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`Fed. Reg. 48756, 48761. None of the requests prematurely force Petitioners to
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`present their litigation position.
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`Moreover, since Markets-Alert’s requests seek only documents and
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`information already considered by and in the hands of Petitioners, they are not
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`overly burdensome to answer. Any minor burden on Petitioners, who are among
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`the largest companies in the industry, would be far outweighed by the benefit of
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`developing a fair record before the Board, which will level the playing field,
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`streamline these proceedings and avoid an unnecessary guessing game. 77 Fed.
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`Reg. 48756, 48761. Therefore, Markets-Alert’s additional discovery requests are
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`warranted under the Garmin factors.
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`II. GOOD CAUSE EXISTS FOR THE REQUESTED DISCOVERY
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`A.
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`Prior Art Known To But Not Submitted By Petitioners.
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`Request 1 is clear and easily understandable. It merely seeks the prior art
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`evidence already known to and in the hands of Petitioners, which were withheld
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`from their Petition. This request does not require Petitioners to search for new
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`prior art or disclose its litigation positions. Further, the undisclosed prior art is
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`only known to Petitioners. Although Markets-Alert could conduct a
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`comprehensive search of the entire prior art world, it could not reasonably
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`3
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
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`determine what prior art Petitioners found and considered. In contrast, simply
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`handing over what is likely already sitting in a computer file of Petitioners’ counsel
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`would pose no burden to Petitioners. Thus, this request easily satisfies factors (ii)
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`to (v).
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`This request also satisfies factors (i) and (v) since prior art known to, but not
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`submitted by, Petitioners is highly relevant to this proceeding as they inform the
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`level of ordinary skill and the state of the relevant art at the time of filing, key
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`factual inquiries in this proceeding. In their Petition, Petitioners made numerous
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`assertions as to how features of the invention, such as “technical analysis,” “real-
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`time,” and “network of computers,” would be understood by contemporaneous
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`practitioners in the field, in order to support both their claim constructions and
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`invalidity arguments, much of which was adopted by the Board based on the as yet
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`unchallenged testimony of Kursh. Since Markets-Alert disagrees that the state of
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`the art supports Petitioners’ assertions, the undisclosed prior art would be highly
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`probative and favorable in substantive value to Markets-Alert. Indeed, this
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`evidence is crucial for adequately cross-examining Kursh to test the substantive
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`merit and credibility of his testimony.
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`This undisclosed prior art is also highly relevant because it circumscribes the
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`realistic range of arguments and amendments available to Markets-Alert. It is
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`utterly incongruous for Petitioners to insist that Markets-Alert limit its Response
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`4
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
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`and Amendments to only the self-selected prior art they disclosed, when
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`Petitioners have made clear that they have other prior art in their possession and
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`intend to submit supplemental information. Keeping Markets-Alert (and the Board)
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`in the dark about other prior art, only to spring them later in this proceeding, makes
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`no sense and is inefficient. If this other prior art is disclosed, then Markets-Alert
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`will be able to avoid unnecessary arguments and amendments, which will help
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`streamline this proceeding to meet the one-year statutory deadline for completion.
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`Petitioners’ main argument has been that the ‘357 Patent invention was
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`already widely in use at the time of filing, which is why Petitioners focused
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`primarily of references allegedly evidence prior products and use. See Petition at 1
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`and 25 – 52. Yet, Petitioners chose only to submit two patent publications, a few
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`general trade articles, and a handful of archived webpages in their Petition. The
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`dearth of patent publications and the complete absence of any evidence of
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`Petitioners’ own prior use of the invention in the Petition is completely at odds
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`with Petitioners’ claim that the prior art was “blanketed with literature.” Petition at
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`1. Thus, the circumstances strongly tend to show that either Petitioners
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`misrepresented the prior art or possess additional prior art and the nature and scope
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`of that undisclosed prior art is unfavorable to Petitioners’ position.2 Therefore, the
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`2 The reasons behind why Petitioners and Kursh disclosed some prior art, but not others, are
`likely to be as useful as the undisclosed prior art itself.
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`5
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
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`evidence sought will likely be favorable to Markets-Alert and useful in this
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`proceeding.
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`B.
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`Evidence Actually Relied Upon By Petitioners And Their Expert.
