`Filed: May 24, 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 No. 7,941,357
`_____________________________
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`PETITIONER’S OPPOSITION TO PATENT OWNER’S MOTION FOR
`AND TO COMPEL DISCOVERY
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`
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`I.
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`STATEMENT OF PRECISE RELIEF REQUESTED
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`Petitioners Bloomberg et al. (“Petitioners”) hereby request Markets-Alert’s
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`motion for additional discovery be denied.
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`II. MARKETS-ALERT’S REQUESTED RELIEF SHOULD BE DENIED
`37 C.F.R. §42.224 requires “a showing of good cause” and directs discovery
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`be “limited to evidence directly related to factual assertions advanced by either
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`party in the proceeding.” Markets-Alert bears the burden of proof to establish that
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`it is entitled to the relief requested. 37 C.F.R. §42.20(c). Markets-Alert’s motion
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`fails to meet this burden for at least two reasons.
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`First, the Board has not authorized Markets-Alert to file a motion
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`compelling testimony and production under 37 C.F.R. §§42.52. The Board Order
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`authorizing a motion for additional discovery (Paper 27) provided, inter alia,
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`“Markets-Alert is authorized to file a motion for additional discovery under 37
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`C.F.R. § 42.51(b)(2).” (Emphasis added.) But contrary to the Board’s
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`authorization, Markets-Alert has filed a motion “for and to compel discovery” (see,
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`e.g., title of motion) and seeks seeks relief under both 37 C.F.R. §§42.51 and 42.52
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`(see page 1). Petitioner respectfully requests that the entire motion be dismissed as
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`unauthorized, as neither the Board nor the Petitioner should bear the burden of
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`sorting authorized from unauthorized request for relief. If Markets-Alert wanted
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`leave to file a motion compelling testimony and production of documents under 37
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`C.F.R. §§42.52, then Markets-Alert should have sought authorization for this.
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`Second, despite the Board providing direction as to the permissible scope of
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`“additional discovery” per Rule 42.51(b)(2), Markets-Alert’s motion improperly
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`seeks the equivalent of district court litigation discovery. In the above cited Order
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`(Paper 27), the Board directed that requests in the motion be specific, tailored
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`narrowly and not unduly broad.
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`Id. at p. 5. The Board emphasized that
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`“Markets-Alert should not expect the Board to sort through a broad request to find
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`items that meet the statutory and regulatory standard.” Id.
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`For further guidance, the Board cited its decisions on additional discovery.
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`Particularly, in Cuozzo, IPR2012-00001 (Paper 26), the Board identified five
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`factors as indicating that requested additional discovery is not warranted: (i) a
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`request is no more than a possibility or mere allegation of finding something
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`useful; (ii) asking for the other party’s litigation positions and underlying basis for
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`those positions under the pretext of discovery; (iii) the requestor’s ability to
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`generate equivalent information without the need of discovery; (iv) lack of
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`understandable instructions; (v) the request is overly burdensome to answer.
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`2
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`A.
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`The Motion to Compel Fails to Establish Good Cause For Discovery
`Request No. 1
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`At page 2, of its Motion, Markets-Alert requests “[p]rior art to U.S. Patent
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`No. 7,941,357 (“’357 Patent”) known to a Petitioner that was not submitted in the
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`Petition For Post Grant Review Of Covered Business Method Under 25 U.S.C. §
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`321 and §18 filed by Petitioners (“Petition”).” (“Request No. 1”).
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`Petitioners oppose Request No. 1 for several reasons. First, the request is
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`unduly broad rather than “tailored narrowly” as required by the Board’s Order
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`authorizing the motion. Paper 27, p. 5. Rather than particularly identifying any
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`specific prior art document, the request is broadly directed to any “prior art”
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`known to Petitioner s. Request No. 1 is improperly directed to a category of
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`documents, with no limitation of technology or privilege. See e.g., CBM2012-
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`00001 (Paper 24); see also, Cuozzo Factor (1), IPR2012-00001 (Paper 26).