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`Requests 2 and 3 are easily understandable as they seek nothing more than
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`access to the same evidence upon which Petitioners and Kursh relied to prepare
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`their Petition and Declaration. They do not require Petitioners to prematurely
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`expound on their litigation position or later assertions. Moreover, the undisclosed
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`evidence Petitioners relied upon cannot be reasonably obtained by other means by
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`Markets-Alert and is crucial to fully analyzing the positions advanced by
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`Petitioners and Kursh. These requests impose no burden because the responsive
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`evidence is already in hands of Petitioners and the volume likely is to be quite low,
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`since only evidence that has not yet been disclosed is requested. Thus, these
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`requests easily satisfy factors (ii) – (v).
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`These requests also satisfy factors (i) and (v), since the Board adopted a
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`number of claim constructions proposed by Petitioners, some only implicitly such
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`as “technical analysis” and “network of computers.” Although Markets-Alerts
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`must now prepare its Response and Amendment in the context of these
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`constructions, no record of the bases for these constructions or any other assertions
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`by Petitioner and Kursh exists. Neither Petitioners nor Kursh cited any supporting
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`evidence for their proposals. Kursh’s testimony consists of conclusory statements,
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`6
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
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`in which he identifies no evidence from which he derives his “opinions” and
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`provides no reasoning.
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`For example, in Paragraph 41 of his Declaration, Kursh opines that “real-
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`time notification” includes the time period sufficiently long to accommodate the
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`remote communication devices mentioned in the ‘357 Patent. But he provides no
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`basis for this opinion, other than to say it is his opinion. This is a particularly
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`important issue since his opinion concerns only the timing on the receiving end of
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`the notification and not, for example, the real-time generation of the notification as
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`compared to time-delayed or end of day alerts. Markets-Alert is entitled to know if
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`Kursh relied on evidence that discussed the relative importance of when the
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`notification is generated (or derived his opinion without any specific evidence).
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`The evidence sought by these requests are necessary to prepare for and
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`thoroughly cross-examine Kursh, not only with respect to his conclusory opinions
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`on claim construction, but also his testimony as to the state of the art at the time of
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`filing. For example, in Paragraph 55 of his Declaration, Kursh summarily opines
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`that one of skill in the art would consider the matching of buy and sell orders in
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`Satow to constitute technical analysis. However, not even Satow characterized this
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`matching as technical analysis. Thus, if not a bald conclusion, then the
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`circumstances strongly tend to show that Kursh’s opinion must have been derived
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`from some evidence other than Satow.
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`7
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
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`If Kursh considered information other than the submitted prior art, then
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`Markets-Alert is entitled to know where Kursh’s conclusion came from in order to
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`cross-examine Kursh on that information for both the substance and credibility of
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`his testimony, as well as afford its own expert a chance to evaluate the same
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`evidence.3 Otherwise, Markets-Alert would be limited to only the self-selected
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`evidence disclosed in the Petition. That would ill serve both Markets-Alert and
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`this proceeding, and be especially unjust since Petitioners may later submit the
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`very same evidence.
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`C. Evidence Of Secondary Indicia Of Non-Obviousness
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`Requests 4 and 5 are clearly and unambiguously directed to specific
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`evidence of Petitioners’ efforts to license and copy Markets-Alert’s invention and
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`implement similar technology, all of which establishes the acknowledged but
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`unfulfilled demand for the ‘357 Patent invention. They do not require Petitioners
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`to disclose their litigation positions since the request is limited to only factual
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`information. Moreover, the evidence sought is uniquely possessed by Petitioners
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`and cannot reasonably be obtained by other means by Markets-Alert. Petitioners
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`were also well aware when they included obviousness grounds in their Petition that
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`3 As Markets-Alert noted to the Board at the May 15, 2013 conference call, Markets-Alert did
`not have the opportunity in its Preliminary Response to provide expert testimony in rebuttal to
`Kursh’s testimony. Markets-Alert appreciates that, under the staged proceeding, the Response is
`Markets-Alert’s first opportunity to fully challenge Kursh’s testimony, which makes the
`requested discovery all the more vital.
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`
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`8
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
`
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`such secondary considerations of non-obviousness would be at issue. Since they
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`likely already have such evidence in hand, these requests impose minimal burden
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`to Petitioners. Thus, these requests easily satisfy factors (ii) – (v).
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`These requests also satisfy factors (i) and (v) because they seek evidence
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`that directly contradicts Petitioners’ underlying presumption that the technology
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`for the ‘357 Patent invention was already in commercial use at the time of the
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`filing, which demonstrates the necessary nexus to secondary considerations.