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`Second, Request No. 1 seeks “any prior art” that is not at issue in these
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`proceedings. Markets-Alert’s seeking of documents irrelevant to the instituted
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`grounds of review runs contrary to the Board’s instructions. See Paper 27, p. 5.
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`Third, Request No. 1 fails to provide any evidence or bona fide reasoning
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`beyond mere speculation that something useful may be uncovered. Markets-Alert
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`presents diffuse arguments regarding additional prior art as potentially probative in
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`claim construction, or possibly relevant in rebutting a comment that the literature is
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`3
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`“blanketed with” anticipatory prior art. A mere allegation that something useful
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`will be found is insufficient to demonstrate that the requested discovery is
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`necessary. See, e.g., Cuozzo Factor (1), IPR2012-00001 (Paper 26).
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`Regarding the argument that discovery might relate to construction of the
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`identified claim terms or the state of the relevant art, if Markets-Alert disagrees
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`with positions taken by Petitioners and/or the Board, Markets-Alert may present its
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`own argument and evidence in rebuttal. Given that a patentee defines the scope of
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`its claims, evidence relevant to claim construction would seem equally, if not
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`more, accessible to Markets-Alert as the owner (and drafter) of the ’357 patent.
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`Regarding the rationale that discovery may address the volume of prior art
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`identified in the petition, multiple grounds of anticipation of every ‘357 patent
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`claim are currently outstanding, with a number of references even indicated by the
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`Board as duplicative to the invalidity grounds on which trial was ordered.
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`Markets-Alert has hardly explained how adding more invalidating prior art would
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`be useful at this stage of the proceeding. Also, Markets-Alert can identify prior art
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`to its own patent absent the requested discovery. For example, Markets-Alert can
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`conduct its own prior art search, or rely on the services of a professional search
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`firm. See, e.g., Cuozzo Factor (3), IPR2012-00001 (Paper 26).
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`Fourth, Markets-Alert improperly seeks privileged attorney work product,
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`thinly veiled under the pretext of “additional discovery.” Cf. Sawgrass Sys. Inc. v.
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`4
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`
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`BASF Aktiengesellschaft, 99-CV-70242-DT, 1999 WL 358681 at *4 (E.D. Mich.
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`Feb. 26, 1999) (denying motion to compel prior art search and holding that “the
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`search was made to aid in current and anticipated litigation, and hence its fruits
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`come squarely within the ambit of the work-product doctrine”). Markets-Alert
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`admits, at FN 2, that it seeks to learn Petitioners’ potential litigation positions:
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`“[t]he reasons behind why Petitioners and Kursh disclosed some prior art, but not
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`others, are likely to be as useful as the undisclosed prior art itself.” Markets-
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`Alert’s demand for prior art identified by Petitioners’ attorneys based on attorney
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`assessment of the ’357 Patent improperly seeks privileged attorney work product
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`and would improperly allow Markets-Alert to “free-ride” off of Petitioners’
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`investment of attorney time. See, e.g., Hickman v. Taylor, 329 U.S. 495, 509-510
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`(1947) (holding that discovery cannot “justify unwarranted inquiries into the files
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`and the mental impressions of an attorney”). Additional discovery is not warranted
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`if it is asking for the other party’s litigation positions and underlying basis for
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`those positions under the pretext of discovery. Cuozzo Factor (2), IPR2012-00001
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`(Paper 26).
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`Finally, at p. 5 of its Motion, Markets-Alert argues that being kept “in the
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`dark about other prior art, only to spring them later in this proceeding, makes no
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`sense and is inefficient. If this other prior art is disclosed, then Markets-Alert will
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`be able to avoid unnecessary arguments and amendments….” However, the
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`5
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`Board’s rules for the presentation of arguments and evidence must govern
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`regardless of whether Markets-Alert believes those rules are inefficient. See, e.g.,
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`Cuozzo, IPR2012-0001 (Paper 26, p. 13). If Petitioners present additional prior art
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`in accordance with the Board’s rules and procedure, Markets-Alert will have an
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`opportunity under the same rules and procedure to address the presented
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`information. However, Petitioners have no obligation to keep Markets-Alert
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`apprised of its positions on substantive issues before Petitioners are ready to
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`present them for review. As such, the Board should deny this request.