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`Despite being among the largest and most well-established players in the industry,
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`Petitioners submitted no evidence of their own implementation of what they now
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`claim was existing technology. Only one reason accounts for this failure –
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`Petitioners had not in fact been able to implement the invention during the priority
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`time frame, despite the consumer demand.4
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`Evidence of why and to what extent Petitioners desired, tried, but failed to
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`implement Markets-Alert’s or similar technology is highly probative of the merits
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`of the claimed invention and lack of merit of the instituted obviousness ground.
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`For example, Petitioners have asserted that Markets-Alert’s invention could be
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`implemented by a PC connected to the internet (the construction of the claim term,
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`4 Indeed, as alleged in Markets-Alert Pty. Ltd. v. Bloomberg Finance L.P., et al., Case No. 12-
`780-GMS, the Bloomberg Petitioners had in fact entered into detailed discussions with Markets-
`Alert to license the technology of the ‘357 Patent and did not announce their infringing
`Launchpad 2010 product until nearly a decade past the priority date. See Complaint, Exhibit
`2022 at ¶9 - 12.
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`
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`9
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
`
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`“network of computers,” adopted by the Board). If this was the case, then
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`Petitioners should have been able to implement the invention around the priority
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`date. But they did not, which casts doubt on the merits of their assertions and
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`lends greater credence to Markets-Alert’s position that the invention involves a
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`complex technical operation requiring a unique combination of hardware and
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`specific steps interacting and tied together in real-time.
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`Thus, the existing evidence and circumstances tend to show beyond
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`speculation that in fact something useful will be uncovered by discovery into
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`Petitioners’ knowledge of consumer demand, failure to meet that demand with
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`existing technology, and attempts to copy Markets-Alert’s invention. Specifically,
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`such evidence of secondary considerations is favorable in substantive value to
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`Markets-Alert’s position that the invention was not implementable with a simple
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`PC connected to the internet. This supports its defense against the instituted
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`obviousness grounds and planned amendments in response to the broad adopted
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`claim constructions.
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`III. CONCLUSION
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`Therefore, for the foregoing reasons and good cause therein satisfying the
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`Garmin factors, Markets-Alert respectfully requests the Board to grant its motion
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`and order Petitioners to produce the requested evidence as soon as possible on a
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`rolling basis, but no later than seven (7) days from the Board’s order.
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`10
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`Case No. CBM2013-00005 (JYC)
`Patent 7,941,357
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`Dated: May 20, 2013
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`Respectfully submitted,
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`
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`
`
`/s/
`Andrew Choung (USPTO Reg. No. 46622)
`Email: achoung@glaserweil.com
`Adrian M. Pruetz (Pro Hac Vice)
`Email: apruetz@glaserweil.com
`GLASER WEIL FINK JACOBS
`HOWARD AVCHEN & SHAPIRO LLP
`10250 Constellation Boulevard, 19th Floor
`Los Angeles, CA 90067
`Tel: 310-553-3000
`Fax: 310-785-3506
`
`William Fitzpatrick (USPTO Reg. No. 58332)
`Email: bill@frobbeintl.com
`3700 Newport Blvd, Ste. 101
`Newport Beach, CA 92663
`Tel: 518-573-2879
`
`Attorneys for
`Patent Owner Markets-Alert Pty Ltd.
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`11
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`CERTIFICATE OF SERVICE
`
`I certify that a copy of the foregoing PATENT OWNER MARKETS-
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`ALERT MOTION FOR AND TO COMPEL DISCOVERY was served on
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`May 20, 2013 to counsel of record for Petitioners via electronic mail:
`
`
`Michael T. Rosato
`USPTO Reg. No. 52,182
`WILSON SONSINI GOODRICH & ROSATI
`701 Fifth Avenue
`Suite 5100
`Seattle, WA 98104-7036
`Tel.: 206-883-2529
`Fax: 206-883-2699
`Email: mrosato@wsgr.com
`
`Brian D. Range
`USPTO Reg. No. 48,437
`WILSON SONSINI GOODRICH & ROSATI
`900 South Capital of Texas Hwy Las Cimas IV, Fifth Floor
`Austin, TX 78746-5546
`Tel.: 512-338-5478
`Fax: 512-338-5499
`Email: brange@wsgr.com
`
`
`
`
`
`
`/s/
`William Fitzpatrick
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`
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`
`