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`B.
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`The Motion to Compel Fails to Establish Good Cause For PO’s Discovery
`Request No. 2 and 3
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`At page 2 of its Motion, Markets-Alert requests “[d]ocuments and things
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`reviewed or considered by a Petitioner in conjunction with preparation of the
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`Petition.” (“Discovery Request No. 2”) and also “[d]ocuments and things reviewed
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`or considered by Steven R. Kursh (“Kursh”) in conjunction with preparation of his
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`[Declaration]” (“Request No. 3”). At page 6, the Motion further clarifies that
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`“[r]equests 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.” (Emphasis added.)
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`First, Petitioners believe they have already provided the necessary
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`information. The Petition includes at pages iii-vi a “List of Exhibits” and
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`6
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`“Evidence Relied Upon to Support the Challenge.” Also, Dr. Kursh’s declaration
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`includes “INFORMATION CONSIDERED BY DECLARANT” at pages 45-46 of
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`Exhibit 1002.
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`To the extent Requests Nos. 2 and 3 go beyond the already provided
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`information, the requests should be denied as being unduly broad, rather than
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`“tailored narrowly” as explicitly instructed by the Board’s Order authorizing the
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`motion. Paper 27, p. 5. Request Nos. 2 and 3 are improperly directed to broad
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`categories of unspecified documents as opposed to identifying specific documents,
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`with no limitation of privilege. See also, CBM2012-00001 (Paper 24); Cuozzo
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`Factor (1), IPR2012-00001, Paper 26.
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`Third, Markets-Alert has not presented a threshold amount of evidence or
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`reasoning beyond mere speculation that Petitioners or Dr. Kursh relied on
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`unidentified documents or that the unidentified documents would relate to claim
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`construction, state of the art, or anything else. A mere allegation that something
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`useful will be found is insufficient to demonstrate that the requested discovery is
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`necessary. See, e.g., Cuozzo Factor (1), IPR2012-00001 (Paper 26). To the extent
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`that Markets-Alert believes some argument in the Petition or testimony in Dr.
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`Kursh’s declaration is not supported by evidence, Markets-Alert may address those
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`contentions in its Patent Owner Response. Accordingly, Markets-Alert has failed
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`to provide good cause showing the requested discovery is necessary or warranted.
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`7
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`C.
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`The Motion to Compel Fails to Establish Good Cause For PO’s Discovery
`Request Nos. 4 and 5
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`At page 2 of its Motion, Markets-Alert requests “[d]ocuments and things
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`relating to any communication, discussion, evaluation, consideration or decision
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`regarding licensing from Markets-Alert or commercial implementation or adoption
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`of any specific embodiment of the ’357 Patent in the 2000 to 2011 time frame.”
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`(“Request No. 4”) and “[d]ocuments and things relating to any commercial or
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`technical review, analysis or decision regarding licensing or commercial
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`implementation or adoption of any technology similar to the invention of the ’357
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`Patent in the 2000 to 2011 time frame” (“Request No. 5”). At p. 8, Markets-Alert
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`titles these requests “Evidence of Secondary Indicia Of Non-Obviousness.”
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`Markets-Alert clarifies “Requests 4 and 5 are clearly and unambiguously directed
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`to specific evidence of Petitioners’ efforts to license and copy Markets-Alert’s
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`invention and implement similar technology, all of which establishes the
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`acknowledged but unfulfilled demand for the ‘357 Patent invention.”
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`Petitioners oppose Request Nos. 4 and 5 for a number of reasons. First, the
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`requests are unduly broad, rather than “tailored narrowly” as explicitly instructed
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`by the Board’s Order authorizing the motion. Paper 27, p. 5. Rather than naming
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`any specific licensing proposals, communications, or commercial implementations,
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`the requests are directed to anything “relating to” a long, compound list of
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`8
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`hypothetical and unspecified activities over an 11 year time period. See also,
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`CBM2012-00001 (Paper 24); Cuozzo Factor (1), IPR2012-00001, Paper 26.
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`Second, Markets-Alert offers no evidence that a Petitioner sought to license
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`from or copied Markets-Alert. Markets-Alert cites, at FN4, only to their district
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`court complaint’s (Exhibit 2022) unsupported allegations. Mere allegation that
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`something useful will be found is insufficient to demonstrate that the requested
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`discovery is necessary. See, e.g., Cuozzo Factor (1), IPR2012-00001 (Paper 26).
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`Additionally, at pages 9-10, Markets-Alert vaguely alludes to secondary
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`considerations of non-obviousness, such as commercial success, failure by others,
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`and consumer demand. Markets-Alert, however, fails to set forth any evidence
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`showing that: (i) the Petitioners themselves had tried but failed to develop a
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`method having the features of the ’357 patent claims; (ii) any Petitioner achieved
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`commercial success because of any inventive feature recited in the ’357 patent
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`claims; or (iii) any Petitioners recognized that there was a long-felt but unmet need
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`in the art for a method of the ’357 patent claim. Markets-Alert’s allegations, to the
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`extent any are clearly articulated, are nothing more than speculation, and fail to
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`demonstrate good cause for discovery requested.
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`Third, Request Nos. 4 and 5 improperly attempt to discover Petitioners’
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`potential litigation positions. For example, the documents Markets-Alert requests
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`are potentially relevant to alleged infringement and/or willful infringement in
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`9
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`
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`litigation. Additional discovery is not warranted if it is asking for the other party’s
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`litigation positions and underlying basis for those positions under the pretext of
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`discovery. Cuozzo Factor (2), IPR2012-00001 (Paper 26).
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`Fourth, each Petitioner would face a significant burden if required to comply
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`with this request. Markets-Alert has not identified commercial implementations of
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`the ’357 Patent, and Petitioners do not know what “technology similar to the
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`invention of the ’357 Patent” includes. Thus, searching the files of each
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`petitioner’s hundreds of employees for information related to alleged “similar”
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`technology—undefined in scope—is far too burdensome. Moreover, Markets-
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`Alert has better access to information about attempted licensing of its alleged
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`invention than Petitioners. Thus, the Board should deny these requests.
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`III. CONCLUSION
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`For the foregoing reasons, Bloomberg Inc. et al. respectfully request that the
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`Board deny Markets-Alert’s Motion for Additional Discovery in its entirety.
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`Date: May 24, 2013
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`Respectfully submitted,
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`/ Michael T. Rosato /
`Michael T. Rosato
`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
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`Attorneys for Petitioner Bloomberg Inc. et al.
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`10
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that the foregoing Petitioner’s Opposition to Patent Owner
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`Markets-Alert Motion For and to Compel Discovery was served on May 24, 2013 at the
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`following address of record for the subject patent:
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`Andrew Y. Choung
`Adrian Pruetz (Pro Hac Vice)
`GLASER WEIL FINK JACOBS HOWARD AVCHEN & SHAPIRO LLP
`10250 Constellation Boulevard, 19th Floor
`Los Angeles, CA 90067
`achoung@glaserweil.com
`apruetz@glaserweil.com
`Tel.: 310-553-3000
`Fax: 310-785-3506
`
`William Fitzpatrick
`3700 Newport Blvd., Suite 101
`Newport Beach, CA 92663
`bill@frobbeintl.com
`Tel.: 518-573-2879
`
`/ Michael T. Rosato /
`Michael T. Rosato
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`11
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